Manufacturing & Downstream: Hindalco in Odisha

National Symposium on Manufacturing and Best PracticesBhubaneshwar, 22nd August 2014

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Why Manufacturing is Important?

From the rise of England in the 19th Century, to the rise of the US, Germany, Japan and USSR in the 20th, to the newly industrializing countries like Korea, Taiwan, and now, China, manufacturing has been the key to prosperity.

- Prof. Erik Reinert, in his book, “How Rich Countries Got Rich … and Why Poor Countries Stay Poor”

Manufacturing is the heart of the economy because:

– It is a vehicle to translate resources (natural & human) into economic development

– Most services stand on the ‘shoulders’ of manufacturing

– It generates quality and long-term jobs

– It is far more tradeable than services

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Indian Manufacturing – yet to realize its full potentialShare of Manufacturing in India’s GDP (%)

While National Manufacturing Policy has set a target of Manufacturing being 25% of GDP, the trend is worsening recently

10.5%

13.7%

13.7%

16.2%

16.2% 15.4%

13.5%12.9%

1951 1961 1971 1981 1991 2001 2011 2014

Contribution of Manufacturing in Indian economy is lower than many comparable, or even more developed economies

33% 32% 31%

24% 24%22% 21%

18% 18%

15%13%

Source: World Bank. Data for 2013 or latest available

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Coming years may, however, see an inflexion point for our Manufacturing

Strong resource base

Urbanization

& Growing Demand

Availability of skilled workforce

Augmentation of infrastructure

Pragmatic & encouraging policies

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Odisha can lead India’s Manufacturing Revival

Mineral-rich State: 33% of India’s coal deposits, 51% of India’s bauxite deposits, 93% of nickel and 98% of chromitedeposits

Huge coastline of 500 km having two major and 10 minor ports

Abundant water resources

Already attracting a large chunk of industrial investments in India in recent years (over one-fourth, as per an RBI survey)

Friendly policies, one of the earliest proponents of single-window system

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Hindalco: A long-term player in Odisha’sindustrial development

Hindalco, $15 bn non-ferrous metals powerhouse of the Aditya Birla Group, has a historical presence in Odishaand is growing its footprint in the State aggressively

India’s second Aluminium smelter in Hirakud was set up in 1959

Its capacity has been expanded many-fold from 10,000 tpa in 1959 to 215,000 tpa now i.e. 21x

Captive Power Plant at Hirakud also grown from 67.5 MW in early 1990s to 467.5 MW now

In last 4 years, Hindalco has invested over Rs 21,000 crore in Odisha in new, state-of-the-art facilities across the Aluminium value chain

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Aluminium Value Chain

As a leader across Aluminium value chain, Hindalcovalues its relationship with the country’s largest base

of bauxite and coal resources

Mine

Bauxite

Coal

Alumina

Refinery

Power Plant

Aluminium

ProductionMetal

Value Added

Products

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Our Presence in Odisha at present

BaphlimaliBauxite Mines &Utkal Alumina

1.5 Mtpa90 MW Co-gen

Hirakud215,000 tpa Smelter

467.5 MW CPP135,000 tpa Flat rolled products

Aditya Aluminium360,000 tpa Smelter

900 MW CPP

Talabira Coal Mines

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Utkal Alumina, Rayagada

• The dream project was commissioned in May 2013 after a long-drawn journey of over two decades

Emerging as one of the most competitive Alumina refineries in the world

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Aditya Aluminium, Lapanga

One of the most advanced Aluminium smelters in the world

Commissioned in January 2014

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Hirakud FRP

Cutting-edge downstream facility; India’s first facility with a capability to produce can body stock

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Contribution to State Economy

Direct employment – nearly 14,500(including regular contract employees

Contribution to Central and State Exchequer

Approx. Rs 1,500 crore

Multiplier effects from indirect employment and ancillary industries

Deployment of state-of-the-art technology and focused efforts to minimize environment impact and create a sustainable development model

Note: Figures are estimated at full capacity utilization of existing facilities

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Hindalco: A responsible corporate citizen

R&R Colony

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Hindalco: A responsible corporate citizen

Community initiatives focused on Health, Education, Livelihood support, Self-Help Groups

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In summary: What Hindalco stands for …

Not stopping at extracting resources, but adding value –right up to the downstream facilities

A long-term approach and commitment to the State’s sustainable economic development

Deployment of advanced technology to create globally competitive assets

A True Partner in Growth and Development

Thank You