Slowdown effect: Nalco holds recruitment of 700 employees

The country's leading aluminium producer Nalco has put on hold the recruitment of about 700 employees in an attempt to cut its operating expenses amid falling demand and reducing prices of the metal.

The PSU was to recruit people for manning its additional production lines in Orissa plants.

"Recruitment has been put on a temporary hold. Whatever manpower we have will be re-deployed to (run) our additional production lines," Nalco Chairman and Managing Director C R Pradhan told PTI.

The company's decision is aimed at cutting expenses all round, as the global economic slowdown has led to a steep decline in demand and prices of the metal, he added.

 

The Navratna PSU has embarked on a Rs 4,400-crore expansion to scale up its aluminium capacity to 4.6 lakh tonnes from 3.5 lakh tonnes by August.

The company is also in the process of augmenting its alumina capacity to 2.1 million tonnes from 1.5 million tonnes by March. It has also lined up the commissioning of two power plants of 120MW each by February and June, respectively.

According to an official source, Nalco's board of directors, which met this week, has decided to review the utilisation of the company's human resources and deploy them accordingly for handling the increased production capacity.

Besides cutting its operating costs, the PSU has decided to take technical measures to improve productivity, which would help it save about Rs 40 crore a year.

Faced with the double whammy of slump in demand and prices of aluminium, Nalco posted a 33 per cent decline in its net profit at Rs 219.46 crore for the quarter ended December.

In the corresponding quarter of FY '08, its net profit stood at Rs 329.44 crore.

The company attributed the dip in profits to lower realisations due to steep decline in prices.

Aluminium prices fell by more than 50 per cent from their peak of about USD 3,800 a tonne last year due to waning demand on account of the global industrial downturn.

Nalco saw its aluminium sales dip by 13.6 per cent to 76,000 tonnes in the third quarter ended December, as against 88,000 tonnes in the corresponding quarter a year ago.

Even as the company's profit shrank and demand for aluminium continues to be on a decline from sectors like automobile and housing, Nalco plans to go ahead with its overseas projects.

The company has lined up a five-lakh-tonne per annum aluminium smelter in Indonesia and a 3.30-LTPA smelter in Iran. About Rs 27,000 crore will be invested in the projects.