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Indal firms up smelting capacity expansion plan - Views on News from Equitymaster
 
 
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  • Nov 23, 1999

    Indal firms up smelting capacity expansion plan

    Indian Aluminium Company has firmed up plans to expand its aluminium smelting capacity even as it has decided to drop its plans of setting up a captive power plant at Hirakud (Orissa). The power plant will now be built by the Tata Electric Companies (TECs).

    Indian Aluminium Company (INDAL) is India's largest fabricated aluminium producer. Indal, along with its associates, is the largest producer of sheets and extrusions and the second largest producer of foils in India.


    source CMIE

    The capacity expansion that will see the smelting capacity rise from 30,000 MMTPA to 65,000 MMTPA (at Hirakud)is expected to cost Rs 4 bn and take three years time to complete. The expansion is to be funded from internal accruals. The company has opted for an eco-friendly technology.

    The decision to drop the plan of setting up the captive power plant will unlock funds for the company that would have otherwise been used in the setting up of the power plant. Also, with the company planning to club the existing power plant with the new one to be built by TECs, there is likely to be an inflow in the form of sales proceeds. Indal, if permitted, will supply coal to the power plants from its captive coal mines. This move will help the company focus on producing aluminium products and leave the power generation to an experienced company.

    The aluminium markets have been witnessing buoyancy in demand and price. With domestic demand expected to grow at 8% per annum as against the global average of 2%, the prospects for the domestic aluminium industry are definitely bright.

     

     

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