Hindalco Industries Ltd, India’s biggest aluminium producer, hopes to set up a high-end alloy plate manufacturing unit for the country’s defence sector, managing director Satish Pai said in an interview on Tuesday. The project would need an overall investment of Rs2,000 crore and Hindalco is in talks with the government to evaluate if it can start it as a public-private partnership (PPP), Pai said. “We are talking to the ministry of defence for setting up more high-end alloy plate manufacturing in India… We are hoping for a pick-up in the defence sector,” Pai said. The company’s factory in Aurangabad already makes aluminium alloy billets and slabs for use in the aerospace, sporting goods and surface transport industries, and Hindalco is ideally suited for such a project due to its downstream capacity of casting alloy, Pai said. It could take about two years to put up such a unit, he added. The company estimates that India will need about 5,000 tonnes of high-end alloy plates over the next five years, and in the absence of strong domestic manufacturing, these would have to be imported. “The end product is one thing, but it needs lots of very high-end aluminium to begin with. We really want support from the government to get that done,” Pai said.
“In defence sector, orders are never smooth, they come and go; that’s why we need public private partnership for putting up this project,” he added.
Hindalco, which has a target of doubling its downstream aluminium capacity in five years, is facing stiff competition from cheaper Chinese imports.
Aluminium is used in everything from packaging, automobiles, aircraft, to defence, construction and other industrial products.
Defence is one of the growth areas that Hindalco has identified, where a number of domestic firms are looking to start manufacturing in India.
It is also targeting sectors such as urban transport, packaging, building and construction, and automobiles to grow domestic demand.
More than half of India’s aluminium demand is currently met through imports.
Hindalco expects domestic aluminium demand to rise 7% in the current fiscal on the back of the government’s push on infrastructure development and the likelihood of higher power sector orders.
On Tuesday, the firm had reported a 25.6% rise in fourth quarter net profit, helped by higher revenue in its aluminium and copper business.