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Q. Though aluminium is described as one of the fastest emerging metal compared to other metals the growth in this field is slow. Why?

It is only in 1989 that the aluminium industry in India was freed of price and distribution control. Since then, industry has made rapid strides and barring a few aberrations the pace of growth has been excellent. In the current year, for example the general industrial slowdown will impact aluminium demand growth even as the long term prospects for aluminium remain excellent. I see growth accelerating as aluminium finds its way into more and more applications.

 

One sector alone which has huge potential is infrastructure. A great deal needs to be done to improve infrastructure and when it is done aluminium will play an important role. For instance, increased aluminium applications in power transmission will see an acceleration of demand growth for aluminium.

.Q. Last year the industry saw a sharp fall in the aluminium price, grim power situation, rising inventory levels and high cost of borrowings, which has apparently worsened the domestic aluminium production. How do you foresee the year ahead for the industry and for you company?

We believe that the industry has weathered the various problems very well. Speaking for ourselves, we are self sufficient in power, have an exemplary record inventory management and consistently reasonable realisations despite the vagaries of international prices. Having fared so well in adverse conditions, we can only be extremely optimistic about the future- more so when we consider the emerging demand.

Hindalco's best years lie ahead. In the coming year we are planing higher volumes, an increasingly diversified and value added product mix and further improvement in consumption norms in short an across the board improvement.

Q. How has India's aluminium sector performed in this era of economic liberalisation?

I believe that Indian aluminium sector has very rightly adopted the right approach of viewing the liberalisation process as an opportunity rather that a threat. Industry has capitalised on the options to source technology and finance and made rapid strides in its export efforts. Given so we can conclude that industry has done well by all standards.

However, the aluminium industry in developed countries has a significant advantage in terms of economy of scale besides advantages in terms of cheaper inputs and lower cost of capital. It is therefore, imperative, that the government of India adopts all measures to prevent India becoming a dumping ground for such large international players. This is a must, it the domestic aluminum industry is to realise its true potential and contribute significantly to India's economic development.

Q. Inspite of virtually uninterrupted supply of raw material and steady increase in demand, the industry has failed to reap financial rewards. Why?

We believe that compared to other industry, the aluminium industry has done well. There are certain handicaps, such as the high cost of power and petroleum products and the fact that we are competing against international giants.

However, despite such handicaps, segments of industry which have stressed on continuous improvement in operational efficiency have done extremely well. Look at our own example. We have an outstanding record of consistently ensuring exceptional financial returns.