Aluminium makers all over the world, including the three in India, have remained under pressure, as the global economy is struggling to get back on its feet from a rough ride now lasting over two years, halting recovery in London Metal Exchange (LME) prices and crippling overcapacity for which the principal villain is China.

Despite the downturn, Hindalco among other Indian primary producers has managed to stay ahead in comptetion, thanks to the significant strides it has made in converting the metal it smelts at its three smelters into value-added products. The fourth quarter of 2015-16 saw a 28 per cent rise in Hindalco's production of flat rolled products and extrusions. Success in the value-added business, which makes a significant contribution to Hindalco aluminium revenues is underlined by building and nurturing its popular brands such as Everlast Roofings and Maxloader. The $6-billion acquisition of Atlanta-based Novelis in 2006 catapulted Hindalco as the global leader in high-end aluminium flat products. Much credit goes to Novelis for making medium- to high-end automobiles aluminium intensive.

The virtuous circle of automobile weight reduction leading to two per cent economy in fuel use for every 100 kg saving in vehicle weight was what propelled Novelis partnership with the likes of Jaguar Land Rover and Audi. Helped largely by aluminium finding growing application in car making, Novelis made record product shipments of 3.1 million tonnes (mt) last year. At the same time, Hindalco's aluminium downstream business must be benefiting from knowledge and expertise of Novelis. Hindalco rightly claims that "our strength in aluminium products differentiates us from our competition". Not resting content with its success in product development and sale, Hindalco is helping small downstream manufacturers using its primary metal to market their products.

Hindalco has also come up with two smelters in two states and also a bauxite mining-cum-alumina refinery in India. The two smelters, each with capacity of 360,000 tonnes, and the 1.5 mt alumina refinery are now fully ramped up. As a result, Hindalco joined the rarefied 1 mt plus global aluminium producers' club in 2015-16.

Hindalco is now at an inflection point. Being a cyclical industry where aluminium prices swung between highs of $3,000 and lows of $1,250 a tonne in the past decade depending on macro factors, only the groups belonging to the lowest cost quartile will sail through difficult times. The two new smelters of Hindalco are built with proven cost-effective AP 36 technology from Rio Tinto Alcan.

The company claims its new 1.5 mt alumina refinery, which has the benefit of sourcing bauxite from its captive mine at Baphlimali by a 21-km long conveyor system "is a world-class refinery with one of the lowest cost structures in the world". As it goes forward, Hindalco will have the twin benefits of economies of scale and use of cost-effective technologies from bauxite mining to metal smelting. New assets in place resulting from an investment programme unmatched in the country's aluminium industry, the focus now "will be on running tight operations, indeed very tight operations", says Hindalco Vice-Chairman Debnarayan Bhattacharya.