Hindalco Acquisition of Novelis

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HINDALCO INDUSTRIES LTD

14 December, 2011
| PROJECT B : SCOPE ANALYSIS|

Hindalco Industries Limited
Hindalco Industries Limited is the flagship company of the Aditya Birla Group. A metals giant with a consolidated turnover of Rs. 72,078 crores (US$ 15.85 billion), Hindalco is the world’s largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its Copper smelter is the world’s largest custom smelter at a single location. Figure 1 shows the various companies owned by Hindalco. Figure 1: Companies under Hindalco Industries [20]

HISTORY
Hindalco was incorporated in 1958. In 1962, the late Mr. G.D. Birla set up India's first integrated aluminium facility at Renukoot, in the eastern fringe of Uttar Pradesh, India. It was supported by a captive thermal power plant at Renusagar in 1967. Hindalco ascended to its leadership position in the aluminium industry under the guidance of the late Mr. Aditya Birla. Mr. Kumar Mangalam Birla, the Group Chairman, took over the mantle next. It was his vision that resulted in the consolidation of the business segments of aluminium and copper to make Hindalco the non-ferrous metals juggernaut that it is today. This was achieved partly by expansion through mergers and acquisitions with companies such as Indal and Birla Copper. Hindalco also secured copper reserves and expanded its operating base by acquiring the Australian Nifty and Mt. Gordon copper mines. Over the years, Hindalco has grown into the largest vertically integrated aluminium company in the country and among the largest primary producers of aluminium in Asia. Its copper smelter is today the world's largest custom smelter at a single location. In 2007, the landmark acquisition of Novelis Inc., the world's largest aluminium rolling company, placed Hindalco firmly on the world map, securing its rank in the top five global aluminium majors and enlisting it in the Fortune 500 companies.

MANAGEMENT
Dr. Kumar Mangalam Birla, an MBA from the London Business School, is the CMD of Hindalco and the management team is listed as below: [19] * * Mr. S.S. Kothari, Non-Executive Director
* Mr. M.M.Bhagat, Independent Director
* Mr. K. N. Bhandari, Independent Director
* Mr.N.J. Jhaveri, Non-Executive Independent Director
* Mr. Ram Charan, Director
Dr. Kumar Mangalam Birla, Chairman
* Mr. D. Bhattacharya, Managing Director
* Mrs. Rajashree Birla, Non-Executive Director
* Mr. A.K. Agarwala, Non-Executive Director
* Mr. C.M.Maniar, Independent Director
* Mr. Jagdish Khattar, Director
LINES OF BUSINESS & PRODUCTS
Hindalco’s operations are organized into two Strategic Business Units, namely Aluminium and Copper.

Aluminium: Hindalco is Asia's largest integrated primary producer of aluminium and among the most cost-efficient producers globally. Their aluminium units across India encompass the entire range of operations, from bauxite mining, alumina refining, aluminium smelting to downstream rolling, extrusions and recycling. In India, Hindalco has a leadership position in aluminium and downstream products. The product range includes rolled products, extrusions, foils, primary aluminium ingots, billets, wire rods and aluminium slabs. Hindalco metal is enlisted under the high-grade aluminium contract on the London Metal Exchange (LME) as a registered brand. Copper: Hindalco's copper division, with its integrated facility at Dahej in the Bharuch district of Gujarat, enjoys a leadership position in India. The unit has the unique distinction of being the largest copper smelter in the world at a single location with a 500,000 tpa capacity with multiple world class technologies. The facilities comprise copper smelters, captive power plants, utilities and a captive jetty. The company's copper product range includes copper cathodes and continuous cast copper rods. Birla Copper also produces precious metals, sulphuric acid, phosphoric acid,...
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