Development of Aluminium industry in India
India is an important role in the aluminium industry in global markets, due to its abundant bauxite proven reserves of 3.04 billion Metric Tonne. The bauxite is of good quality and easy to mine which makes the country one of the lowest cost manufacturers of metal in the world. India’s bauxite reserves are enough for futuristic 211 years of production. India accounted for about 8.7% of global bauxite production based on the production of 14 million tonnes in 2004. India’s production of aluminium aggregated 0.91 million MT in 2005, accounting for 3% of global production.
Indian Aluminium Industry dates back to 1942 stared a small capacity of 2500 MT/year plant by Indian Aluminium Company Limited. The Indian aluminium industry is primarily operated by large integrated players such as the National Aluminium Company. Consequently, mainly there are only three primary metal manufacturers in the sector namely Balco (Vedanta), National Aluminium Company (Nalco) and Hindalco (Aditya Birla Group). The factory was a collaboration effort with Alcan of Canada. Since then it has grown considerably. Today it markets 1.2 million MT of aluminium primary metal and 1.00 million MT of alumina. The Indian aluminium majors are now focused on pursuing brownfield and greenfield expansion programs along with commensurate captive power generation. The liberalization policy introduced by the Government of India generates a few impacts on the Aluminium Industry as well.
Features of Indian Aluminium
1). Highly concentrated industry with only three primary manufacturers in the country.
2). Controlled by two private groups (Hindalco & Vedanta) and one public sector unit (NALCO).
3). Electricity, coal and furnace oil are the main energy inputs.
4). All factories have their own captive power units for cheaper and nonstop power supply.
5). Energy cost is 40% of the manufacturing cost for metal and 30% for rolled products.
6). All the plants focus on Energy Management.
7). Plants have set their target of 1-2% decrease in specific energy consumption in the next years
The spring of Indian Aluminium
After years of silence, spring has finally arrived in India's aluminium industry. India's big aluminium companies are forecasting double-digit growth in demand for the metal in the current financial year, helped by car growth and increased industrial activity. Increased public investment is also seen as a major stimulus to demand, along with electricity reform and unprecedented suburban demand. India's aluminium industry is in a period of rapid growth. The compound annual growth rate for the use of light metals in industries such as automobiles and household appliances was 8 percent between 2011 and 2016 and is expected to continue through 2020. "Made in India" will further boost demand growth from the current 3.2m to 5m tonnes by 2020 to 8m tonnes by 2025.
According to research data from the aluminium industry association of India (AAI) and Crisil, electricity demand will increase from 290Gw today to 360Gw in 2020-21, so India's aluminium demand will increase in bulk. Demand for cars will rise from 25m now to 38m in the same period. India's construction industry is another big area where aluminum is expanding. In keeping with international sustainability standards, more aluminum building systems will be applied to future housing projects.
In addition, the national defense department is opening the door to aluminum, which will be used in many defense equipments, such as ammunition hardware and military aircraft, which will use rolled plates, extruded materials and forgings. Hindalco's spokesman said in a recent interview that demand is expected to grow by double digits as the government steps up industrial production, infrastructure investment and power sector reform. In addition, the monsoon will drive the growth of suburban demand. Earlier, Mr. TKChand, chairman of the National Aluminium Company Ltd. (Nalco), said Indian car sales would boost demand for aluminium. Hindalco spokesman added that the surprising positive side is that Chinese demand is returning strongly. Buoyant property markets, infrastructure investment, tax rebates and car sales have all boosted demand.
Industrial aluminum profiles are relative to architectural aluminum profiles. Generally speaking, industrial aluminum is to point to in addition to building doors and windows, curtain walls, interior and exterior decoration and building structure with aluminum outside all aluminum. Generally speaking, the transportation industry is a large demand for industrial aluminum profiles. Compared with aluminum extrusions used in construction, industrial aluminum extrusions have higher requirements on the production technology and equipment of enterprises. In the early stage of development, aluminum enterprises may need to invest a large amount of start-up capital, which may be difficult to bear for the aluminum enterprises whose operating conditions are not very ideal. But the introduction of the country's 13th five-year plan is likely to encourage aluminium companies to take big risks for future returns.
From the perspective of domestic aluminum consumption structure during the past "twelfth five-year plan" period, the transportation industry is an important consumption field of industrial aluminum profiles. In 2015, the proportion of aluminum consumption in the transportation industry was 21%, 6 percentage points lower than the global average. With the promotion of lightweight transportation vehicles, the proportion will grow rapidly. The transportation industry can also be divided into four areas: automobile manufacturing, shipbuilding, rail transit and aerospace. The real estate market has gradually come to a bottleneck today, the construction of aluminum has been no longer as broad as before, the transformation of industrial aluminum production, no matter from the policy, or from the market is the general trend. At present, including liaoning zhongwang and other domestic aluminum giants have announced to focus on the future of the business on industrial aluminum profile, I believe that in the future will lead more aluminum enterprises into this new field. To realize the "walking on two legs" of architectural and industrial aluminum profiles, and to focus on industrial aluminum profiles, to improve the viability of enterprises in the current environment.
The Challenge of Indian Aluminium
Indian aluminum is one of the most high-growth areas which could give impetus to the domestic GDP. However, the COVID-19 pandemic has already generated negative effects to India’s aluminum exports. Exports declined 11% from $5.7 billion in fiscal year 2019 to $5 billion in 2020. The new directive with regard to MEIS would render aluminum exports vulnerable and uncompetitive.
How to overcome the complicated situations
Explore more markets
Indian Aluminium Industry has to speed up the market entry, so as to provide first entry advantage to most of these unexplored markets, which will provide a substantial edge of Indian aluminium industry compare with other international competitors.
Maintain international customers
To indicate the importance of our presence to international customers. Setting branch offices in these countries of export is essential. Then it will make the international customer feel at ease since the supplier is always accessible and the requirement of the company can be well understood.
Keep strategic vendor relationship
Strategic vendor relationships with industrial consumers can be encouraged in Aluminium export markets. One approach we suggest is to cooperate with these industrial consumers in long term contracts. Another is to demonstrate the improvement and advanced tech of the Indian aluminium industry to meet their objectives. Even if it requires price discussion it’s worthwhile to obtain a strategic vendor relationship.
Set up a consortium
The approach of international sales should be able to establish an Indian foothold in this industry at the initial entry-level. A consortium can be built by these companies in the industry, to improve their national competitive advantage in this industry. As soon as the Indian aluminium industry establishes a foothold in this metal internationally then the firm can establish its position individually and easily.Tags: aluminum
Post time: 2020-11-30