The National Aluminium Company Limited (NALCO) is paving the way to make aluminium the metal of the future. The Chairman-cum-Managing Director, Dr Tapan Kumar Chand, in a tête-à-tête with Jetender Rawat, shares the company’s aggressive efforts to expand aluminium production in the country to make India self sufficient
The Navratna public sector undertaking (PSU), under Ministry of Mines, NALCO is the country’s leading manufacturer and exporter of alumina and aluminium. The company has declared its financial results for the third quarter ended December 2018 which is an indication of a good year in 2019. Edited excerpts from the interview:
Despite the drop in prices of aluminium in the global market, NALCO has recorded good profits. What has brought about this success?
The aluminum prices have come down from the third quarter to the fourth quarter almost by $100. According to the results for the third quarter of the financial year 2018-19, we recorded a net profit of Rs 302 crore and the net profit for the period from April 2018 to December 2018 grew to Rs 1499 crore in camparison to Rs 1,085 crore during the same period last year, which is a growth of 38 per cent. This is already more than the last year’s total profit of Rs 1,342 crore. Our operating profit was Rs 589 crore, registering 80 per cent growth over the same period of the last year. The net sales for the nine months of the fiscal are Rs 8,644 crore which is a growth of 32 per cent over the same period of the last year.
We have also achieved a record growth in production in all fronts. During the first nine months of the current fiscal, we achieved production of 55.39 lakh tonnes of bauxite, as compared to 54.40 lakh tonnes achieved during the comparable period of the previous fiscal. We produced 15.92 lakh tonnes of alumina hydrate, against 15.51lakh tonnes achieved in the corresponding period of the previous financial year. The metal production was 3.29 lakh tonnes, against 3.17 lakh tonnes during the comparable nine months of the previous fiscal and the net power generated during the period was 4,580million units.
We have a corporate plan to increase the turnover from the existing level of `10,000 crore to ` 30,000 crore. This year itself, we are likely to register a gross turnover of more than `12,000 crore. We have managed to clock this growth by increasing the production capacity, reducing the cost of production and also reducing energy costs. Now, our plan is to open the Utkal-D coal block mines in the first half of 2019 which will help us bring two million tonnes of coal, which will be a game changer in NALCO’s profitability.
What were the major insights during the recently held International Conference on Aluminium (INCAL 2019)?
INCAL 2019 was a grand success which saw participation from more than 850 delegates, including 150 foreign delegates from 20 countries. This global summit saw aluminium producers, technologists, equipment suppliers, raw material suppliers from across the globe who came together to develop a roadmap for sustainable aluminium industry vis-à-vis other metals and contribute for green development. This event provided us a mega platform to exchange ideas on the latest technological advances, upstream and downstream integration and also became the platform to promote Odisha as the aluminium capital of the country. We also formulated the Aluminium Roadmap 2030 which focuses on reducing the cost of production through technology solutions. This reduced cost of production will make the metal more affordable to the masses and thus increase its salability, leading to scalability. Another attraction was the exhibition with over 100 exhibitors from across the globe for industries to showcase their technology, products and processes.
It was deliberated that aluminium should be projected as the metal of choice for driving growth and development. The conference was also instrumental in dispelling some myths regarding the environmental impact of bauxite mining. It was discussed that aluminium is an environment friendly metal since it does not corrode, is anti bacterial and light. In case of automobile sector, aluminium is a better metal and this can be understood from the fact that if one kg of metal is replaced with one kg of aluminium, there is a reduction of 23 kg of carbon dioxide. It is a direct impact on improving air quality. Electrical vehicles are manufactured from aluminium, which reduces two-thirds of consumption of fuel and thus indirectly reduces the consumption of fossil fuels.
What is the focus of the ongoing international tie-ups of the company?
To ensure that we have access to strategic minerals like lithium and cobalt, along the lines of ONGC Videsh, a joint venture was set up between NALCO, Hindustan Copper and Mineral Exploration Corp Limited, to look for and acquire strategic mineral assets abroad, particularly in Argentina, Bolivia and Chile. A collaboration with Argentina is highly likely for lithium extraction to be done by India. The other tie-ups focus on high-end technology. We are also planning to set up high-end aluminium products plant by availing technology from foreign suppliers. The technology for high-end aluminium products plants is not available in India. So, we are in talks with potential suppliers in USA and Russia to avail their technologies. If we get the right technology, our proposed plant may come up within the aluminium park at Angul or somewhere closer to the site. We have floated an Expression of Interest (EoI) to select the technology supplier. We already have a memorandum of understanding (MoU) with the Defence Ministry PSU—Mishra Dhatu Nigam Limited (Midhani) for manufacture of high-end aluminium alloys.
What initiatives have been taken to boost research and development?
As per the government mandate, one percent of the company’s expenditure should be on research and development. We are spending more than this amount and have set up a modern research centre. The Centre of Excellence is functioning under four broad categories—application of new products, process efficiency, fundamental research and wealth from waste. We are also setting up a Special Purpose Vehicle in collaboration with the Department of science and Technology (DST) and knowledge partners like IIT, NIT, ICTR and IIIT to develop incubation centres particularly for technology. Recently, we have had a breakthrough in combating fluoride contamination with the use of nano-technology.
What are the CSR initiatives of the company?
We have introduced the idea of Employee Social Responsibiliy (ESR) along with Corporate Social Responsibility (CSR) which is an idea to engage the employees of the company for socio-economic upliftment. We introduced a scheme— ‘NALCO Ki Ladli’, where a poor and underprivileged girl child is adopted to provide education from kindergarten to post graduation. The employees can contribute Rs 3,000 per annum, per girl child, choose a school from a list of defined government schools and then the school adopts the child to fulfil the educational requirements. The company also contributes an equal amout which is given to the principal. We started in 2016 with 277 girls and many of these children have done extremely well in their examinations. Taking the scheme further, NALCO is now supporting the girls until they are settled as a professional. As many as 300 employees have already shown support to the cause. We have also introduced an Integrated Health Management scheme to plug the gaps in the health care system. We are developing a structure where we can connect the people from the peripheral areas to the ongoing schemes of the government.
Monday, 11 February 2019