Hindalco adds downstream capacity; buys Hydro's Rs 247 cr unit in Andhra

Hydro's Kuppam plant has 15,000-tonne extrusion capacity and is integrated with advanced value addition capabilities for surface finishing and fabrication

Continuing to build its capex in the downstream segment, Hindalco Industries today signed a definitive agreement to acquire aluminium extrusions business for an enterprise value of Rs 247 crore from Norway-headquartered Hydro.

The transaction for the same is expected to close in the next quarter.

Hydro’s Kuppam plant in Andhra Pradesh has 15,000-tonne extrusion capacity and is integrated with advanced value addition capabilities for surface finishing and fabrication, the Aditya Birla group company release said.

Located about 120 kilometres from Bengaluru, the Kuppam facility offers custom aluminium extrusion products and solutions for auto, building & construction, and industrial applications.

It will further extend Hindalco’s footprint in South India, which is the second largest extrusions market in India, said the company.

“Over the past year, we have already announced a total capex of Rs 3,730 crore towards addition of downstream capacities at Silvassa and Hirakud. Our recent acquisition of the Ryker copper wire rod unit for our Copper value-added portfolio is also in line with this strategy,” the release quoted Satish Pai, managing director at Hindalco Industries as saying.

The acquisition is aligned with Hindalco’s strategy to increase downstream capacity to meet the growing market demand, further expand product portfolio and increase revenue from value-added products.

The Kuppam plant will also serve as an archetype for Hindalco’s upcoming state-of-the-art extrusions plant in Silvassa in western India.

The aluminium extrusions market in the country is expected to grow rapidly from the current level of around 373,000 tonne to reach about 850,000 tonne by 2030.

Once commissioned, the Kuppam and Silvassa units are expected to boost Hindalco’s total aluminium extrusions capacity from 60,000 tonne to 109,000 tonne, it said.

Hindalco Industries is expected to end FY22 with a capex of Rs 2,400 crore, down Rs 300 crore from previously planned Rs 2,700 crore as it lost a few months to the second wave of Covid early in the fiscal.