23 May 2006

Hindalco to set up world-class aluminium smelter

• The new smelter to contribute significantly in Hindalco's global growth ambitions
• Project to cost Rs. 7,700 crore
• Direct employment for 4,000 people and indirect employment for 12,000 people
• Hindalco committed to sustainable development and upliftment of underserved communities
• Project to contribute Rs. 500 crore revenues to the exchequer
• The state of Madhya Pradesh is an attractive investment destination with a proactive government.
  

Hindalco, the Aditya Birla Group's flagship company, today entered into an MoU with the Madhya Pradesh government for a greenfield aluminium smelter in Siddhi district. Mr. O.P. Rawat, Principal Secretary — commerce, industry and employment, signed the MoU on behalf of the government, while Mr. D. Bhattacharya, Managing Director — Hindalco, represented the Aditya Birla Group.

"The MoU with the government of Madhya Pradesh marks yet another milestone in our goal of making Hindalco a non-ferrous metals powerhouse. In aluminium, our Chairman, Mr. Kumar Mangalam Birla's vision is to be among the top 10 global players. This new greenfield aluminium project is a forward move in this regard", said Mr. D. Bhattacharya.

Dwelling on the linkages between the Aditya Birla Group and Madhya Pradesh, Mr. Bhattacharya commented, "We have always been committed to the growth and development of M.P. Our tryst with the state dates back to 1948, with the positioning of Grasim in Nagda, off Ujjain, beginning with our viscose staple fibre plant. Subsequently in 1972, we put up our rayon grade caustic soda unit also in Madhya Pradesh. When our Group forayed into cement in the 1980's, interestingly the late Mr. Aditya Birla chose Jawad in this state as its location".

Till now the Aditya Birla Group's investment in Madhya Pradesh at its VSF and cement plant are in excess of Rs. 6,000 crore. More than 5,500 people are employed at these plants and ancillarisation/outsourcing has added to 18,000 more jobs. The aluminium smelter in Siddhi, at an investment of Rs. 7,700 crore, is expected to create 4000 to 5000 new jobs and generate another 12,000 jobs indirectly.

Attributing the Group's interest in Madhya Pradesh to the government's endeavours in making the state an attractive investment destination, Mr. Bhattacharya appreciated the tremendous support provided by the administration and the government. He profusely thanked the Honourable Chief Minister, the Finance Minister, the Principal Secretary and all others in the government for facilitating the entire process.

Outlining the contours of the project, Mr. R.K. Kasliwal, Advisor — Hindalco, said that this greenfield project entails putting up of a 325,000 tonne aluminium smelter, a 750 MW captive power plant and a jointly owned captive coal mine. Hindalco will source the alumina required for this smelter from Utkal Alumina, the company's greenfield project in Orissa, in a joint venture with Alcan, Canada. The new 3.25 lakh smelter in Madhya Pradesh will need around 6.40 lakh tonnes of alumina. Utkal Alumina is slated to produce 1.5 million tonnes of alumina.

The finances for this project have already been tied up through internal accruals and debt. Hindalco is an AAA rated corporation. The project is expected to go on stream in a 4-year time frame, after all the necessary approvals and infrastructure support are well in place.

"We feel extremely reassured, given the unequivocal commitment of the government of Madhya Pradesh toward the fruition of this project," stated Mr. Bhattacharya.

Hindalco has already filed applications for land and related infrastructure to get the project going.

Mr. Bhattacharya also dwelt on the Group's social vision. The Group's social projects are spearheaded by Mrs.Rajashree Birla through the Aditya Birla Centre for Community Initiatives and Rural Development. The Group works in 3,700 villages and reaches out to 5 million people annually. He said that in line with the Group's DNA of caring for the communities among which it operates and as a responsible corporate citizen, Hindalco will be actively engaged in the betterment of the underserved communities in proximity to its proposed smelter.

Currently, Hindalco is involved in the upliftment of the weaker sections of society in over 520 villages and the company touches the lives of over 1.5 million people. The company subscribes to the triple bottom line accountability and is a signatory to the United Nation's Global Compact.