aluminium expansion
TRANSCRIPT
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CONTENTS• An Intro into Aluminum .• Source and obtaining process• Global consumers (by share and purchasing ratio)• Major companies
• MARKET SHARE• TURNOVER (PRODUCTION / SALES)
• Global Indian Companies.• MARKET SHARE • TURNOVER • TOP PROFITABILITY • LAST FIVE YEARS ACUISITION / MERGERS.
• Export – Import / Supply = Demand• Future of Aluminum in India.
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ALUMINUM – AN INTRO
• Third most abundant element on earth. It has atomic mass of 13 and is currently traded at the value of US$2365 / Metric Ton.
• Global output at 44.8 million metric tonnes with an estimated $112.8 billion in revenue in 2012.
• Analysts predicted an annual growth rate of 7 to 14% in the global industry demand up to 2011,
• 12% increase in construction expenditure in 2007.
• Minimum of plus 16 million annual growth in urban population during the next 8 years fuelled by Aluminum.
• Aluminum alloys are the critical backbone of three global industries –Transport, Engineering and construction.
2010 2011 201238
39
40
41
42
43
44
45
41.53
43.98
44.9
40.96
42.45
43.33
Production (In Million Tonnes)Consumption (In Million Tonnes)
INDIA
RUSSIA
CHINA
JAPAN
USA
EUROPE
0% 5% 10% 15% 20% 25% 30% 35% 40%
11%
28%
29%
18%
17%
26%
27%
10%
13%
35%
33%
35%
31%
22%
22%
10%
12%
10%
15%
29%
10%
10%
23%
15%
18%
13%
21%
22%
10%
7%
OthersPackagingEngineeringTransportConstruction
ALUMINIM DISTIBUTION IN VARIOUS SECTORS
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Source and obtaining process
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Source and Obtaining Processes
•Aluminum is sourced at bauxite ores. •Third most abundant metal on earth with bauxite as its main ore. •Derived through open mining system in various parts of the globe. •Largest reserves of alumina are in Guinea.•Production usually distributed in three steps: - Mining – Electrolysis Separating – Hall-Hérault.•Biggest aluminum producing mines are in Australia.
Source
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Process
Mentioned below are three steps in Alumina Manufacturing process: - •Bayer process : -
is the first step through which aluminum is crushed and mixed with sodium hydroxide. It is then further subjected to high temperature and pressure to separate
heavier elements. The Electrolysis Step: -
aluminum oxide is placed in an electrolytic cell, an electrically charged carbon rob is introduced to pull the oxygen atoms away from the aluminum. The result is carbon monoxide, carbon dioxide and pure aluminum, which sinks to the bottom in a powder form.
•Hall-Hérault Process: - alumina is dissolved into a mixture of molten cryolite, and then electrolyzed to end up with pure aluminum. For the Hall-Hérault process to function, an electric current of low voltage but from 200,000 to 500,000 amperes must pass continuously through each cell. On average it takes about 15.7 kWh of electricity to produce 1 kg of aluminum
•Electricity plays a big role in Aluminum production. •Average electricity costs fluctuates at $0.015 per KWH. •Transportation also forms an intrinsic and expansive part of the process. •Average transportation cost US$33.36 per Ton.•Global mining wage stands at $87.56 / ton.
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•Meting point of aluminum at 660.32 Celsius. •Boiling point at 2519 Celsius. •An aluminum smelter consists of a large number of pots, steel containers lined with carbon, in which the electrolysis takes place; smelting is run as a batch process, with the aluminum metal deposited at the bottom of the pots and periodically siphoned off. Power must be constantly available, since the pots have to be repaired at significant cost if the liquid metal solidifies.•A typical smelter contains anywhere from 300 to 720 pots, each of which produces about a ton of aluminum a day. •Besides labor, Electricity constitutes a lions share (in some countries up to 44%)of the production cost in aluminum as it is required in all three stages. •The global primary production stood at 44.9 million tones. • The global consumption was slightly less at 43.33 million tones. •Due to its non corrosive nature it is used in 90% of the manufacturing around globe.
0
2
4
6
8
10
12
14
16
1816.13
2.5 2.27
4.253.8
2.7
1.742.3
4.68
17.78
2.53 2.3
4.314.02
3.48
1.82.18
4.96
17.99
2.32.01
3.963.3 3.34
1.41.88
4.4
2010 (Primary Aluminum Pro-duction In Million Tonnes)
2011 (Primary Aluminum Pro-duction In million tonnes)
2012 (Primary Aluminum Pro-duction In million Tonnes)
Process & Output
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Global Consumers TRANSPORT
CONSTRUCTION
ENGINEERINGPACKAGING
OTHER
ALUMINUM
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Major Global Consumer Base• Five major global Aluminum consumption Industries: -
– Transportation– Engineering – Construction – Packaging – Others (consumer goods )
• Transportation:-– Includes aviation, automobile and shipping sectors. – Composite aluminum or aluminum based alloys are imperative in making airplanes
lighter and stronger. – Aluminum consumption in automobile industry increased to 9.8 MT (million tonnes)
in 2009 as compared to 3.7 MT in 1991. – In newer cars, aluminum induction comprises up to 28% of the total car parts
further reducing the weight of the car on an average by 194K.G globally. – Introduction of Aluminum in automobile also reduces the emissions from the car (on
an average it increases the fuel efficiency by 700 liters over the lifetime of the car and cuts down the lifetime emission of the car by 8 tonnes).
– two thirds to three quarters of a passenger plane’s dry weight, and from one twentieth to half of a rocket’s dry weight accounts for the share of aluminum in airborne craft
– aircrafts of all types and dimensions are constructed mainly of the ‘winged metal’. It accounts for about 80% of the weight of unloaded air vehicle. For example, the famous Boeing 747 contains 75 tonnes of aluminum.
– The advantages of aluminum alloys (2219 etc.) also include their high performance under cryogen temperatures in contact with liquid oxygen, hydrogen, and helium. The so-called cryogen reinforcement happens in these alloys, i.e. the strength and flexibility increase parallel to the decreasing temperature.
– Aluminum is used in high-speed railway cars and modern subway cars — it is light and resistant to heavy vibration but consumes little power. For these reasons, for railway manufacturers, aluminum is certainly a material of the future. Aside from passenger railway cars, freight cars have been made from aluminum for a long time, with the first car being manufactured in 1931. In the 1960s, aluminum was used in the manufacturing of box freight cars with a capacity of about 100 tonnes. It took about 7 tonnes of aluminum to make each car, 10 tonnes less than for the steel version.
42%
13%4%
8%
4%
4%
25%
Aluminum Consumption in Developed Economies
TRANSPORT
CONSTRUCTION
CONSUMER GOODS
ELECTRICAL GOODS
MACHINERY
PACKAGING
OTHERS
19%
37%15%
18%
6%
4%4%
Aluminum Consumption in Developing Economies
TRANSPORT
CONSTRUCTION
CONSUMER GOODS
ELECTRICAL GOODS
MACHINERY
PACKAGING
OTHERS
10
Major Global Consumer Base
• Aluminum alloys used in shipbuilding corrode 100 times slower than steel. During the first year of operation, steel corrodes at a speed of 120 mm/year, while aluminum – at a speed of 1 mm/year
• Aluminum vessels do not require such extensive care as steel vessels, which has an impact on the cost of their maintenance.
• Aluminum alloy 5083 is an aluminum alloy suitable for cryogenic applications down to design temperatures of −165 °C (−265 °F), since alloys of this type do not show the ductile-brittle transition phenomenon. This alloy is also common for the marine applications such as body materials for ships, underwater vehicles etc.
INDIA RUSSIA CHINA JAPAN USA EUROPE0%
5%
10%
15%
20%
25%
30%
35%
27%
10%
13%
35%
33%
26%
ALUMINUM CONUMPTION IN TRANSPORTATION SECTOR BY COUNTRY
ALUMINUM CONUMPTION IN TRANSPORTATION SECTOR BY COUNTRY
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Construction
INDIA RUSSIA CHINA JAPAN USA JAPAN0%
5%
10%
15%
20%
25%
30%
11%
28%29%
18%17%
26%
CONSTRUCTION'S SHARE OF INDIVIDUAL COUNTRY'S ALUMINUM CONSUMPTION
CONSTRUCTION'S SHARE OF IN-DIVIDUAL COUNTRY'S ALUMINUM CONSUMPTION
Alumina & Steel alloys are used in making structural steel beams for high rises, dams and nuclear plants. Its proximity to non-corrosion add qualitative strengths to steel alloys. High Purity Alumina is the most cost-effective and widely used material in the family of engineering ceramics.Excellent dielectric properties from DC to GHz frequencies Resists strong acid and alkali attack at elevated temperatures . Aluminum's unmatched recyclability is user friendly and gives architects a key sustainability design tool.Aluminum's high strength-to-weight ratio makes it possible to design light structures with exceptional stability.The metal‘s inherent strength allows aluminum window and curtain wall frames to be very narrow, maximizing solar gains for given outer dimensions.
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ENGINEEERING Aluminum, a superb conductor of electricity has seen replacing copper in many electrical applications. Moreover it is non-magnetic and non combustible, properties highly essential in advanced industries such as electronics or in offshore structures.Since it is non corrosive and light its alloys are used in off shore rigs and drilling stations. Aluminum alloys are used with steel and Titanium for use in primary heavy industries . Aluminum and its alloys can be easily shaped by any of the main industrial metalworking processes by combining properties which also ensures rolling, extrusion, forging and castingIn this day and age there is approximately 66.7 MT of aluminum being used in engineering based applications (wiring, machines, corrosive spray).
INDIA RUSSIA CHINA JAPAN USA JAPAN0%
5%
10%
15%
20%
25%
30%
35% 31%
22%24%
10%12%
10%
ENGINEERING’S SHARE OF INDIVIDUAL COUNTRY'S ALUMINUM CONSUMPTION
ENGINEERING'S SHARE OF IN-DIVIDUAL COUNTRY'S ALU-MINUM CONSUMPTION
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PACKAGINGAluminum has the best barrier options to keep food and drinks fresh and safe and to avoid lossStudies have documented that the aluminum cans are the most recycled beverage container in the world and most aluminum foil applications are fully recyclable.The aluminum beverage can is one of the most sustainable packaging solutions available, because it not only protects its contents but is cost-effective and can be recycled after use. Worldwide production for all beverage cans is approximately 475 billion cans per year worldwide, 52 billion per year in Europe.Aluminum due to its inertness helps to reduce the impact of used packaging. It is light and minimizes packaging volumes within cheaper limits
INDIA RUSSIA CHINA JAPAN USA JAPAN0%
5%
10%
15%
20%
25%
30%
15%
29%
10% 10%
23%
15%
PACKAGING’S SHARE OF INDIVIDUAL COUNTRY'S ALUMINUM CONSUMPTION
PACKAGING'S SHARE OF INDI-VIDUAL COUNTRY'S ALUMINUM CONSUMPTION
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MAJOR CORPORATIONS
UNITED RUSAL RIO TINTO ALCOA ALUMINUM CORPORATION
OF CHINA
NORSK HYDRO ASA DUBAI ALUMINUM CO
CHINA POWER INVESTMENT CO
BHP BILLITON LTD SHANDONG XINFA ALUMINUM
ALUMINUM BAHRAIN BSC
05
1015202530354045 41.27
38.2936.69
31.27
17.05
13.86 13.8112.49
10.168.81
TOTAL PRIMARY ALUMINUM PRODUCTION IN THOUSAND TONNES
UNITED RUSALRIO TINTOALCOAALUMINUM CORPORATION OF CHINANORSK HYDRO ASADUBAI ALUMINUM COCHINA POWER INVESTMENT COBHP BILLITON LTDSHANDONG XINFA ALUMINUM ALUMINUM BAHRAIN BSC
9.19%
8.53%
8.17%
6.96%
3.80%
3.09%
3.08%2.78%2.26%1.96%
50.11%
TOTAL SHARE PER CORPORATION IN GLOBAL PRODUCTION
UNITED RUSAL
RIO TINTO
ALCOA
ALUMINUM CORPORATION OF CHINA
NORSK HYDRO ASA
DUBAI ALUMINUM CO
CHINA POWER INVESTMENT CO
BHP BILLITON LTD
SHANDONG XINFA ALUMINUM
ALUMINUM BAHRAIN BSC
OTHERS
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RUSAL RIO TINTO ALCOA ALUMINUM CORPORATION
OF CHINA
NORSK HYDRO ASA
DUBAI ALUMINUM COMPANY
CHINA POWER INVESTMENT
BHP BILLITON LTD
SHENDONG XINFA
ALUMINUM
ALUMINUM BAHRAIN BSC
PRODUCTION CAPACITY
4127 3829 3669 3127 1705 1386 1381 1249 1016 881
NUMBER OF EMPLOYEES
72,202 68,000 61,000 107,887 (CONGLOMERT
AES OF DIFFERENT
COMPANIES
23,000 3800 N.D 109,000 (CONGLOMERA
TE)
60,000 2730
REVENUE US$ 12.2 Billion US$ 12.1 Billion US$24.91 Billion
US$2.35 Billion US$15.18 Billion
US$3.03 Billion US$2.7 Billion US$5.2 Billion US$4.2 Billion US$2.3 Billion
OPERATION COSTS
US$8.7 Billion US$ 6.6 Billion US$18.9 Billion US$2.21 Billion US$ 11.1 Billion N.D N.D N.D N.D US$1.7 Billion
NET INCOME US$ 521 Million
US$ 442 Million
US$ 611 Million
US$ 110.8 Million
US$ 312 Million
US$ 953 Million Profit
US$ 186 Million
N.D N.D US$ 562 Million
TOTAL ASSETS US$ 25.3 Billion US$ 26.24 Billion
US$ 40.01 Billion
US$ 25.23 Billion
US$ 16.2 Billion N.D US$ 41.55 Billion
US$ 102 Billion N.D US$ 3.6 Billion
CEO Oleg Deriparska
Jacynthe Cote Klaus kleinfield Hong Weiping Svein Richard Abdullah Jaissim Kalban
Lu Qizhou Marius Kloppers
Zhang Gang Tim Murray
TOP 10 BASIC INFORMATION
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ALUMINUM IN INDIAN ECONOMY
INDIA CHINA BRAZIL ITALY JAPAN U.S CANADA GERMANY0
5
10
15
20
25
30
35
40
45
1.8
16.7
6.8
26.227.6
22.3
16.7
38.2
PER CAPITA CONSUMPTION OF ALUMINUM IN KILOGRAMS-2011
INDIACHINABRAZILITALYJAPANU.SCANADAGERMANY
Indian consumption per capita stands at 1.8KGs against the world (lowest In rapidly emerging economies). India produced 1.66million tonnes of Aluminum as compared to 44.9 M.T globally. India plans to achieve 5MT annual production by the end of 2015. Exports to be doubled to 1.8 M.TCoal is the primary energy source for majority of Indian smelters. Bauxite reserves in India are estimated to be at 2300 MT. Engineering which also includes electrical operations is the largest consumer of aluminum based applications.India exported almost 300,000 tonnes of aluminum in 2011.The primary Indian Aluminum industry is controlled by HINDALCO and VEDANTA RESOURCES in the private sector and NATIONAL ALUMINUM COMPANY in GOVT SECTOR.
CONSTRUCTIONTRANSPORTATION
ENGINEERINGPACKAGING
OTHERS
0%
5%
10%
15%
20%
25%
30%
35%
11%
27%
31%
15%18%
ALUMINUM CONSUMPTION IN INDIAN ECONOMY
CONSTRUCTIONTRANSPORTATIONENGINEERINGPACKAGINGOTHERS
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PRIMARY ALUMINUM PRODUCING CORPORTAIONS IN
INDIA 26%
42%
36%
TOTAL ALUMINUM PRODUCTION SHARE IN 2011
NALCO
VEDANTA
HINDALCO
The big three in India are Nalco, Vedanta resources and Hindalco. Only Vedanta and Hindalco have global operations; whereas Nalco is government owned and managed. In the Indian theater, Vedanta is further divided into subsidiaries such as Balco, Malco (have temporarily ceased operations from Dec 2008), Sterlite. Hindalco owns INDAL (Indian aluminum corporation) and acquired Novelis a global aluminum manufacturer in 2007 for US$ 6 billion. Hindalco registered US$5.5 billion in revenue in 2011. Whereas Vedanta resources registered a net of US$14.1 billion from their global operations.National Aluminum Corporation registered a revenue of US$1.4 billion from 2011 operations.
NALCOVEDANTA
HINDALCO
0
100
200
300
400
500
600
700
800
413
679
513438
745
575
TOTAL ALUMINUM PRO-DUCTION IN 2011-000 TONNES
TOTAL ALUMINUM PRO-DUCTION CAPACITY IN 2011-000 TONNES
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NALCO HINDALCO (Indalco) VEDANTA RESOURCES (Sterlite + Vedanta aluminum + BALCO + MALCO + Hindustan Zinc)
ANNUAL PRODUCTION 413,000 MT 513,500 MT 679,542 MT
OVERALL CAPACITY 438,000 MT 575,000 MT 745,000 MT
REVENUE US$1.4 BILLION US$ 5.5 BILLION US$1.8 BILLION
NET PROFIT 2009-2010-2011US$155 MILLION-187 MILLION – US$201 MILLION
2011-2010-2009US$467 MILLION – 410 MILLION – US$369 MILLION
2011-2010-2009US$387 MILLION – 770 MILLION – 602 MILLION.
ACQUISITION / MERGERS Joint venture between MEC and Nalco will operate a smelter in East Kalimantan for $5.6 billion construction.It plans to hike its stake in the nuclear power joint venture with Nuclear Power Corporation of India (NPCIL).Nalco's current stake in the firm is 26% and its is expected to be 49%In 2008 Nalco started investing close to US$8 billion in aluminum smelters and refineries to boost its production
NOVELIS FOR US$ 6 BILLION. Acquired Indalco in 2000 from Indian government with 74.6% stake in equity.In July 2007, Hindalco announced it is acquiring the stake of Alcan Inc.'s in the Utkal Alumina Project located in Orissa
Merged Sterlite with Sesa Goa to form Sesa Sterlite. Vedanta acquired 10.4% stake in Cairn India through Sesa Sterlite for US$1.4 Billion.
CEO Ansuman Das Kumar Manglam Birla Anil Aggarwal
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OTHER ALUMINUM
PRODUCERS IN INDIA
RANGE OF PRODUCTS
TOTAL REVENUE TOTAL PRODUCTION
CAPACITY
NO OF EMPLOYEES
CEO/ MANAGING DIRECTOR
Jindal Aluminum Extrusions
Aluminum Extrusions; Aluminum Flat bar and
Tubes, Foils
US$ 121 million in 2011 82,000 MTPA. 1800 as of 2009 KR Raghunath
Bhoruka Aluminum
Extrusions, Anodizing, Transport grade aluminum,
Construction, foils.
US$ 27 million 8581 MTPA 1156 R.K Aggarwal MD / Ajay Kumar Dalmia (Chief
Financial Officer)
PG Foils Food packaging aluminum, insulation aluminum
US$36.85 million 1800 MT estimated ** N.D Pankaj P shah
Hind Aluminum all-alloy aluminum Rods, floors, grills, railings, EC
grade wire rods
US$74.97 million 35000 MTPA 4500 estimated Lalit Kumar Daga
Sacheta Metal aluminum and stainless steel sheet, circles, utensils,
castings, non-stick items and other house wares.
US$ 11.7 million 2000MTPA (present)3000MTPA by 2014
900 estimated** Founder-Satish K. Shah
Century Extrusions
aluminum products and aluminum unalloyed ingots,
aluminum extruded products such as bars, rods,
wires and pipes
US$ 35.5 million 15000MTPA N.D M.P Jhunjhunwala
Maan Aluminum Secondary aluminum producers
US$21.24 million 13000MTPA N.D Mr. Bijender Kumar Rathaliya
Gujarat Foils aluminum sections, aluminum tubes, flat, round
and hexagonal bars, plain angles & channels
US$47.65 million 7000MTPA N.D Pradeep J Saxena-Director
Pennar Aluminum aluminum rolled products and conductors
US$24.5 million 8000MTPA 1200 employees Nrupendra Rao
TOP SECONDRY ALUMIUM PRODUCERS
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Supply = DemandExport : - -: Import
1996-1998 1998-2000 2000-2002 2002-2004 2004-2006 2006-2008 2008-2010 2010-2012
0
200
400
600
800
1000
1200
1400
1600
1800
550624 644
850
1020
1250
1456
1667TOTAL ALUMINUM PRODUCTION in thousand tonnes
Aluminum is directly affected by big 5: - GDP, population, power generation, transport and construction. The total aluminum output was at 1.6 million tonnes. Consumption was at 1.3 million tonnes. India exported 310,000 tonnes of aluminum in 2011. Primary exported countries included china, South Korea, Japan and several other smaller Asian nations. Despite the slowdown in global economy, Indian aluminum market stayed relatively with overall national production cost being 20% less due to higher quality of bauxite and larger coal deposits. However coal generated aluminum is still expansive in comparison to gas or hydro generated aluminum. The total imports were less than 10% of total consumption (around 110,000 tonnes of primary aluminum products)
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Aluminum industry in India. Even with global slowdown India increased its production to 1.67 million tonnes. Historically, the supply of aluminum has been higher than the demand in lieu of anticipation thus for 2012-13, India had close to 30,000 tons of aluminum in reserves. All the big three Indian producers (Nalco, Hindalco and Vedanta) are planning to amping their production to 5 million tonnes. Increase in GDP, growth in population directly impacts automobile demand, construction demand and generation of more electricity which cannot be supported without aluminum. There is a pressure on global auto makers to increase fuel consumption in junction with decrease in emissions. Aluminum plays a vital role in an automobile's production as it helps in decreasing a cars weight. In India alone aluminum is used in more than 3000 applications thus the demand is slated to stay strong. India has high deposits of aluminum (3300 million tonnes) which at present consumption can last up to 200 years. With the rapid growth in infrastructure and defense (aviation) aluminum will be in high demand for next 10 years.
1996-1998 1998-2000 2000-2002 2002-2004 2004-2006 2006-2008
0
200
400
600
800
1000
1200
1400
550
624 644
850
1020
1250
201
699
800
900
1200
1359
180
240
300
500
650
750
821
10501100 1115
11751210
500
578
689
779
850
1200
TOTAL ALUMINUM PRODUCTION in thousand tonnes
TOTAL GDP in bil-lions
POWER GENER-ATION in kwh
POPULATION in mil-lions
AUTOMOBILE MANUFACTURING in thousands
ALUMINUM PRODUCTION IN COMPARISON WITH GDP / POPULATION / POWER GENERATION / AUTOMOBILE PRODUCTION
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S.W.O.T ANALYSIS
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References
-Upon Request -Rohan Krishan