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Hindalco transfers Novelis’ metal can sheet technology to new Indian plant

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hindalcoINDIA – Hindalco Industries is opening a new aluminium sheet facility in Hirakud, Orissa, India, for the production of beverage metal cans mainly for export.

 

This is the second phase of Hindalco’s strategy to expand its markets - it purchased Novelis in 2007 for $6 billion so the Indian aluminium and copper giant can use Novelis’s metal can sheet technology to produce for major global beverage brand owners such as Pepsi and Coca-Cola.

Hindalco is currently shifting key equipment from Novelis’ plant in Rogerstone, UK, to the new factory in Hirakud and has scheduled operations to start in October 2011. The new facility will have an initial production capacity of 140,000 tonnes of can body stock, with plans to expand it to 500,000 tonnes in the future

The Birla Group flagship claims that it will be the first to produce can body stock in India. "This is for the first time that can body stock will be manufactured in India,” said Hindalco managing director Debu Bhattacharya.

"This is part of the premium portfolio we want to grow. We follow a global marketing strategy and the target mark up and profitability of our Hirakud facility is expected to be in line with Novelis' premium portfolio margins," explained Bhattacharya, who is also Novelis’ vice chairman.

Last year, thin aluminium sheets accounted for 50-55% of Novelis' annual shipments last year and are priced 30-40% above base grade aluminium products. Currently, value-added items account for almost 43% of Hindalco's product basket in aluminium.

Hindalco said its Hirakud plant will primarily target export markets, though it is not ruling out its domestic market. It also revealed that one of its main customer target is Poland-based Canpack - one of the largest producers of aluminium packaging material for beer, beverages, food and chemicals – which has a 650-million can facility at Aurangabad.

PACKAGING BUSINESS INSIGHT ASIA

1 PBIA May2015 web

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