The Rs 15,000 crore A V Birla group proposes to invest over Rs 8,100 crore in its Aditya Aluminium project.
The project involves setting up an aluminium smelter, an alumina refinery and a captive power plant. The company is exploring the possibility of launching a $100-150 million yankee bond issue in the US section 144A market to part-finance the project.
The integrated complex in Orissa will be set up by group aluminium major Hindalco Indus-tries, which is now led by Kumar Mangalam Birla. The proposed Aditya Aluminium project will be a division of the Rs 1,157 crore Hindalco Industries.
Given Hindalco Industries expertise in the aluminium business and to capitalise on its inherent strengths, the group is assessing the feasibility of an integrated aluminium complex in Orissa, company officials told Business Standard. Although the company has yet to officially confirm the estimated project cost, its board of directors is expected to submit a status report on the project at the companys annual general meeting this month.
The aluminium smelter is expected to have an installed capacity of 250,000 tonnes per annum and the alumina refinery of over 1 million tpa. The captive power plant will have an installed capacity of 600 mw. The company also proposes to set up a wire rod mill. Sources close to the group said the project will also necessitate development of port facilities. The project site has not been finalised although the company has initiated a study to find one.
A techno-economic feasibility report is being prepared and a final decision on the project, capacities, costs and funding options will be taken only on completion of the report, the officials said, adding that as a first step the company had signed a memorandum of understanding with Orissa Mining Corp for transfer of two bauxite deposits for the aluminium complex.
Rating agencies Moodys and Standard & Poors have been appointed to rate the company before it floats the yankee bonds issue in the US market.
Despite a one-month shutdown caused by power problems in April last year and low aluminium prices, the net sales of Hindalco Industries dipped by only 7 per cent to Rs 1,157 crore in the last financial year.
Hindalco Industries, which is among the market leaders in the aluminium industry, had embarked on a Rs 1,750 crore expansion and modernisation programme in 1994. It spent Rs 575 crore in the year to March 31, 1997 on the programme and hopes to complete it by the end of the current fiscal.
The expansion and modernisation is seen enabling the company to consolidate its position as a competitive supplier of diversified and quality products and to increase its share of the value-added products market through higher volumes.
