Hindalco inks pact to acquire Hydro’s aluminium extrusions business in India for Rs 247 cr

Hydro’s Kuppam plant has a 15,000-tonne aluminium extrusions capacity and is integrated with advanced value addition capabilities for surface finishing and fabrication.

Hindalco, Hydro's aluminium extrusions, Hydro's Kuppam plant , diversified Aditya Birla Group., aluminium extraction
Hindalco is part of the diversified Aditya Birla Group.

Hindalco Industries on Friday said it has signed a definitive agreement with Norway-based Hydro to acquire the latter’s India business of aluminium extrusions for an enterprise value of Rs 247 crore. The acquisition brings into the Hindalco fold, an integrated facility located at Kuppam in Andhra Pradesh, an experienced team of employees and the ability to serve a robust portfolio of reputed customers, the company said in a statement.

Hydro’s Kuppam plant has a 15,000-tonne aluminium extrusions capacity and 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.

It will further extend Hindalco’s footprint in south India, which is the second largest extrusions market in the country. Hindalco is part of the diversified Aditya Birla Group. The acquisition of Kuppam plant is a strategic step to expand our 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, Hindalco Managing Director Satish Pai said.

“The acquisition is the latest step in our long-term strategy to augment our downstream business. Over the past year, we have already announced a total capex of Rs 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,” Pai said.

The agreement is aligned with Hindalco’s strategy to increase downstream capacity to meet the growing market demand. The Kuppam plant will also serve as an archetype for Hindalco’s upcoming state-of-the-art extrusions plant in Silvassa in western India.

The aluminium extrusions market in India is expected to grow rapidly from the current level of around 3,73,000 tonnes to about 8,50,000 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 1,09,000 tonnes. The transaction is expected to close in the next quarter, the company said.

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