Aditya Birla Group’s metals flagship Hindalco Industries Limited today signed a definitive agreement to acquire Hydro’s aluminium extrusions business in India for ₹247 crore.
This acquisition from Hydro, the Norway-headquartered aluminium and energy company, brings into the Hindalco fold, an integrated facility located in Kuppam, Andhra Pradesh, the world’s largest aluminium rolling and recycling company said in a statement to the stock exchanges today.
Hydro’s Kuppam plant has a 15,000-tonne aluminium extrusions capacity. It is integrated with advanced value addition capabilities for surface finishing and fabrication.
Located about 120 kilometres from Bengaluru, the Kuppam facility offers custom aluminium extrusion products and solutions for auto, building and construction, and industrial applications. As per Hindalco, it will help extend Hindalco’s footprint in South India, the second largest extrusions market in India.
Satish Pai, Managing Director, Hindalco said the acquisition of the Kuppam plant is a strategic step to expand the company's presence in the upper-end of the value-added market. "The plant’s specialised product portfolio will enhance our capabilities in high-end extrusions and fabricated solutions," he said.
As per Pai, the acquisition is the latest step in Hindalco's long-term strategy to augment its downstream business. "Over the past year, we have already announced a total capex of ₹3,730 crore towards addition of downstream capacities at Silvassa and Hirakud. Our recent acquisition of the Ryker copper wire rod unit for our copper value-added portfolio is also in line with this strategy," he added.
Hindalco is eying to increase downstream capacity to meet the growing market demand, and expand product portfolio and increase revenue from value-added products.
As per the company, the Kuppam plant will also serve as an archetype for Hindalco’s upcoming state-of-the-art extrusions plant in Silvassa.
The aluminium extrusions market in India is expected to grow rapidly from the current level of around 373,000 tonnes to reach about 850,000 tonnes by 2030. Once commissioned, the Kuppam and Silvassa units are expected to boost Hindalco’s total aluminium extrusions capacity from 60,000 tonnes to 109,000 tonnes. The transaction is expected to close in the next quarter.
The Hindalco share is trading at ₹455.30, up ₹4.80 or 1.07 per cent, on the National Stock Exchange (NSE) today.
Also read: Hindalco acquires Hydro’s aluminium extrusions biz in Andhra. Details here
