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Hindalco Industries, an Aditya Birla Group company, plans to invest ₹5,000 crore capex in this fiscal against ₹3,000 crore spent last year even while putting off its $350 million capex in China.
The company, which intends to spend a similar capex next fiscal, will fund the entire investments through internal accruals and will not raise any debt.
Satish Pai, Managing Director, Hindalco Industries said the major part of the capex will go for the ongoing expansion at Aditya Mahan smelter by 50,000 tonnes and rolling mill capacity at Hirakud besides developing the Chakla coal mine.
The capex in China was put-off due to the ongoing trade tussle between the US and China, while Novelis’s investment of $1.8 billion in the US, Brazil, and Korea will continue.
While the company expects LME prices to fluctuate between $2,200-$2,400 a tonne for the next two quarters, the EBITDA per tonne will increase due to lower input costs. The coal prices have settled lower with good supply and other input cost are also inching down, he said.
Also read: Hindalco net down 37% on lower realisation
The benefit of the increase in TcRc (treatment and refining charges) rates to 20 cents from 16.7 cents in copper business will start reflecting from June quarter, he added
The demand in India for aluminium and copper is so strong that the company is short of capacity, said Pai adding that the 34,000-tonne per annum extrusion plant at Silvassa will go on stream in the next few days catering to the growing domestic demand.
The pace of Chinese economic recovery and cheap aluminium scrap imports remains the major concern in the domestic market. After the series of rate hikes, the US Fed should start cutting interest in second half of this year to bolster their economy, he said.
The company has recently received green Aluminium certification for 8 per cent of production at Aditya Mahan as 8 per cent of power used in the smelter was through solar energy. With use of more solar power supplied by its green energy partner, Greenko, Hindalco intends to convert 30 per cent of its production into low carbon aluminium over 3-4 years.
Though there is no big premium for green aluminium as of now, there are few customers, especially in Europe, who buy only green aluminium, said Pai.
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