Hindalco eyes $1 billion Novelis Ebitda by year-end

Hindalco Industries will invest  Rs21,000 crore in two years in its various greenfield projects, chairman Kumar Mangalam Birla said at the recently concluded annual general meeting.

It will pump in Rs10,000 crore this year and another Rs11,000 crore next year.

The company is embarking on five greenfield projects with a total cost of Rs40,000 crore. These are slated to be complete by fiscal year 2014.

Citing robust demand for its rolled products in South America, Hindalco has embarked on a 50% capacity expansion at the Brazilian plant run by its subsidiary Novelis. This will increase the plant’s capacity to over 600,000 tonnes per annum.

Backed by a turnaround in Novelis’ operations, Birla said the company is targeting an Ebidta (earnings before interest, depreciation, tax and amortisation) of $1 billion by the end of the current fiscal from the current $754 million.

Birla said the company’s two brownfield expansion projects at Muri and Hirakud are on schedule. While the Muri alumina refinery is complete, the Hirakud smelter expansion (from 155,000 tonnes per annum [tpa] to 161,000 tpa) will be complete by the end of the second quarter of the current fiscal.

“The work for further expansion to 213,000 tpa has started and will be complete by the fourth quarter,” he said.

Birla added that the management is contemplating further expansion to 360,000 tpa and increasing captive power generation from the proposed 467.5 mw to 967.5 mw.

D Bhattacharya, managing director, Hindalco Industries, said the company is bullish on the auto sector, especially with the increased awareness that automotive models require lighter weights to decrease carbon emissions.

“We are expecting good demand since the auto industry is now reviving world over, especially the high-end segment,” he said.