Hindalco bets big on aluminium alloys

Hindalco Industries of the Aditya Birla Group has targeted the automobile and aviation sectors to drive it foray into aluminium alloys.

Novelis, the Canadian subsidiary of Alcan Inc, which was acquired by Hindalco this year, owns the niche technology that creates special aluminium alloy that could replace steel in cars.

According to D Bhattacharya, vice-chairman, Novelis, the company would bring special technologies that could add value to the overall operations of Hindalco.

Though it would take some time before car makers in India replace steel with aluminium, car makers in Europe are already using this technology. The technology has helped to make an Audi much lighter than a Maruti 800.

"The weight of personal utility vehicles is going to be an important aspect of the overall strategy in controlling green house gas emissions in the developed world, where aluminium alloy is going to play a big role," he said.

The special technology alloy is expected to make a car over 40 per cent expensive than the normal car made with steel. But it would provide as much strength and shaping capability as steel.

"As the consumption grows, the cost of these special metal would come down finding its way into emerging countries like India," he said.

Meanwhile, Hindalco is investing about Rs 150 crore in Hindalco Almex Alloys Limited (HAAL), a joint venture company between Hindalco and Almex of US, to develop high-strength aluminium alloys for the aviation industry.

Hindalco holds 70 per cent equity in the project, which is coming up in Aurangabad, Maharashtra. It is expected to be ready in a year. The plant is expected to be a Rs 700-crore company once it reaches the full capacity of 45,000 tonnes.

"Aviation offers high business potential as the sector is growing at 15-20 per cent annually," Shashi K Maudgal, executive president (marketing), Hindalco, said.

The company is looking at tying up with tier 2 and tier 3 customers, who are essentially the component suppliers to aircraft manufacturers such as Boeing and Airbus.

Besides the aviation sector, the company also expects to find several domestic customers, including the Defence Research Development Organisation (DRDO) for these aluminium alloys.