Terming the market situation for domestic aluminium producers as "very challenging", Vedanta today said the firm might be forced to take "some difficult decisions" on jobs to cut costs.
"It is a very challenging market situation for aluminium producers in India. We are taking all measures to keep our aluminium business steady and reduce costs. This may result in us taking some difficult decisions," Vedanta CEO Tom Albanese told PTI when asked whether the company will cut jobs in its aluminium business.
He said the domestic aluminium and steel producers are facing an almost similar predicament.
"Both steel and aluminium companies in India are facing similar problems of weak prices and increasing cheaper imports. In both, aluminium and steel, China is a dominant producer and it has excess production, which it is exporting," he added.
Earlier this month, Vedanta Aluminium CEO Abhijit Pati had said that due to cheap imports and falling aluminium prices in the global market, domestic industry will be forced to take drastic steps such as job cuts and production cap.
"We are at such a low point that if the government does not support the aluminium industry, we may have to resort to drastic steps such as job cuts and bringing down production," Pati had said.
Vedanta Aluminium, one of India's largest aluminium producers, operates a refinery having a capacity of 1 million tonnes per annum (MTPA) at Lanjigarh in Odisha.
Aluminium Association of India (AAI) met the Mines Secretary and other government officials last week and sought a level playing field for the Indian producers by raising the import duty on aluminium metals to 10 per cent.
According to market analysts, the situation has worsened due to continuously sliding global prices in recent years.
In last three years, LME (London Metal Exchange) prices have come down by 35 per cent to USD 1,660 per tonne in June, 2015 from a peak of USD 2,555 a tonne in June 2011.
According to AAI data, total imports to India have grown by more than 159 per cent to 1,563 kilo tonnes (KT) in 2015 as against the import of 881 KT in 2011, mainly from China and Middle-Eastern countries.
This has led to imports accounting for 56 per cent of Indian aluminium consumption in 2014-15, while products of Indian producers account for only 44 per cent.
China, which possesses more than 50 per cent of world's aluminium production, is now exporting over 20 per cent of its products and their exports to India have surged by 200 per cent in FY 2014-15 compared to FY 2010-11.
To capture global markets and gain competitive edge over its rivals, China offers its companies indirect subsidies like power tariff discounts of around USD 200 per tonne to aluminium smelters, 13 per cent value added tax rebate on exports and favourable terms of credit.
