Hindalco to make beverage cans in India

Kumar Mangalam Birla-controlled Hindalco Industries plans to produce cans for beverages and food giants such as Coca-Cola and PepsiCo from its plant at Hirakud in Orissa. The company has begun dismantling a closed plant of Novelis in Rogerstone, Britain, and intends to ship all key equipment to Hirakud.

The Hirakud expansion for beverage can-making is scheduled to be complete by October next year. “A project is underway for transfer of equipment for flat rolled products from the Novelis plant...this will enable us to produce can body stock for local and export markets,” said the company.

Canada-based Novelis was acquired by Hindalco for $6 billion in 2007. It had announced the closure of the Rogerstone plant in March 2009, following the economic downturn and a demand crash. With the closure, about 440 workers lost jobs. Also, the company had transferred the businesses Rogerstone would handle to Novelis’ other plants in Europe.

“The present move to transfer the Rogerstone plant to India is intended to make the group’s beverages can production cost-effective. With the relocation, the company could cut costs by at least 20-30 per cent. However, shipping of the end products back to Europe and the US would be costly,” said a Mumbai-based analyst.

Hindalco would be using the plant and technology of Novelis to make cans’ body stock in India for the first time. Novelis is the world’s leading maker of aluminium rolled products, used for making cans.

About 45 per cent of Novelis’ shipment is beverage cans. It produces an estimated 19 per cent of the world’s flat-rolled aluminium products and is the number one producer in Europe, South America and Asia, and the second-largest in North America. It is also the world leader in the recycling of used aluminum beverage cans.

At Hirakud, the aluminium maker has a smelter capacity of 155 kilo tonnes per annum (ktpa). It is expanding this to 213 ktpa and building a 100-Mw captive power generation capacity. Expansion to 161 ktpa will be completed by July this year and the rest will be commissioned in October 2012.

Land acquisition for the expansion has been completed and statutory clearances obtained. The technology agreement has been finalised with GAMI. Equipment has started arriving at the site and erection begun, said the company in a recent investor presentation.