Hindalco Industries Limited (NSE:HINDALCO) is the metals flagship company of the Aditya Birla Group. With a consolidated turnover of US$18.7 billion, Hindalco is an industry leader in aluminium and copper.1

Hindalco’s acquisition of Aleris Corporation in April 2020, through its subsidiary Novelis Inc., has cemented the company's position as the world’s largest flat-rolled products player and recycler of aluminium.

Hindalco’s state-of-art copper facility comprises a world-class copper smelter and a fertiliser plant along with a captive jetty. The copper smelter is among Asia's largest custom smelters at a single location.

In India, the company’s aluminium units across the country encompass the gamut of operations from bauxite mining, alumina refining, coal mining, captive power plants and aluminium smelting to downstream rolling, extrusions and foils. Today, Hindalco ranks among the global aluminium majors as an integrated producer and a footprint in 9 countries outside India.

The Birla Copper unit produces copper cathodes and continuous cast copper rods, along with other by-products, including gold, silver, and DAP fertilisers. It is India’s largest private producer of gold.

Hindalco has been accorded Star Trading House status in India. Its aluminium is accepted for delivery under the High-Grade Aluminium Contract on the London Metal Exchange (LME), while its copper quality is also registered on the LME with Grade A accreditation.

Business Overview

An industry leader in aluminium and copper, Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is one of the world’s largest custom smelters at a single location.2


One of the largest integrated primary producer of aluminium in Asia. With a pan-Indian presence that encompasses the entire gamut of operations, from bauxite mining, alumina refining, aluminium smelting to downstream rolling, extrusions and recycling, Hindalco enjoys a leadership position in aluminium and downstream value-added products in India.3

The company's Indian aluminium operations are integrated and consist of bauxite mining, alumina refining, smelting and converting primary metal into value-added products. Hindalco Industries has dedicated sources for critical raw materials such as bauxite, power and coal. The company also have committed supply sources for auxiliary chemicals.

The company's finished products include alumina, primary aluminium in the form of ingots, billets and wire rods, value-added products such as rolled products, extrusions and foils. Metallurgical alumina is used for its own captive needs. Chemical alumina and hydrates are used in range of industries including water treatment, fillers in cables and plastics, refractories and ceramics, glass among others.

The company's facilities are in regions close to raw material sources, low cost and available labour and demand markets. This helps in reducing costs and improving profit margins. The technology upgrade has resulted in higher utilisation rates at its plants and improved efficiency.

Hindalco’s integrated complex at Renukoot, in Uttar Pradesh, India, houses an alumina refinery, an aluminium smelter and facilities for the production of semi-fabricated products. Power is sourced from its Renusagar power plant, located about 45km from Renukoot. The company's facilities also include an aluminium smelter and an aluminium FRP facility (for rolled products, extrusions products and wire rods) at Hirakud (Odisha) with a captive power plant and coal mine, and alumina refinery at Muri (Jharkhand). The company's Chemical grade alumina plant is located at Belagavi (Karnataka), and rolling mills at Belur (West Bengal), Taloja near Mumbai and Mouda near Nagpur (Maharashtra). Foil rolling facilities are situated at Mouda near Nagpur (Maharashtra) and Kollur (Telangana) and its extrusion plant at Alupuram (Kerala).

Hindalco's new age smelters at Aditya (Odisha) and Mahan (Madhya Pradesh), operating on state-of-the-art AP36 technology, have not only resulted in expansion of its capacities but also improved cost-efficiency of its operations. These smelters have their own captive power plants and source alumina from Utkal, its 100% subsidiary.

Utkal Alumina (Odisha) is a world class refinery with one of the lowest cost structure in the world. The bauxite for Utkal is sourced from Baphlimali mines by a 18 kilometer long conveyor, one of its kind in the world.

The company's strength in aluminium products differentiates it from its competition. A significant portion of Hindalco’s sales come from value-added products. This is in line with its ‘market-grower’ philosophy. Hindalco has introduced numerous new products in the Indian market, including branded roofing sheets, branded kitchen foils and input material for bicycles and railway wagons. Hindalco’s Aluminium Gallery is a platform for its small customers to showcase their products to their consumers.


Hindalco’s copper division, Birla Copper, operates one of the largest single location custom copper smelters in the world. The custom copper smelter at Dahej in the state of Gujarat (west coast of India) houses three copper smelters, three refineries, two rod plants, a captive power plant, a captive oxygen plant, phosphoric acid plant, di-ammonium phosphate plant, precious metal recovery plant, captive jetty and other utilities. One of the new rod plants is under construction and will be operational by end FY18.4

Hindalco produces LME grade copper cathodes, continuous cast copper rods in various sizes, and precious metals like gold and silver. Hindalco is one of the major manufacturers of 19.6mm diameter copper rods, which is used for railway electrification. The co-product, sulphuric acid, is partly utilised to produce phosphoric acid and fertilisers like di-ammonium phosphate (DAP).


Hindalco manufactures coarse alumina hydrate, metallurgical alumina, special alumina and alumina hydrate. The chemicals business focuses on special alumina and alumina hydrates, which are products of in-house technological innovation by its Research & Development team at Hindalco Innovation Centre-Alumina(HIC-A). This research centre is recognised by the Department of Scientific & Industrial Research (DSIR), Government of India.5

The chemicals business serves a wide range of customers across 32 countries around the world with special alumina and alumina hydrates. Alumina hydrates find use in applications like – alum, poly aluminium chloride (PAC), zeolites, aluminium fluoride, and as fire-retardant filler in polymer composites. The company's special alumina finds a good suit in applications like refractory, ceramics, polishing compounds, abrasives and glass.

Hindalco’s captive bauxite mines in the Indian states of Maharashtra, Jharkhand, Chhattisgarh, and Odisha, supply high quality raw material to its refineries located at Belagavi in Karnataka, Muri in Jharkhand and Renukoot in Uttar Pradesh, India. The alumina refineries at Belagavi, Muri and Renukoot have installed capacities of 350,000 TPA, 450,000 TPA and 700,000 TPA respectively. The state-of-the-art alumina refinery at Belagavi is dedicated to the manufacture of special alumina and alumina hydrates.

Utkal Alumina International Limited (UAIL), the fully-owned subsidiary of Hindalco Industries located in Rayagada district, Odisha, operates a most modern 1.5 MTPA alumina refinery.

Dry cargo handling

Hindalco’s Dahej Harbour and Infrastructure Limited (DHIL) operates an all-weather jetty in the Gulf of Khambhat on the west coast of India. DHIL is strategically located at latitude 21.42° N and longitude 72.315°E to cater to the logistics and transportation needs of its customers. Equipped with a skilled and professional workforce, and customer friendly port, DHIL values the time, money and cargo of its customers. Reputed for reliability and high performance, the company enjoys strong relationships in the marketplace.6


Hindalco produces di-ammonium phosphate (DAP) fertiliser. It is the most popular phosphatic fertiliser because of its high nutrient content and good physical properties. The composition of DAP is 18% Nitrogen and P2O5 46%. Within the same facility, Hindalco can also produce nitrogen phosphorus potassium (NPK) complexes as value-added downstream products. It can manufacture NPK complexes such as 10:26:26, 12:32:16 and 20:20:0. Hindalco’s DAP plant went on-stream in the year 2000, and has a capacity of 400,000 TPA.7

Phosphoric acid is produced at Hindalco’s phosphoric acid plant by the chemical reaction of sulphuric acid (generated as by-product from copper smelting process) and rock phosphate (imported). At the DAP plant, phosphoric acid and ammonia are reacted to form DAP. Imported potash is used to produce the NPK complexes.

The products are marketed under the well-known brand Birla Balwan, a name that commands preference among the farmers of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Chhattisgarh, Haryana and Punjab, through a vast, established network of dealers, retailers and C&F agents. Operations are carried out through both private and institutional distribution channels. The products are packed in gusseted Lyril-green 50kg PP bags, and are transported to various destinations by rail and road, stored and then delivered to dealers, retailers, co-operative societies, and other customers in various marketing regions.

The customers are serviced through an experienced and qualified marketing team across all the seven states. Marketing, service-related activities, and farmer/retailer meets are regularly held at customers’ locations by well-trained field personnel.

Birla Phospho Gypsum is marketed in the agricultural field as a soil conditioner. The product contains 15-17 % sulphur, 20-22 % calcium and 1 % of P2O5. It is an economical input that adds nutrients to the soil and enhances its productivity, improvement and crop growth. Birla Phospho Gypsum is available in loose form, bulk and also in bags for convenience of handling and storage.

The popular brand, Birla Vishwas, caters to the market of diversified agricultural inputs.


During Hindalco’s copper production process, by-products such as sulphuric acid and copper slag are formed. Sulphuric acid is partly converted into phosphoric acid, which is then made to react with ammonia to make di-ammonium phosphate (DAP) fertiliser. During the process of making phosphoric acid, phosphogypsum and hydrofluosilicic acid (HFA) are formed. HFA is partly utilised to make aluminium fluoride, and rest is sold in the market.8

Sulphuric acid

Hindalco produces sulphuric acid of IS 266/1993 technical grade. The sulphuric acid plants use the double contact double absorption (DCDA) process, and are designed by Monsanto Envirochem (USA).

Phosphoric acid

Hindalco’s phosphoric acid plant is based on the Prayon Mark IV dihydrate technology provided by SNC Lavalin (Belgium).


Phosphogypsum is a by-product of Hindalco’s phosphoric acid plant.

Copper slag (iron silicate)

Copper slag is produced during the smelting process at Hindalco’s copper smelter located at Dahej.

Aluminium fluoride:

Hindalco produces aluminium fluoride by reacting HFA (a by-product of the phosphoric acid plant) with aluminium hydroxide (from Hindalco’s aluminium manufacturing facilities).

Hindalco Brands

Hindalco’s brands are well-known for their reliability and superior quality. Hindalco’s brands have evolved into very successful products over the years and represent the technological excellence of the company.9

Aluminium Extrusions Brands

  • Hindalco extrusions
  • Maxloader
  • Eternia

Aluminium FRP Brands

  • Everlast

Aluminium Foil Brands

  • Freshwrapp
  • Superwrap

Copper Product Brands

  • Birla Balwan


Hindalco operates 51 units in 13 countries and includes a workforce of 35,000 representing 15 different nationalities.10

Operations in India

In India, Hindalco commissioned the Renukoot plant in Uttar Pradesh in 1962. The facility operates across the aluminium value chain from bauxite mining, alumina refining, aluminium smelting to downstream rolling and extrusions. The integrated facility houses a 700,000 tpa alumina refinery and a 345,000 tpa aluminium smelter along with facilities for production of semi-fabricated products namely conductor redraw rods, sheet and extrusions.

Hindalco's other units in India are located at Muri in Jharkhand, Belur in West Bengal, Kollur in Telangana, Hirakud in Orissa, Alupuram in Kerala, Taloja in Maharashtra, Belagavi in Karnataka and Dahej in Gujarat.

Hindalco operates captive bauxite mines in Jharkhand, Chhattisgarh, Maharashtra and Orissa, which provide the raw material to alumina refineries at Belagavi, Muri and Renukoot.

Hindalco also has two research and development centres in Belagavi and Taloja.

Operations around the world

Novelis is headquartered in Atlanta, Georgia and operates 25 manufacturing facilities in nine countries on four continents, with nearly 11,000 employees. Novelis is the world’s largest rolled aluminum producer in terms of volume shipped, and the largest purchaser of aluminum as well.

Hindalco-Almex operates a first-of-its-kind facility in India, which is exclusively devoted to high-performance aluminium alloys. HAAL is located at Shendra, Aurangabad in western India, around 350 km from Mumbai.

Industry overview

Aluminium Segment

CY 2018 was a highly volatile year for the aluminium industry with the US being a pivot for major events. The first half of the year was completely dominated by the US sanctions on UC Rusal and the imposition of Section 232, i.e., import tariffs of 10% on all aluminium products. The second half was impacted by the eruption of trade war between the US and China. Alumina supply was also impacted during the year due to disruptions at one of the world’s biggest refineries outside China, pushing alumina prices to an all-time high of $700/tonne in CY 2018.11

The US-China trade war dampened the global economic environment with most of the major economies experiencing a slowdown in growth, which in turn impacted aluminium consumption. In CY 2018, primary aluminium consumption growth moderated to 3% y-o-y from 6% y-o-y in CY 2017. The world, excluding China, reported aggregate consumption growth of around 2% in CY 2018, down from 3% in CY 2017, owing to subdued demand in Japan, the Middle East, Brazil, and Europe, while demand growth in North America remained flat at 2% y-o-y. Among user industries, only the packaging sector witnessed growth in CY 2018 versus CY 2017. However, consumption growth moderated in the construction, electrical, machinery, equipment and the transportation sectors.

China in CY 2018 struggled on two fronts – the trade with the US and moderation in the domestic economy. Consequently, consumption growth slowed significantly to around 3% in the year from around 8% in CY 2017, owing to a sharp decline in demand from the transport, construction and electrical sectors.

Global aluminium production excluding China grew around 2% y-o-y in CY 2018 versus around 1% y-o-y a year ago; production growth in China slipped to around 1% y-o-y from 13% y-o-y in CY 2017. A surge in input costs, coupled with environmental regulations, made a majority of the smelters in China unviable. As a result, overall global production marginally grew by 0.5% y-o-y in CY 2018, around 8% y-o-y growth in CY 2017.

In the domestic market, aluminium production maintained a strong growth of 9% in FY 2018-19 while domestic consumption remained robust at around 9.5%. User industries like transportation, construction and consumer durables were the major demand drivers.

Imports continued to be a concern for domestic players, which accounted for nearly 60% of the market in FY 2018-19. Overall imports including scrap touched ~2.3 Mt in FY 2018-19 from ~2 Mt in FY 2017-18.

Copper Segment

The copper market was also impacted by global uncertainties, trade disputes, slowing Chinese economy (constitutes 50% of global consumption) and strengthening US dollar. In addition, there were fears of major supply disruptions as labour contracts at many major mines, especially in Chile and Peru, were up for renewal during the year. However, all the negotiations were concluded without any disruptions.

In CY 2018, concentrate production grew around 3.5%, with a majority of the production coming in the second half. However, concentrate output from the world's two biggest mines, Escondida in Chile and Grasberg in Indonesia fell, as the latter shifted from open cast to underground mining. The expectation of a likely disruption in CY 2018 led to a moderation in benchmark TC/RC to 21.1 c/lb from 23.7 c/lb in CY 2017.

Global consumption of refined copper grew 2.8% y-o-y in CY 2018 versus 2.7% y-o-y in CY 2017; the world excluding China grew around 1% y-o-y versus around 0.3% y-o-y. Demand in Japan, North America and Europe (majorly driven by Germany) grew while that in South Korea and Taiwan witnessed a sharp decline.

Growth in Chinese demand was at 4.5% in CY 2018, down from 5% in CY 2017, due to its economic slowdown and the trade dispute with the US in the second half of CY 2018. However, the ban on grade 7 scrap imports supported primary copper consumption. Building & construction, machinery and consumer durables were the leading demand drivers.

In the domestic market, demand surged to 10% in FY 2018-19 as compared with 2% in FY 2017-18. This was largely driven by growth in electrical and electronics and consumer durables sectors. However, slowing industrial growth was a concern during the year. Imports from ASEAN and FTA countries continued to put pressure on the domestic market. During FY 2018-19, imports recorded an increase of 20% as against a growth of 7% in the previous year. As a result, the overall share of imports in the domestic market increased from 37% in FY 2017-18 to 42% in FY 2018-19. The majority of the imports were in the categories of rods and wires.


Economic growth and material substitution continue to drive increasing global demand for aluminium and rolled products. With the exception of China, where can sheet overcapacity and high competition remain, favourable market conditions and increasing customer preference for sustainable packaging are driving demand for recyclable aluminium beverage cans.

Meanwhile, demand for aluminium in the automotive industry continues to grow, justifying the investments made by Novelis in its automotive sheet finishing capacity in North America, Europe and Asia in recent years. The robust demand environment is also fuelling additional investments in Guthrie, Kentucky (US) and Changzhou, China.

This growing demand is primarily a reflection of automotive companies’ preference for lightweight aluminium in vehicle structures and components, as they respond to stricter emissions and fuel economy regulations, while improving vehicle safety and performance.

In FY 2018-19, Novelis announced its plans to expand rolling, casting and recycling capability in Pinda, Brazil. The company also signed a definitive agreement to acquire Aleris, pending regulatory approvals, which will further diversify Novelis’ global footprint and portfolio.

Financial highlights

On February 12, 2020, Hindalco Industries Ltd announced consolidated results for the third quarter ended December 31, 201912


Novelis delivered a continued strong operational and financial performance in Q3 FY20. Total shipments of of flat rolled products (FRPs) were at 797 Kt, which is flat year-on-year. Beverage can sheet and automotive body sheet shipments, however, were higher by 4% and 3% respectively, driven by growing consumer preference for sustainable packaging and light-weight vehicles. Novelis recorded its highest Q3 EBITDA of US$ 343 million, a growth of 7% over the prior year. Adjusted EBITDA per ton was US$ 430 in Q3 FY20, up 7% year-on-year. Novelis reported a Net Income (excluding tax-effected special items) of US$ 132 million in Q3 FY20, an increase of 31% over Q3 FY19. Revenue was down 10% year-on-year at US$ 2.7 billion in Q3 FY20, mainly due to a decline in average base aluminium prices and local market premiums, partly offset by favourable recycling benefits.

Aluminium (Hindalco including Utkal Alumina)

Reported revenue of Rs. 5,467 crore in Q3 FY20 (Rs. 6,019 crore a year ago) was down 9%, due to lower realisations. EBITDA stood at Rs. 1,036# crore in Q3 FY20, compared to Rs. 1,252 crore in Q3 FY19. Stable operations in the Indian Aluminium Business helped achieve Alumina (including Utkal) and Aluminium metal production of 662 Kt and 330 Kt respectively in Q3 FY20. Aluminium Metal sales volume grew 2% to 328 kt in Q3 FY 20. Aluminium VAP (excluding wire rods) volumes remained flat year-on-year, at 75 kt


Overall production volumes (Copper Cathodes) were down 18% year-on-year to 86 Kt in Q3 FY20, compared to the prior year. The Copper Business’ Value Added Product (VAP) production was at 60 Kt, lower by 8% year-on-year. Total VAP sales were up 3% at 58 Kt in Q3 FY20, which is in line with market growth. Total copper metal sales were lower by 14%, at 84 Kt in Q3 FY20, versus 99 kt in Q3 FY19 on account of lower production. Revenue from the Copper Business was Rs. 4,774 crore in Q3 FY20 versus Rs. 5,943 crore a year ago. EBITDA was lower at Rs. 256 crore in Q3 FY20 compared to Rs. 490 crore in Q3 FY19, down by 48% year-on-year, primarily due to lower volumes and realisations in Q3 FY20

Consolidated Results

Hindalco’s Consolidated Revenue for Q3 FY20 stood at Rs. 29,197 crore compared to Rs. 33,213 crore in the same quarter last year. Total EBITDA was at Rs. 3,676 crore in Q3 FY20 (versus Rs. 4,080 crore in Q3 FY19), down by 10% year-on-year. Consolidated Profit before Exceptional Items and Tax was Rs. 1,487 crore in Q3 FY20 compared to Rs. 1,931 crore in the prior year, down by 23%. Profit After Tax (PAT) stood at Rs. 1,062 crore in Q3 FY20, down by 24%, compared to the third quarter of FY19. The consolidated net debt to EBITDA ratio was 2.65x as on December 31, 2019 versus 2.48x on March 31, 2019.

Business Updates

  • .Novelis made excellent progress in advancing its major organic expansion projects in the U.S., China and Brazil. Notably, its greenfield automotive finishing plant in Guthrie, Kentucky, is in the commissioning process, with commercial shipments to customers expected to commence in the coming months.
  • Novelis has received anti-trust approval from China for the Aleris acquisition. The European Commission is currently evaluating the suitability of the proposed buyer of Aleris’ Duffel, Belgium plant. In the U.S., arbitration proceedings are in progress
  • In January 2020, Novelis successfully issued US$ 1.6 billion Bonds at 4.75% due in 2030, to repay its existing US$ 1.15 billion 6.25% Bonds, due in 2024 with net interest savings of around US$ 17 million per annum. Balance proceeds of these Bonds will be used to finance the ongoing Aleris acquisition.
  • Utkal Alumina’s capacity expansion of 500 Kt is on track and is expected to be commissioned in December 2020.
  • The Muri Alumina refinery re-started production in December 2019.
  • Hindalco won the “Silver Shield” for Excellence in Financial Reporting for FY2018-19 awarded by The Institute of Chartered Accountants of India (ICAI).


  1. ^ http://www.hindalco.com/about-us
  2. ^ http://www.hindalco.com/our-businesses
  3. ^ http://www.hindalco.com/our-businesses/aluminium-overview
  4. ^ http://www.hindalco.com/our-businesses/copper-overview
  5. ^ http://www.hindalco.com/our-businesses/chemicals-overview
  6. ^ http://www.hindalco.com/our-businesses/dry-cargo-handling
  7. ^ http://www.hindalco.com/our-businesses/fertilisers
  8. ^ http://www.hindalco.com/our-businesses/acids
  9. ^ http://www.hindalco.com/our-businesses/hindalco-brands
  10. ^ http://www.hindalco.com/operations
  11. ^ http://www.hindalco.com/upload/pdf/hindalco-annual-report-2019.pdf
  12. ^ https://www.bseindia.com/xml-data/corpfiling/AttachHis/0fee6aeb-7cdf-41b3-9b37-4324e37ea168.pdf
Created by Asif Farooqui on 2020/06/01 10:06
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