Public sector integrated aluminium producer Nalco, which has planned to gradually diversify into other industrial non-ferrous metals and minerals and power generation, may consider spawning separate entities for verticals.
Mr B.L. Bagra, Chairman and MD of Nalco, told Business Line here on Friday that as a part of the long-term corporate strategy, the company might consider setting up two subsidiaries — one for metals and minerals (other than bauxite and aluminium) and another one for power generation.
In partnership with State-owned Hindustan Copper Ltd, Nalco is exploring the possibility of venturing into copper mining within the country. It is also scouting for copper and uranium mining assets abroad. It tied up with State-owned Indian Rare Earths Ltd for manufacturing titanium from beach sand in Orissa.
Earlier in the day Mr Bagra, on the sidelines of a two-day conference on non-ferrous metals here, said: “We have already started diversifying into non-aluminium businesses. It makes sense to hive-off the units once we have substantial size.”
Currently, Nalco has opted for the joint venture route to get into new areas.
“Almost 25 per cent of our revenue should come from non-aluminium businesses in next five years,” Mr Bagra said.
Power vertical
Nalco has decided to hire a consultant for drawing up its long-term growth roadmap in the power vertical.
Mr Bagra said cash-rich Nalco would invest Rs 1,700 crore to pick up 49 per cent stake in a joint venture with Nuclear Power Corporation. The Rs 13,000-crore project entails nuclear power generation 1,400 MW (2X700 MW) at Kakrapar in Gujarat. It is to be commissioned by 2015.
Nalco is also establishing an Rs 274-crore, 50-MW windmill project in Andhra Pradesh. It intends to bid for an ultra-mega power project (UMPP) in Sundergarh district of Orissa.
These initiatives are, however, independent of its captive power generation in Orissa for its smelter, refinery and its operating mine. Its current captive capacity is 1,200 MW. For captive generation, it has been allocated a coal block in Orissa — Utkal-E — which is going into the development stage.
Nalco planned a total capital expenditure of Rs 1,057 crore for 2011-12. Its cash reserves stands at Rs 5,400 crore.