Report

INDEX

Sr no Topic Page no1 Introduction to Hindalco 22 Vision, Mission and Values 53 Quality Accreditations 64 Key Business highlights 75 Location of Manufacturing Facilities 86 Product Details and Process Details 207 Technology Initiatives 338 Energy Conservation 369 Supply chain management & Logistics 4210 Financials of Hindalco 5011 Benchmarking with competitors 5412 Corporate Social Responsibility Initiatives 5713 Conclusion 6014 Bibliography 61

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Introduction to Hindalco

An industry leader in aluminium and copper

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 the world’s largest custom smelter at a single location.

Established in 1958, we commissioned our aluminium facility at Renukoot in eastern Uttar Pradesh, India in 1962. Later acquisitions and mergers, with Indal, Birla Copper and the Nifty and Mt. Gordon copper mines in Australia, strengthened our position in value-added alumina, aluminium and copper products.

The acquisition of Novelis Inc. in 2007 positioned us among the top five aluminium majors worldwide and the largest vertically integrated aluminium company in India. Today we are a metals powerhouse with high-end rolling capabilities and a global footprint in 12 countries. Our consolidated turnover of USD 13 billion (60,000 crore) places us in the Fortune 500 league.

Hindalco's businesses — Creating superior valueHindalco is one of the leading producers of aluminium and copper. Our aluminium units across

the globe encompass the entire gamut of operations, from bauxite mining, alumina refining and

aluminium smelting to downstream rolling, extrusions, foils, along with captive power plants and

coal mines.

Our copper unit, Birla Copper, produces copper cathodes, continuous cast copper rods and other

by-products, such as gold, silver and DAP fertilisers. 

Our units are ISO 9001:2000, ISO 14001:2004 and OHSAS 18001 certified. Several units have

gone a step further with an integrated management system (IMS), combining ISO 9001, ISO

14001 and OHSAS 18001 into one business excellence model. We have been accorded the Star

Trading House status in India. Hindalco's aluminium metal is accepted for delivery under the

High Grade Aluminium Contract on the London Metal Exchange (LME). Our copper quality

standards are also internationally recognized and registered on the LME with Grade A

accreditation. 

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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 742 MW 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 the largest single-

location copper smelter 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). 

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Mines 

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

copper mine consists of an underground 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

FY2009, Mt. Gordon produced 17,815 tonnes of copper in

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.

Cornerstones of growth 

Our well-crafted growth and integration hinges on the three cornerstones of cost

competitiveness, quality and global reach. We are also committed to the triple bottom line

accountability of economic, environment and social factors. Care for the community around our

operating units is best exemplified by our deep-rooted social commitment.

VISION, MISSION AND VALUES

Our Vision:

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To be a premium metals major, global in size and reach, excelling in everything we do and creating value for its stakeholders.

Our 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

Our Values:

Integrity- Honesty in every action.

Commitment- On the foundation of integrity, doing whatever it takes to deliver, as

promised.

Passion- Missionary zeal arising out of an emotional engagement with work.

Seamlessness- Thinking and working together across functional silos, hierarchy levels,

businesses and geographies.

Speed- Responding to stakeholders with a sense of urgency.

Quality accreditations

Alumina refineries at Muri and Belgaum and mines in western and eastern India.

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ISO 9001:2000 quality certification. ISO 14001 environmental certification. OHSAS 18001:1999 certification for occupational health and safety assessment systems.

OHSAS 18001:1999 Occupational Health and Safety Assessment Series.

Bauxite mines in the western and eastern regions

ISO 14001 environmental certification

OHSAS 18001 certification

Belgaum R&D centre

ISO 9001:2000 quality certification

Key Business highlights 2009-2010

Total aluminium rolled production increased by 34%

Total copper production increased by 22%

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Total aluminium production increased by 5%

Revenues increased by 8% in 2010 as compared to 2009

Earnings before interest tax and depreciation increased by 23% from the previous

year

The company has spent aroung Rs 3600 crore on new projects which has been part

financed by equity

A project is underway for transfer of all key equipments for flat rolled products, from

the Novelis plant at Rogerstone, UK to Hirakud. This will enable us to produce can

body stock for local and export market.

Increase in demand mainly due to rise in building and construction demand

Improvement in prices of copper due to global recovery

High operating costs due to high inventory levels, strong appreciation in Indian rupee,

high cost of purchasing coal.

Location of Manufacturing Facilities

Locations In India

1. Renukoot

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Renukoot plant was commissioned in 1962, with one potline and a smelter of 20,000 tpa

capacity. Over the years the plant has increased its capacity through various brownfield

expansions and asset sweating measures.

Today Hindalco, at Renukoot, 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.

In 1967 Hindalco established a captive power plant at Renusagar, the first captive power plant

(CPP) for aluminium industry in India. This along with a co-generation power unit ensures

continuous supply of power for the smelter and other operations.

Renukoot has earned the Integrated Management System (IMS) certification combining quality,

environment and occupational health and safety into one business excellence model.

The sprawling 1056 acre Renukoot complex located near the Rihand Dam, 160 kms from the city

of Varanasi, includes beautifully landscaped gardens with residential colony cum mini township

for management and staff members, a full-fledged hospital for employees and the community

around along with schools, clubhouses, banks sports, cultural facilities, supermarkets and the

Renukeshwar Mahadev Temple.

As a responsible corporate citizen Hindalco Renukoot’s Community Development Cell plays a

leading and exemplary role in social projects on health care, women’s empowerment, education,

sustainable livelihood schemes and espouse social causes such as widow re-marriage and dowry-

less marriages. 

Hindalco Renukoot's CSR cell has taken up various innovative rural development projects in 385

neighbouring villages around its operating sites in the states of Uttar Pradesh, Jharkhand and

Chhattisgarh. These social projects are carried out under the aegis of Aditya Birla Center for

Community Initiatives and Rural Development spearheaded by Mrs. Rajashree Birla.

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A dedicated and highly enthused team of around 1285 managers at Renukoot and Renusagar are

engaged in challenging and enriching jobs. The unit has been a recipient of several national and

international awards in quality, environment management, energy conservation, CSR, among

others.

2. Alupuram

Hindalco Alupuram Works is situated in the Ernakulam district of Kerala, India's southern-

most state. The lush green scenic beauty of this state has given it the reputation of being “God’s

own country” and it was here that the country’s first aluminium ingot was produced at the

Alupuram smelter in 1943.

The smelter has since been shut down but the Alupuram Extrusions unit, set up in 1955,

currently operates at a capacity of 8,000 tonnes per annum. The plant is equipped with two

extrusion presses, solutionising furnaces and heat treatment facility. It also has a state-of-the art

packing facility.

Its library of dies has the widest range of shapes and alloys, offering customers — architectural

profiles, geometrical shapes, busbar tubes / channels / flats, heat sinks and motor / pump body,

bus structurals, railway wagons, bicycle frames, knitting needles, solar panels, furniture,

Maxloader: aluminium truck body, and hard alloys for defence and marine applications.

Alupuram’s 300 odd strong multi-skilled workforce works with total flexibility and is fully

aligned with management goals. Residential colonies for workmen and staff members include

recreational club facilities, where families get together for sports, fitness and cultural activities.

3. Muri

Hindalco’s presence in Jharkhand (through erstwhile Indal) dates back to 1943 when mining

commenced at Bagru in the Lohardga district. Commissioned in 1948, the Muri alumina plant

was India’s first alumina refinery. It is located on the banks of the Subarnarekha River in

Chhotamuri village, 60 km from the town of Ranchi.

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The recently expanded Alumina refinery operates at 450,000 tpa capacity, producing standard

and specialty grade alumina and hydrates to serve customers in aluminium, refractories,

ceramics, water treatment, power and plastic industries. 

A management team of 67 people work tirelessly to ensure stringent quality and delivery

standards at competitive costs. A 30 MW coal-based captive power plant provides uninterrupted

power supply to the refinery as well as to the surrounding colony. The expanded plant is

equipped with advanced, and the latest technology available in the field of alumina

manufacturing.

Committed to sustainable development, Hindalco Muri partners the community in social

projects, particularly women’s empowerment, improved agricultural methods for higher crop

yield, income generation along with regular health and educational initiatives.

Muri has a well-built colony consisting of individual quarters for employees, separate bachelor

accommodation for young engineers, a club house and sports facilities and also a health centre.

4. Belur

India’s aluminium story begins with the Belur plant, located in the eastern Indian state of West

Bengal, near the city of Kolkata (Calcutta), on the banks of the Hooghly river. The plant was

set up in 1938 with a small capacity of 2,500 tpa. Today it operates at 45,000 tpa and caters to a

wide range of industries in India and across the globe.

Its cast house, hot and cold rolling mills, annealing furnaces and finishing lines like slitters, roll

former, cut to length, tension leveler (with de-greasing) and circle punching produce quality flat

rolled products such as closure stock for pilfer proof caps, circles for pressure cooker and non-

stick cookware, flooring and patterned sheets, foil stock for packaging, corrugated sheets for

roofing, lamp caps for bulbs, sheets and plates in various alloys, fin stock for air conditioners,

bus bars for electrical conductors, and so on.

Belur has quality and environment certifications and has won state and national awards in

environment, water conservation and safety. 

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As a prominent corporate citizen, Hindalco Belur plays a leading community role through

initiatives in health, adult education and income-generating schemes for the local community

5. Kalwa

Hindalco’s Kalwa foil and packaging plant was commissioned in 1965. The unit is located

around 3 km from Thane town, in the western Indian state of Maharashtra, and is 34 km from

India's commercial capital — Mumbai.

The 6,000 tpa foil plant is equipped with state-of-the-art foil rolling mills that allow foil to be

rolled down to 7 microns with very close tolerances, and high-end converting facilities.

The unit is responsible for creating appropriate packaging solutions for diverse applications and

caters to the flexible packaging needs of various product segments like pharmaceuticals,

processed foods, personal health care, confectionery and others. Kalwa’s product range covers

bare foil, printed foils and printed multiply laminated products. Process control and innovation

form the basis to meet the changing needs of customers.

Its impressive range of equipment includes, two rolling mills of Hunter, three coater-cum-

laminators of Rotoconvert, Hoffman and Kampf makes, an extruder from Sumitomo, twin-head

tandem co-extruder of Egan Davis, two multi-colour printing machines from Cerutti, 7-colour

Rotomec printing machine, Italy, electronic engravers, and 13 slitting machines.

It has to its credit certifications of ISO 9001, ISO 14001 and ISO 18001 from BVQI. The plant

employs 74 management staff, including experts in printing technology. Its colony houses 58

staff quarters with a club for recreational activities.

6. Kollur

The Kollur foil plant is located 35 km from the city of Hyderabad (famous for the Charminar)

in the southern Indian state of Andhra Pradesh. The 23-acre plant was originally acquired from

Annapurna Foils Ltd. by Indal in 2001 and later merged with Hindalco in 2008, consequent to

the acquisition of Indal by Hindalco.

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The 4,000-tpa plant produces a wide array of high-quality foil and foil laminates ranging from

blister foil and poly laminates for pharmaceutical applications and down gauging upto 7-micron

thickness used for flexible packaging applications / confectionery industry.

Addressing the potential demand in the foil and packaging segment, Kollur has invested in the

latest high-end equipment at par with global standards. Its efficient functioning depends on the

1060-mm wide 4-high universal foil cold rolling mill, operating with globally recognised Fata

Hunter Technology of Italy; its foil separator of Midimat, Switzerland, two laminators from

Prandi, Italy for various foil lamination processes and coating of cigarette foil, confectionery

wrap, blister foil, lidding foil and other substrates used in food and packaging applications.

Its poly extruder produces polyethylene grades on foil surface for varied foil structures and the 5-

colour printing machine produces various foil printed designs tailored to meet customer needs. 

Kollur is certified with the Integrated Management System (IMS) covering all three international

standards viz., ISO 9001, ISO 14001 and OHSAS 18001. The Kollur unit has the DMF

registration with US:FDA for blister and strip foil, to enable its pharma customers export to the

US markets. Its 250-strong workforce has the requisite expertise to meet the stringent customer

demands from the pharma, processed foods and cigarette-packing industries it caters to, in terms

of quality and delivery. About 20 per cent of its produce is exported to countries in the Middle

East, Gulf region, Africa, South East Asia and South America.

7. Taloja

The Taloja sheet rolling plant is located in the Raigad district of Maharashtra, in western India,

45 km from the city of Mumbai. Originally commissioned by Indal in 1971, Taloja is a pioneer

in aluminium flat rolled products in India, with current capacity of 50,000 tpa.

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It caters to a wide spectrum of end users, with over 25 per cent of its production reaching out to

customers in 64 countries. It contributes to one fourth of Hindalco’s total rolled products volume

and 20 per cent of its output is made for lithographic applications.

Taloja works in partnership with Hindalco’s global subsidiary Novelis, to meet world-class

standards in quality and hygiene and commands a leadership position in the domestic market for

its specialised product portfolio. It enjoys the highest market share in India for litho sheets,

foilstock, closure stock, auto finstock, lamp caps and aluminium composite panels.

The 62-acre Taloja campus includes a re-melt plant, a hot mill, two cold mills, finishing

equipment and other auxiliary and supporting equipment. The country’s first aluminium scrap

recycling facility was

8. Silvassa

Hindalco’s Silvassa plant covering a land area of 97 acres is located in the Union Territory of

Dadra and Nagar Haveli, 180 km from Mumbai and 21 km from the western Indian coastline of

Daman. The 30,000-tpa aluminium foil and converted products plant set up in technical

collaboration with Reynold’s Metal, USA in 1998 has made significant strides towards increased

value-addition with a rolling capacity of 9 to 100 micron thickness.

As a multi-dimensional performer of international standards, the Silvassa plant in addition to the

standard bare and converted pharma, blister, light and medium gauge and household foil, has a

unique product diversification ranging from coated closure stock in coil and sheet form, and

coated fin stock in different tempers, to bare and coated container foil.

The plant is ISO 9001, ISO 14001 and ISO TS 16949 certified and backed up by in-house testing

facilities with a well trained team and state-of-the-art equipment including five rolling mills —

“5 Stand Tandem Mill', AGC and coolant filters, two foil separators, two rewinders, six

annealing furnaces with inert gas facility , five slitters, a lubricator, fin coating line, wet and dry

bond laminators, a printing line and a blown film line.

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Silvassa plant’s pristine surrounding includes a residential colony for employees, well-equipped

guest house, occupational health centre, play school, recreational facilities for employees and

family members.

The Union Territory of Dadra and Nagar Haveli has about 2100 industrial units and provides

good infrastructural facilities by way of schools, colleges, government hospital, rotary hospital

and is well connected by road / rail.

Silvassa’s key customers in pharmaceutical packaging are Glaxo Smithkline Beecham, Pfizer,

Lupin, Aventis, Aristo, Macleods, Cadila, Torrent among others. The unit exports to over 11

countries across Europe, the Middle East, South Asia, Australia and the Far East.

set up at Taloja in 1996, with current capacity of producing 20,000 tonnes recycled metal from

scrap. The NABL accredited Taloja R&D Centre specialises in R&D and analytical services in

the fields of oils, lubricants and metallurgy. It also provides environmental services and serves as

a technical information centre for semi-fabs.

Hindalco Taloja has a multi-skilled workforce and experienced management team of 500 people.

The Integrated Management System (IMS), accreditation by BVC combines the ISO 9001,

14001 and OHSAS 18001 into a holistic management approach to provide better value to

stakeholders through focused review and improvement across the entire gamut of Taloja’s

operations.

Its 40-acre colony for employees, houses 90 residential quarters, located adjacent to the plant. A

dedicated occupational health centre serves the needs of its employees, while the unit also plays

an active role through health and sustainability initiatives for the surrounding community.

9. Belgaum

The Belgaum unit of Hindalco, located in the southern Indian state of Karnataka, houses an

alumina plant, a world-class research centre for alumina, and a carbon paste and block plant. 

The alumina plant started operating in 1969 with an initial capacity of 75,000 tpa of alumina

hydrate. It currently produces around 350,000 tpa. Since the 1990s the plant has become

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predominantly an export-oriented unit of metallurgical alumina, while producing several grades

of special aluminas and hydrates for non-metallurgical applications, like refractories, ceramics,

polishing, fire retardant plastics, alum, zeolite, etc.

Over the years, the plant has expanded its capacity of speciality products to around 138,000 tpa,

with approximately 120 different grades, serving more than 600 customers across 35 countries.

In addition to providing technical support to the alumina plants of the Aditya Birla Group on the

Bayer process and special products, the research centre has been carrying out projects for

international clients.

The Belgaum unit has earned recognition in the form of national awards in the areas of energy

conservation, R&D excellence, environment, and safety. It also has the Star Trading House

status.

The 1182-acre plant has a large colony for its 752-strong workforce, with a well-equipped

occupational health centre, club / community centre for sports and recreational activities, and an

upper primary school. The unit has adopted seven nearby villages and the CSR initiatives cover

different areas like education, women’s empowerment, sustainable livelihood, health and

infrastructural development.

10. Hirakud

The Hirakud smelter and power complex is located in the state of Orissa, in eastern India, on

the bank of the world’s longest earthen dam – the Hirakud Dam, which is 25.8-km long and

spans the Mahanadi river. It is situated 6 km away from NH-6 connecting Kolkata and Mumbai

and 12 km from the nearest town of Samabalpur. It is 320 km by road from Bhubaneswar, the

capital of the state of Orissa.

The Hirakud smelter, set up by Indal in 1959, was the country’s second aluminium smelter

operating on grid power sourced from the hydro power station of the Hirakud Dam. After facing

severe power scarcity, Hirakud’s captive coal-based power plant came up in 1993. It was the first

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in India to adopt clean coal combustion technology that uses a circulating fluidised bed, which is

considered environmentally friendly.

Today, as a part of Hindalco, the original 10,000-tpa smelter has moved to 143,000 tpa capacity

with ongoing plans for further capacity augmentation. The old HSS smelter technology has given

way to the modern, environment friendly prebake smelter technology. It is the first smelter in

India to have achieved this technological upgrade using the same infrastructure facilities.

Similarly the power plant has been enhanced with three additional units to bring generating

capacity up to 368 MW.

Further access to captive coal blocks at Talabira, approximately 45 km from Hirakud, ensures

optimal backward integration for cost-competitive power to feed the aluminium smelter. Hirakud

has an enviable array of international and national awards for energy conservation, safety and

environment management. 

As an active community player it focuses its CSR initiatives towards health care, education,

women’s empowerment and sustainable livelihood programmes. The unit employs 1,785 people

and has a well equipped colony with club house and recreational facilities.

11.Dahej

Birla Copper, Hindalco’s copper unit, is located at Dahej in the Bharuch district of Gujarat,

India. This is one of the largest single-location copper smelters with integrated port facilities. 

Dahej Harbour and Infrastructure Limited (DHIL) is strategically located at latitude: 21 degrees

42 North and longitute: 72 degrees 31.5 East to cater to the logistics and transporation needs of

its customers.

The copper unit at Dahej comprises copper smelters, backed by a captive power plant, oxygen

plants, by-products plants, utilities and a captive jetty.

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There is also a precious metals recovery plant at Dahej, which produces gold, silver and

selenium.

Locations Overseas

Australia

Aditya Birla Minerals, a subsidiary of Hindalco, is headquartered in Perth, Australia, and has

mining and exploration activities focused at the Nifty copper mine in the Pilbara region,

northwest Australia, and the Mt. Gordon copper mine in northwest Queensland, since 2003. The

company is headed by Mr. Debu Bhattacharya, who is the non-executive chairman. Mr Sanjay

Loyalka is the chief executive officer and managing director.

Aditya Birla Minerals is poised to become the fourth largest producer of copper in Australia with

the commissioning of the Nifty sulphide operation. The production is expected to be 46 kt in FY

2006 and 106 kt in FY 2007. The Nifty sulphide operation,

with an average life of mine head grade of approximately 2.8

per cent copper, is expected to be one of the richest

underground copper operations in the world.

The company has also successfully completed a conversion

project of cathode to concentrate at Mt. Gordon, which now enables the production of copper

concentrate. The copper concentrate is used as a raw material by Hindalco, whose requirements

are expected to grow substantially over the next few years, through a long-term contractual

agreement. Aditya Birla Minerals will continue to benefit from being part of Hindalco and the

Aditya Birla Group. It will have access to substantial international industry knowledge and

networks as well as advisory support on technical, financial, risk management, legal and human

resource aspects.

Aditya Birla Minerals is well positioned for the ongoing delivery of copper products into the

growing Asian construction, electrical and industrial markets. The Asian region accounted for

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around 42 per cent of the world's copper consumption in 2005 and is expected to account for

around 39 per cent of global consumption growth over the next five years.

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Product Details and Process Details

Aluminum Business:

Hindalco is Asia's largest integrated primary producer of aluminium and among the most cost-

efficient producers globally. Our aluminium units across India encompass the entire gamut of

operations, from bauxite mining, alumina refining, aluminium smelting to downstream rolling,

extrusions and recycling.

In India, we enjoy a leadership position in aluminium and

downstream products. Our product range includes rolled

products, extrusions, foils, primary aluminium ingots, billets,

wire rods and aluminium slabs.

Hindalco metal is accepted under the high-grade aluminium

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

brand. We have also been accorded the Star Trading House

status in India.

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 our Renusagar power plant, located about 45 km from Renukoot.

The captive power plant located at Renusagar, Uttar Pradesh, with 10 power-generating units,

has a current generation capacity of 742 MW. Excellent operational standards have ensured a

consistent plant load factor of over 90 per cent.

The integrated complex at Renukoot also houses a co-generation plant with a capacity of 37.5

MW. A new co-generation plant with a capacity of 41 MW has just been commissioned to meet

the requirements of the enhanced post-expansion capacities.

Other facilities include an aluminium smelter at Hirakud (Odisha) with a captive power plant and

coal mine, alumina refineries at Muri (Jharkhand), and Belgaum (Karnataka), and rolling mills at

Belur (West Bengal), and Taloja, Mouda (Maharashtra), foil rolling at Kalwa (Maharashtra) and

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Silvassa (Union Territory of Dadra and Nagar Haveli) and an extrusions plant at Alupuram

(Kerala).

A strong presence across the value chain and synergies in operations has given Hindalco a

dominant share of the domestic value-added products market. In India, the company enjoys a

leadership position in speciality aluminas and hydrates as well as in primary aluminium and

downstream semi-fabricated products.

As a step towards building the market for value-added products and services, we have launched

several brands in recent years, namely, Freshwrapp aluminium foil, Everlast aluminium roofing

sheets, Permashield aluminium waterproofing membrane sheeting, and Al Planet, an exhibition

showcasing aluminium products for the construction industry.

All our units are ISO 9001, 14001 and OHSAS 18001 certified. Furthermore, many of our units

have adopted the Integrated Management System (IMS) certification, reflecting a combined

business excellence model.

Primary Aluminum:

Hindalco is a major player in the primary aluminium market. Our product range includes:

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.

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Billets:

Hindalco's aluminium billets are produced by a state-of-the-art Wagstaff casting process using

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

produce extrusions and forgings.

Aluminum Extrusions

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 defence and space sectors. Our extrusions

capacity stands at 31,000 tpa.

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, defence 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.

Rolled Products

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 tonnes, and the market share is more than 20 per cent. Superior quality, delivery and

customised 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

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

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, defence

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

colour-coated and tiled roofing profiles.

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

23

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.

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.

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

confectionery, processed foods, personal products, 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.

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 speciality aluminas and

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

speciality 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 customised, 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 tpa, 450,000 tpa and 700,000 tpa, respectively.

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

team. The Belgaum R&D Centre is recognised 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 processability

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

enhanced understanding of the end-usage of speciality chemicals.

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Our mechanised bagging and stitching ensure quality packing. Products are shipped in poly-lined

PP/ HDPE bags or polypropylene bags as desired by the customer, and are normally exported in

containers. For large volumes, bulk or break-bulk shipment is made. Bags are palletized, stretch

wrapped, shrink wrapped with each pallet containing around 1 MT of material.

We have a wide network of agents and distributors for better delivery performance and better

communication with customers. Our marketing and technical personnel also provide assistance

in product usage.

The products when properly used do not constitute a risk to health nor are they inflammable or

explosive. MSDS (Material Safety Data Sheet) shall be offered on request.

Copper Business

Hindalco's copper division, with its integrated facility at Dahej in the Bharuch district of Gujarat,

enjoys a leadership position in India. The unit has the unique distinction of being the largest

copper smelter in the world at a single location with a 500,000 tpa capacity with multiple world

class technologies. The facilities comprise copper smelters, captive power plants, utilities and a

captive jetty. The company's copper product range includes copper cathodes and continuous cast

copper rods. Birla Copper also produces precious metals, sulphuric acid, phosphoric acid, di-

ammonium phospate (DAP) and other phosphoric fertilisers, and phospho gypsum.

Copper cathodes

Hindalco's copper cathodes branded as Birla Copper and Birla Copper II are known for high

purity and consistent quality. These are largely used in the manufacture of continuous copper

26

rods for the wire, cable and transformer industries, and copper tubes for consumer durable goods,

such as air conditioning and refrigeration, as also other applications in the form of alloys and

sheets. Copper alloys such as brass, bronze, cupro-nickel, etc., find application in diverse areas

such as defence, mint, construction and the electrical industry.

The Birla Copper laboratory has been accredited by NABL (National Accreditation Board for

Testing and Calibration Laboratories) in accordance with the standard ISO/IEC 17025:1999.

Birla Copper Cathodes are square shaped, with 99.99 per cent copper purity levels, produced

using the Mount ISA electro-refining process. They meet the international quality standards BS

6017 1981 (1989) and u-Cath-1 / ASTM B-115 (1999) and are registered as LME A Grade. They

are high grade and boast the lowest levels of various group and individual impurities.

Continuous cast copper rods

Hindalco’s continuous cast copper rods meet all the requirements of international quality

standards. Their excellent surface finish makes them suitable for processing to enamelled, coated

and plated wires. They are available in diameters of 8, 11, 12.5, 16 and 19 mm.

The homogeneous structure and fine grain size of the continuous cast copper rod result in

outstanding drawability. It can be drawn to an ultra-fine wire at a high yield rate.

The Birla Copper rod is considered suitable for power and communication cables, strips for

power and distribution for transformers, magnet wires, and zari manufacturing. Larger diameter

rods — 11, 12.5 and 16 mm — are used to produce profiles and busbars.

Birla Copper is the only manufacturer of the 19-mm-diameter copper rod in India. This rod is

used for groove conductors and profiles.

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Precious metals

Precious metals are extracted at our precious metals refinery located at Dahej. Gold and silver

have an affinity to copper ore and are found in certain quantities in the concentrate supplies.

Hindalco pays for the gold and silver content based on the prevailing international bullion market

prices and other factors.

The precious metals are extracted after copper refining to produce 99.9 per cent pure gold, silver

and selenium. The residue contains traces of platinum and palladium, which are sold as platinum

group metal mix, commonly known as PGM.

DAP and NPK Complexes

As value-added downstream products, Hindalco produces di-ammonium phosphate (DAP) and

nitrogen phosphorus potassium (NPK) complexes, which are used as fertilisers. The DAP plant

went on stream in October 2000 and has a capacity of 400,000 tpa. It manufactures DAP and

NPK complexes such as 10:26:26,12:32:16 and 20:20:0.

Phosphoric acid is produced at the company's phosphoric acid plant by the chemical reaction of

sulphuric acid from the smelting complex and rock phosphate, which is imported. At the DAP

plant, phosphoric acid and ammonia are reacted to form DAP. Imported potash is used to

produce the NPK complexes.

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The phosphatic fertilisers are marketed under the brand name Birla Balwan, which commands a

strong market position and is very popular among farmers in the states of Gujarat, Maharashtra,

Madhya Pradesh, Rajasthan, Punjab and Haryana. The recently launched soil conditioner,

branded as Birla Phospho Gypsum, has also been well accepted by farmers.

Products are sold through private trade channels as well as institutions like co-operatives and

Agro Industry Corp

Acids and Fertilisers

Sulphuric acid, copper slag, phospho-gypsum and hydrofluosilicic acid are by-products of Hindalco's

production processes. The company is in the process of setting up an aluminium fluoride manufacturing

facility using its by-product hydrofluosilicic acid.

Sulphuric acid

Birla Copper produces sulphuric acid (also known as oil of vitriol and dipping acid) of IS

266/1993 technical grade. It has great affinity for water, making it a strong dehydrating agent

and therefore a valuable electrolyte and strong oxidising agent.

Three sulphuric acid plants, with a total capacity of 16,70,000 tpa, have been installed. They use

the DCDA process and were designed by Monsanto Envirochem (USA). The off-gases from the

smelting furnace and from the PS converter, which contains sulphur dioxide (SO2), are delivered

to the gas cleaning section, which comprises two stages of reverse jet scrubbers. The cleaned

gases from the final reverse jet scrubber are fed into two-stage electrostatic precipitators to

eliminate mist and residual dust particles from the gases. The sulphur dioxide-rich gases are

further processed and converted into sulphuric acid of commercially acceptable quality.

Substantial storage capacity and a 3.5-km-long pipeline feed sulphuric acid into the vessel

directly from the storage tank.

Phosphoric acid

The phosphoric acid plant is based on the Prayon Mark IV dihydrate technology provided by

SNC Lavalin (Belgium). The plant is designed to treat 285,000 tonnes of sulphuric acid and

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300,000 tonnes of rock phosphates to produce 180,000 tonnes of merchant-grade phosphoric acid

(52 to 54 per cent) each year. The plant also has a fluorine recovery section, which produces

about 5,100 tonnes of hydrofluosilicic acid (18 per cent) per year.

Phospho gypsum (CaSO4.2H2O)

Source Phosphoric acid plant

Physical properties Powder form

Sieve analysis BSS Mesh (% passing)

72 (211 micron) 96

170 (89 micron) 64.3

Chemical analysis (On a dry-weight basis) CaSO4

92–95

Uses Cement manufacturing, bricks manufacturing, gypsum board, plaster of paris (POP), filler for fertilizers

Copper slag (iron silicate)

Source Produced during smelting of copper

Physical properties Granulated, black in colour

Hardness 6 to 7 Mohs scale

Specific gravity 3.51

Bulk density 1.87 (Kg/l)

Electrical conductivity 2 (mS/m)

Sieve analysis Sieve size (mm) Range (%)

4.00 to +3.00 2 to 4

3 to + 2.36 3 to 12

2.36 to +1 40 to 55

1 to +0.5 15 to 30

30

0.5 to + 0.212 6 to 12

0.212 below 0.2 to 1.0

Uses Shot blasting as abrasives, sub base and land filling for roads

Novelis Inc.

Novelis Inc. is the world’s leading aluminium rolled products producer based on shipment

volume. The company produces an estimated 19 per cent of the world’s flat-rolled aluminium

products and is the number one producer in Europe and South America, and the second largest in

North America and Asia. In its 2009 fiscal year, the company shipped 2.9 million tonnes of

aluminium products and reported net sales of approximately US$10.2 billion.

Novelis is also the world leader in the recycling of used aluminium beverage cans. In 2008, the

company recycled nearly 39 billion cans back into new can sheet to be manufactured into

beverage cans by its customers. Novelis has a large global footprint across 12 countries,

employing 12,000 people in 31 manufacturing plants and associated activities worldwide.

With its industry-leading assets and expertise, Novelis is the only company able to produce

premium aluminium rolled products in all four continents where it operates. End-use applications

for its sheet and light-gauge products include beverage and food cans, foil and packaging,

transportation, electronics, construction and industrial products.

In addition to its aluminium rolling activities, Novelis operates bauxite mining, primary

aluminium smelting and power generation facilities in Brazil that are integrated with its rolling

plants there.

Novelis is a Canadian corporation formed in January 2005 as a spin-off from Alcan Inc. In 2007,

Novelis was acquired by Hindalco Industries Limited and became part of the Aditya Birla

Group.

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Technology Initiatives

Novelis strives to deliver customer-driven, innovative technical solutions in the areas of casting

and molten metal treatment equipment. Through our PAE engineering division, we offer:

continuous casting Twin Roll Casters (3C), DC automatic slab casting systems, degassing and

filtration equipment, spare parts & consumables for this equipment.

Continuous Casting Twin Roll Casters (Jumbo 3C)

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The Jumbo 3CM®, the latest generation of Pechiney twin roll casters, is now available from

Novelis PAE. This system produces strips of aluminum alloys by feeding molten metal between

water-cooled rolls on a 2-Hi mill. The Jumbo 3CM® caster implements an all-in-one process

combining two different operations: solidification and hot rolling.

The benefits of this system include:

Reliable, industrially-proven equipment with to date over one hundred Jumbo 3C® roll

casters in operation worldwide

Pechiney know-how as equipment manufacturer combined with operating experience and

extensive research and development

Efficient supervision and data management system capable of controlling all key process

parameters Modular, flexible investment.

Low capital and operating costs

Short lead time

Scrap recycling capability

DC Automatic Slab Casting

Slab casting molds: Water hole' molds with adjustable or fixed dimensions. Owing to the

advanced technology of our slab casting molds (fixed or variable), it is possible to cast all

families of alloys, whatever their dimensions, cross-sections and lengths.  By choosing

this technology the customer will benefit from the best possible balance in terms of

investment and product quality.

DC casting machines

The rich experience gained in former Pechiney and Alusuisse plants allows Novelis to

propose fully automated casters including the casting table, the lift and the hydraulic

33

cylinder, which can be customized to meet all customer configurations and work

conditions.

Automation System

The AUTOPAK concept is a global automatic slab casting process that automatically

manages the sequence of casting phases and controls the associated parameters.

Consequently, no manual operation is required during slab production.  In addition, it can

be integrated on all types of slab casting pits and with any type of mold, and offer the

following benefits:

Operator safety - No operator action required and automatic shutdown of cast in event of

any abnormal situation

Quality - Strict compliance with casting parameters and excellent repeatability

Traceability – Edition and recording of casting data

Degassing & Filtration Equipment: Impurities in aluminum can cause quality problems

and affect the mechanical properties of the product and its processing. To remove these

impurities in the molten metal, we offer a variety of filtering and degassing processes.

Our range of equipment includes:

1. ALPUR® degasser: removes hydrogen inclusions and alkali metals with a

patented rotor installed between the furnace and the casting machine

2. Jetcleaner degasser: a compact, inline trough degassing unit

3. Ceramic Foam Filter (CFF): removes inclusions from melt while reducing

operating costs

4. Deep Bed Filter (DBF): provides high-grade metal filtration at a lower cost

5. IRMA® In-furnace Treatment System: fully automated process uses rotary

injection technology to remove hydrogen and inclusions in a short treatment time

Customer Service / Spares & Consumables

They are able to supply original spares and consumables for all Novelis PAE equipment.

We keep a large inventory of spare parts, and with the knowledge and expertise of our

team, you are sure to find and receive the right part in the shortest time possible. Novelis

PAE also provides after-sales support for customers when required.

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Cast house technology at Hindalco-Almex Aerospace Limited (HAAL) is based on

Almex's proprietary CASTRIGHT IITM casting methodology and LARSTM, in-line

aluminium purification system.

CASTRIGHT IITM is a premium accuracy billet and ingot casting machine utilising PLC

programme operation, while LARSTM operation is based on the proven principle of

high-energy diffusion and chemically-driven mass transfer. LARSTM has over 75 per

cent degassing efficiency and over 99 per cent inclusion removal efficiency.

HAAL will also be equipped with an R&D cast house for alloy development work. Small

production runs of 1 tonne per casting will be undertaken at this facility. Aluminium

lithium alloys will also be cast here.This facility will be a scaled down version of a full-

fledged cast house. Development work for new chemical compositions for several

aerospace applications will be undertaken at this facility.

Energy Conservation

Energy conservation is the reduction of quantity of energy used. Energy conservation supports

the eco friendly lifestyle by providing energy, which saves your money and at the same time

saves the earth. When you decrease the amount of energy you use you automatically make

efforts to reduce increasing global warming.

35

Today Hindalco, at Renukoot, 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.

In 1967 Hindalco established a captive power plant at Renusagar, the first captive power plant

(CPP) for aluminium industry in India. This along with a co-generation power unit ensures

continuous supply of power for the smelter and other operations.renokoot have taken major s for

energy conservation.

A dedicated and highly enthused team of around 1285 managers at Renukoot and Renusagar are

engaged in challenging and enriching jobs. The unit has been a recipient of several national and

international awards in quality, environment management, energy conservation, CSR, among

others

CII has conferred the Energy Efficient Unit award to Renusagar Power Division during the 10

National Awards for Excellence in Energy Management-2009.

Hirakud Power Unit was globally recognised as one of the top six power plants for its

environment friendly operations by the POWER Magazine.

Commitment, Policy and Organizational Set Up

Reliability in power supply, minimised dependence on grid power and environment protection

were the key driving factors in technology selection when we decided to put up our only captive

power plant at Hirakud. Commissioned in 1994 with multiple CFBC boilers per Turbo-

generators configuration and Dry ash disposal system the plant started with a very high Specific

auxiliary consumption of around 15 %. With passage of time through sound energy management

36

system, active involvement of people, provoking innovative ideas, and transforming these ideas

into meaningful implementation now we could able to reach auxiliary consumption of 11.79 %.

Energy management at Hindalco Industries Ltd, Hirakud Power starts with support of Top

management and active participation of all shop floor people. First an Energy policy has been

formulated at Hirakud Power that reflects the overall direction and commitment of the plant

towards energy conservation.

Energy Policy

We, at HINDALCO Industries Limited, Hirakud Power, are committed to continuously improve

our energy performance in all our activities, products and services so as to make it

environmentally sustainable for future generations.

To meet the above goals, we will strive for:

• Energy efficient power generation, aluminium smelting and casting.

• Nurturing energy efficient designs and technology for all future acquisitions, wherever

practicable.

• Enhancing utilization of renewable energy resources, wherever feasible.

• Recognizing efforts of our employees and their family members in energy conservation

initiatives.

• Going beyond standards, wherever economically viable.

• Yardsticks, which drive us to monitor and improve energy performance through periodic

reviews and skill up-gradation of our employees.

A Resource Conservation Cell under the leadership of energy manager is functioning where

people cutting across various departments and shop floor are assigned with the task of sketching

the road map with following responsibilities.

• Formulating a Strategy for energy Conservation.

• Fixing of Targets with participation from various departments for specific Auxiliary

Consumption, Thermal energy parameters.

37

• Making Budgets for Energy conservation projects.

• Organising for energy audits by Energy auditors and ensuring implementation of the

findings.

• Collecting Energy saving opportunities from small group activities and suggestion Scheme

and evaluating them for implementation.

• Monitoring energy consumption levels through on line EMS, plant performance software

and ensuring initiation of actions to bridge the gap.

• Creating awareness among employees for resource conservation.

All the work force are grouped into 9 Teams with cross-functional team members. Each of the

teams functions as mini-enterprise in the plant. They strive to excel their own areas in highly

competitive, but positive, environments. The Small Group Activities takes place in each team

and meaningful innovations come out of brainstorming. Zero Loss Movement in the small group

activities takes care of all wastes by identifying them and attending through autonomous

maintenance.

Energy Consumption

With the implementation of various energy conservation measures as on going practice, there is a

steady decline of specific energy consumption. Energy conservation measures & ideas increases

efficiency of equipment.

Description UNIT 2004-05 2005-06 2006-07

Electrical Energy Kwh / T n.a. n.a. 739

Thermal Energy mkcl / T n.a. n.a. 26

Total Manufacturing Cost Rs. (Lakhs) n.a. n.a. 4470.9

Total Energy Bill Rs. (Lakhs) n.a. n.a. 636.936

Energy as % of Total cost of

production

% n.a. n.a. 14

38

Hindalco Industries Ltd. has been involved in continuous improvement in energy conservation.

The team is lead by works head and headed by all department heads along with self motivated

Engineers. Energy consumptions are monitored on daily basis. The Unit gives utmost importance

to energy conservation. Specific energy consumption targets are decided by Executive

Management and every effort is made to achieve the targets. It is always promoting and

propagating energy awareness among all the employees.

Energy Conservation Achievements

During the period 2006-07 the unit implemented 4 energy saving projects. Annual energy saving

of Rs.4.9 Lakhs ( Till March 2007. Most of the projects installed and commissioned in the end of

year) were achieved with an investment of Rs.9.7 Lacs with payback period of approx. 6 months.

Environment and safety.

The unit is committed to preserve its environment and safety of its employees.

Unit consent to operate under section 26 of the water(prevention & control of pollution )

act,1974 and under section 21 of the air (prevention and control of pollution) act,1981 and

authorization /renewal of authorization under rule 5 of the hazardous wastes (management and

handling) rules 1989 and amendment rules thereto.

Unit gives utmost importance to Machine and Human safety. There were no major

casualty/accidents in the yr. 2006-07.

Major Projects implemented for enegy conservation during 2006-07

1. Installation of variable frequency drive 75 KW at CRM in Fume exhaust Motor

FUME EXHAUST SYSTEM : 75KW VFD

FUME EXHAUST SYSTEM : 75 KW AC MOTOR

39

2. Installation of variable frequency drive 110 KW at CRM in Roll Coolent Feed Pump

Motor

3. Installation of Separate Air Compressor in Cut-to-length line.

4. Various Energy saving Measures in Plant Lighting

20 W CFL in place of 40W Tube Light.

90W CFL in place of 150W sodium vapor lamp

Major Projects which were undertaken during 2007-08 & beyond

Energy Conservation Measures (Planned - 2007 - 2008)

Anticipated Savings in Approx. Investment (Rs.

Lakhs)

Project Commencement & Completion

Year Energy Value (Lakhs kWh)

Rs. Lakh / Year

1) Reducing the Speed of the Idle running Fume Exhaust Fan Motor of the Bliss Cold Rolling Mill.

0.11 0.40 0.00 2007-08

2) Installation of Star Delta Controller at the Bliss Cold Rolling Mill Cartidge Filter & Hydraulic Pump and Finishing Line Machine Motor.

0.21 0.80 0.30 - Do -

4) Installation of Dilution Air Blower of

the 1500 NM3 / Hr.Flow Capacity and 150 MM WC Total Pressure at New Remelt Furnace.

0.08 0.30 0.70 - Do -

5) Installation of Interlock System at the Uncoiler Drive at the New Circle Punching Machine.

0.07 0.25 0.00 - Do -

6) Installation of Interlock System at the Coiler Drive at the Tension Leveller Degreasing Oil Supply & Return Pump and Blower.

0.13 0.50 0.00 - Do -

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7) Installation of Start / Push Button for Idle running of Hot Mill CT Fans & Pumps.

0.05 0.20 0.15 - Do -

8) Installation of 1800 CFM Centrifugal Air Compressor with Energy Saving Features.

3.24 12.30 50.00 - Do -

9) Installation of Dross Press at the Remelting Furnaces.

4.97 18.90 80.00 - Do -

10a) Installation of Recuperator at Preheating Furnace No. 1

0.87 Lakh 33.00 25.00 - Do -

SUPPLY CHAIN MANAGEMENT & LOGISTICS Of HINDALCO

Supply chain is a network of facilities and distribution option that performs the function

procurement of material, transformation of these material into intermediate and finished

products, and the distribution of this finished product for final uses. Supply chains exist in both

41

service and manufacturing organization, although the complexities of change may vary greatly

from industries to industries and from firm to firm

Problems addressed by Supply chain management:

1) Distribution network configuration.

2) Distribution strategies

3) Market segmentation

4) Information

5) Trade off in logistical activities

6) Inventory management

Inventory Management

Inventory means goods and materials which are available in stock by a business.

Inventory management is primarily about specifying the size and placement of stock goods. It

requires different location within a facility or within multiple location of a supply network to

protect the planned force of production against the random disturbance of running out of material

or goods.

Inventory management is the active control program which allow the management of sales

purchase and payment.

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Inventory Turn-Over Ratio

Inventory turn-over= annual consumption/ avg. inventory * 100

This ratio is called efficiency indicator. So, higher the inventory turn-over ratio the better is

financial outlook and system is considered more efficient.

The Majors to improve Inventory Turn-over ratio

a) Efficient production of inventories

b) Discourage poor maintenance

c) Reduction in critical and non-critical items lying in stocks since long period.

Identification of obsolete/ surplus items and their disposal/ utilization

Distribution Channel

A set of interdependent organization involved in process of making a product available or

reached the target market.

Smooth availability of our product to the right customer at the right place, at the right time with

safe and secured quality and quantity is an important task for the customer satisfaction or goals

of an organization.

Organizations’ are spending a huge amount about 25-30 % of cost of product.

Roles and Functions of distribution channels

1) Principles of minimum total transactions.

2) Discrepancy of assortment and sorting.

3) Routinisation.

4) Searching

5) The principle of mass reserves.

Various types of channel levels

Generally two methods of distribution are in practice.

1) Direct marketing channel

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2) Indirect marketing channel

Direct marketing channel: when there is no intermediary levels of manufacturers or sellers it is

called direct marketing channel.

Manufacturer

Indirect marketing channels: Indirect marketing channel is channel containing one or more

intermediary levels. Manufacturers or sellers are appointed various type of marketing

intermediaries in context of nature

Types of channel members

1) Clearing and forwarding agents

2) Distributors

3) Wholesalers

44

Customers

4) Merchandising agents and brokers

5) Commission merchants

Market segmentation of Hindalco

The market of Alumunium products in India is very wide spread.

1) Geographically

2) By diversified of end user

Almunium is being used in around 3000 products countries like US, Japan and Canada. Where in

India only around 350 products find use in aluminium, more over the per capita consumption of

alumunium in the country is very low.

Hindalko manufactures the products with very specifications as desired by the various

customers, Hindalko market may be segmented in the following manner.

a) Market segmentation based on the product group.

Primary product: ingots, wire rods, billets.

Rolled products: Sheets, chequred sheet, roofing sheet, coil, hot rolling plates, circles.

Extruded products: generally solid sections, tubings, moldings

Alloy wheels: 12-18 diameters.

b) Market segmentation on the basis of product wise

Primary product: value added aluminium.

Sheet producer industry.

Foil producer industry

Electrical equipments

Automobile industries

Ferrow alloy

Rolled products:

Foil and packaging industries

Transportation industries

Electrical industries

45

Extruded products:

Automobile industry

Building and construction centre

Household consumer durables

Alloy wheels:

Maruti Suzuki

Tata motors

Ford India

GM India

c) Segmentation on the basis of demand pattern

d) Market segmentation on the priority

e) Market segmentation based on the consumtion sector

f) Market segmentation based on the geographical area

g) Transportation facility

Distribution Process at HINDALCO

There are different tasks involved in distribution process as follow:

A) Order processing

B) Packaging and insurance, Banking, Bills

C) Warehousing

D) Transportation

E) Godown sales procedure

INPUT SOURCING

46

The aluminium units across the globe encompass the entire gamut of operations, from bauxite

mining, alumina refining and aluminium smelting to downstream rolling, extrusions, foils, along

with captive power plants and coal mines.

Our copper unit, Birla Copper, produces copper cathodes, continuous cast copper rods and other

by-products, such as gold, silver and DAP fertilisers.

Our units are ISO 9001:2000, ISO 14001:2004 and OHSAS 18001 certified. Several units have

gone a step further with an integrated management system (IMS), combining ISO 9001, ISO

14001 and OHSAS 18001 into one business excellence model. We have been accorded the Star

Trading House status in India. Hindalco's aluminium metal is accepted for delivery under the

High Grade Aluminium Contract on the London Metal Exchange (LME). Our copper quality

standards are also internationally recognised and registered on the LME with Grade a

accreditation.

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

copper mine consists of an underground 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 FY2009, Mt. Gordon produced 17,815 tonnes of copper in

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.

2007

Novelis becomes a Hindalco subsidiary.

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Takes/acquires Alcan’s 45 percent equity stake in the Utkal Alumina project

2006

Hindalco enters joint venture with Almex.

Copper mining subsidiary Aditya Birla Minerals Limited listed on the Australian

Stock Exchange.

2004

Announcement of merger with Indal.

2003

Hindalco acquires Nifty Copper Mine.

Hindalco acquires the Mount Gordon copper mines.

Hindalco becomes the majority stakeholder in Utkal Alumina (a joint venture

with Alcan).

2002

The amalgamation of Indo-Gulf Corporation’s copper business, Birla Copper,

with Hindalco.

2001

Hindalco appears on the Asia Top 25 list of the CFO Asia Annual Report Survey, the

only Indian company listed in 2001.

1995

Kumar Mangalam Birla takes over as chairman of the Indal board.

1962

Production commences at Renukoot (Uttar Pradesh) with an initial capacity

of 20,000 million metric tons/year of aluminum metal and 40,000 million

metric tons/year of alumina.

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Financials of Hindalco

Operating Costs

Raw material and product type:

Bauxite and calcined petroleum coke are primary raw materials for this industry. However,

alumina is raw materials for smelters and aluminium metal is raw material for fabrication units.

Fuel Usage:

Coal, Furnace oil and electricity are primary energy inputs in aluminium production. Coal is

primarily used to generate steam, which is used in the process while fuel oil is mainly used in

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Calcination of alumina and various furnaces in fabrication plants. Electricity is the major energy

input in aluminium production and is considered to be prime factor in determining economics of

aluminium production.

Total Operating expenses

2008 Rs 15990.40 cr

2009 Rs 14709.86 cr

2010 Rs 17632.13 cr

The higher than expected increase in operating expenses in a concern for the company. Despite

an increase in operating expenses the profit after tax has significantly increased. This has been

on the back of strong recovery in Novelis and also mainly due to reduction in conversion cost

inspite of an increase in input cost.

Inventory turnover ratio

2008 4.32

2009 5.16

2010 3.63

The inventory turnover ratio was lower than previous year, which implies inventory levels were

significantly high. This was mainly due to tightness in physical market, with most inventories

tied up at various warehouses under financing deals.

The company also declared a dividend of Rs 1.35 per share, which aggregated to 258.32 crore.

Novelis turnaround story

Novelis witnessed a tremendous turnaround in the midst of challenging circumstances. In an

economy that was still emerging from recession Novelis reported record results in FY 2009-

2010.

Novelis, a Canadian firm which was bought by Hindalco in 2007 for $6 million, staged a

turnaround in the September quarter to post a net profit of $195 million (about Rs 915 crore).

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The feat by the Atlanta-based firm must have been a personal victory for Mr Birla, who faced

criticism from several quarters for backing the deal that was considered expensive. Shares of

Hindalco — Novelis was acquired by the Birla flagship — had fallen by 14% on February 12,

2007, the day the deal was announced.

As the turnaround was achieved on the back of strong sales in Asia and South America, the

company’s earnings, that will be boosted by tough cost-cutting measures and the closure of loss-

making supply contracts, can only improve with the US economy riding out of recession with a

3.5% growth in gross domestic product.

Back in 2007, when the group was trying to close the deal, the viability of acquiring a

downstream company at a time when the whole world was going upstream was questioned. In

the metals sector, downstream implies value-added, high-tech products, while upstream means

mining. The company was bought at the peak of a commodities boom when prices of metals,

such as copper and aluminium, were ruling at record high levels, almost double the prices seen in

the year before. That was the time when the world’s largest metals firms, such as BHP Biliton,

Rio Tinto, Xstrata and Vedanta, were on an acquisition spree.

Novelis had a can price sealing contract with Pepsi and Coke that restricted the company from

selling can stock metal used in beverage cans at a price not higher than the corresponding price

on the London Metal Exchange. So, when the price of aluminium surged by more than 60% in

the subsequent period, Novelis was buying at a higher price and selling its products to Pepsi and

Coke at a lower price. The can contracts expired on December 31, 2009.

Mr Birla also faced opposition from some senior executives within the group who wanted the

greenfield projects to be given priority. Subsequently, the group did both — acquired Novelis,

and also went ahead with the greenfield projects in Orissa, Jharkhand and Madhya Pradesh. “But

no one anticipated the slowdown that gripped the world and then, access to credit was

restricted,” the executive said. Also, in 2008, Hindalco took a $982 million foreign currency loan

at Libor plus 315 basis points to pay back a $3.03-billion bridge loan it had taken a year back at

Libor plus 80 basis points to fund the deal.

Analysts back the Canadian firm to do well in the coming quarters. “Operational improvements

are driving significantly improved profitability in Novelis,” said Promeet Ghosh of DSP Merrill

Lynch. Other analysts back this view as the turnaround was achieved at a time when markets

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haven’t been robust and recovery was just beginning. “This clearly signals that the company has

staged a turnaround and the momentum is likely to sustain over the next few quarters,” said a

Mumbai-based analyst, adding, “However, the next quarter could see strain on the profitability

due to the winter season where the demand for aluminium cans typically fall.” The feat by

Novelis is commendable considering cross-border acquisitions by Indian companies have run

into hurdles, mainly due to issues relating to integration and developing synergies. Most of their

issues on synergy between the Indian company and the foreign company have been market

related.

Indian scenario

Global economies recovered after an unprecedented sharp fall in FY09. The recovery was

equally spectacular but fraught with uncertainty and the average aluminium prices remained

lower than the FY09 averages. The Indian economy showed its resilience in FY09 and staged a

sharp recovery on the back of generous stimulus packages by the Government. In the aftermath

of FY09 meltdown and in the midst of uncertainty surrounding this recovery, many global

majors were forced to adapt to the dynamic conditions in an ad hoc manner and resorted to

reactive actions in response to the challenges faced such as curtailing production, closing

facilities and then re-starting some of these facilities when the situation improved. Hindalco on

the other hand approached these adversities in a much steadier and controlled manner and was

able to weather the storm much better. Not only did it perform credibly on the operational front

but also ensured smooth and steady progress on the various Greenfield projects.

Factors contributing to successful 2009-2010

Improved domestic aluminium sector fundamentals with a positive demand outlook

Focused growth of Indian Operations

Improvement in Copper Business

Turnaround of Novelis

In the Indian context there has been a considerable increase in demand for end user industries.

Demand from industries like Electrical and electronics, Building and construction, Consumer

52

durables, Automobiles, Industrial machinery and Packaging are on a rise. Large scope for metal

consumption are expected to rise from current levels. Also end user segments have a

strong/positive outlook – i.e. Power, Transport, Construction, Industrial etc. There has been

considerable rise in per capita consumption of Aluminium in India. Strong metal sector growth is

also expected in near future.

Future

Hindalco will be investing more than Rs 400 bn in Greenfield expansion projects across

India and more than Rs 31 bn in Brownfield expansions in the next 4 years making it one

of the largest integrated Aluminium producers in India.

Hindalco expects capital expenditure of Rs 100 billion in the year 2010-2011.

Hindalco's continued focus on cost control, operational efficiencies and integrated business

approach will enable the Company consolidate its cost leadership as well as its position in the

value chain. The Company remains on track with respect to the growth projections despite the

challenging ground conditions.

Benchmarking with competitors in terms of operations excellence

Hindalco’s Indian operations comprise of custom copper smelting, special grade alumina,

and low cost integrated primary aluminum smelting. Nifty and Gordon copper mines in

Australia meet small requirements of its custom copper smelters in India.

Copper and special grade alumina businesses provide steady cash flows from an average

EBITDA of US$200m-250m. Its primary aluminum smelter capacity of 545,000tpa is

fully integrated, with captive power plant (CPP) capacity of 1,219MW and alumina refinery

capacity of 1.5mtpa. Hindalco’s aluminum smelters are among the most cost competitive

in the world – cost of production ranges from US$1,300/ton at Hirakud to US$1,400-

1,500/ton at Renukoot.

Though its captive bauxite mines meet most of its requirement, Hindalco also buys from

53

third-party mines to benefit from low regional pricing and preserve its own bauxite. Its

390,000tpa Renukoot smelter meets its coal requirement through linkages and third-party

purchases, while its 155,000tpa Hirakud smelter sources all its coal from captive mines.

Hindalco’s integrated greenfield projects, which will increase capacity 3x to 1.7mtpa over

the next five years, have started progressing well on ground. Over the next two years,Hindalco

will increase its aluminum capacity by 142% to 1.3mtpa at a capex of Rs240b

Primary aluminum – low cost; high margins

Hindalco’s 545,000tpa Indian aluminum operations comprise of a 390,000tpa smelter at

Renukoot and a 155,000tpa smelter at Hirakud. Both smelters are fully integrated and

backed with captive power plant, bauxite mines and coal mines. Cost of production at

Hirakud is around US$1,300/ton. Cost of production at Renukoot is higher at US$1,400-

1,500/ton, as coal is sourced though linkages and open market purchases.

Hindalco is the only aluminum producer in India with high level (60% of product mix) of

value addition, which makes its earnings less sensitive to LME volatility. The recently

closed FRP plant at Rogerstone, UK is being relocated to Hirakud, Orissa at a capex of

Rs8.5b (US$185m). The plant is likely to be commissioned by 2012. It will have initial

capacity of 150,000tpa, which will be expanded further to 285,000tpa by FY15. This plant

will produce high value added beverage can products.

Utkal Alumina: significant progress on ground

Hindalco is setting up 1.5mtpa alumina capacity in Utkal Alumina, Orissa. The project

is on fast track and is likely to be commissioned in 2HFY12. There has been significant

progress on the ground.

The bauxite will be sourced from Baphlimali mines 20km away from the site. Requisite

clearances and mining leases have been received.

Hindalco has achieved financial closure for the project with capex of Rs56b. So far,

Rs17b has been spent and Rs24b capex is slated for FY11. The visibility of Utkal

Alumina is improving. This is likely to re-rate the stock.

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US$2b capex each in FY11, FY12

Hindalco has lined up Rs400b capex to expand its aluminum smelting capacity from the

existing 0.54mtpa to 1.7mtpa by 2013 along with captive power plants of 2980MW. The

three smelters (359ktpa with 900MW CPP each) are strategically located near resources

to achieve lowest cost of production per ton. In the initial phase, it is looking to commission

1.5mtpa alumina refinery and two smelters (Aditya and Mahan) by 2HFY12 at capex of

Rs240b. The capex will be funded by project financing debt of Rs168b (70:30 debt to

equity), while Rs72b of equity will be required. Hindalco has already spent Rs39b till date,

while Rs45b is available in treasury.

Steady income from copper TcRc and special grade alumina business

Hindalco’s 430,000tpa copper smelter and special grade alumina refineries in Belgaum

are steady sources of income. Both these operations together generate an EBITDA of

US$200m-250m per year. The trend is likely to continue because copper TcRc margins

are already at the bottom of the cycle, though a recovery in the near term is unlikely due

to tight demand-supply equation of copper mine production. Also, price volatility for special

grade alumina is low. We expect US$200m of base case EBITDA from these two

operations, with a potential upside in some years.

POWER

Hindalco's integrated complex at Renukoot in India houses an alumina refinery, aluminium

smelter and facilities for production of semi-fabricated products. Power is sourced from our

Renusagar power plant, located at a distance of about 40 km from Renukoot.

The captive power plant located at Renusagar in Uttar Pradesh has 10 power generating units and

has a current generation capacity of 742 MW. Excellent operational standards have ensured a

consistent plant load factor of over 90 per cent.

The integrated complex at Renukoot also houses a co-

generation plant of 37.5 MW capacity. A new co-

generation plant of 41 MW capacity has been

55

commissioned to meet the requirements of the enhanced capacities, post the expansion.

Hindalco has two smelters, one located at Hirakud in Orissa, India with a captive power plant

and coal mines, and the other at Alupuram in Kerala, India. We also have two sheet plants at

Belur, West Bengal, and Taloja, Maharashtra, India and an extrusions unit at Alupuram.

Hindalco's two DSIR recognised R&D centres are located at Belgaum and Taloja, India.

Project activities are in the full swing to increase the smelter capacity at Hirakud to 100,000

tones, with a doubling of captive power generation, as well as an additional 100 MW power

plant.

Corporate Social Responsibility Initiatives by Hindalco

Winning smiles…touching hearts

Long before corporate social responsibility found a place in the corporate lexicon, it was already

textured into the Group's value system. As early as the 1940s, the late Mr. G.D. Birla espoused

the trusteeship concept of management — investing a portion of the company's profits for the

larger good of society. The late Mr. Aditya Birla went beyond chequebook philanthropy when he

brought in the concept of 'sustainable livelihood'.

For over 50 years, Hindalco has worked in the hinterlands of

India to better the quality of life of the underprivileged

sections of society. 

56

Today, we reach out to millions of people in the villages, of whom more than 60 per cent live

below the poverty line. Their needs include: access to water, agriculture and sustainable

livelihood, healthcare, and education. These four areas form the focus of our efforts. 

The company also works to bring about social reform through widow re-marriage and dowerless

marriages.

We work in partnership with government agencies and the beneficiaries to provide these

necessities and encourage social reform.

Focus areas

Health care

Medical camps: Taking mobile medical units and providing ambulance service to remote areas.

Health facilities: Setting up well-equipped and professionally manned health centres at several

locations.

Regular health camps: Providing family planning, mother and child care and specialised camp

for eye care and for cataract; coordinating regular pulse polio immunisation drives; and

promoting the awareness, prevention and treatment of malaria, water-borne diseases, TB,

HIV/AIDS, and others diseases.

Education

Balwadis- Providing primary education to the underprivileged children.

Adult Literacy- Providing formal and informal classes and active support to the government's

mission to improve rural literacy levels.

Merit scholarships / Schemes: Support female students for educational endeavours.

Educational support: Contributing uniforms, textbooks and classroom equipment and

undertaking school building construction and maintenance.

57

Skills training / capacity building

The Aditya Birla Rural Technology Park (Muirpur, Uttar Pradesh, India): Runs over 70

training programmes in diesel / hand pump repair / maintenance, electrical repair/maintenance,

bee-keeping, tailoring, knitting and agriculture-related programmes and encouraging self-

employment through income-generating projects.

The Yashogami Skills Training Centre (Radhanagari, Tarale, Maharashtra, India): Trains

women in skills such as rexine handicraft, fashion design, tailoring, food processing, pottery,

lamination, electronics assembly, zardozi, jewellery design, papier mache, rangolli, and fabric

design.

Women's empowerment

Self-Help Groups (SHG): These programmes involve over 11,000 women from rural

communities around Hindalco units.

SHG activities: Micro credit and micro finance schemes, entrepreneurship building, oil-

processing units, tailoring centres, horticulture and nutrition gardens, diesel and hand pump

repair, vermi compost production, mushroom cultivation, food processing, etc.

Awareness building: Health and sanitation, family planning, literacy drives and microfinance;

facilitating government loans for small-scale enterprise and rural insurance schemes, etc.

Social causes: Promoting dowerless marriages and widow re-marriages.

Agricultural support

Irrigation schemes: Land brought under irrigation with better yield and multi-cropping

methods.

Watershed development: Hydel towers, drainage canals, wells, check-dams, pedal pumps and

harvest tanks.

Training: Field schools train local farmers in modern agricultural techniques for higher crop

yield; introducing lac cultivation, post-harvest technology with safe grain storage through an

integrated pest-management system, floriculture, horticulture and kitchen gardens; shifting from

mono to multi cropping patterns and distribution of high-yield seeds.

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Conclusion

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Bibliography

www.hindalco.com

http://www.hindalco.com/about_us/overview.htm http://www.hindalco.com/about_us/vision_values.htm http://www.hindalco.com/about_us/CSR.htm http://www.hindalco.com/operations/manufacturing_locations.htm http://www.hindalco.com/operations/worldwide_operations.htm

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