Debnarayan Bhattacharya, managing director at Aditya Birla Group company Hindalco Industries, sounded genuinely concerned about Indian government's role in reducing the worries of the domestic aluminium industry players who are badly hit by Chinese imports and aluminium price freefall.
In a recent interview with a leading news daily, Bhattacharya said, "There are almost 750,000 people who are directly or indirectly engaged in the aluminium industry in the domestic market. So, it is important that the government takes some measures to curb Chinese imports in the national interest."
Coming from someone who is steering the company at a very difficult time, this certainly stands as a view that every aluminium producer in the country would agree upon. The Aluminium Association of India has, therefore, made representation to the government asking them to raise import duty on the metal to 15 per cent from five per cent at present. Currently, of the total domestic demand, about 50 per cent is being met by cheap imports from China, which is hurting domestic producers.
When asked, how he saw Hindalco Industries’ cost of production going ahead, Bhattacharya said, "There are several steps we are taking to keep our cost of production lower going ahead. Our ramp-ups at Mahan and Aditya aluminium smelters and Utkal refinery are going superb as efficiencies at each of these plants are hitting desired levels."
"Moreover, coal prices have come down globally and so there is some benefit towards power costs, although it could have been higher if the rupee was stronger. Given that Coal India is to increase its production, supply is expected to rise and hence we see energy costs coming down. Alongside, Hindalco has shut 42 per cent of capacity at the Hirakud plant since it was higly inefficient and could have been a cost burden," he said.
On being asked about his outlook on aluminium businesses Bhattacharya opined, "I think prices have bottomed out but cannot say how it would go from here. Premiums for aluminium, however, have seen marginal improvement."
Hindalco Industries' stock is down 52 per cent in the past year due to falling aluminium prices.
