Managing Director of Hindalco Industries Ltd Satish Pai, in a free-wheeling chat with Bijay Chaki, dwells on the company’s commitments in Odisha, the impact of restrictive US tariffs on the aluminium sector, and why nuclear energy is the way forward.
What do the new projects mean for Hindalco’s long-standing commitments in Odisha and in the larger context of the aluminium industry?
This is one of the company’s major investments in the country. The FRP coil and battery foil plants inaugurated by Chief Minister Mohan Charan Majhi are the next value-added step beyond primary aluminium, which is the ingot. You can make many more value-added products—whether it is foil, defence, or automotive components. Odisha is going to become a centre for engineered products and not just primary aluminium production. We are investing in value-added products that will help Odisha attract more MSMEs and ancillary industries. That is the big change.
The expansion of the Aditya Aluminium smelter plant at Lapanga is a major investment in the state.
Yes, the investment is more than Rs 20,000 crore. Our projects will add another 5,000 jobs, expanding opportunities for skilled employment. Indirectly, ancillary industries will also come up to provide support. For example, within the boundary of Aditya Aluminium, APAR Industries is manufacturing wires and cables, while Century Metal Recycling is producing recycled aluminium. Two more companies are coming up to manufacture conductor cables.
The state government is emphasising more employment opportunities through industrialisation. How do Hindalco’s plans aid that?
Our aluminium production is increasing, and the ancillary industries along our boundaries are also on the rise. The more aluminium we produce, the more we can supply to ancillaries. This leads to both indirect and direct job creation. Roughly, for every one direct job, about three indirect jobs are created.
What is the progress of the refinery project in Rayagada, and what kind of impact will it have on economic development in that region?
The impact will be even greater. We expect 5,000–6,000 jobs to be created in that area. The refinery will be commissioned in December 2027. At Utkal Alumina, we currently produce 2.5 million tonnes, and we are adding one million tonnes at Kansariguda, with the potential to add another two million tonnes. The entire region will benefit. We have the best hospital there, the Aditya Birla Public School, and a livelihood centre in Rayagada. We are also setting up an apparel factory. Besides alumina, we are creating jobs and livelihoods for local communities.
How has the Indian aluminium sector coped with the restrictive tariffs imposed by the US?
India does not export much aluminium to the US; we send more to Europe. So the tariff per se has not significantly impacted Indian exports, but it has distorted metal flows worldwide. This has led to higher aluminium prices and regional premiums. However, the Indian aluminium industry has not been badly affected overall.
The India–EU free trade agreement is in the works, and Prime Minister Modi has described it as the ‘mother of all deals’. How do you think it will help India, and the aluminium sector in particular, amid US tariff impositions?
We have to wait until the deal is signed; it has not been announced yet. Europe is a big market for us, and the potential to increase trade between India and Europe is immense. Any trade agreement the government signs with the European Union will be very beneficial for the Indian aluminium sector.
The industry faces challenges related to decarbonisation. You focused on a green shift after taking over as MD of Hindalco. Can you elaborate on sustainability? Will Hindalco achieve its zero-carbon target by 2030?
We are progressing along our net-zero journey. At the smelter, we already have 35 MW of solar energy. We have also secured 100 MW of round-the-clock power from Ayana Green Co., which combines solar, wind, and pumped hydro. We plan to add another 200 MW of RTC power. Within the next five years, 30 per cent of Aditya Aluminium’s power will be zero-carbon. We are very encouraged by the Government of India’s SHANTI Bill, which allows nuclear power for industrial use. We are keen to use small modular reactors. If Indian industry is to decarbonise, nuclear energy must play a role. You cannot rely only on solar and wind.
Energy costs have been a drag on the aluminium sector, impacting sustainability and competitiveness.
We believe electricity duty is too high. Second, cross-subsidy and inter-state charges should be reduced, especially for renewable energy, to encourage states like Rajasthan. Overall, the government is supportive and has launched several initiatives to promote nuclear and renewable power. If you look at India, it is one of the few countries that has actually met its renewable energy targets. Many European countries made aggressive public announcements but later withdrew them, whereas India is progressing steadily towards greater use of low-carbon energy.