MUMBAI: Hindalco Industries, the flagship company of the Aditya Birla group, is learnt to be exploring the possibility of bidding for the US subsidiary of global aluminium major Alcan, as the world's second largest aluminium maker is mulling closure of smelters due to high electricity costs.
Revenues of the undisclosed unit is estimated to be in the range of $2billion and $3billion, said sources close to the development. However, when contacted, an Aditya Birla group spokesperson denied any move to bid for any Alcan unit.
Hindalco, which is India's largest aluminium maker, recently indicated its willingness to buy units overseas to boost its presence in the global aluminium market. Hindalco already has a joint venture with the Canada-based Alcan, called Utkal Alumina, to build an alumina refinery in Orissa.
Aluminium, used largely in the transportation and power sectors, is an electricity-intensive industry. Many companies have been forced to look at regions with cheaper electricity costs. “The proposal to bid for Alcan units has been on Hindalco's radar for a very long time and there have been intense debates on whether to go for such bid,” said sources.
At about 3.5 million tonnes, Alcan is the second largest after Alcoa. In comparison, Hindalco makes only 500,000 tonnes of aluminium products annually.
Hindalco recently formed a joint venture partnership with Almex USA Inc to make high-strength aluminium alloys used in the aerospace, sporting goods and surface transport industries. The joint venture is to be named Hindalco-Almex Aerospace. Hindalco owns 70% of the equity capital, with Almex holding the balance 30%. Shares of Hindalco rose 2% to Rs 168 on the BSE on Thursday, in a strong market which saw the broader index rising by 2%.
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