Hindalco Industries Ltd. has earmarked about $2.5-$3 billion of capital expenditure to bolster growth over the next five years, chairman Kumar Mangalam Birla said while addressing shareholders online at the company’s AGM on Monday.
He said the capex in Novelis would be invested mainly in the auto-finishing line expansions in the U.S. and China and in rolling and recycling capacity expansions in Brazil.
“In India, we are on track to implement organic growth projects entailing a capital outlay of over $1 billion towards Utkal Alumina expansion, various aluminium and copper downstream expansions, and speciality alumina projects. These investments will advance our strategy of building a more predictable and resilient business model,” he added.
He said the company started FY22 at a strong pace, despite the impact of the second wave. “We continue to see strong demand across all our business segments, plants running at capacity, and improving margins, supported by better macros and operating efficiencies,” he said.
Mr. Birla said economic indicators showed that the Indian economy was rapidly normalising towards pre-pandemic activity levels and various steps taken by the Reserve Bank and the government had helped in containing the economic disruptions of the pandemic.
“In FY22, the Indian economy is projected to grow at a little below10%. Vaccination is picking up pace, which would improve India’s resilience against a potential third wave,” he added
Stating that the uncertainty about virus mutations and repeated infection waves had not gone away, he said: “Yet, one gets a strong sense that there are more silver linings to the economic scenario today than at most points during the pandemic.”
He said the fiscal stance clearly seemed to be poised for an acceleration of government capex in the coming years, especially in relation to the National Infrastructure Pipeline projects. Alongside, there were very strong signals of a pick-up in the private sector capex cycle, driven by companies such as Hindalco, he added.
“The three factors of cyclical upswing, conducive policy impulses and an improving global backdrop are likely to align themselves to position India for a virtuous cycle of growth and investments in the medium-term,” Mr. Birla said.
“In the interim, of course, policymakers and companies will need to remain on guard with respect to the pandemic-related uncertainties,” he added.
“If the story of 2020 was about resilience. In 2021 the story is all about transformation. And one of the biggest levers for transformation is technology,” Mr. Birla said.
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