Nalco to invest Rs 33,000 crore for diversification, expansion

Unveiling a plan for high growth through diversification and expansion, aluminium giant Nalco is set to invest more than Rs 33,000 crore in a host of sectors including energy to boost its productivity and profitability.

"Nalco is embarking upon an ambitious growth plan involving a massive investment of more than Rs 33,000 crore in next 3 to 4 years, not only in aluminium sector but also in energy sector," Ansuman Das, CMD of Nalco, told reporters after the company's annual general meeting held in Bhubaneswar on Friday.

"Nalco has begun a new odyssey to conquor the challenges of present and threats of future with its new Corporate Plan ... this will give a significant boost to the company's productivity and profitability," he said.

The plan encompasses expansion, both brownfield and greenfield, diversification into energy and non-ferrous metal sectors, backward integration, merger and acquisition, Mr Das said.

Referring to greenfield projects, the Nalco chief said the company is planning to set up a Rs 5,500 crore alumina refinery in Gujarat with capacity of one million tonne per annum, preparation of detailed project report for this has started.

Similarly, the company is also planning a Rs 16,450 crore smelter of 0.5 MTPA capacity and power plant of 1260 MW capacity in Odisha's Sundargarh for which approval of the high level clearance authority of the state government has been obtained, he said.

He said that site-selection study and preliminary land survey for the proposed project was underway and that the company is actively pursuing allocation of coal block in this regard.

On Nalco's foray into the energy sector, Mr Das said the company had formed a joint venture with Nuclear Power Corporation of India (NPCIL) to set up nuclear power plants.

Both the partners have selected Kakrapar units 3 and 4 of 700 MW each in Gujarat as their first JV project with an estimated project cost of Rs 11,500 crore, he said. The Nalco chief further said construction work had already started and the project was scheduled to be commissioned by December, 2015.

In pursuit of harnessing renewable energy sources, Nalco has entered into new business of wind power generation with the establishment of 50.4 MW wind power plant at Gandikota in Andhra Pradesh at an investment of Rs 274 crore.

A second wind power plant of 47.6 mw is being set up in Rajasthan with an investment of Rs 283 crore, while another plant has been planned in Nalco's own mined-out area at Panchpatmali in Koraput district of Odisha.

Regarding Nalco's performance, Mr Das said the company had posted a higher net sales turnover of Rs 6,809 crore in 2012-13, which was 4.75 per cent over Rs 6,500 crore achieved in the previous fiscal year. The rise in sales turnover was mostly attributed to higher production and sale of alumina.
However, net profit of the company during the year was at Rs 593 crore compared with Rs.850 crore in previous fiscal year, primarily due to high input costs, he said.

Mr Das noted that the company in the previous fiscal year, had achieved the highest-ever performance in Bauxite transportation of 54.19 lakh MT, against previous best of 50.03 lakh MT in 2011-12.

At the same time, Nalco's alumina refinery had produced 18.02 lakh tonnes of alumina hydrate, which was an all-time high, against the previous best of 16.87 lakh tonnes achieved in 2011-12, Mr Das further said.

The aluminium smelter plant at Angul achieved cast metal production of 4.03 lakh MT against 4.13 lakh MT achieved in 2011-12, he said.

The company has also set up a foundation for its CSR activities and allocated an additional 1 per cent of its yearly profit, thereby doubling the CSR budget to 2 per cent of its net profit, Mr Das added.