RAIPUR: At a time when aluminium manufacturers are struggling with low orders and fall in prices, Vedanta-owned Bharat Aluminium Company (Balco) in Chhattisgarh seems to have surmounted the difficult situation by taking steps to cut cost and improve efficiency.
These included cutting high expenditure, optimising existing manpower, sourcing raw material from nearby areas, revamping of inefficient units, among others.
“We were confronted with a crash in commodity prices. But, we turned the difficulty into an opportunity. We initiated tough counteractive measures and brought down losses substantially, paving the way to reach full capacity production,” Ramesh Nair, CEO and the whole-time director of Balco, told Express.
He added that the coal linkage option by the Centre facilitated the company to access coal locally from Korba, which helped the company reduce expenses.
Its sheet-rolling plant, which was shut during 2015-16 due to global economic slowdown, has now resumed production. Balco now produces 0.57 million tonnes of aluminium and generates 2,010 Mw of power per annum.
According to the Aluminium Association of India, the fall in aluminium prices was exacerbated by the slowdown in global demand. To deal with the impact of recession, Balco meticulously executed huge cost reduction.
“The commissioning of new 1,200 Mw power plant came as a big boost even as we restructured the manpower and revamped the inefficient units,” said Nair.
To cut down on expenses on sourcing, the company accessed raw materials from nearby areas. The first ever Korba visit in November 2016 by Vedanta chairman Anil Agrawal after taking over Balco in 2001, too, worked as a stimuli, motivating the company into executing the action plans, Nair added.
With a market share of about 25 per cent, the firm plans to increase aluminium production from 0.6 million tonnes a year to one million capacity, but that will depend on how it succeeds to explore the option of accessing new sources of raw material (bauxite).
After taking over Balco, Vedanta is estimated to have invested about Rs 15,000 crore in the company. Vedanta, a globally diversified natural resources group, had acquired 51 per cent share in Balco, which was a public sector undertaking in 2001. According to company officials, Balco gives direct and indirect employment to around 7,500 people.