India's Nalco Invests Big in 2013

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The government–controlled aluminum company, National Aluminum Company Limited (NALCO) plans to invest Rs 23.43 billion ($478 million) next fiscal year, to increase capacity, reports Business Line. Citing the 2012-13 budget documents, the newspaper report says that the proposed investment represents a 76 percent increase in the capital expenditure budget as compared to the previous year.

The story quotes a research report of the Parliamentary Standing Committee on Coal and Steel, stating that NALCO, based in the eastern Indian state of Orissa, has plans to invest Rs 579.03 billion ($11.8 billion) by 2020, mainly for establishing two aluminum smelters.

The company plans to establish a 5-million-ton smelter in Indonesia, with a 1,250-MW power plant, with an investment of Rs 165 billion ($3.3 billion). According to company plans, another smelter with a 1,260-MW power plant would be developed in Western Orissa in two phases, at a projected investment of Rs 163.45 billion ($3.33 billion).

The Indian Producers

Incorporated in 1981, as a public sector enterprise of the Government of India, NALCO serves as Asia’s largest integrated aluminum producer, encompassing bauxite mining, alumina refining, aluminum smelting, casting, power generation, rail and port operations. Current production capacity of the company includes 345,000 tons of aluminum with a plan to increase capacity to 460,000 tons.

After Australia, Guinea, Brazil, and Jamaica, India ranks as the fifth-biggest alumina producer in the world. India has the capacity to produce 2.7 million tons, or nearly 5 percent of the total aluminum production globally. India also has large bauxite reserves projects to last for more than 350 years.

Indian Aluminum Consumption Per Capita

Reports suggest that the per capita consumption of aluminum metal in India remains less than 1 kilogram, whereas the US and Europe per capita consumption rates range from 25 to 30 kilograms. The balance of aluminum consumption per capita ranges from Japan at 15 kilograms to 10 kilograms in Taiwan and 3 kilograms in China.

Despite the lower per capita consumption in India, several domestic industries maintain heavy aluminum demand, including the power industry that makes up 44 percent of demand, while consumer durables and transportation industries consume about 10-12 percent, and the construction and packaging sectors consume about 17 percent.

The top players in the Indian aluminum industry are NALCO and Hindustan Aluminum Company (HINDALCO), while private sector Vedanta Resources rounds out the top three firms. Hindalco, the largest firm in the Indian aluminum industry, holds more than a 39-percent market share.

The firm manufactures a number of aluminum products, making up a market share of 42 percent in the primary aluminum segment, 20 percent in extrusions and 63 percent in rolled products, with 31 percent of the products in the wheels and 44 percent in the foils segments.

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