Hindalco plans $3-bn capex

"WE CONTINUE TO SEE A STRONG DEMAND ACROSS ALL OUR BUSINESS SEGMENTS, PLANTS RUNNING AT CAPACITY, AND IMPROVING MARGINS, SUPPORTED BY BETTER MACROS AND OPERATING EFFICIENCIES," KUMAR MANGALAM BIRLA Chairman, Hindalco Industries

Hindalco Industries plans growth capex of $2.5-$3 billion on a consolidated basis over the next five years, Chairman Kumar Mangalam Birla said on Monday, as the firm looks to strengthen its balance sheet.

Part of the capex will be deployed towards expanding Novelis’ auto-finishing lines in the US and China, and rolling and recycling capacity expansion in Brazil.

In the domestic market, the company is already on track to implement organic growth projects of over $1 billion towards Utkal Alumina expansion and various downstream projects in both aluminium and copper businesses.

As of March 2021, the company’s consolidated net-debt-to-ebitda is at 2.59 times, down from the peak of 3.83 times in June 2020, Birla said at Hindalco’s 62nd annual general meeting held virtually.

“Our India downstream strategy of reducing exposure to the global aluminium price fluctuations and increasing the share of value-added-products across businesses is also playing out well. More than 80 per cent of Hindalco’s consolidated Ebitda was delinked from the volatility of the global metal prices,” Birla informed the shareholders.

The Aditya Birla Group company has also chalked out a clear Environmental, Social and Governance (ESG) commitment road map to achieve net neutrality by 2050.

The company said its efforts towards carbon neutrality have led to a 17 per cent reduction in specific energy consumption in aluminium production against their target of 25 per cent by 2025.

The company recommended a dividend of ~3 per equity share for FY21.