Domestic aluminium biz to go through testing time: Kumar Mangalam Birla

Company has fully ramped up its Mahan aluminium smelter facility and about 55% of ramp-up has taken place at Aditya smelter

Hindalco Industries will see its domestic aluminium business go through testing times in the short term, as the recent ramp-up of projects will impact its performance in the coming months, chairman Kumar Mangalam Birla told shareholders at the company's 56th annual general meet here on Wednesday. “High interest outgo and depreciation are expected keep the company's performance under pressure,” Birla said.

The country’s largest aluminium producer has fully ramped up its Mahan aluminium smelter facility in Madhya Pradesh, and about 55 per cent of ramp up has taken place at Aditya smelter in Odisha.

The chairman also informed the shareholders that the company has refinanced its loan to get a longer tenure of 10 years, thus giving it additional repayment time.

“In the coming years, focus will continue to be on operational excellence and increasing productivity of new assets,” said Birla.

He, however, remained optimistic about the copper business, which has been saving the day for the aluminium major for quite a few quarters now. The copper business saw its Ebitda (earnings before interest, tax, depreciation and amortisation) grow 45 per cent on a year-on-year basis in the year ended March 2015. "Operational efficiencies, lower cost of production, coupled with favourable trend in treatment charges refining charges have been the success drivers," he said.

Birla said though coal costs have moved up post re-allocation of the blocks, the company managed to lock 25-30 per cent coal as captive. Coal and bauxite are the key raw materials for making light-weight base metals and, hence, their captive supply helps companies bring down input costs.

Novelis, the US subsidiary of Hindalco Industries, came closer to aligning its portfolio towards premium products.