Hindalco Industries, the country's largest aluminium company, plans to make inroads into supplies for the car market which has so far been dominated by steel manufacturers.
The Aditya Birla flagship, which also makes copper and owns mines, will soon make high-grade aluminium products for the body-in-white segment for cars -- mainly the outer body and side panels -- as part of an integration process following its recent acquisition of Novelis.
The $6-billion acquisition of Novelis, completed in May, has catapulted Hindalco as one of the top five aluminium companies in the world, apart from making global companies such as Coke and Pepsi, its customers for beverage cans. High-end aluminium maker Novelis has already achieved 3% penetration in supplying to the car market in Europe.
Hindalco officials said the same could be attempted in India especially at a time when global car companies are planning to launch small cars in the country. Aluminium usage in the body-in-white segment in the Indian car industry is practically nil although the white metal is used in radiators and other vital parts.
Steel companies such as Tata Steel have in the past signed agreements with large foreign steel companies such as ArcelorMittal and Nippon Steel, to make high-quality products for building car bodies, a vital and lucrative revenue segment for the steel industry.
Steel content in cars is currently estimated to be 60% of the total metal used in making the body. While all-aluminium cars, such as Audi and Jaguar, have also hit the market, the transition is still very gradual. This is now being challenged by the global aluminium sector that has joined hands to increase aluminium usage in cars saying it reduces the weight of the car and cuts fuel consumption.
This move by Hindalco follows closely on the heels of its plan to make can stock grade aluminium for the growing Indian beverage can market. Can stock aluminium is currently not made in India. Last year the country used about 280 million cans and the segment is growing at the rate of 25-30% annually. In volume terms, the can stock market is 3,000 tonnes large.
The integration of Novelis into the Aditya Birla fold will mainly focus on the merging of processes. "We are not in the classical term, overlapping companies," said Hindalco MD Debu Bhattacharya. "We have different product scopes. By and large, we are at the low-end of the product, (while) Novelis is at the high-end."
The Aditya Birla flagship, which also makes copper and owns mines, will soon make high-grade aluminium products for the body-in-white segment for cars -- mainly the outer body and side panels -- as part of an integration process following its recent acquisition of Novelis.
The $6-billion acquisition of Novelis, completed in May, has catapulted Hindalco as one of the top five aluminium companies in the world, apart from making global companies such as Coke and Pepsi, its customers for beverage cans. High-end aluminium maker Novelis has already achieved 3% penetration in supplying to the car market in Europe.
Hindalco officials said the same could be attempted in India especially at a time when global car companies are planning to launch small cars in the country. Aluminium usage in the body-in-white segment in the Indian car industry is practically nil although the white metal is used in radiators and other vital parts.
Steel companies such as Tata Steel have in the past signed agreements with large foreign steel companies such as ArcelorMittal and Nippon Steel, to make high-quality products for building car bodies, a vital and lucrative revenue segment for the steel industry.
Steel content in cars is currently estimated to be 60% of the total metal used in making the body. While all-aluminium cars, such as Audi and Jaguar, have also hit the market, the transition is still very gradual. This is now being challenged by the global aluminium sector that has joined hands to increase aluminium usage in cars saying it reduces the weight of the car and cuts fuel consumption.
This move by Hindalco follows closely on the heels of its plan to make can stock grade aluminium for the growing Indian beverage can market. Can stock aluminium is currently not made in India. Last year the country used about 280 million cans and the segment is growing at the rate of 25-30% annually. In volume terms, the can stock market is 3,000 tonnes large.
The integration of Novelis into the Aditya Birla fold will mainly focus on the merging of processes. "We are not in the classical term, overlapping companies," said Hindalco MD Debu Bhattacharya. "We have different product scopes. By and large, we are at the low-end of the product, (while) Novelis is at the high-end."
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