Hindalco Looks to Bolster Global Aluminum Resources

India’s Hindalco Industries Ltd. (a major aluminum and copper producer) recently earmarked CAPEX totaling US $7.2 billion. According to recent news reports, Hindalco management is seeking to expand the company’s aluminum production over the next five years. This includes commitments to boost aluminum resources in both North America and Germany.
In a recent presentation to investors, Hindalco reps remarked on how global supply shortages have pushed aluminum prices to new levels. In response, they’re pouring resources into new investments. The plan includes US $4.8 billion for its subsidiary, Novelis Inc., which will help increase distribution to the US, Brazil, Asia, and Germany. This move comes fresh on the heels of several other major expansions.
All in all, Hindalco has decided to use about 75% of its cash flow towards growth CAPEX. Of the total new investments until 2027, US $2.4 billion has been earmarked for spending in India.
 

Spending in All the Right Places

Most analysts and industry experts welcomed Hindalco’s announcement with open arms. After attending the presentation earlier this month, Edelweiss reported that Hindalco’s CAPEX plan should strengthen its competitive position in chosen markets. Better yet, it will still allow the company to concentrate on the high returns segment in India.
In its main points, the presentation referred to the company assessing and setting up the first greenfield mill in the US 20 years ago. It also reminded attendees of how Hindalco concentrated on US beverage can and automotive markets and limited Brownfield Al smelter expansion to 180ktpa.
The Edelweiss team went on to report that concentration in the US and on alumina in India was a step in the right direction. The former represents some 65% of total Novelis spending. The latter represents some 32% of all spending on the subcontinent.

Expanding US Automotive Recycling

Aluminum is the key ingredient in countless products, including everything from auto parts to beverage cans. Earlier this month, aluminum prices jumped to an unprecedented high of $4,000 a ton. This was largely the result of Russia’s war against Ukraine, which raised apprehensions about stifled supply.
Back in January, Novelis announced plans to construct a US $365 million recycling center next to its automotive finishing plant in Guthrie, Kentucky. According to a report in Recycling Today, the center would bring its carbon emissions down by over one million tons a year. At the same time, it would help expand the company’s closed-loop recycling program. Even better, the center would also be able to process aluminum from end-of-life vehicles.
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Committed to a Sustainable Aluminum Resources

Last October, Novelis announced plans to invest approximately US $130 million in upgrades to its aluminum mill in Oswego County, New York. Even then, Hindalco was eager to need a growing demand for sustainable, aluminum at rolled products. According to the report, the upgrades would allow the facility to boost hot mill capacity by 124,000 metric tons.
When completed, the new recycling center in Kentucky will feature advanced shredding and sorting technology. It will also boast several energy-efficient innovations intended to support Novelis’ sustainability goals. Among them is a commitment to reduce energy intensity by at least 10 percent before 2026.

Plans for Europe Still Forthcoming

While the company explained its India and North American expansion plans in some detail, its plans for the German operation were less thorough. Of course, Novelis is well recognized as a key player in the German automotive market. Along with the likes of Thyssenkrupp AG, & BASF SE, the company helps manufacture lightweight materials for electric vehicles.
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