The Evolution & Future Of The Aluminium Industry

KR Raghunath, Vice Chairman, Jindal Aluminium As the vice chairman of one of the largest aluminium extrusion companies in India, he is responsible to drive the growth of the company from the forefront.

Emergence Of Aluminium In India
In the late 1700s, Hans Christian Orstead a Danish chemist came upon a metal that revolutionized the way industries started functioning. Derived from the Latin word ‘alumen', aluminium was initially considered a precious metal however it has evolved as the material used extensively in almost every sphere of life, in just one and a half centuries. The global production of the metal in the 1800s was largely dominated by four countries Australia, USSR, Jamaica and Suriname owed to access to resources like bauxite. India stepped into this industry in early 1808, soon after its global counterparts. Since aluminium was found only in its pure form, it took us almost five decades to make this aviable and commercial metal. Production of aluminium in India commenced with the establishment of the Aluminium Corporation of India in 1938. As India was home to five percent of the world's bauxite deposits, it opened a wide array of opportunities for the country. With a vision to put India on the world map for aluminium production and streamline the industry the Aluminium Association in India was formed in 1981. Currently, the Indian aluminium industry holds a share of around three percent of global aluminium production.

Industry landscape and key players
The aluminium industry in India is highly concentrated with a clear classification between the primary and secondary producers of aluminium. The growing demand for aluminium across the globe has fuelled the pace at which the Indian aluminium industry is expanding. The primary producers synergise their energies in the production of primary forms of aluminium like ingots and billets. With large established players like Vedanta Hindalco, Nalco and Balco influencing this space, primary producers make up a large chunk of the industry. With a growth of 11 percent year-on-year, the production of primary aluminium is going to see a rise in the coming years. The secondary producers are how ever a fragmented group with fewer established players that focus on semi fabricated products and recycled aluminium. Key players, like Jindal Aluminium Limited are
leading the way for secondary producers to establish a strong foothold in the market. With a surge in demand for recycled aluminium the opportunities for secondary producers are plenty and key players are picking up the pace to meet the rising consumption of aluminium in the country and overseas.

A larger number of industries are now resorting to aluminium as a sustainable metal

Trends Governing The Aluminium Industry In India
With significant progress in science and technology, the aluminium industry in India has undergone a radical change since its inception. A larger number of industries are now resorting to aluminium as a sustainable metal. Here are some of the key trends that are defining the industry today:

Infrastructure Boost: With the Government of India encouraging the establishment of Smart Cities there has been a significant boost in demand for aluminium in the construction sector. As India prepares to lay the foundation for 100 Smart Cities, the demand for aluminium rods and profiles is expected to soar. The demand in 2017 reached 41487.41 tonnes and this number is only going to multiply owing to substantial investments in infrastructure. Rapid urbanization is also showing signs in the upsurge of aluminium consumption.

Sector Expansion: The perception of aluminium over the years has moved from being just an industrial metal to a more commercial metal. It has now reached end consumers directly through aluminium foils cans, containers, etc. The metal has become an integral component of not just industries like construction, architecture, transportation, power, but also packaging and consumer durables. The power industry consumes 48 percent of the aluminium in India, closely followed by transport(15 percent) and construction(13 percent). With a ban on plastic packaging the demand for this metal has also considerably risen in the packaging sector.

Green A pplications: World leaders are collectively encouraging citizens towards lowering the carbon footprint. Aluminium, often referred to as the green metal is empowering governments, companies and individuals in their endeavour to promote sustainable and responsible development. With applications in Green Buildings Electric Vehicles, and Sustainable packaging the trend of green applications in the aluminium industry is here to stay.

Import of Aluminium Scrap: The recyclability of aluminium is a key factor that has encouraged the usage of aluminium scrap in the domestic market. Aluminium is 100 percent recyclable and can retain its properties throughout its lifecycle. Aluminium scrap is therefore becoming a crucial ingredient in the manufacturing processes for secondary aluminium producers. Domestic users also prefer aluminium scrap as it is priced 22 percent lower than primary aluminium. According to S&P Global Platts 3.34 lakh tons of scrap was imported in the first quarter of this year enabling India to overtake China as the leading scrap importer in 2019.

The Road Ahead For The Indian Aluminium Industry
With a surge in industrial activity, the future of the Indian aluminium industry looks promising. With an optimistic CAGR of eight percent swift strides towards Make in India, Smart Cities and FAME has further given a thrust to the industry. India commands a competitive advantage in terms of natural resources. Therefore the Indian aluminium industry has the potential to lead the aluminium production globally and scale up by leveraging the abundant resources available.