Hindalco in Expansion Mode
Hindalco in Expansion Mode with CAPEX of USD 8.5 billion
06.09.2010 | Deskman: Marcel Dröttboom
Mumbai, India – At the recent annual meeting, Kumar Mangalam Birla, Chairman of Hindalco, said that the company has earmarked a capex of around INR 40.000 crore (approx. USD 8.5 billion) towards projects to be commissioned between 2012 to 2014.
At the 51 Annual Meeting, Mr. Kumar Mangalam Birla, Chairman of Hindalco, said that Novelis had witnessed a remarkable turnaround in the midst of extremely challenging circumstances. In an economy that was still emerging from recession, Novelis reported record results in terms of record adjusted EBITDA, liquidity and free cash flow. Adjusted EBITDA at USD 754 million was higher by 55 per cent year on year. The company registered a commendable improvement in liquidity over the past year. Its liquidity surpassed USD 1 billion, free cash flow went from a negative USD 352 million in FY09 to a positive USD 355 million in FY10.
Mr. Birla discussed Hindalco’s brownfield expansion projects, stating that the smelter expansion at Hirakud from 155000 to 161000 tonnes per year was under progress and was slated for completion in the second quarter of financial year 2011. Further capacity expansion to 213000 tonnes per year, through the addition of 80 pots, is underway and expected to be completed by the fourth quarter of 2012. Additionally, the company is evaluating the possibility of amplifying the smelting capacity at Hirakud from the proposed 213000 to 360000 tonnes per year. An increase in the back-up captive power plant from the proposed 467.5 to 967.5 MW is on the anvil.
On the company’s greenfield projects, Mr. Birla said that Utkal Alumina, a 100 per cent subsidiary of Hindalco, was setting up a 1.5 million tonnes per year alumina refinery in Rayagada district of Orissa, India. The project would feed the alumina requirements of the Mahan and the Aditya smelters. These are currently under construction. The company has successfully achieved the financial closure of Utkal Alumina with the signing of a common loan agreement of INR 4.906 crore (approx. USD 1 billion) with a consortium of 28 banks. This constitutes the entire debt requirement of the project. The production of alumina should commence in the second quarter of 2012.
The equity requirement for Utkal Alumina project has been tied up as well. This is a significant milestone in the company‘s strategy to grow its alumina capacity and play the entire value chain in aluminium. The Utkal Alumina project offers the potential to scale up to 3 million tonnes per year at relatively low incremental capital cost.
All of the company’s greenfield projects – Utkal Alumina, Mahan Aluminium, Aditya Alumina/Aluminium and Jharkhand Aluminium – are on course. Notwithstanding the difficult terrain, the company has made significant progress on each of these projects. These projects are expected to be commissioned between 2012 to 2014. The company has earmarked a capex of around INR 40.000 crore (approx. USD 8.5 billion) towards these projects.
This article is protected by copyright. You want to use it for your own purpose? Infos can be found under www.mycontentfactory.de (ID: 359398)