Hindalco invests Rs 730 cr in 34,000 tonne extrusion facility at Silvassa

Topics Hindalco | Investments | aluminium

The company’s intent is to build a larger value-added product portfolio over the next few years
Hindalco Industries Limited on Monday announced that it plans to invest Rs 730 crore to set up a 34,000-tonne extrusion plant at Silvassa.

The new plant will service the fast-growing market for extruded aluminium products in the western and southern regions, the Aditya Birla Group company said in a release.

The Silvassa project is a step towards Hindalco’s downstream strategy as the company revives its long-term downstream investment plan.

The company’s intent is to build a larger value-added product portfolio over the next few years, it said.

This investment indicates confidence in the economic revival, which in turn will grow the demand for downstream value-added products.

“We are seeing a revival in the economy, with demand picking in the building and construction and automotive sectors. This has given us the confidence to move forward. The Silvassa facility will enable us to service our customers faster, with an offering of high-end quality aluminium products,” Satish Pai, managing director at Hindalco Industries was quoted as saying.

The fully automated plant includes three extrusion presses and will enable Hindalco to service premium customers in the building and construction, auto  and transport, electrical, consumer and industrial goods sectors.

Aluminium is gaining ground as the preferred sustainable metal across these sectors as it is infinitely recyclable and enables industries to integrate circular economy models in their operations.

The aluminium extrusion market in India is expected to grow exponentially – from the current level of around 373,000 tonne to reach about 850,000 tonne by 2030.

The western and southern regions of the domestic market account for over 60 percent of the extrusion market. The Silvassa facility will allow Hindalco to serve customers in these regions with superior quality, faster service and shorter response times.

“Over the next few years, as part of our downstream strategy, we intend to enhance our capacity from over 300,000 tonne currently, to more than 600,000 tonne with investments of around  Rs 7,000 crore. Our focus on downstream assets is part of our Sustainable Business Model with an emphasis on further de-risking our business from LME volatility,” the release quoted Pai as saying.

Hindalco’s existing extrusion plants in Renukoot in Uttar Pradesh and Alupuram in Kerala cater mainly to the auto, defence, aerospace and industrial segments.

The Silvassa facility will add an additional 34,000-tonne capacity with a focus on the B&C segment, which comprises over 60 percent of the extrusion market, apart from auto, transport and other segments.

Commercial production at the plant is expected to start in 24 months.

The increase in adoption of aluminium in diverse industry sectors is in line with global awareness of aluminium’s lightweight strength and infinite recyclability as a sustainable raw material.

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