Hindalco builds many brands out of one

The Aditya Birla Group flagship repackages its metals portfolio for a varied and global audience

The 60-year old metals major from the Aditya Birla Group (ABG) has adopted a multi-pronged branding strategy for its aluminium products, pursuing a premium play for its ingots for the global market while walking the thin line between value and price for its value-added products at home. Driving Hindalco Industries’ brand push are its two modern aluminium smelters and a growing internal thrust towards consumer-facing businesses. However as it builds itself a portfolio that caters to different consumer groups, the challenge will be to consistently maintain a differentiated identity across its brands.   

Satish Pai, Managing Director, Hindalco

Besides, branding aluminium is tricky. Commodity markets are volatile and that makes it difficult for a company to hold on to a price and for brands to hold on to their positioning. For Indian aluminium producers, branding is even more perilous because the quality of the local metal is seen to be inferior to that from the West.  

To break away from the past, Hindalco has positioned the metal from its new smelters, Aditya and Mahan, differently from that produced in its other centres. These plants are more modern and use the latest technology and Hindalco has made sure that the aluminium they spew out is duly certified by reputed agencies. 

“Earlier, ingots coming from Hindalco were sold at discounted price compared to the West. But with Mahan and Aditya, the equation is changing. Now the metal that comes from these two smelters, there is no discount. They are considered international class,” said Satish Pai, managing director of Hindalco Industries. So within Hindalco there is a distinct brand hierarchy at work; aluminium ingots from the old smelters will continue with the discounting game while those from Aditya and Mahan will be positioned in the premium space. 

The premium game

To change the perception around Indian aluminium, Hindalco decided to get metal from its new smelters certified by the London Metal Exchange (LME). “And so a certain quality, finish and packaging is assured which lifts the ingots from these plants to the international class category to be called the good western metal,” explained Pai. 

The smelters have also helped expand capacities and improve cost-efficiency, the company said. Experts say automation, improved technology and lower manpower cost among other parameters helped price Aditya and Mahan metal at $1300-1400 per tonne as against $1,600 per tonne from older plants like Hirakud and Renukoot. Once the quality of the metal is accepted, the brand develops a reputation and this helps command a premium status in the commodity market say experts.

Riding downstream

Hindalco is eager to develop significant and reputed downstream (products such as aluminium foil, cans and other applications) labels. Downstream operations help hedge against volatility in the commodity market and Hindalco’s two acquisitions Indal (2000) and Novelis (2007) have helped it do that. 

However within the downstream portfolio, Hindalco has taken a differentiated approach for its brands from Novelis visa-a-vis the rest of the company. While the Novelis acquisition has given the Indian brand a global footprint, Hindalco is not keen to impose its imprint on its turf. Hence there has been no move to bring about an identity makeover or impose a different label on Novelis products. 

  

 “We haven't changed the branding of Novelis after the takeover. It was not doing well operationally when we acquired it and we have turned it around, made requisite investments but no rebranding has been done,” said Pai. Through Novelis, Hindalco is looking at a big push into the  aluminium cans market and into automotive white sheets. 

In the domestic market, Hindalco has three consumer facing brands along with a business-to-business product: industrial metal. Eternia aluminium windows, Freshwrapp aluminium foils and Everlast aluminium roofing sheets are the consumer brands that Hindalco plans to scale up. “We are trying to position ourselves closer to international brands (in these three segments) in quality, but with a price point lower than international and higher than local brands,” explained D K Das, chief marketing officer at Hindalco Industries.

For industrial metal, which is essentially a business product, the company is looking at adding value through efficient after-sales service facilities. “We will make the customer reach deeper by selling solutions to them rather than just delivering the product on time. This will ensure long-term clients with customised reach,” said Pai. 

Service is a key brand differentiator when it comes to commodity purchases and for Hindalco, this could be one way to charge a premium for its product and stand out from competitors. On the flip side, dissatisfied customers could do long term damage to the brand’s reputation and that could impact the entire portfolio. And that is the fine line that Hindalco will need to walk as it puts together a multi-layered branding strategy.