Hindalco ties up with manufacturers of beverage cans to promote aluminium

Hindalco Industries, the country’s biggest aluminium producer, has tied up with two international manufacturers of beverage cans — US-based Ball Beverage Packaging AMEA and CAN-PACK India, arm of Poland-headquartered CAN-PACK. The consortium, to be called the Aluminium Beverage Can Association of India (ABCAI), will advocate replacing glass and plastic with aluminium as packaging material.

“The consumption in aluminium beverage cans in India is 3-4 per cent of the total. There is good scope for this to grow but awareness is low,” Prakash Nedungadi, group head, consumer insights and brand development at Aditya Birla Group, told Business Standard. 

At present, packaged beverage consumption in the domestic market stands at 20 billion. But with economic growth estimated at 7-8 per cent for the next 10-12 years, this is seen to be reaching 50 billion by 2030. It is this growing pie the consortium is aiming to capture.

There are multiple benefits of choosing aluminium over glass or plastic, said the consortium. “Consumption of aluminium beverage cans is crucial because it will change the landscape of production, transportation and disposal of beverage packaging and will move towards being more ecofriendly,” said Nedungadi.

An aluminium beverage can weighs 15 gm while the weight of a glass bottle is about 200 gm. Transporting aluminium cans is easier. In aluminium beverage packaging, chilling is faster and hence uses less power than glass does. Also, aluminium cans can be recycled with no deterioration in product quality.

“Washing glass bottles before reusing needs a lot of water and with scarcity growing, it makes sense to switch to aluminium,” said Harsh Vardhan Jajoo, managing director and chief executive at CAN-PACK India. He, however, was unable to quantify water usage by the beverage bottle industry.

“There is enough capacity on the ground at present and as the market continues to grow we will put appropriate investment in place,” said Amit Lahoti, managing director (India), Ball Beverage Packaging AMEA.

However, an official with Borosil Glassworks said: “Consumers prefer glass over aluminum, and the demand structure is such that aluminum cans take the back seat.” 

In India, the glass industry is well established and has no excise duty issue like aluminum, for which some states levy duties on aluminum sheets, the official added. Maharashtra and Karnataka are more tax-friendly towards aluminum beverage cans while others have imposed excise duties. 

To begin with, the ABCAI will be approaching key stakeholders such as state and central government entities along with beverage brands. 

At present, the domestic aluminium beverage packaging industry comprises a 300,000-tonne recycling plant announced by Hindalco Industries in Gujarat along with four can-producing plants.

Among the developing markets, India’s per capita consumption stands at one can per person per annum as against China, where it is 40 cans per person per annum and Vietnam, where it is 70 cans per person per annum. 

The ABCAI has set a target of eight cans per capita which is far lower than other developing markets but is definitely much higher than the existing per capita consumption in India.