Alcan pockets Indian outfit

Mumbai, June 5: Alcan Inc is acquiring 76 per cent in Alukbond India Pvt Ltd for less than $50 million in an all-cash deal. Alukbond manufactures aluminium composite panels used in the exteriors of buildings.

This is the Canada-based company's second investment in manufacturing in the country. It had exited from Indian Aluminium six years ago.

The company also had a 45 per cent stake in the Orissa-based Utkal Alumina project with Hindalco as a partner. However, Alcan decided to part ways with the partner.

The investment in Alukbond comes at a time when the Indian real estate sector is growing at a robust pace. Alukbond will be renamed Alcan Composites India Pvt Ltd.

With the acquisition, Alcan plans to manufacture and sell Alucobond, its aluminium composite material for architectural facades, locally.

"The combination of our partner's local market knowledge with Alcan Composites' technological leadership and global network offers significant opportunities in building and retail construction," said Georg Reif, president of Alcan Composites. Alcan Composites is a subsididary of Alcan Inc. Alukbond has a manufacturing plant in Maharashtra and its revenues were below $5 million in 2006. Alcan plans to modify Alukbond's product line.

Senior officials of Alcan Composites said while the high-end market for architectural facades was put at 2.5 million sq ft and Rs 300 crore in 2006, it was growing at around 15 per cent per annum.

Alcan plans to capture at least 50 per cent of the high-end segment. The company is targeting large commercial establishments.

The investment coincides with speculations that Alcan may join hands with Sterlite Industries to bid for Hindalco Industries.

Although officials of Alcan did not comment on the subject, they said the company was aiming to form joint ventures in other engineered products.

Alcan is represented through Alcan International Network in India. However, this company is only the trading arm of the Montreal-based company and it sources for its parent's global operations.

Alucobond was first used as a cladding material for the architectural facade in DLF Corporate Park in New Delhi.

Other buildings that are now using it include the National Stock Exchange.