National Aluminium Company (Nalco) may incur losses for the first time in its history in 2009-10 if the current global economic slowdown continues, said Chairman and Managing Director C R Pradhan.
Pradhan, however, clarified that the aluminium major would not record any loss in the current financial year even though the profit margin would drop due to the fall in aluminium prices in the global market. The price of aluminium on the London Metal Exchange (LME) on Tuesday was $1313 a tonne. Last year, the average LME price of aluminium was $2,800.
"The international prices of aluminium has come down drastically, thereby lowering our profits in the third quarter of 2008-09. The profit figure would be badly affected by the end of this financial year. However, Nalco will not cut production," Pradhan told Business Standard during his visit to the company’s smelter plant here.
| METALLIC BLUES |
| * The international prices of aluminium have come down drastically, thereby lowering the profits of Nalco in the third quarter of FY09 |
| * The price of aluminium on the London Metal Exchange on Tuesday was $1,313 a tonne. Last year, the average LME price of aluminium was $2,800 |
| * Nalco has not scrapped its domestic as well as overseas expansion plans in the wake of the economic downturn |
The Navratna PSU has adopted several cost-cutting measures in order to reduce the cost of production. The costs of four departments — entertainment, public relations, advertisement and hospitality — have been brought down in the wake of the global economic downturn.
However, Nalco has not scrapped its domestic as well as overseas expansion plans in the wake of the economic downturn. "Nalco is going ahead with its Rs 6,000-crore third phase expansion plan. The company’s greenfield project at Jharsuguda is awaiting the Centre's approval," Pradhan said.
On the progress of Nalco’s expansion project at the smelter plant in Angul, Pradhan said, till now 50 out of 240 pots in the smelter unit have been commissioned with a production of 52 tonnes of aluminium a day. Another 120 pots would become operational by March-end and the remaining pots are scheduled to start operations by June.