NEW DELHI: It is a good time for domestic companies to invest more in India – the current environment is very conducive, India’s economic growth will be more than the rest of the world and there is also policy consistency from the government, says Satish Pai, managing director of Hindalco Industries in an interaction with TNIE. Pai also mentioned that the production-linked incentive (PLI) scheme and state incentives are also encouraging industries to invest in India.
Hindalco has committed Rs 40,000 crore investments over the next three years in brownfield expansion.
“It’s not just for announcing, we are actually doing the project. I think for us, it was the market condition and the strength of our balance sheet (which helped us make these investments),” says Pai.
Pai said that the Lapanga rolling plant (in Odisha) is getting commissioned this month, while the work in the Kansariguda alumina project is starting this week. The construction work of the copper recycling plant in Gujarat has started. The company has applied for environmental clearance for the copper smelter in Dahej and the aluminum smelter Lapanga.
“Two projects are off the ground, two projects are in environmental clearance phase,” says the Hindalco MD, when asked about the company’s expansion plans.
Hindalco Industries, the Aditya Birla Group metals flagship, reported a consolidated net profit of Rs 3,735 crore for the third quarter, up 60% year-on-year, driven by a strong operational performance by the India business.
Pai attributed the strong Q3 numbers to very strong performance in the India Business, both in aluminum and copper.
“We managed to keep our costs under control. We had stable operations, we benefited from our third party alumina sales because alumina prices went up. So that’s why the downstream aluminum business also performed well. On the copper side, the demand was very strong. The copper also benefited from byproduct sales, because it’s a very varied chain. So that’s why the Indian businesses did very well,” Pai said while giving reasons for strong Q3 numbers.
Pai expects the global sales to remain flattish. “We export about 30-35%, mostly to Asia. So, we are not seeing our primary markets being impacted, but we are not expecting huge growth internationally,” he said, adding that for the India business, the company is not dependent on the international market.
When asked if the Trump administration’s economic and tariff policies will impact Hindalco, Pai said he does not expect the Indian aluminum market to be suddenly flooded with aluminum coming in from countries which export to the US.
He says that a large part of US aluminum is coming from Canada, and he does not think that the US has any other option but to take that Canadian aluminum. Hindalco has an exposure in the US market through its Novelis plant. “Mr Trump is doing this to make the US manufacturing sector bigger and stronger. So, our view is that Novelis will ultimately benefit from these policies,” says Pai.