The Financial Express
4 September 2010
Aditya Birla Group's flagship company Hindalco
Industries on Friday said it has earmarked a capital
expenditure of Rs 40,000 crore between 2012 and
2014 on the company’s greenfield projects
for aluminium and alumina capacity expansion.
The projects include the Utkal alumina project,
Mahan project and Aditya Alumina and Jharkhand
alumina project, said Kumar Mangalam Birla, chairman,
Aditya Birla Group, on the sidelines of the company’s
annual general meeting (AGM).
However, for the current financial year, the company
plans to spend about Rs 10,000 crore and Rs 11,000
crore in the following year for the said expansion,
added the chairman. He said the amount of the
capex would be raised through debt. The company’s
current debt level stands at Rs 12,172 crore.
"The capex is on account of our ongoing
expansion programme, which should be commissioned
between 2012 and 2014. The Utkal project offers
the potential to scale up to 3 million tonne
per annum (mtpa) at relatively low incremental
capital cost." he said. Moreover, it is
constantly looking at ways to increase promoters'
stake in the company. "The robust growth
prospects of the aluminum industry in India
made investment in Hindalco attractive."
Birla added.
Furthermore, the company plans to evaluate
the possibility of amplifying the smelting capacity
at Hirakud from the proposed 213 ktpa to 360
ktpa. An increase in the back-up captive power
plant from the proposed 467.5 mw to 967.5 mw
is on the anvil.
Hindalco has borrowed funds at an average rate
of 6.5% in the year ended March 2010. In addition,
Birla rules out the possibility of any take
over this fiscal year.
Birla was also positive on the turnaround of
Novelis. “The company registered a commendable
improvement in the liquidity over the past year.
Its liquidity surpassed $1 billion on the back
of strong operational flows, the bond issuance
and increased gross borrowing. Free cash flow
went from a negative $352 million in financial
year 2008-09 to a positive $355 million this
year,” Birla said.
Hindalco posted a net profit of Rs 534 crore
in the June quarter of 2010, as against Rs 481
crore in the second quarter last year. Net sales
for the second quarter jumped 33% at Rs 5,178
crore year-on-year.
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