HINDALCO

Corporate Review Session

Hindalco Industries Limited

Submitted To:-

Prof. Anil Kumar – Professor

Submitted By:-

ASHISH DWIVEDI (M4-13)

ASHISH BHASKAR (M4-14)

DEBAL KUMAR CHAKRABORTY(M4-16)

BRAHMRAJ PANDEY(M4-15)

Renusagar

(CPP)

Bauxite

Mines(Jharkhand &

Chattisgarh)

Silavasa(Foils & Wheels)

Renukoot

“THE WINNING ORGNIZATION WILL BE THOSE WHO REGURALY OUTPERFORM

COMPETTIION. THEY HAVE A STABLE CONSISTENT STRATEGY. A STABLE

STRATEGY DOES NOT MEAN STATIC STRATIGY, RHATHER IT MEANS

FOLLOWING A BROAD PHILOSPHY AND CONTINOUS IMOROVEMENT IN HOW

STATEGY IS MANIFESTED. INCORPORATING THE EXPECTED MARKET

REQUIREMENTS AND THE CUSTOMER NEEDS”

―KUMAR MANGALAM BIRLA‖

Company Profile Hindalco Industries Ltd.

Established 1985

Major industry Metal Producer & Products

Sub Industry Aluminium Producer

Country India

Employees 20366

Hindalco Industry Limited , the metals flagship company Aditya Birla Group, is an industry

leader in aluminium and Copper, A metal powerhouse with a consolidate turn over in excess of

US$14 billion, Hindalco is the world‘s largest aluminium rolling company and one of the biggest

producer of primary aluminium in Asia. Its copper smelter is the world‘s largest custom smelter

at a single location.

The group‘s operating unit is located at Renukoot, Renusagar and Silvassa. Hindalco

commissioned its aluminium facility at Renukoot in Eastern U.P. in 1962. Later acquisition and

mergers, with Indal, Birla Copper and Nifty and Mt. Gordon Copper Mines in Australia.

Strengthened the company‘s Position in Value –added alumina, aluminium and Copper Products,

with vertical Integration through access to captive copper concentrates.

The company initially had an aluminium smelting capacity of 20,000 tons per year (TPY) and

aluminium refining capacity of 40,000 TPY. The facilities are located in Renukoot, In the State

of Utter Pradesh in India. Continual expansions have seen smelting capacity grown 12 fold to

242,000 TPY, whereas aluminium refining capacity has been increased to 450,000TPY. With an

outstanding record of capacity utilization, the company has grown into India‘s largest aluminium

producer with a 40% share production. More significantly. Hindalco is firmly entrenched

amongst the lowest cost producers of aluminium in the world.

The company has ISO 2002 Certification since 1994 and ISO 14001 Certification since 1998.

Vision

To be a premium metals major, global in size and reach, excelling in everything we do, and

creating value for its stakeholders

Mission

To relentlessly pursue the creation of superior shareholder value, by exceeding customer

expectation profitably, unleashing employee potential, while being a responsible corporate

citizen, adhering to our values.

Values

Integrity

On the foundation of integrity, doing whatever it takes to deliver, as promised.

Passion

Missionary zeal arises out of an emotional engagement with work.

Seamlessness

Thinking and working together across fictional, hierarchy levels, business and geographies.

Speed

Responding To stakeholders with a sense of urgency

The Group Operates in Following Segment

Aluminium

Hindalco's major products include standard and specialty grade aluminas and hydrates,

aluminium ingots, billets, wire rods, flat rolled products, extrusions and foil.

The integrated facility at Renukoot houses an alumina refinery and an aluminium smelter, along

with facilities for the production of semi-fabricated products; namely, redraw rods, flat rolled

products and extrusions. The plant is backed by a co-generation power unit and a captive power

plant at Renusagar to ensure the continuous supply of power for smelter and other operations.

A strong presence across the value chain and synergies between operations has given us a

dominant share in the value-added products market. As a step towards expanding the market for

value-added products and services, we have launched various brands in recent years — Everlast

roofing sheets, Freshwrapp kitchen foil and Freshpakk semi-rigid containers.

Copper

Birla Copper, Hindalco‘s copper unit, is located at Dahej in Gujarat, India. The unit has the

unique distinction of being one of the largest single-location copper smelters in the world. The

smelter uses state-of-the-art technology and has a capacity of 500,000 tpa.

Birla Copper also produces precious metals, fertilisers and sulphuric and phosphoric acid. The

unit has captive power plants for continuous power generation and a captive jetty to facilitate

logistics and transportation.

Birla Copper upholds its longstanding reputation for quality copper cathodes and continuous cast

copper rods by assuring its management processes meet the highest standards. It has acquired

certifications such as ISO-9001:2000 (Quality Management Systems), ISO-14001:2004

(Environmental Management System) and OHSAS-18001:2007 (Occupational Health and Safety

Management Systems).

Mines

Hindalco acquired two Australian copper mines, Nifty and Mt. Gordon, in 2003. The Birla Nifty

copper mine consists of an open-pit mine, heap leach pads and a solvent extraction and

electrowinning (SXEW) processing plant, which produces copper cathode.

The Mt. Gordon copper operation consists of an underground mine and a copper concentrate

plant. Until recently, the operation produced copper cathode through the ferric leach process.

In 2004, a copper concentrator was commissioned to provide concentrate for use at Hindalco's

operations in Dahej. During FY2008, Mt. Gordon produced 23,886 tonnes of copper in

cathode/concentrate.

Both Nifty and Mt. Gordon have a long-term life of mine off-take agreement with Hindalco for

supply of copper concentrate to the copper smelter at Dahej.

Alumina Chemicals

Hindalco's captive bauxite mines in Jharkhand, Chhattisgarh, Maharashtra and Orissa, provide

the raw material to our alumina refineries located at Belgaum in Karnataka, Muri in Jharkhand

and Renukoot in Uttar Pradesh, India.

These refineries produce standard alumina, standard hydrate and specialty aluminas and

hydrates. Our chemicals serve a wide range of customers around the world with our standard and

specialty aluminas and hydrates, offering a wide spectrum of grades to suit diverse applications,

like high grade refractories, ceramics, fire retardant plastics, alum, zeolite and many more.

Today, our customized, tailor-made products serve 37 countries across the world.

The alumina refineries at Belgaum in southern India, Muri in eastern India and Renukoot in

central India, have installed capacities of 350,000 tap, 180,000 tap and 700,000 tap, respectively.

Our specialized aluminas and hydrates emanate from the technological innovations of our R&D

team. The Belgaum R&D Centre is recognized by the Department of Scientific & Industrial

Research (DSIR), Government of India. With over 25 years of experience, the Research and

Development team of expert scientists carries out research in the fields of bauxite process ability

studies of the Bayer process, product development, quality control and application research for

enhanced understanding of the end-usage of specialty chemicals.

ALUMINA CHEMICAL

Normal soda course aluminas

Calcined aluminas are widely used in refractories and in the ceramic industry. Their specific

properties include extreme hardness, refractoriness, high mechanical strength and resistance to

wear abrasion, chemical attack, and corrosion. These are used as feed material for fused alumina,

refractory aggregates, etc.

Coarse alumina grades are white crystalline powders that are predominantly alpha alumina of

high chemical purity and consistent physical properties. These products have excellent grind

ability.

Medium and low soda course aluminas

Medium and low soda course alpha aluminas consist of friable aggregates of crystallites having

easy grind ability and are used in the manufacture of wear-resistant ceramic liners, as well as in

industrial ceramics and electrical insulators.

Medium and low soda fine aluminas

Medium and low soda fine aluminas are predominantly in the alpha phase, with controlled

particle-size distribution. They are widely used in special refractory bricks and shapes, refractory

gunning mixes, wear-resistant ceramic parts, ceramic liners, grinding media, HVDC / HVAC

insulators, etc., when used for high-temperature applications. These low soda grades provide

excellent hot strength to the refractory body.

Normal soda fine aluminas

These are predominantly fine, alpha aluminas of about 5µm with controlled particle-size

distribution. They are widely used in high-alumina refractories, Comcast shapes, grinding media,

high-tension insulators, ceramic liners, etc.

Reactive fine aluminas

These grades are predominantly alpha aluminas having wider particle-size distribution. They

yield a low water demand with very good flow properties when used in low-cement constables,

ULCC and self-flow refractory mixes. They are also recommended for usage in grinding media,

wear resistant ceramic components and liners, owing to their superior packing characteristics.

Reactive aluminas — ultrafine

These reactive alumina grades are white crystalline alpha alumina powders developed for

specialized ceramic and refractory applications. These aluminas are characterized by high

reactivity, low water absorption and controlled particle-size distribution. Typical applications

include low cement and ultra-low cement constables, slide gates and refractory bricks, resistor

cores, new generation ceramics and wear-resistant ceramic parts.

Polishing aluminas

These grades are developed through controlled calcinations and processing in order to obtain

consistent particle hardness, shape and size distribution. They provide a choice of oil absorption

values within the product range. These are recommended for use in solid bars, emulsions and

pastes for metal and stone polishing applications.

Coarse alumina hydrates

Alumina hydrate, which is also termed as aluminium hydroxide and alumina trihydrate, is a

crystalline white powder with the chemical formula Al2O3·3H2O or Al (OH) 3. These hydrates

are available in both moist and dry forms. Coarse alumina hydrates are recommended in the

manufacture of aluminium sulphate (alum), PAC (Poly Aluminium Chloride), zeolite, aluminium

fluoride, glass, etc.

Fine alumina hydrates

These are fine white powders, with average particle size ranging from 5 to 15µm. They are used

as fillers in paper and in SMC / DMCs; they also function as flame retardants in latex, rubbers,

plastics, etc.

MINIRALS

Bauxite

Bauxite is an ore used in the production of alumina. In the mines located in the eastern region,

there are pockets of good quality bauxite that can be used for various purposes in various

industries, such as refractories, steel, polishing and for manufacturing water-treatment chemicals.

The ore is graded as per segment requirement

Laterite

Laterite is an ore with a lower percentage of alumina content that occurs just above the bauxite

layers at the mines in the western region of India. It is used as a raw material by cement

Mindustries as an additive / flux to increase the alumina percentage in the cement composition.

Laterite can be supplied in particle sizes ranging from 50 to 150 mm. The alumina content in the

product is around 36 - 43 per cent.

Novelis Takeover

On February 11, 2007, the company entered into an agreement to acquire the Canadian company

Novelis for US$ 6 billion, making the combined entity the worlds largest rolled- aluminium

producer. On May 15, 2007, the acquisition was completed with Novelis shareholders receiving

$44.93 per outstanding share of common stock.

Hindalco, through it‘s wholly- owned subsidiary AV metals Inc, acquired 75,415,536 common

shares of Novelis, representing 100 percent of the issued and outstanding common shares.

Immediately after closing, AV Metals Inc. transferred the common shares of Novelis to its

wholly-owned subsidiary AV Aluminium Inc.

Result of Novelis Acquisition

The acquisition of Novelis effective 15 May 2007, Hindalco is now a global player with a strong

presence in five continents and with a product portfolio which is a natural hedge against the

volatility of aluminium prices. Novelis has reported net profit of US$ 28 million (under US

GAAP ) for the period 16 May 2007, to 31 March 2008 vis-à-vis a loss of UD$ 265 million

(under US GAAP ) in FY2007. The reported result for the post- acquisition period were

favorably impacted by certain income and expanse item , Aggregating to a net USD 21million on

a pre-Tax basis , associated with fair value adjustments recorded at the date of acquisition.

The improved result came on the back of strong operational focused and increase in capacities in

fast growing markets of Asia and South America. Total shipment increased from 3113kt to

3150kt. Novelis countered inflation and challenging market condition in certain geographies with

portfolio of optimization, price increases working capital improvement and reduction in

corporate cost. The company‘s exposure to contracts with metal price ceiling reduced during the

year. The benefits can be seen in increased revenues and stronger cash flows.

Milestones

1958

Incorporetion of Hindalco Industries Limited .

1962

Commencement of production of renukoot (Uttar Pradesh , India ) with an intial capacity of

20,000 mtpa of aluminium metal and 40,000 mtpa of alumina .

1965

Downstream capacities commissioned ( rolling and extrusion mills at Rnukoot )

1967

Gommissionning of Renusagar power plant – a strategic and farsighted more .

1991

Beginning of major expansion programme.

1994

A huge expansion , modernisation and diversification programme takenoff

1998

Mr. Kumar Mangalam Birla takes over as chairman of Indal Board .

1999

Aluminium alloy wheels production commenced at Silvassa Brownfield expansion of metal

capacity of Renukoot to 242,000 tpa .

2000

Acquisition of controlling stake in Indian aluminium company limited (Indal) with 74.6 percent

equilty holding .

2001

Hindalco enters ‗the Asia Top 25‘ list of the CEO Asia Annual Report Survey the only Indian

company in 2001.

2002

Brownfield expansion at an outlay of Rs 1,000 crore-ninth potline commissioned .

Buyback of equity shares to generate shareholder value and utilise surplus cash.

Major corporate restructuring to create a non –ferrous metals powerhouse .

Amalgametion of Indo Gulf Corporetion Ltd‘s copper business Birla copper , with Hindalco with

effect from , April 2002 .

Open offer of aquire additional equity to make Indal a Wholly – owned subsidiary .

2003

Hindalco acquires nifty copper mine through Aditya Birla Minerals Ltd .(ABML ,Formerly ,

Birla minerals Resources Pty Ltd .)

ABML acquires the Mt. Goadon Copper mines in november 2003.

Hindalco becomes majority stakeholder in Utakal Alumina ,a joint venture with alcon.

The amalgametion og Indo Gulf‘s copper business with Hindalco become effective from 12

february 2003.

Equity stake in Indal increased to 96.5 pre cent through an open offer .

Divestment of 8.6 per cent holding in Indo Gulf fertilisers Ltd.

Brownfield expansion of aluminium smelter at renukoot to 345,000 tpa .

2004

Schem of arrangement announced to merge Indal With Hindalco Copper smelter expantion to

250,000 tpa.

2005

All business of Indal expect for the kollur foil palnt in Andhra Pradesh merged with Hindalco

Industries Limited .

In Speptember 2005 the company split its shares in a ratio of 10:1 to enhance liquidity and

encourage participation from retail investers .

Aditya Birla Group to set up a world-class aluminium perfect in orissa at a project cost of about

Rs.11,000 crore.

MoUS signed with state governments of Orissa and Jharkhand for setting up greenfield alumina

refining ,smelting and power plants commissioned copper 3rd

expention taking total capacity to

500,000 tpa.

2006

Joint venture with Almix USA for manufacture of hight strength aluminium allays.

Signed on MOU with the government of Madhya Pradesh for green field aluminium amelter in

siddhi.

Hindalco completes the largest right issues in the history of indian capital market with a total size

of Rs. 22,266 million.

Hindalco announce 10:1 stock split .Each shares with face value of Rs 10 split into 10 shares of

Rs 1 each.

In may 2006, enters into a joint venture with essar power (M.P.) Ltd to overlop and operate coal

mines to mohan , Madhya preadesh .

The JV will supply coal to the proposed aluminium smelter and complex in Madhya preadesh.

In may 2006 the company‘s copper mining subsidiary ,Aditya Birla Minirals Limited ( Formerly

Birla Miniral Resources Pty Ltd .) come out with an equity offering and subsequent listing on the

Australian stock exchange (ASX).

In March 2006 , acquired an aluminium rolling mill and wire rods facility situated at Mouda

(Nagpur) from Asset Reconstruction company (India )Ltd (ARCIL), belonging to Rennor

Aluminium company Ltd.

2007

In May 2007 , Novelis become a Hindalco subsidiary with the completion of the acquisition

process . The transaction make hindalco the words largest aluminium rolling company and one

of the biggest producers of primary aluminium in Asia.

Acquisition of Alcon‘s 45 percent equity stake in the Utkal Alumina project , makes Hindalco

the 100 % project ownwr .

2008

Alumina expansion of Muri.

Management Team

Hindalco‘s management team consists of experienced individuals with strong credentials

Board of Directors

Mr. Kumar Mangalam Birla, Chairman

Mrs. Rajashree Birla

Mr. C. M. Maniar

Mr. E. B. Desai

Mr. S. S. Kothari

Mr. M. M. Bhagat

Mr. K. N. Bhandari

Mr. A. K. Agarwala

Mr. N. J. Jhaveri

Mr. Debu Bhattacharya, Managing Director

Group Executive President and Chief Financial Officer

Mr. S. Talukdar

Company Secretary

Mr. Anil Malik

Chief People Officer

Mr. Vineet Kaul

Business / Unit Head

Mr. Dilip Gaur, Group Executive President, Copper

Mr. Shashi K. Maudgal, Chief Marketing Officer, Aluminium

Mr. Satish M Bhatia, President, Foil and Wheel

Mr. R. S. Dhulkhed, Senior President, Operations

Mr. Vinod Sood, Joint President, Chemicals & Intl. Trade

Mr. D. K. Kohly, Chief Officer Operations, Renukoot Unit

Aditya Aluminium

Mr. S. N. Bontha, CEO

Utkal Alumina International Ltd

Mr. Suryakant Mishra, CEO

Novelis Inc.

Mr. Philip Martens, President and Chief Operating Officer

Aditya Birla Minerals Limited

Mr. D. Bhattacharya, Chairman

Mr. Sunil Kulwal, CEO and MD

Mr. Peter Torre, Company Secretary

key products and brands Locations Capacities Country

Hindalco Industries Ltd.

Alumina Chemicals Renukoot (Uttar Pradesh),

Muri (Jharkhand), Belgaum

(Karnataka)

1,160,000 tpa India

Primary Aluminium Renukoot, Hirakud (Orissa),

*Taloja

489,000 tpa

Extrusions Renukoot, Alupuram 27,700 tpa

Rolled products Belur(West Bengal),

Taloja(Maharashtra), Renukoot,

Mauda(Maharashtra)

200,000 tpa

Wire rods Renukoot, Alupuram(Kerala) 64,400 tpa

Aluminium foil Silvassa (Dadra & Nagar Haveli),

Kalwa(Maharashtra)

11,000 tpa

Aluminium Wheels

Silvassa (Dadra & Nagar Haveli)

300,000 pcs

*For Taloja recycling plant

Indal (subsidiary of Hindalco)

Foil Rolling Kollur (Andhra Pradesh) 4,000 tpa

key products and brands Locations Capacities Country

Birla Copper (Hindalco Industries Ltd.)

copper cathodes Dahej (Gujarat) 500,000 tpa India

continuous cast copper rods 97,200 tpa

Sulphuric acid 1,670,000 tpa

phosphoric acid 180,000 tpa

gold (Birla Gold) 15 mt

silver (Birla Silver) 150 mt

DAP and complexes (Birla

Balwan)

400,000 tpa

Hindalco Industries Ltd. (Aditya Birla Minerals Resources Pty. Ltd.)

copper cathodes Nifty mines 25,000 tpa Australia

copper in concentrate Mt. Gordon mines 40,000 tpa Australia

Power Mt. Gordon mines 28mw Australia

HINDALCO PRODUCT RANGE

PRIMARY ALUMINIUM

Ingots

Hindalco produces high-purity ingots through smelting. Alloy

ingots of various grades are also produced and mainly used for the

production of castings in the auto industry and in electrical

applications. Both these products are re-melted and further

processed into a large number of products for various downstream

applications.

Hindalco metal is accepted under the high-grade aluminium

contract on the London Metal Exchange (LME) as a registered

brand.

Wire rods

Hindalco manufactures wire rods in a continuous casting and

rolling process. Electrical conductor (EC) wire rods are used for

the production of cables and ACSR and AAC conductors. Alloy

wire rods are used to produce AAAC conductors.

Billets

Hindalco's aluminium billets are produced by a state-of-the-art

Wagstaff casting process using Airship technology. These are

top-quality billets with a smooth finish. They are used mainly to

produce extrusions and forgings.

EXTRUSIONS PRODUCT

A leading player in the extrusions industry in India, Hindalco offers a wide range of alloys,

including hard alloys and some special alloys for the defense and space sectors. Our extrusions

capacity stands at 46,000 tap.

We have two extrusion plants in India, one in Renukoot, Uttar Pradesh, and the other in

Alupuram, Kerala. Both plants have well-established manufacturing processes and QA systems

honed over five decades of experience.

Our extrusions are manufactured from high-quality billets made out of virgin in-house metal and

offer the widest range of shapes and alloys.

Hindalco Extrusions is a leading brand for a wide spectrum of industries, including architectural,

electrical, industrial, transport, and defense and consumer durables industries.

We export extrusions primarily to the US, Canada, Germany, the UK, France, the Netherlands,

South Africa, UAE, Singapore, Malaysia, Sri Lanka and Bangladesh.

Quality accreditations

ISO 9001:2000 Quality Management System

ISO 14001 Environment Management System

OHSAS 18001:1999 Occupational Health and Safety Assessment Series

EXTRUSIONS PRODUCT RANGE

Section weight range

Standards 0.058 kg/m to 117 kg/m

Other profiles 0.08 kg/m to 100 kg/m

Alloys

6005, 6060, 6061, 6063, 6066, 6082, 6101, 6351

1050, 1060, 1070, 2014, 2017, 2014

5052, 5083, 5086, 7018, 7039, 7075

3003, 4043, 4047

plus customized alloys for special applications

Length range

94 mm to 13,500 mm

Rods -from 6.35mm to 289mm diameter

Flats -from 8.00mm to 330mm width

Squares -from 6.35mm to 206mm

Equal leg angles -from 12.00mm to 153mm

Channels -from 6.00mm to 260mm width

Various applications of extrusions

Round tubes -from 9.50mm to 225mm O. D.

Rectangular tubes -from 20mm to 165mm width

Square tubes -from 12.70mm to 127mm

Rail coach windows

Solenoid valves and actuator

Expanded grills

Matt ground surface

Suitcases

Motor bodies

ROLLED PRODUCT

Hindalco has become the world's largest aluminium rolling company with its acquisition of

Novelis, the global leader in value-added high-end aluminium flat rolled products and aluminium

can recycling. The combined volume of sales of flat rolled products in the world market is about

3 million tones, and the market share is more than 20 per cent. Superior quality, delivery and

customized service capabilities have helped us in growing market share globally.

We are India's largest manufacturer of the entire range of flat rolled products. Our aluminium

sheet is produced from our own cast slabs or continuous cast coils, rolled down to customized

thickness, gauge and tolerances.

We enjoy nearly 60 per cent of the market share, and our rolled products are widely used in

various segments such as packaging, transportation, building and construction, electrical, defense

and general engineering applications.

Our commitment to quality and service, along with extensive infrastructure, has made us a prime

source for best-selling brands. Continuous improvements in manufacturing processes, practices

and systems ensure that customers' needs and expectations are fully met.

We ensure efficiency and product quality by using state-of-the-art equipment and a strong

research and development setup, supported by dedicated and motivated employees and the

Oracle ERP system. Wagstaff Air Slip™ slab casting technology is used to guarantee consistent

quality and surface finish of stock feed, which in turn ensures quality finished products.

Hindalco's brand, Everlast Aluminium Roofing Sheets offers an ideal solution for all roofing

and cladding needs that translate into durable, faster and economical constructions. We also offer

color-coated and tiled roofing profiles.

Rolled products applications

Al-clad sheets / coils

Cablewrap stock

Automobile radiators

Inter-coolers

Air conditioners

Telecom cables

Closure stock

Cold rolled sheets

Flooring sheets / treads plates

Pilfer-proof caps

Vial seals

Cream containers and caps

Defense

Industrial engineering

Transport — road, rail, air,

marine

Building and construction

Fan blades

Electrical engineering

Flooring for buses, trucks and rail coaches

Floors for loading bays, kick plates, stair treads and catwalks

Lamp cap stock

Pattern sheets

Plates

GLS lamps and tube lights

Decorative applications like interior panelling for trucks, cabins, etc

Electrical busbars and ducting , Tanks

Ships, boats (corrosion-resistant and weldable plates)

Defence and industrial uses (strong alloy plates), Aircrafts

Building sheets

Circles

Cladding for roofs and walls, Industrial buildings, warehouses, aircraft

hangers ,Indoor and outdoor stadiums, Insulation and protection of fuel

storage tanks and industrial boilers, Wall panels for high-rise buildings,

Residential roofing, Roof-on-roof roofing, Exhibition pavilions, Poultry

farms, False ceilings.

Pressure cookers, non-stick cookware and hard anodised cookwar

Milk cans

Medical cylinders

Cold rolled coils

Fin stock

Foil stock

Air conditioners, Car radiators, Automobile heat exchangers

Pharma / confectioneries / cigarette foils, Foils, Tetrapacks

Bus cabins and bodies, Insulation, Cladding in buildings, aluminium

composite panels, false ceilings and panelling (plain or color-coated coils),

Electrical busbar ducting, flexibles, transformer strips, z etc,

Litho stock

Printed Circuit Boards (PCB) entry sheets

Spiral fin stock

Offset printing plates

Electronic circuit boards

Industrial heat exchangers

FOIL AND PACKAGING

Delivering 'never-before-tried' solutions to customers in India and across the globe, Hindalco has

the distinction of being India's premier supplier of foil and foil laminates — plain, lacquered and

printed.

Our foil and packaging division operates out of three modern, well-equipped plants located at

Kalwa in Maharashtra, Silvassa in Dadra and Nagar Haveli and Kollur in Andhra Pradesh, India.

These well-equipped foil rolling and converting facilities provide a veritable 'one-stop-shop' for

packaging solutions. The plants also employ high-end technology and professional expertise to

develop visually appealing and functionally useful packaging.

The Kalwa Foil Plant's advanced ERP-based bar code-operated material tracking system is the

first of its kind in the packaging industry, ensuring full traceability from input to final product.

An impressive range of foil rolling and converting equipment is backed by strong QC systems.

Adherence to the company's standard operating practices ensures that the final product conforms

to the committed specifications. Our complete backward integration, right down to the raw

material stage from bauxite ore to primary metal, guarantees full control over the quality of the

final foil output.

With over four decades of experience and expertise, we enjoy a domestic market share of more

than 40 per cent in the foil and packaging business. Fostering this incredible growth is the

combined effort of our plants, competently operated by a young and energetic workforce and a

strong technical team.

We offer packaging solutions to well-known brands in the pharmaceuticals, healthcare, dairy,

confectionery, processed foods, personal products, and tobacco industries and also serve the

HVAC (heat, ventilation and air conditioning) segments with radiator and AC finstock. Some of

our clients are — GlaxoSmithKline, Aventis, Merck, Pfizer, Johnson & Johnson, Nestle,

Cadbury, Amul, Britannia, Hindustan Lever, Perfetti Van Melle, ITC, Golden Tobacco, Godfrey

Philips, LG, Hitachi and Voltas.

Our house foil brands include Superwrap, Freshwrapp and Freshpakk semi-rigid containers,

which are convenient and popular with consumers.

Applications of aluminium foil and packaging

Pharmaceuticals

Strip packing

25/30/40-micron thick, soft foil either laminated to low density polyethylene or

coated with heat seal laquer (HSL) for sealing as per customer need.

Blister packing

20/25/30-micron thick, hard foil coated with heat seal laquer of varied

grammages. Compatible with PVC.

Alu Alu Blister

45-micron foil, laminated on one side to 25 micron OPA and 60 micron PVC

film on the other side to meet the fast emerging Alu alum packaging needs.

Hindalco offers a maximum depth of 9mm.

Dairy

ORS Pouch

7/9/12-micron thick, soft foil laminated with paper, films like polyester (PET),

biaxially oriented polypropylene (BOPP), polyethylene (poly) and their

combinations. Chiefly used for pouches and sachets. Offered in both surface

and reverse printing.

Closure caps

Rolled to very fine tolerances for more closures per tone of stock.

Closure caps have high formability, strength, low earring and

printable surfaces. Widely used for pilfer-proof bottle caps and vial

seals. Offered in both coated and bare form.

Lidding foil

30/38/40-micron thick, soft foil coated with heat seal laquers (HSL), compatible

with PS and PP containers. Used for cheese spreads, yoghurts and mineral

water.

House foil and semi rigid containers

Processed food and beverages

House foil and semi rigid containers

Household foil is available in a range from 10 micron upwards. Widths can vary

as per market requirements. Semi rigid containers are available in a range of

sizes and shapes.

Confectionery

9/12-micron thick, soft foil with printing on one side and heat seal laquer (HSL)

coating or polythene lamination on the other. Also offered as a laminate of 9-

micron foil with paper and wax.

Biscuit and bubble gum wrap

9-micron thick, soft foil with printing on foil surface, laminated to paper and

further coated with wax. Also 7-micron foil printing on foil surface, laminated

to paper and further coated with wax.

Cigarette foil

Personal products

Ice-cream cone labels- 7-micron foil with printing on foil surface and poly

laminated to paper

.

Cigarette foil

Cigarette foil for inner packing of cigarettes is offered in 7-micron thick soft foil

laminated to paper. Foil can be silver or gold lacquered in matte of bright finish

as per customer requirements

Lamitude webstock- Flexible laminated tubes that utilise 12/20-micron thick

soft aluminium foil laminate. Extensively used in toothpastes, cosmetics,

ointments, cream and foodstuffs.

Surgical

Heating ventilation and air conditioning (HVAC)

Contraceptive Wrap -9-micron thick, soft foil or BOPP and heat seal laquer

(HSL) coated or co-polymer laminated as per customer demand.

Surgicals- The laminates have two components, top — paper, 40 micron foil,

co-polymer structure and bottom — coated, 50 micron foil, co-polymer

structure

Bare and coated finstock

80-160-micron thick foil, soft or partially annealed temper, offered bare as well

as with hydropholic and hydrophobic coatings in blue or gold color. The coated

foil enhances the life of the air conditioner and improves cooling.

Collapsible insulation ducts

Available in reels of various widths and in alloy AA3003 or AA1100 in soft temper as stock for

making collapsible insulation ducts. Ducts can be compressed and transported to installation sites

where they can be expanded to the required length. Used in buildings where air conditioning

requires movement of cooled air from heat exchangers through ducts to vents. Mainly supplied to

quality-sensitive markets.

Auto radiator finstock

80-160-micron thick foil, soft or in partially annealed temper, offered bare as

well as with hydropholic and hydrophobic coatings in blue or gold color. The

coated foil enhances the life of the radiator and improves cooling.

Hindalco announces consolidated and standalone audited financial results for the year

ended 31 March 2009

Consolidated turnover Rs. 65,625 crore USD 14.3

billion

Operating PBIDTA* Rs. 6,046 crore USD 1.3

billion

Proposed dividend 135 per cent

Hindalco Industries Ltd., the flagship company of the Aditya Birla Group, today announced its

consolidated and standalone audited financial results for the year ended 31 March 2009.

Hindalco‘s performance has been adversely affected by the global economic environment.

Financial highlights

(In Rs. crore)

Audited standalone Audited consolidated

Year ended Year ended

31 March 09 31 March 08 31 March 09 31 March 08

Net sales and operating revenues 18,219.7 19,201.0 65,625.2 60,012.8

Other income 636.7 492.9 687.8 656.0

PBIDTA 3,672.5 3,894.1 3,665.2 7,291.1

Depreciation and impairment 645.3 587.8 3,037.8 2,488.3

Interest and finance charges 336.9 280.6 1,232.3 1,849.1

Profit before tax 2,690.3 3,025.6 (604.9) 2,953.7

Provision for taxes 610.9 705.3 (804.6) 1,188.9

Tax adjustment for earlier years

(net) (150.8) (540.7) (149.1) (548.1)

Profit before minority interest 2,230.3 2,860.9 348.8 2,313.0

Minority interest

(171.8) 219.4

Share in profit / (loss) of associates

(net) 35.3 (99.8)

Net profit 2,230.3 2,860.9 485.3 2,193.3

EPS (basic) (in Rs.) 14.82 22.23 3.22 17.04

* Operating PBIDTA is before adjusting non cash unrealised derivative loss of Rs. 2,381 crore at

Novelis

Standalone results

Net sales and revenues at Rs. 18,219 crore in FY 09 are lower as compared to Rs. 19,201.03

crore in FY 08. The steep reduction in copper LME led to a fall in the overall sales revenue;

though the rupee depreciation against the USD partially mitigated the impact. Higher input costs

and an unfavorable market mix (more sale of primary metal and increased exports) impaired

profitability. EBIDTA is lower as compared to FY 09, even after factoring the benefit derived

from higher metal production consequent to the Hirakud brownfield expansion, profit

improvement measures and higher other income.

To reduce the strain on its profitability the company has initiated aggressive cost control

measures and tighter working capital management besides re-aligning its capital expenditure

across the businesses.

The turnover in the aluminium business grew by 6.4 per cent to Rs. 7,603.84 crore vis-à-vis Rs.

7,144.94 crore in the corresponding period in the previous year on the back of the highest ever

metal volumes. However the lower LME and spiraling input costs squeezed the margin, coupled

with the shrinkage in the domestic demand for value added products which have better margins.

This in turn reduced the gains from a weaker rupee.

In the copper business, revenues stood at Rs. 10,624.5 crore lower by 12 per cent vis-à-vis Rs.

12,065 crore in FY08 as a result of the 21 per cent lower LME. The profit before interest and tax

also fell by 25 per cent to Rs. 379.14 crore from Rs. 503.36 crore in the last year, mainly due to

37 per cent fall in TcRc and planned annual shut down.

The steep depreciation of the Indian Rupee against the US Dollar affected the copper business by

an estimated Rs. 156.5 crore, as a result of restatement of net foreign currency exposures as on

31 March 2009. For the previous year, this amount was Rs. 41crore. Consequently, the PBIT of

copper business is lower than the previous year by Rs.115.45 crore on this account.

Profit before tax at Rs. 2,690.32 crore in FY 2009 vs. Rs. 3,025.61 crore, 10.4 per cent fall,

reflects superior performance of the company as compared to industry performance in the

backdrop of economic downturn.

The adjustment for earlier year (net) under tax expenses reflects the write back of provision for

tax resulting from a change in estimation of tax liability in progress in tax assessments.

Operational review

Aluminium

Consequent to the Brownfield expansion at Hirakud, metal production of the company was up by

10 per cent. It has crossed the half million mark. With the higher production at Muri from the

Brownfield expansion, alumina production has increased to 12.37 lakh ton. The demand

shrinkage in domestic and global markets resulted in lower production of downstream products.

Production Units Year ended

31 March 2009

Year ended

31 March 2008

Primary metal MT 523,453 477,723

Alumina MT 1,237,284 1,192,709

Wire rods MT 74,968 71,798

Rolled products MT 181,784 215,198

Extruded products MT 35,895 43,315

Foils MT 22,046 27,645

Copper With the bi-annual shutdown in smelter-III, output declined. Copper cathodes production is

lower by 8 per cent. The value added product, CC rod‘s production increased by 4 per cent over

FY 08. The operations at copper smelter–II continue to be suspended.

Production Units Year ended

31 March 2009

Year ended

31 March 2008

Copper cathodes MT 297,797 323,884

CC rods MT 145,542 139,682

Brownfield expansion projects

Hirakud

The Phase II of the expansion of smelting capacity from 100,000 tpa to 143,000 tpa was

completed on time. Its expansion to 155 ktpa is at an advanced stage and will be completed by

August 2009.The power generation capacity has been raised from 267.5 MW to 367.5 MW. All

the units have been commissioned. The smelter expansion from 155 ktpa to 206.6 ktpa has also

begun and will be commissioned in FY 12. It will use advanced pot technology of 235 KA with

pre-baked anodes and will need an additional 100 MW power plant.

Belgaum

The specials alumina production from Belgaum will be ramped up to 316 ktpa from 138 ktpa. On

completion, this project will catapult Hindalco to one of the largest specials producer in the

world. A cogen power plant (steam and power production) and a railway siding facility etc are

also being taken up as a part of the project; it will reduce the cost of production substantially.

This is expected to be completed by end 2011.

Greenfield projects

Utkal Alumina is an alumina refinery coming up in Raygada, Orissa. The project consists of a

1.5 million tpa refinery, with a 90 MW cogen plant and a 2 million tpa bauxite mining facility.

The construction of the refinery is currently in full swing. All the land required for the project

has been acquired. Around 70 per cent of the project cost has already been committed. The

mechanical completion of the plant is expected by January 2011 and the first alumina is slated

for production around July 2011.

The Mahan Aluminium project coming up in Bargwan, MP, will have a smelter capacity of

359,000 tpa and a captive 900 MW power plant (6 x 150 MW). The land acquisition for the

project will be completed in Q2 FY 10. All the major clearances have been obtained. Major

orders have been placed for both the smelter and the power plant. BHEL has been given the

order for the boiler – turbine – generator packages for the power plant. Orders for cranes,

cathode blocks, rectifiers and substation for the smelter have also been placed. Nearly 40 per

cent of the total project cost has been committed so far. The first metal from the smelter would

roll out by July 2011.

Aditya Aluminium, is an integrated aluminium project coming up in Orissa, with a 1.5 million

tpa alumina refinery, 359,000 tpa aluminium smelter, and 900 MW captive power plant. A large

portion of the land required for the project has been acquired. Forest clearance for the rest of the

land is under progress. Key clearances have been obtained. As is in the case of Mahan, a number

of major orders have been placed for the smelter and power plant. The first metal from the

smelter is slated for October 2011. The refinery should be mechanically completed by June 2013.

Jharkhand Aluminium is an aluminum smelter coming up in Sonahatu, Jharkhand, with a

capacity of 359,000 tpa . A 900 MW captive power plant will also be a part of the project. The

plant will be located in Sonahatu which is 20 kilometers from Muri and 55 kilometers from

Ranchi. The land acquisition process has already started. The government of Jharkhand has

given the water allocation clearance for 55 mcm of water from the Subernrekha basin. The tubed

coal mine has been allotted jointly with Tata Power. The first metal from the smelter is expected

by June 2013.

Consolidated results

The consolidated revenue for the year is at Rs. 65,625 crore and PBIT at Rs. 627 crore.

The result includes a non-cash unrealised derivative loss of around Rs. 2,381 crore (USD 519

million) which was only Rs. 12 crore (USD 3 million) last year. These derivatives are used to

hedge exposures to aluminum, primarily related to customer fixed-price contracts, other

commodities and currency. The magnitude of the mark-to-market loss on the company‘s

derivative portfolio primarily reflects the dramatic downward movement in the LME price of

aluminum.

Aluminium business revenue is Rs. 54,306.42 crore and PBIT at Rs. (425.31) crore, while the

copper stood at Rs.10,760.26 crore with a PBIT of Rs. 374.11 crore.

Novelis The liquidity position of Novelis has remained stable despite challenging market conditions. The

company‘s actions taken to adjust metal intake, reduce production and decrease fixed costs will

deliver an estimated $140 million annualised future savings.

The comparative shipments for the twelve months ended 31 March 2009, and for the combined

twelve months ended 31 March 2008 are as indicated: Twelve months ended

Twelve months ended

31 March

16 May 2007

through 31 March

1 April 2007

through 15 May

2009 2008 2008 2007

Shipments (kt): Successor Combined Successor Predecessor

Rolled products 2,770 2,988 2,640 348

Ingot products 173 162 147 15

Total shipments 2,943 3,150 2,787 363

The integration activities are proceeding smoothly. The acquisition is expected to significantly

enhance shareholder value In the near future.

Business Reconstruction Reserve

The company has formulated a scheme of financial restructuring to deal with various costs

associated with its organic and inorganic growth plan. The recent economic downturn

particularly in the commodity space is also expected to result in impairment / diminution in value

of certain assets/ investments. Accordingly, as per a Scheme of Arrangement under sections 391

to 394 of the Companies Act 1956 ("the Scheme") between the company and its equity

shareholders approved by the High Court of judicature of Bombay, a separate reserve account

titled as Business Reconstruction Reserve ("BRR") has been created by transferring balance

standing to the credit of Securities Premium Account of the company for adjustment of certain

expenses as prescribed therein. Accordingly, Rs. 8,647 crore has been transferred to BRR and

Rs. 67 crore in standalone accounts and Rs. 4616 crore in consolidated accounts have been

adjusted against the same as per the Scheme during the year.

Dividend

The directors have recommended a dividend of Rs. 1.35 per share. ( Rs. 1.85 per share). This

will be paid in line with the applicable regulations. The total outgo including the tax on dividend

would be Rs. 268.60 crore (Rs. 265.5 crore)

Industry outlook

Aluminium

Global primary consumption showed a 3 per cent increase in H1 FY 09 vis-à-vis H1 FY 08 but

due to the recession and slowdown, year FY 09 finally ended on a negative growth rate of 7 per

cent as compared to FY 08. China which has been a strong driver with double digit growth in the

last decade also suffered a negative growth. The production was maintained at FY 08 levels,

creating a demand-supply gap which:

Led to rise of LME inventory to 3.5 million tons i.e. more than 3 times the April 2008 levels

Slide in LME prices from $3000 /t in June 2008 to $1254/t in February 2009

Announcement of more than 5.5 million tons cutbacks of high costs smelters in North America,

Europe, South America and China The demand seems to have hit the bottom and revival of the

industry is expected by end of Q1 FY 10.

Copper

With the global economy on the road to recovery, driven by the expected increase in Chinese

demand by 10 per cent, the lack of secondary material and delay in mining projects, the copper

prices would be between $3000-6000 per MT.

The benchmark TCRC for CY 2009 witnessed an increase of 66 per cent over CY 2008.

However, the gain on TCRC was largely offset due to reduced by product credits, mainly on

account of sharp decline in sulfuric acid prices.

Overall, the copper concentrate market is expected to remain in deficit during CY 10 due to an

increase in smelting capacity in China and lack of addition of major mining projects. This would

put pressure on spot TCRC.

Further the demand growth in the Indian copper consumption would be robust particularly in the

power cables, transformers and other related segments and also due to the thrust on energy

efficiency and infrastructure development.

Company outlook

The business continues to be impacted by the overall slow down in the global economy and the

unprecedented fall in commodity prices. The short-term outlook seems negative. However the

long term market fundamentals remain strong.

Aggressive cost control measures, stretched operational efficiency, enhanced asset productivity

and containment of input cost along with effective working capital management to maximize

free cash flow, will continue to be the major growth drivers.

With the intense focus on operational efficiency and synergy between businesses, the company

intends to grow in current and new markets in terms of geography and product portfolio.

Competitiors

National Aluminium Company (NALCO)

NALCO is one of the largest integrated aluminium producers in Asia. The Government

of India (GoI) holds 87.15 per cent stake in the company. The company has an alumina refinery

at Damanjodi and a smelter at Angul in Orissa. Currently, NALCO has undertaken a capex

programme of Rs.41 billion to increase aluminium production capacity to 460,000 tonnes from

345,000 tonnes, and also to enhance the capacity of its mining, refining and power generation

operations.

Sterlite Industries Ltd (Vedanta)

Sterlite Industries‘ Aluminium business comprises of two operating companies, BALCO

and MALCO. BALCO is a partially integrated aluminium producer with two bauxite mines, one

refinery, two smelters, a fabrication facility and two captive power plants at Korba in central

India. MALCO is a fully integrated producer with two bauxite mines, a captive power plant and

refining, smelting and fabrication facilities at Mettur in southern India. The primary products are

aluminium ingots, rods and rolled products.

The smelters at BALCO and MALCO produced 380,000 tonnes in FY 2007, marginally

higher than the rated capacity. The parent company Vedanta is coming up with a 5 lakh ton

smelter in Jharsuda, Orissa. The project is in advance state and is expected to be operational by

the year 2009.

HINDALCO39%

Sterlite Industries32%

NALCO29%

Market Share

THE SWOT ANALYSIS OF HIL.

STRENGTH

Global brand image.

Cost effective producer.

Sound financial position.

A high degree quality consciousness is the core competence of the company, ISO 9001 and

ISO 14001 have added more prestige to the company.

Integrated production facility at Renusagar power plant.

Company has a well-established distribution network, covering a geographically wide and

scattered market.

A number of Brownfield & Greenfield projects.

Industrial peace as, there has been no major strike in last 22 year.

A well focused human resources development.

Serve maximum customer satisfaction.

WEAKNESS

Present production capacity is not adequate to meet the rising high demand.

Technology is not upgraded to mark as compare to global giants in aluminium industry.

OPPORTUNITY

R & D collabratation with universities and another research organization.

More emphasis on downstream production of value added products.

Recycling should be adopted as routine production.

Raising more finance from marketing for more acquisition and merger for consolidating

position in the global market.

Aluminium, continuous to be strong with a growth in transportation sector 16%,

construction15%, passenger car 25%, two wheeler segments 14% respectively during FY07.

THREATS

Strong domestic and global competitors, such as TATA, POSCO, MITTLE, ESSAR .

Innovative revolution in plastic and steel industry.

Reduce in Exide duty.

Fall in price of Al. In neighbor country.