On

THE DISTRIBUTION CHANNEL OF HINDALCO INDUSTRIES LTD.

SUBMITTED TO:
Mr N.N.Sen Gupta H.O.D. Management Dept. IIMT COLLEGE MEERUT

SUBMITTED BY:
RAVI SHANKAR MISHRA MBA 2nd Sem. IIMT COLLEGE MEERUT

U.P. Technical University Sitapur Road, Lucknow

Theres some swear by titanium And some by manganese Theres virtue in lump of tin And iron is hard to please Of course the steel doesnt give that appealing feel By choice the dead are lined with lead The living lined with gold Theres some that think the best is zinc, And some on silver sold. Magnesium and cadmium And copper- these are fine, But it is the wise who truly prize Unrivalled aluminum. So raise a flag and beat a drum In honour of aluminum.

ACKNOWLEDGEMENT
All pries goes to Almighty God whose mercifulness benevolence and vengeance gifted me the ever scaring parents whose praise and selfless gesture make this work to reach its fruitful destination. Grateful acknowledgement and heartfelt gratitude to my all the faculty members of IIMT College Meerut. I feel to my proud privilege to express my deep sense of gratitude and highest veneration to Mr. M. C. Mahapatra Asst. Manager (Sales) Hindalco for his able guidance, supervision and keen interest through out period of my project work. I am most obligated to Mr. S.K. Das Manager (Training & Development) Hindalco for allowing me to summer training in his esteemed organizations also thanks Mr. R.K. Tendon GM (Sales & Account) for imparting me to undertake training in his department. I express my deep sense of gratitude and thanks to Mr. Rahul Paliwal who helped in completing this project by sparing time for me from his busy schedule.

(RAVI SHANKAR MISHRA)

CERTIFICATE
I had the privilege of under going my summer training at Hindalco Industries Limited Renukoot. The project allotted to me was to know the Distribution Channel of all the products of aluminium of Hindalco Industries. The schedule included office work at Central Sales and Marketing Office (CSMO) Renukoot.

(RAVI SHANKAR MISHRA)

PREFACE
In
the dynamic business environment of today Distribution-channel decisions are among the most critical decisions. Faced by the Management of any company. A Distribution system has to be designed carefully, as it normally takes years to build and is not easily changed. In the modern era of cut-throat competition a company with a efficient distribution network definitely has a thick edge over its competitors. This report has been written in response to a comprehensive study , conducted on the Distribution channel of HINDALCO INDUSTRIES LTD . The report mentions and evaluates the various aspects, pertaining to the distribution channel of the company. After a thorough analysis of the various facts and figures, a set of recommendations has been given at the end of the report. Accuracy and precisions has been given the prime considerations, while compiling the report. The sources used to compile this report, are authorities and authentic. This report provides a bird eye view of the distribution channel of HINDALCO INDUSTRIES LTD. The company will certainly find it useful to examine the various recommendations, forwarded at the end of the report .It is thus clear that this report would serve a variety of purposes.

Date : 03 Aug 2004

RAVI SHANKAR MISHRA

Place : RENUKOOT

CONTENTS
COMPANY PROFILE INTRODUCTION ADITYA BIRLA GROUP AN OVERVIEW HINDALCO AT A GLANCE ABOUT HINDALCO PRODUCTS APPLICATION OF ALUMINUM GENERAL INFORMATION ABOUT ALUMINIUM REPORT PROFILE MARKET SEGMENTS OF HINDALCO DISTRIBUTION CHANNEL OF HINDALCO RECOMMENDATION, CONCLUSION & SUGGESTION BIBLIOGRAPHY

INTRODUCTION OF THE STUDY :

GENERAL INFORMATION ABOUT THE STUDY

The

study on Distribution channel of Hindalco was carried out of HINDALCO INDUSTRIES LTD, Renukoot (U.P.) from 10th June to 26th July 2004. This report has been broadly divided into several sections. The preliminary pages of the report provide introductory information about Aluminium industry in India, with particular reference to HINDALCO INDUSTRIES LTD. the middle text throws light on the distribution channel and the related aspects of the company, is followed by recommendations and conclusion , in the end. OBEJECTIVE OF THE STUDY

This project was undertaken to have an insight into the distribution channel
of Hindalco. The study aims to investigate the minute details of the distribution channel. An analysis of the various facts and figures has been done to arrive at logical recommendations. In short, at it can be said that this study has two-fold objective of knowing, what is the present distribution channel? and what should be the future distribution channel? SIGNIFICANCE AND SCOPE OF THE STUDY

An

efficient distribution channel plays a vital role in the success of any organization. A distribution system has to be designed carefully, as it normally takes years to build and is not easily changed. This study provides a birds eye view of distribution channel of Hindalco. This report would do well to all the person interested in learning about distribution channel of Hindalco. A general idea about Hindalcos presence in aluminium market, is also well given by this report. After a thorough analysis of the various

facts and figures, a set of recommendations, with regard to the distribution channel, has been given in the concluding part of the report. The company would find it useful to look into the viability of the implementation of these recommendations, once implemented, and are expected to fetch immense benefits to the company. It is thus clear that this report would serve a variety of purposes and its scope is very wide and open.

METHODOLOGY USED

Both primary and secondary datas have been resorted to, while completing
this project Primary datas have been collected, by the means interviews and other face-to-face informal conversations with the company- personnels. Secondary datas have been obtained from the printed- matter provided by the various departments and industrial library of Hindalco. The sources used to compile this report, are authorative and authentic. After the collection of various datas, an independent of these has been done and certain recommendatory measures have been suggested, in the end. It has been endeavoured to be precise and accurate, thorough out the report.

LIMITATION OF THE STUDY

It must be remembered that the various recommendations are the outcome

of an analysis, made individually. Another analyst may arrive at certain other recommendations, after using the same datas. It is therefore advisable for the company to examine the various recommendations, before going ahead with any of there implementations.

Chairmans profile. Mr. Kumar Mangalam Birla Chairman: The Aditya Birla Group

Mr. Kumar Mangalam Birla is the Chairman of the Aditya Birla Group, which is among Indias largest business houses. Among its major Companies in India are Grasim Hindalco, Indian Rayon, indo Gulf and Indal. Its JVs include Idea Cellular (Birla Tata AT&T [TELECOM]). Birla Sun Life (Financial Services) and Birla NGK (Insulators). While Mr. Birla is the chairman of all of the Groups blue-chip Companies in India, he serves as Director on the Board of the Group, International Companies Spanning Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, USA and UK. He is also on the Board of several other Companies in India including Tata Iron & Steel Company (TISCO) and Larsen & Toubro (L&T) Additionally, he is on the Board of G.D.Birla Medical Research & Education Foundation, and a Member of the Board of Governors of the Birla Institute of Technology & Science (BITS), Pliant, and the prestigious Indian Institute of Management, Ahmedabad as well. He is a Member of the London Business Schools Asia Pacific Advisor Board, which provides counsel on the Schools strategy and curriculum. He is Honorary Fellow

of the London Business Schools (LBS) a title recently conferred upon him by the Covering Board of the LBS.

Mr. Birla has and continues to hold several key and responsibleon various regulatory and professional Boards, such as: The prime Minister of Indias Advisor Council of Trade and Industry, the National Council of the Confederation of Indian Industry (CII), the Apex Advisory Council of the Associated Chambers fo Commerce and Industry of India, the Government of Uttar Pradesh High Powered Investment Task Force, and the Advisors Council for the Centre for Corporate Governance.

ADITYA BIRLA GROUP OVERVIEW

The Aditya Birla group is Indias Second Largest business house. With turnover of over Rs. 280 billion asset base valued at over Rs. 265 billion and nearly 72,000 employees in 18 countries the world over. Over 75 units in India and overseas as well (in Thailand, Indonesia, Malaysia, Philippines, Egypt and Canada) and international trading operation spanning several countries including Singapore, Dubai, Russia, Vietnam, Mayanmar and China make it Indias first truly multinational conglomerate. The Aditya Birla Group reaches out to the core sector in India in industrial integral to the nations growthCement, Aluminium, Fertilizers, Viscose Staple Fibre, Textiles, Petroleum Refining, Power, Telecommunication, Industrial Chemicals and Financial Services.

BIRLA GROUP IN THE WORLD:

Largest producer of Viscose Staple Fibre. Third largest producer of insulators. Fifth largest producer of Carbon Black.

BIRLA GROUP IN THE INDIA:

India largest integrated Aluminium producer and among the worlds lowest cost producers. Viscose Filament YarnNo. 1. White CementNo. 1. Rayon Grade PulpNo. 1. Grey CementNo. 3. Linen Yarn(only producer). The group also has a significant presence in the Petroleum Refining Power and Telecommunication sector in Tie ups with giants Hindustan Petroleum(Indias first jiont sector Refinery Powergen(U.K.) and AT&T(U.S.A) respectively.

GROUP VISION
TO BECOME A PREMIUM CONGLOMERATE AND WITH CLEAR BUSINESS FOCUS AT EACH CORPORATE LEVEL.

GROUP OBJECTIVE
TO DELIVER VALUES FOR OUR CUSTOMERS, SHAREHOLDERS EMPLOYEES AND SOCIETY AT LARGE.

GROUP PHILOSOPHY
u CUSTOMERIZE u PEOPL-IZE u STRATEGIZE u INSTITUTIONLIZE

GROUP VALUES
u INTEGRITY u SPEED u SIMPLICITY u SEAMLESSNESS u SELF CONFIDENCE u ACCOUNTABILITY u 100% COMMITMENT u CUSTOMER ORIENTATION

GROUP COMPANIES AT A GLANCE IN INDIA

Company Hindalco Indal Grasim Key Products / Services Aluminium Aluminium Viscose Staple Fibre , Cement , Sponge, Iron, Textiles, (Fabrics & Apparels), Chemical, International Business Viscose Filament Yarn, Textiles, Insulators Carbon Black, Ready to wear Apparels, Software, International Business Fertilisers, Copper

Indian Rayon Indo Gulf

Birla Global Finance HGI Industries Essel Minning

Financial Services Casting, Gases Iron & Manganese ore mining, Ferro Alloys, HDPE woven sacks Shree Digvijay Cement (Subsidiary Cement of Grasim) Dharani Cement (Subsidiary of Cement Grasim) Birla Technologies Ltd Financial Services, telecom, insurance & e-learning

JOINT VENTURES IN INIDIA

Company Birla AT&T & TataBPL Communication MRPL Tanfac industries Partner AT & T (USA) Tata , BPL Hindustan petroleum Corporation limited(HPCL) TIDCO (Tamilnadu industrial Development corporation) Key products Cellular Telecommunication Petroleum products Fluorine chemicals

Bihar Caustic & Chemicals limited Bina- power Supply Birla Sun Life

Bihar state industrial Development corporation Powergen (uk) Sun Life (Canada)

Caustic soda Power Financial Services

JOINT VENTURE COMPANIES OF HINDALCO

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Indo-Gulf Fertilizers & Chemicals Corn. Ltd. Bihar Caustic & Chemicals Ltd. Tanfac industries Ltd. Mangalore Refinery & petrochemicals Ltd. Birla AT & T and Tata Communication Ltd. BPL Bina Power Supply Co. Ltd. Birla Global Finance Ltd. Birla Capital International AMC Ltd. Century Enka Indal ltd.

HISTORY OF HINDALCO

A STORY OF GROWTH OF INDIAN ALUMINIUM

INDUSTRY 1956 Rihand Dam area surveyed

1958 1960 1962 1964 1967

Hindalco registered Collaborated with Kaiser Smelter operation and alumina plant commenced Power plant envisaged Operation of power plan commenced Massive expansion with market demand, modernization, diversification had been and is being taken up in all activities which is a regular feature and updating for economic scale of operation. Bihar caustic at Garhwa for caustic soda

Tamil Nadu flourine at Tamil Nadu for AlF3

2000 Foil and Wheel plant at Silvassa Indal acquisition

Further brownfield expansion with adoption of newer technologies and modification / upgradation of processes will result in improved efficiency and reduction in cost as follows:

Alumina Plant Reduction in consumption of steam, fuel oils and power. Smelter Better quality of anodes to reduce carbon consumption.

 Improvement in Aluminium Flouride &Al203 consumption norms. Lower specific power consumption. Power Plant Lower coal consumption.
Less auxiliary power requirement.

Indal: Synergy benefits gaining momentum. 1. Synergy will be a major market force
Indal`s alumina and downstream strengths Complimentary to Hindalco`s strength in metal Locational and distributional strength

2. Progress made already

Avoiding competitive clashes with major customers Rationalization of prices 3. Alumina tolling increased Foil from Silvassa being supplied to Taloja Recycling Plant Best practices being exchanged across

HINDALCO INDUSTRIES LIMITED:

One of the major producers of primary Aluminium metal and Semis in the country, is the biggest industrial enterprises of Utter Pradesh. It is a public limited company in the private sector having about 39000 shareholders . It is the largest integrated aluminium plant in India with all its production facilities viz. Alumina, Aluminium and fabrication located at Renukoot near Rihand Dam in Sonbhadra (U.P.) Hindalco power Divison is situated at Renusagar about 35Kms from Renukoot. In September 1959, an industrial licensewas granted by the government for setting up an integrated aluminium plant at Renukoot, with an initial installed capacity of 20,000 MT. The construction work was completed within 18 months, a record for a major job of this kind. The dream of the great visionary Syt. G D Birla to locate an aluminium plant near Rihand powerhouse come true. The late Prime Minister, pt. Jawaharlal Nehru formally inaugurated the plant in January 1963. Going round the extensive works, Pandit ji saw his dream of a brighter future of India take shape before his eyes. From the modest beginning in 1962, Hindalco has now become an industrial giant with a capacity to produce 3,42,000 Tones of aluminium per anum. The companys export efforts have led to recognition as a Star Trading House. Hindalco is an ISO 9002 Company and has also received ISO -14001 AND OHSAS 18001 Certification for its entire operations including Power Plant and Mines. As apart of its diversification program, a 5000 MTPA Aluminium Foil Plant and an Aluminium Alloy Wheel Plant of 300,000 W.P.A Capacity has been set up at Silvassa.

BROWNFIELD EXPANSION:
To further augment its presence in the aluminium sector, Hindalco has initiated work on a brown field expansion at renukoot. The expansion

will increase Smelting capacity by 100000 M.T.P.A to 342000 M.T.P.A. Alumina refining capacity will be raised by 210000 M.T.P.A to 660000 M.T.P.A. Power generation capacity.

ACQUISITION OF INDAL:
Hindalco has also acquired another aluminium major INDAL . Hindalcos holding in Indal now stands at around 90%. Indal strength in alumina and downstream aluminium products admirably dovetails Hindalcos unmatched presence in metal and collectively commands the highest metal capacity in the entire South East Asia region.

OTHER INFORMATION:
In 1962 when production started, the company had on its rolls about 900 staff and workmen and the present strength of employees is about 1400. The principal office is at Mumbai and works is located at Renukoot and there are regional sales offices at Bangalore, Mumbai, Delhi and Kolkata. A board of directors and other senior executives manages the company.

RESEARCH & DEVELOPMENT:

To keep peace with the growing demands of industry, the R&D unit of Hindalco is constantly working on improvements in process technology improving productivity and application development.

ENVIRONMENT PROTECTION & POLLUTION CONTROL:

Hindalco is an Eco-friendly Company; the Companys compliance on the environmental is well above required standards. Hindalco is making concrete efforts to obtain the recently established Environment Certification, ISO 14001.

ACHIEVEMENTS:
Hindalco was awarded ISO 9002 certificate by TUV Germany in July 94 and it is the first aluminium producer which received ISO certification for its entire operations at one go. The company has also received OHSAS 18001 Certificate by DNV INDIA in 2002 Hindalco has also received many awards for its efforts in the area of energy conservation, export etc., which are instituted by the government of India.

FACILITIES AT HINDALCO, RENUKOOT:

Well equipped hospital Education Temple Supper bazaar & birla market Banks Places of interest Clubs Mahila mandal

Rotary club Lions club Junior camber Committees Rural development cell Canteen Auditorium House /accommodation

CAPACITITES:

Power Alumina

769 MW 660000 MTPA

Aluminium Rolled products Extrusions Wire rods Foils Co generation

342000 MTPA 80000 MTPA 16250 MTPA 52203 MTPA 17209 MTPA 37 MW

ABOUT PERSONNEL DEPARTMENT:

In Hindalco, Renukoot personnel department is divided into following different sections: Personnel Section Organization Development Training & Development Apprenticeship Training Recruitment and Selection Manpower Planning Industrial Relation & Labor Law Section Welfare Section Time Office Section Safety Section The head of these sections report directly to Joint President (HR)

HINDALCO VISION
To strengthen our position as a premium Aluminium Company, Sustaining Domestic Leadership And Global Competitiveness through innovation, quality and Value added growth.

HINDALCO MISSION
To pursue, the creation of value for our Customers, Shareholders, Employees and Society at Large.

HINDALCO STRATEGY
Efficiency Focus : Effectiveness Focus : Growth Focus : To be one of the lowest cost producers Globally, To continue to remain the market leader Domestically, To pursue value adding growth opportunities In Aluminium,

ACTIVITIES OF HINDALCO

 MINING OF BAUXITE CONFORM EXTRUDED PRODUCTS BILLETS CONCOST PRODUCTS EXTRUSIONS CARBON BLACK ALLOY WHEELS

PRODUCTION OF POWER INGOTS SLAB ROLLED PRODUCTS VANADIUM SLUDGE ALUMINIUM FOILS

ABOUT HINDALCO
Took birth as Hindustan Aluminium Company Ltd. In 1962,with an alumina capacity of 40,000 TPY and aluminium capacity of 20,000 TPY. First semi-fabrication facility , a Redraw rod mill, in 1964. Bliss Hot and Cold rolling mills, and the first extrusion press in 1965. Own power startup at Renusagar with initial capacity of 67.5 MW, in 1967.Second Redraw rod mill, second and third extrusion presses also in 1967. A Gas Suspension Calciner, one of the first of its kind in the world was installed in 1986. Modemisation and full revamping of the Bliss Hot and Cold mills completed in 1997, resulting in an increased in rolled product capacity of 80,000 TPY.

SPECIAL FEATURES OF HINDALCO INDUSTRIES LIMITED Largest producer of primary aluminium in India with 36% share in production. Fully integrated production facilities from bauxite to value added aluminium products. One of the lowest cost producers of aluminium globally. Significant economics of small scale through large scale expansion. Strong market presence & wide distribution network. Robust balance sheet with high degree of financing flexibility. First Indian aluminium producer which was accorded ISO 9002 certification in one go, in July 1994 and accorded ISO 14001 in April 1998.

MAJOR POLICIES OF HINDALCO

We at Hindalco Industries Limited, are Committed to resource conservation and control of environment aspects of our activities interlaid, relating to production of Alumina, Aluminium, Fabricated Product and Power Generation at Renukoot in order to serve the cause of Sustainable Development. Our Objectives, therefore, will be to :-

 Innovate and improve our processes, equipment, operations maintenance and other practices continuously for pollution prevention Adopt cleaner technologies wherever techno-economically viable Conserve key input resources such as bauxite, caustic soda, coal, power, water, furnace oil and other oils Keep exploring the feasibility of recycling and utilization of inevitable wastes especially of water, tube oils, red mud and fly ash. Remain in compliance with all applicable environmental laws and regulations and also strive to go beyond. Ensure continual improvement in our environment performance through awareness and training amongst the employees and contract worker. We shall make this policy available to all the employees

We at Hindalco, shall aim to achieve and sustain excellence in all our activity

We are committed to Total Customer Satisfactions By providing products and services, which meet or exceed the customer expectations.

 Modernization of the manufacturing facilities, stress on technology innovation and training of employees all levels shall be a continuous procession in Hindalco.

A motivated workforce with a sense of pride in the Organization shall lead us towards Total Quality.

We at Hindalco value people as our most important resource and hence committed to achieve health and safety excellence by providing healthy and safe working environment. Our objective, therefore, will be:

 Use appropriate technology and other resources to upgrade safety standards. To continuously improve the working condition leading to prevention of accidents. Not only continue to comply with all the applicable laws an deregulations but also strive to achieve beyond and set new standards. To continuously monitor and control work places hazards and protect employees and community from them. To create an awareness and concern for safety amongst employees through active involvement, participation, continuous training etc. Above all, endeavor to be one of the accident free industries. Our policy is to maintain safety beyond compromise

Hindalco the ADITYA BIRLA group of companies is amongst India largest business houses with commanding Presence in widely diversified business set up in several countries. The ADITYA BIRLA group sales exceeded US $ 5.6 billion in 2001-2001. Hindalco Industries limited is a flagship Company of the ADITYA BIRLA group, and indeed the front Runner in Indias Aluminum Industry. Set up in

1962 Hindalco has chalked up a remarkably path breaking course for itself, and is today the largest Aluminum producing company in India.

HINDALCO CAPACITIES ARE AS FOLLOWS:

Aluminum refinery of 6,50,000 MTPA. Aluminum Smelter of 3,25,000 MTPA. Sheet-Rolling capacity of 80,000 MTPA. Extruded profiles capacity of 17,430 MTPA. Hindalco has recently embarked upon a Rs.18 billion brown field expansion project which will Smelter capacity by 100000 MTPA, refining capacity by 210000 MTPA, and capacity Power Generation to 769 mw. In the year 2000,HINDALCO acquired Alcoas 54.6 majority stake in another Indian aluminum major indal. This was followed by public offer for an additional 20% stake the acquisition makes possible and excellent synergistic fit-Indal. Strength in Alumina and downstream products dovetail admirably with Hindalco strong presence in metal. HINDALCO consequently is set to become the number no aluminum company in south East Asian region. An ISO 9002 and 14001 certificate company, HINDALCO achieved significant export in the year 2001-02 and is registered on the London metal exchange. Hindalco also has star trading house status. Hindalco Products range include Primary Aluminum Ingot, Alloy Ingot, Billets, Cast Slabs, Alloy Wire Rod, Sheet Products, Extruded Profiles, Conform Products, Foils and Alloy Wheels.

WE at Hindalco shall continuously TPM-WCM practices as a key to optimization of Resource, and recognition as a World class company constantly aspiring to exceed the exception of all stakeholder. We shall: Involve all our people in the pursuit of efficient production system. Target Zero Accident, Zero Breakdown, and Zero Defect. Work vigorously for elimination of losses and wastage of resource. Promote product innovation for application development. Enhance process capability through innovation. Conserve energy and ensure a healthy a green environment through pollution prevention and control. Provide a work environment that ensures knowledgeable, empowered and committed people. Be flexible, so as to meet the challenge of change throng association, assimilation and improvisation Be a solutions provider delivering optimum valve to our customers.

RECENTS ACHIEVEMENTS In 1999-2000 Hindalco won capaxit award in recognition of out standing expert performance in respect of aluminium Ingot. In 2000 company won Aditya Birla Group sun award and planet award for community development world. For world class manufacturing Aditya Birla Bronze Award in year 2000. Best safety performance plant by international Aluminium installed, safety performance back marking 2000 and best safety performance plant. Mother Teresa Commendation Certificate for Community Initiative Activities 2001. FICCI Award for Community Initiative Activities 2001.. Energy Conservation Award by the Ministry of Power 2001.. Various Awards for Mines Environment and Mineral Conservation by the Indian Bureau of Mines 2001. FIMI's Social Awareness Award 2002. FICCI (SEDF) - Social Responsiveness Award 2002. Hindalco wins Asian CSR Award 2003, Asia's premier awards on corporate social responsibility. ISO/TS 16949:2002 certification by RWTUV, Germany for Aura Alloy Wheels in 2003. Birla Copper is registered on the London Metal Exchange (LME) in Feburary 2003. The Company's Copper Cathodes

marked as 'Birla Copper', have been approved as 'Grade A' Copper Brand by the LME.

MILESTONE OF PROGRESS
o 1958 : o 1962 : Date of registration. Aluminium production started capacity 20,000 TPA. Alumina production started capacity 40,000 TPA. Properzi wire rod mill commissioned. Aluminium production expanded capacity 40,000 TPA. Renusagar power plant commissioned with 65.7 MW. Aluminium production expanded capacity 60,000 TPA. Properzi Mill No.2 , Extrusion Press 2 & 3 commissioned . Aluminium production expanded capacity 80,000 TPA. Aluminium production expanded capacity 95,000 TPA. Aluminium production expanded capacity 1,20,000 TPA.

o 1964 : o 1965 : o 1967 :

o 1969 : o 1972 : o 1981:

3rd generator at Renusagar commissioned. o 1986 : o 1988 : o 1990 : o 1991 : o 1993 : o 1994 : o 1996 : Alumina production expanded capacity 300,000 TPA. Conform Extrusion press commissioned. Continous Caster installed. Aluminium production expanded capacity 150,000 TPA. Davy Cold Rolling Mill commissioned. Alumina production expanded capacity 350,000 TPA. Continuous Ingot Casting machine Installed. Aluminium production expanded capacity 210,000 TPA . Wagstaff Slab casting machine Installed. Bliss Hot And Cold Mill Revamped. Co-generation power plant of 37 MW commissioned. Wagstaff Slab casting machine commissioned. 6th generator at Renusagar commissioned. Aluminium production expanded capacity 242,000 TPA. Alumina production expanded Capacity 450,000 TPA. Aluminium Foil Production Commenced at Silvassa.

o 1997 :

o 1998 :

o 1999 : o 2000 :

Wheel Plant Commissioned at Silvassa. Alumina refinery is named as the 'Best Safety Performing Plant' in the world by the International Aluminium Institute. Hindalco acquires Indal. Indal Board reconstituted. Mr Kumar Mangalam Birla becomes Indal's new chairman. Group holding goes up to 74.6 per cent.

o 2001 :

Hindalco enters 'The Asia Top 25' list of the CFO Asia Annual Report Survey, the only Indian company in 2001. The 'Fair Business Practices' award by the CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar 2001. The 'Outstanding Export Award' for the years 2000 and 2001 from EEPC and CAPEXIL. Adjudged the worldwide runner-up for the 'Millenium Business Award for Environmental Achievement', under the auspices of the United Nations Environment Programme.

o 2002 :

Brownfield expansion at an outlay of Rs.1,800 crore - 9th potline commissioned Buyback of equity shares to generate shareholder value and to utilise surplus cash. The FICCI Socio-Economic Development Foundation's (FICCI-SEDF) Social Responsiveness Award for the year 2001, for projects on rural development and promoting economic self-reliance in over 334 villages.

Major corporate restructuring to create a nonferrous metals powerhouse : Indo Gulf Copper business to merge with Hindalco (effective Feb 2003). Open offer to acquire additional equity to make Indal a wholly-owned subsidiary. Birla Copper is accredited with ISO 9001 and ISO 14001.

o 2003 :

Birla Minerals Resources Pty Ltd acquires the Mount Gordon copper mines in Australia. Birla Minerals Resources Pty Ltd acquires Straits (Nifty) Pty Ltd in March 2003. Hindalco achieves ISO/TS16949 certification for Aura Alloy Wheels in March 2003. It is one of the first few alloy wheel companies in India and the world to receive this certification. Birla Copper is registered on the London Metal Exchange (LME) in February 2003. The company's Copper Cathodes marked as 'Birla Copper', are approved as 'Grade A' Copper Brand by the LME. The amalgamation of Indo-Gulf's Copper business with Hindalco becomes effective from 12 February 2003.

Hindalco receives the Asian CSR Award for its 'Rural Poverty Alleviation Programme'. The Asian CSR Awards are Asia's premier awards.

ORGANISATION CHART OF CENTRAL SALES & MARKETING OFFICE

(CENTRAL ZONE RENUKOOT)
VICE PRESIDENT
SALES

SALES MANAGER PRIMARY METAL

GENERAL MANAGER FAB. PRODUCT

GENERAL MANAGER MARKETING

NON MARKETING FUNCTION

DY. MANAGER

DY. MANAGER DY. MANAGER ROLLED EXTRUSION

SR. SALES ENGINEER

SALES MANAGER

SENIOR

SALES

OFFICER TRANIEE MARKETING DEVELOPMENT

MT

MT

ASST.

ASO

SSO

MT

MT

SE

SR. SE

ASO

SO

SO

ASO

ASO

ASO

ASST.

DY. MANAGER

SENIOR ASSITANT

ASSITANT

SALES TRAINEE

SENIOR ASSISTANT

ASSISTANT SALES OFFICER

NOTE:

DY.MSEASSTSSO-

Deputy Manager. Sales Engineer. Assistant. Senior Sales Officer

MTSOASO-

Management Trainee Sales Officer Assistant Sales Officer

HINDALCOS FUTURE PLANS

Hindalco is alive to the growing needs of aluminium in the auto sector and in enaching its capacity of primary metal from 2,10,000 MT to 2,42,000 MT per annum. Hindalco is considered setting up a green field aluminium plant in the state of ORISSA. As the new generation cars will have aluminium wheels fitted to them, Hindalco is setting up a wheel plant to manufacture 3,00,000 wheels per annum.

 Hindalco hopes to meet the sheet metal requriements and panelling sheet requirements of auto sector by its expanded capacity of 80,000 MT rolled products per annum. Hindalco has drawn up plans for setting up an aluminium die casting project to supply high quality casting to the auto sector. Handling individual packaged units at intervals for example in a small satellite/buffer warehouse or storage facility. Handling within a factory, for example assembling many different items or components to make up an order prior to dispatch, or for finishing in another plant in a complex of manufacturing building.

PRIMARY ALUMINUM PRODUCTS

SEMI-FABRICATED PRODUCT

EXTRUSIONS PRODUCT

OTHERS

1. PRIMARY ALUMINIUM PRODUCTS:

INGOTS:
Is an LME (London Metal Exchange) registered brand. These are also known as virgin metal, these are used as raw material for making aluminum product.

ROUND BILLETS:
These are used for making extrusion.

CAST SLABS:
Slabs are used input in Hot Rolling Mill, which is converted into thinner Sheets, Plates or Coils. .

2. SEMI FABRICATED PRODUCTS: ROLLED PRODUCTS:

Hindalco produces 900 different rolled product items of which 40 are standard. The rolled products are two types: 1. HOT ROLLED PRODUCTS:-These are the product which are used after the process of hot rolling according to their specification and requirements, these products are as follows: A.. HOT ROLLED PLATES: a. Thickness (mm) 5.00 to 80.00 b. Length (mm) 1829 to 3658 c. With (mm) 610 to 1321 These plates are supplied in alloys 6351, 5052,5086. These are supplied flat with sheared milled. B.. HOT ROLLED PLATES FOR ELECTRICAL APPLICATION: a. Thickness (mm) 12.50 to 80.00 b. Width (mm) 200 to 1270 c. Length (mm) 900 to 7000 These electrical application plates are used as Bus Bar. They are supplied in Alloy 1050, 1060 and 1070. Standard Temper is F (As Fabricated). C. HOT ROLLED COILS: a. Thickness (mm) 4.50 to 12.00 b. Trimmed width (mm) 914,965,1000,1219 c.Untrimmed width (mm) 5005,6061,6351,5052,5086 These are supplied in alloy 5005,6061,6351,5052,5086

3. COLD ROLLED PRODUCTS: PLAIN SHEETS: a. Thickness (mm) 0.40 to 5.00 b. Width (mm) 1829 to 3658 c. Length (mm) 610 to 1320 These sheets are supplied flat with sheet door slit edge. Sheet in alloy 5005, 6061, 6351, 5052, 5086.And special alloy can be presently supplied in maximum width of 914mm and minimum thickness of 0.56mm. Supply of sheets in none standard lengths and widths or subject to prior confirmation By CSMO. COLD ROLLED COILS: a. Thickness (mm) 0.20 to 5.00 b. Width (mm) 90.0 to 127.003 A continuous length of material having thickness of above, minimum thickness for alloy 5052 is 0.35 mm, for alloy 6351 and 5086 is 0.56 mm and thickness below 0.35 mm can be supplied in alloy 1100, 1950, 1060, 1070. 3. SLUG STOCK: Hindalco also produces slug stock needed for punching slugs for the manufactured of collapsible tubes etc. They are manufactured in alloy 1050, 1060, 1070, and in temper O. Thickness of slug stock varies from 2.5 mm to 10 mm. 4. CIRCLES: a. Thickness (mm) 0.40 to 5.00 b. Diameter (mm) 102 to 914 This product is made as sheet cut to circular cross section before subjecting it to deep drawing or other form of operation.

5. MILK CAN CIRCLES: a. Thickness (mm) 1.500 to 4.00 b. Diameter (mm) 100 to 950 They are supplied in alloy and temper O. They are used to make milk cans. 6. CHECKERED SHEETS: a. Thickness (mm) 1.50 to 5.50 b. Width (mm) 813 to 914 c. Length (mm) 2438 to3658 d. Depth of checkered (mm) 0.61 to 1.30 These checkered sheets are also known as flooring sheets because these are use to join floor in buses etc. They are in following patterns. A. Diamond Pattern. B.Two bar Pattern. C. Five bar Pattern. 7. CIRCULAR CORRUGATED SHEETS: a. Thickness (mm) 0.91, 0.71, 0.56, 0.46 b. Width (mm) 813, 660 c. Length (mm) 1829 to 3658 d. Corrugation depth (mm) 19 e. Corrugation 10/3, 8/3 Corrugated sheets can be supplied in other lengths also at extra charges. Corrugated sheets are supplied in alloys 3003, 40800 with temper H4. For roofing and siding, corrugated sheets in alloy 8011 is ideal. 8. CORRUGATED SHEETS WITH RIB: The product is also used for roofing and siding it has better strength as compared to circular corrugated sheets due to extra cold working involved. It is aesthetically superior. a. Thickness (mm) 1.22, 0.91, 0.71, 0.56, 0.46 b. Width (mm) 795 c. Length (mm) 1829 to 3658 d. Corrugation depth (mm) 25.4 e. Finish Mill Finish

f. Alloy & Temper

3003 H4 and 40800 H2

9. FOIL STOCK: It is a semi-finished coil strip used for further rolling to manufacture foils. They are supplied in alloy and temper FS H O. FS I have Fe : Si ratio of 5:2 and having 0.3 to 0.6% iron while FS H has Fe : Si ratio of 1:1 and having 0.6 to 0.95%. They are supplied in thickness of 0.45 to 0.61 mm. 10. LITHO STOCK: It is semi-fabricated coils used for lithography printing. Extremely high required with emphasis on almost complete absence of surface defects. Inclusion sub-surface oxide course grain streaks should be avoided during melting and casting stage. Degassing grain refinement (Titanium Aluminium Rods) and proper filtration should be done. It is supplied in alloy and temper 1050 H2 and thickness of 0.26 mm. 11.ALKALOID SHEET: It is also known as brazing sheet and extensively used air passenger radiators, automotive air conditioning evaporators air condensers, alkaloid sheets consists of a Bramble Aluminium Alloy (AA4045) Clad (10% of total thickness).

3 EXTRUSIONS
Hindalco extrusions offer an enermous range of shapes, wide range of alloys for decorative, structural and functional application. The present die catalouge includes over one thousand dies for various sections and we are fully equipped to design and make new dies as per exclusive requirement. Some of the common shape are as followsROD, BAR- Flat, Square, Hexagonal STRUCTURAL SHAPES Angles, channels, Tees, I-beans, H Sections etc TUBES Round, Oval, Square, Rectangular, Triangular. MOULDINGS SOLID AND HOLLOW SHAPES

There are also numerous sections used for architectural purposes (including doors and windows), Road-Transport, Rail Coaches etc.

Apart from the common aluminium alloys like 19501 (E.C), 52000 (5052), 63400 (6063), 65032 (6061), and 64430 (6351); Hindalco extrusion offer following additional alloys for specialised application: 19600 0r higher purity aluminium strips for slug punching. 24345 (2014) and 24534 (2017) etc. for high strength application 43000 (4043) and 46000 (4047) rods for welding / brazing wire production. 53000 (5036) rods and strip for revert and coinage application. 63401 (6101) section for bus bar. 64401 (6201) rods for the manufacture of ACAR and AAAC conductors. 22450 (6066) rods for textiles and other heavy machined parts.

Apart from the alloys metioned above, new alloys with improved chracterstics are being developed from time to time. For special requirements of alloys and material, Hindalco sales office situated in this area may be contacted.

EXTRUSION BILLETS 4 (101.6), 5 (127), 6 (152.4), 7 (177.8), 8 (203.2) and 9 (228.6) mm. Standard lengths 500 to 800 mm.

Other lengths subject to special enquiry.

ADVANTAGES OF ALUMINIUM EXTRUSION

Less fabrication -- Replacing an assembly to components with one single extrusion section can reduce cost. Less machining -- Extrusion can be produced to the finished shape required, and thus eliminate cost where the alternatives are either solid bars or casting. Less design Design can be simplified by producing an extrusion where previously sections formed from strip were used. Less tooling expenditure The cost of extrusion dies is low compared with those for rolling forming, casting, forging and moulding. More structural efficiency Optimal structure is possible because by using extrusion metal can be place where it aids strength and omitted where it is not necessary. More design scope Extrusion makes it possible to design shapes and components that, without the aid of this process, would be impossible to produce. Easier and quicker product assembly. ALLOYS 19000 (1100) 19501 (E.C) 63400 (6063)

 65032 (6061) and Other alloys subject to special enquiry.

TYPE OF SECTIONS General solid sections Tubings Structural Mouldings Road Transport Rail coach Electrical and Electronic accessories Architectural Miscellaneous

4- OTHERS
The main by products of the process include Vanadium Sludge Gallium Aluminium has excellent prospects, both in the domestic market and international markets. The companys expertise in aluminium business is well established. It is in this light, that the company is also thinking of launching Pre-fabricated Shelters in the market. Hindalco is also examining venture into related value added products, such as manufacturing of aluminium Cans and Hi-Tech Aluminium Casting. The table given below provides an overview of COMPARITIVE PRODUCTION (MT), till April and May 2003 of some aluminium producing industries.

PRODUCTION OF ALUMINIUM IN APRIL 2003 (in MT)

Material METAL EXETRUSION ROLLED Hindalco 23637 1377 5668 Indal 5620 704 5547 Nalco 23856 _ 799 Balco 8130 _ 2628

PRODUCT FOIL 1762 567 _ _

PRODUCTION OF ALUMINIM IN MAY 2003 (in MT)

MATERIAL METAL EXETRUSION ROLLED PRODUCT

HINDALCO 28658 1408 6244

INDAL 5957 766 6111

NALCO 24653 _ 487

The above table suggests that company is growing its market day by day. Indias leading aluminium makers said that their metal, the country s largest aluminium producer HINDALCO INDUSTRIES LTD reported at 16.6% rise in production of base metal to 23637 tonnes. When we see to NALCO Group we find that they had produced near about 23850 tonnes. INDAL a subsidy of HINDALCO said in a statement that its aluminium output zoomed 53.4% to 5620 tonnes in the past month from the previous year and BALCO Group produced 8130 tonnes of metal during the period. HINDALCO, a part of diversified Aditya Birla Group is in the midst of expanding the capacity of its Smelter at Renukoot in the Northern State of UTTAR PRADESH BY 100000 tonnes to 342000 tonnes a year. The project is likely to be over September. NALCO had added half of the planned 115000 tonnes Smelter capacity and is likely to complete the expansion to 345000 tonnes a year by March 2003.

INDAL nearly doubled the capacity of its Hirakud Smelter located in the Eastern State of Orissa in September last year by shifting half of the 400 electrolytic pots lying idle at another unit in Belgaum in Southern Karnataka

[A] IN CONSTRUCTION INDUSTRY:

Aluminium & aluminium alloys have a number of properties, which make them ideal for use in building and construction industry. These properties include lightweight combined with high strength, good resistance to corrosion, visual attractiveness without the need for panting, low maintenance and handling cost and in the case of structural, materials, reduces building time and cost as the materials are easier to handle, and involve the use of lighter, cheaper cranes and other materials handling equipment. Aluminium is used in both the structure and fittings of residential and non-residential buildings. The to main uses are roofing and cladding and in window & doorframes, but there are many other uses including solar panels, sheet, air conditioning, ducts and fixture and fittings. Until 1978, the construction industry had been the largest end use of aluminium in the USA, but in 1979 shipments to the construction industry were exceeded for the first time not only by containers and packaging but also transport. Since then, consumption by the transport industry has remained closely comparable to the consumption by the construction industry in most years, but the consumption of aluminium and containers and packing has increased continuously and in 1991 was over 30% of total consumption compared with 14% consumed in the construction industry in that year.

The door and windows frames are the largest outlets for aluminium in the construction industry. In 1981, these products accounted for 31% of the sector. Total consumption reached a peak of 5,15,000tones in 1991; the next largest group is residential siding (cladding for residential buildings) which consumed 1,36000 tones in 1991, in further drop in consumption of aluminium. The largest end use of aluminium is in the production of windows, doors and screens. The form in which aluminium is used in windows, doors and screens is mainly in the extruded shapes, which accounts for over 2,51,700tones with the exception of 21,300 tones of extruded shapes shipped for use in mobile homes. Aluminium for use out of doors is generally anodized. Anodized aluminium has the ability to accept a wide range of dyes; so that cladding panels can be produced in a wide range of colors for exterior architectural applications. Anodizing an electrolytic process, unique to aluminium on a commercial scale, which thickness the thin layer of the aluminium oxide, which form naturally, when aluminium is exposed to oxygen in the air. The oxidized layer itself provides corrosion resistance and the use of colors is almost wholly decorative although their application may also provide increased protection against corrosion. Anodized aluminium sheeting is being used for signs and for flagpoles. Other uses of aluminium in construction industry include prefabricated buildings, glasshouse for domestic and commercial growers and highway furniture such as signboards.

CONSUMPTION OF ALUMINIUM CONSTRUCTION INDUSTRY: YEAR

1990

IN

CONSUMPTION (%)
6

1996 1998 2000 2002

8 8 12 15

[B] IN PACKIGING INDUSTRY:

The use of aluminium in packaging products other than metal cans mainly involves the use of foil. Foil can be used as a household or commercial wrapping, either alone or in commercial wrapping, in the form of laminates with other materials. Foil containers are widely used for the packaging of food, especially frozen food. Foil layers are important in paper-based packaging such as cartons for fruit juice. Wine boxes have foil containers inside them, which collapse as the contests are drawn off and prevent the ingress of air, which of air which oxidize and spoil the remaining contents. Foil is used as an oxygen tight seal in the packaging of dry powders like coffee and foil seals are also under development to provide tamper proof seals for pharmaceuticals. Many pharmaceuticals in tablet form are contained in foil packages, which permit individual tablets to be removed without opening the others up to the air. Production of aluminium foil in the 14 member countries of the European aluminium foil association in 2001 was 5,23000 tones, 3% higher than in 2000. In USA aluminium association statistics show that shipment of foil in 1995 were 2,74900 tones. Per capita consumption of aluminium foil in 2002 in selected countries in Western Europe.

SWITZERLAND WEST GERMANY BENELUX AUSTRIA FRANCE SCANDINAVIA UNITED KINGDOM SPAIN ITALY GREECE

4.78Kg 2.01Kg 1.90Kg 1.81Kg 1.50Kg 1.42Kg 1.27Kg 1.06Kg 0.74Kg 0.50Kg

The fastest growing outlets for aluminium foil are in flexible packaging for pharmaceuticals, in foil lid stock and portion control packaging. Collapsible tubes for products such as toothpaste and other toiletries, or for sauces and other food products were made only from aluminium. Aluminium is used for closures, which includes products such as pressed foils sheets on bottles, jars and screw tops. Amongst the largest volume application for aluminium in the form of packaging in the manufacture of aerosol containers, which are not classified as metal, cans in the same category as beer and beverage cans. Nevertheless, the increase in the use of aerosol containers is considerable, despite the need to reduce the use of chlorofluorocarbon (CFC) propellants, in response to legislation introduce to reduce the pase of environmental degradation caused by the attack of CFC on the earths ozone layer. The aerosol manufacturers have responded quickly to the restrictions on the CFC propellants by introducing alternative propellants and have also developed new versions of CFCs which breakdowns before they reach the ozone layer. Such has been their success that aerosol fillings worldwide continued to increase up to 1999 despite the slowdown in consumption in USA.

CONSUMPTION OF ALUMINIUM IN PACKAGING INDUSTRY:

YEAR
1985 1990 1996 1997 2000 2002

CONSUMPTION
7 6 16 17 4 16

[C] IN TRANSPORT INDUSTRY:

Aluminium alloys are used in the construction of almost all types of transport equipment. The most widely publicized application for aluminium is in aircraft, though this is one of the smaller applications in terms of the tonnage consumed. The largest end use in the road vehicles, both passenger car & commercial vehicles, and it is also used in railway rolling stock and in the construction of naval and merchant ships and small boats. The largest out let for aluminium amongst road vehicles is in passenger cars, which though smaller than commercial vehicles are build in very large numbers. Different type of vehicles also consumes different forms of aluminium in different quantities. The largest out let for sheet is in the construction of passenger cars, followed by tailors and semi tailors and then by trucks & buses. The main out let for extruded shapes is in tailors & semi tailors, followed by trucks and buses and then by passenger cars. Aluminium ingots accounted for 46% of total shipments to the transport industry and mill products for the other 54% in 1995.

CONSUMPTION OF ALUMINIUM IN TRANSPORT INDUSTRY

YEAR
1985 1990 1996 1997 2000 2001 2002

CONSUMPTION
17 20 22 20 23 18 21

[D] IN AUTOMOTIVE INDUSTRY:

The use of aluminium in construction of passenger cars is far from new. In the UK the ROVER company has made extensive of aluminium in bodywork for over 40 years, starting with the LAND ROVER 1948 then notably in the ROVER 75 and ROVER 90 series (1949-1964) and ROVER 2000(1963-1976). All the models of vehicles concerned, where by the standards of the times during which they were build, low volume models. Aluminium is still more widely used in low volume, high performance, highly priced models of automobiles then in the high volume production models, which account for most of the passenger car produced. The consumption of aluminium, and other lightweight materials in the manufacturers of passenger cars is governed by consideration of safety of fuel efficiency, in emission control and cost. Aluminium is used for a wide range of components. A variety of examples are available to show the range of components, which have been produced from aluminium. The weight of aluminium cylinder heads and cylinder blocks substantial so that their construction in aluminium creates a useful additional demand for aluminium. GENERAL MOTORS for example, is proposing to switch its basic 5-litre v-8 engine to aluminium. In addition to its use for high volume of production models, aluminium is also chosen for the construction of new design of engine. chrysler, for example, is developing a 2- stroke engine for automobiles, which would be smaller and lighter than conventional 4 stroke engines. The aluminium industry has devoted over 20 years of effort towards securing the use of aluminium in preference to copper and brass in the manufacture of radiators and heater cores for use in automobiles. Its first major success was in 1976 when VOLKSWAGEN, replaced an air cooled

engine with a water cooled engine and specified an aluminium radiator for use in conjunction with it.

Another major application of aluminium casting for wheels. The use of aluminium for wheels in partially for weight reduction and partially to meet the demand of fashion. It has been estimated that using aluminium alloy wheels in preference to steel wheels can make a weight reduction of as much as 25 lbs. Such a weight reduction has the undesirable consequence of raising the center of gravity of the automobile and reducing its stability but this does not appears to discourage its use. Brake discs, brake drums and other brake components are being developed so that they can be made from aluminium brake disc made of aluminium are about one third the weight of cost iron disc and are more efficient at conducting the heat away from the brake pads which makes them last for longer and operate more quietly. Estimates have been made of the fuel savings, which results from the use of aluminium to replace the steel components in automobiles. One estimate made by ALUSUISSE is that the use of 50Kg of aluminium to replace steel will result in saving of 850lts of fuel over a 10-year life span of an automobile. Nippon light metals has estimated that the aluminium content of automobiles build in JAPAN in 1991 was 4.7% and will grow to 30 to 40% by the year 2004. Application of aluminium in truck cabs includes doorframes, sills, steps, roof bows and side pots. Extrusions are used for flat truck beds, tanks, van bodies, dumpier bodies and other application. Aluminium is greatly preferred to steel by most trucks and trailer manufacturers because its weight saving leads to improved fuel economy.

[E] IN AVIATION INDUSTRY:

Aluminium alloys are widely used in military as well as in civil aircraft. The development of aluminium lithium alloys that combine lightness of weight with increased strength is extending the use of aluminium in airframe construction.Alcoa estimates that aluminium lithium alloys were substituted for conventional alloys in BOING 747, the weight reduction would be 14000lbs, which would permit a saving of 4 million gallons of fuel over the service life of the aircraft. The use of aluminium will be maintained by the development of improved aluminium alloys and of improved methods of fabricating them. In some instances, this development may lead to the use of aluminium alloys to replace other materials such as titanium alloys or composites, which are generally to be more likely to replace aluminium.Super plastic forming of aluminium alloys permits them to be used in preferences to composites in non structural application because their manufacturing processes are so cheap that the cost of component is below the cost of a comparable component manufactured using composite.Other developments include nickel aluminium alloys, which, ig their properties can be improved offer the possibility of extending the use of aluminium in aircraft gas turbines. Nickel aluminates are reported to have four key advantages over nickel based other super alloys. These are first that they are two-thirds the density, second, that have four to eight times the thermal conductivity, third, that they have excellent resistance to oxidation and fourth, that their crystal structure makes plastic deformation of easier. Apart from military and civil aircraft, aluminium alloys are used for other aerospace application including spacecraft and satellites, missile components, light aircraft, micro light aircraft and hang gliders. The NASA space shuttle makes extensive use of aluminium the excellent resistance of aluminium alloys to corrosion by liquid fuels oxidizers has made them suitable for the use in missile and rockets. In other development, MITSUBISHI ALUMINIUM has introduced an aluminium alloy reinforced with silicon carbide whiskers for use in space vehicles. It is claimed that this alloy, designated NEOMET W has twice the strength to weight ratio of titanium alloys and a 30% high resonance

characteristic than conventional aluminium alloys so that damage cost caused by resonance during launching is avoided

[F] IN SHIP BUILDING INDUSTRY:

The use of aluminium as a construction material for marine craft is now widely accepted although its use in large vessels is still not wide spread, the recent emergence of the auto/ passenger fast ferry has sparked an existing new era in marine transportation an dramatic growth in the construction of large aluminium craft. Aluminium is used for the fame a hull a vessels a rescue craft. The largest design of TRIUMPH rescue vessels use by the US coast guard service involves an all aluminium sheet are used in hull, the keel and the other components like engine mountings. Aluminium was selected in preference to fiber reinforced plastics because it provides superior water tightness an in preference to steel to achieve weight reduction. Aluminium is used for decks are generally in the form of extruded planks, which give better stiffness than plate over large flat areas without the need for extensive framing. Aluminium planks have important advantages, which assist fabrication an encourage their use. In fighters, the increased the use of aluminium may permit carriage of increased payloads notably in containership in which the containers are stacked to very high levels above deck. Aluminium is used in hull & super structure of all vessels improves stability by reducing the waterline. The alternative way to achieve is this is by the increasing the size & displacement of the hull, which increases the drag and leads to a reduction in operating efficiency. A much larger application for e.g. is the use of aluminium alloy plate in the construction of cargo tanks in liquefied natural gas tankers which has been reported to consume 4,000 tones per ship of the A-5083 structural alloy. The use aluminium in competition racing yacht also encourages its use in construction pleasure craft.

[G] IN RAILWAYS:
The high strength to weight ratio of aluminium alloys makes them highly suitable for use in railway rolling stock, in which they reduce the tare weight to permit fuel savings and the carriage of increase the payloads. Aluminium alloys are also resistant to corrosion, which leads to savings in maintenance, and increase the service life of railway vehicles. The types of railway vehicle for which aluminium alloys are suitable include mainline locomotives, passenger carriages and freight wagons. Aluminium alloys are also being considered for use in the magnetically levied trains, which have been introduced in some cities in recent years. ALCON, ALCOA, ALUSUISSE, KAISER and REYNOLDS have all developed lightweight aluminium coal cars. These advantages of fuel economy an increased speed on return journey when the train runs empty. Aluminium car is 30% more expensive, but one third lighter than its steel counterpart. Its payload is around 10% higher & fuel consumption is significantly reduced. Aluminium is widely used in the best-known highspeed passenger trains in use and under development around the world. High-speed passenger trains are used in FRANCE, the TGV make extensive use of aluminium. Aluminium alloys are widely used in rolling stock for this type of railway operation. Because their lightness of weight permits faster acceleration and reduces breaking both of which are important in trains, which are required to provide the shortest possible journey times despite the need to make many intermediate stops, sometimes at intervals of only a few hundred meters.

[H] IN ELECTRICAL INDUSTRY:

Annealed commercial grade aluminium with a purity of 99.7% aluminium has an electrical conductivity 63.5% that of copper, but it has much lower density than copper (2.6 compared with 9.0). Aluminium has been used for overhead transmission of high voltage electricity. Aluminium is resistant to corrosion. It is almost universally used for high voltage bare overhead conductors and in some instances it is also used for the transmission tower they. Aluminium is almost suitable where space is not restricted and insulation is not required. High voltage overhead transmission lines are usually not insulated so the higher costs of insulating larger conductors avoided. Since aluminium provides the equating conductance more cheaply than copper, it is widely used in bare overhead conductors. The manufacture of cables by using standard aluminium rather than copper conductors is no more difficult, but additional cost of insulation required discourages their use. The additional insulation required could be reduced if solid rather than standard aluminium conductors are used.

[I] IN CONSUMER DURABLES:

Consumer durable goods include kitchen utensils and domestic electrical applications. One of the earliest applications of aluminium was in the manufacturing of kitchen utensils, notably saucepans. The properties, which make aluminium suitable for use in kitchen utensils, includes its good thermal conductivity, its lightness of weight, its resistance to corrosion, the brightness of its appearance and the case of fabricating it. Aluminium is used in components for many domestic electrical appliances such as cookers, refrigerators, freezers, vacuum cleaners, washing machines, dishwashers, tumble dryers and many others. The ice tray and grid were among the first use for aluminium in refrigerators, dating from 1927. Freezer shelves are often solid pieces of aluminium sheet, since no air circulation is required. Aluminium die-casting is used for low cost, durable components for garbage disposes. In food preparation and cooking, aluminium is used for measuring and mixing containers, scoops, paddles, a variety of stove top pots and pans and over ware steam jacketed kettles and gas fired kettles for large quantity cooking are made of aluminium. Dry irons and steam irons have cast aluminium soleplates principally because its high thermal conductivity rapidly brings the ironing surface to temperature, and maintains a uniform temperature avoiding scorching. Aluminiums lightness reduces work in ironing and its resistance to corrosion is important in steam irons. The rough casting is polished to produce the ironing surface, and this finish gives satisfactory service. Finishes that would provide a greater degree of scratch resistance than bare aluminium have been considered. Home hair dryers include aluminium components to improve portability. Vaporizers utilize aluminium for water tanks to reduce the possibility of corrosion.

MAJOR APPLICATIONS OF ALUMINIUM: THE WHITE GOLD:

CONSUMPTION OF ALUMINIUM in %
Sl.No. Sector World consumption 1995 World consumption 1998 World consumption 1999 World consumption 2004 A.D.

1. 2. 3. 4. 5. 6.

Electrical Building Packaging Transport Industrial Other including domestic

8 20 22 27 8 15

8 19 20 32 9 12

31 8 6 18 10 27

31 10 5 21 10 23

Emerging Applications:
Automotive: Cars & 2 Wheelers Trucks, Bus Railways Building & Construction Packaging
Alloy wheels, Radiators, Air conditioners, Engine components. Wagons and Engine components Windows, Doors, Curtain Wall partitions Cables, Wraps, Finstock, House foils, Pharmaceutical foils

Agriculture

Irrigation

A unique combination of properties makes aluminium one of our most versatile engineering and construction materials. Amore racial of its characteristics is impressive. It is light in mass, yet some of its alloys have strength greater than that of structural steel. It has high resistance to corrosion under the majority of service condition, and no colored salts are formed to stain adjacent surfaces or discolor products with which it comes into contact, such as fabrics in the textile industry and solution in chemical equipment. It has no toxic reaction. It has good electrical and thermal conductivity and high reflectivity to both heat and light the metal can easily be worked into any form and readily accepts a variety of surface finish. Lightness is one of the aluminiums most useful characteristics. The specific gravity is about 2.7. The mass aluminium is roughly 35% to that of iron and 30% to that of copper. Commercially pure aluminium has a tensile strength of about 90 Megapascales. Thus its usefulness as a structural material in this form is somewhat limited. By working the metal as by cold rolling its strength can be approximately doubled. Much larger increase in strength can be obtained by alloying aluminium with small percentage of one or more other elements such as copper, Magnesium or Zinc. Like pure aluminium the alloys are made stronger by cold working. Some of the alloys are further strengthened and hardened by heat treatments and because of that today aluminium having tensile strength approaching 700 Megapascales available. Aluminium and its alloy lost part of their strength at elevated temperatures, although some alloys retain good strength at temperature from 200 degrees to 260 degrees. At subzero temperature, however their strength increases without loss of ductility so that aluminium is a particularly useful metal for low temperature applications. When aluminium surfaces are exposed to the atmosphere, a thin invisible oxide skin forms immediately, which protects the metal from further

oxidation. This self-protecting characteristics gives aluminium its high resistance to corrosion unless exposed to some substance or condition that destroys this protective oxide coating, the metal remains fully protected against corrosion. Aluminium is highly resistant to weathering, even in industrial atmosphere that often corrode other metals. It has also corrosion resistance to many acids Alkalis are among the few substance that attacks the oxide skin & therefore corrosive to aluminium. Although the metal can safely be used in the presence of certain mild alkalis with the aid of inhibitors, in general, direct contact with alkaline substances should be avoided. A word of caution should be mentioned in connection with the corrosion resistant characters of aluminium. Direct contacts with certain other metals should be avoided in the presence of an electrolyte otherwise galvanic corrosion of aluminium may take place in the vicinity of the contact area where other metals must be fastened to aluminium, the use of bituminous paint coating or insulating tape is recommended. The fact that aluminium is nontoxic was discovered in the early days of the industry. It is this characteristics that permits the metal to be used in cooking utensils without any harmful effect on the body, and we find also a great deal of aluminium equipment in use by food processing industries. The same characteristics permits aluminium foil wrapping to be used safely in direct contact with food products. Aluminium is one of the two common metals having an electrical conductivity high enough for use as an electric conductor somewhat, so that whatever possible alloy 1350 (electric conductivity of aluminium ) is used in electric conductor applications. The high thermal conductivity of aluminium came prominently into play in the very first large-scale commercial application of the metal in cooking utensils. This characteristic is important whenever the transfer of thermal energy from one medium to another is involved, either heating or cooling. Thus aluminium heat exchanges are commonly used in the Food, Chemical Petroleum, Aircraft and other industries. Aluminium is also an excellent reflecter of radiant energy though the entire range of wavelengths, the visible spectrum to infrared and heat waves as well as electromagnetic waves of radio and radar.

Aluminium has light reflectivity of over 80%, which has led to its wide use in lighting fixtures. Aluminium roofing reflects a high percentage of the suns heat, so that buildings roofed with this material are cooler in summer. Almost any method of joining is applicable to aluminium; Riveting, Welding, Brazing, or Soldering. Aluminium sheet, because of its superior corrosion resistance and smooth continuous surface is an excellent base for the high quality paints used in producing painted sheet.

Aluminium Scenario in Some Countries

(In Lakh Tones)
Country Country Estima Mining Alumina Alumin Annual rank in (% of ted capacity capacity ium /capita Bauxite Share) Bauxite capacit Consum reserves reserve y ption Kg/pers on Guinea 8200 166.50 6.00 1 (23%) Australia 45720 395.50 99.10 14.22 2 (20%) Brazil 30720 76.60 12.30 12.13 2.10 3 (10%) Jamalca 20320 98.50 16.80 4 (5%) (5%) India(8%) 26500 45.00 16.4 6.33 0.50 5 Gayana 10200 30.00 6.2 6 Venezuela 5000 10.00 13.5 6.30 10 (3%) CIS 1500 28.00 46.00 32.45 13

14 16 +17 +18 +19 +23 World Total

China France USA Canada Germany Norway

1500 400 400

20.00 12.00 8.00

251380

1090.00

10.00 5.60 35.90 11.00 8.3

355.30

7.78 4.22 40.44 22.83 8.01 8.99 2145.80

27.50 26.10

Salient Points: Some countries with plentiful Bauxite reserves have developed mining and alumina capacity but no aluminium capacity. Some with no or very few Bauxite reserves have very good aluminium capacity. India has 5th largest (metallurgical grade) Bauxite deposit, 4 th largest mining capacity,5th largest Alumina capacity and 8th largest (comparatively low) aluminium capacity. Indias per capita consumption is one of the lowest in the world: Japan has 29.40, Switzerland, UK 13.80

World Aluminium Consumption

Country North America South America Weston Europe CIS Australia Africa Asia Japan PRC India Other Asia In million tones 4.700 0.700 4.800 2.200 0.300 NA 2.300 1.500 0.470 0.400 % of total 27 4 28 12 2 13 9 3 2 CAGR(%) 2.6 5.5 4.2 1.1 1.8 NA 2 9 9 9

Capacity & Production of Aluminium

Country North America South America Weston Europe CIS Australia Africa Asia Japan PRC India Other Asia Capacity 6.401 2.160 4.062 3.654 1.697 0.667 0.025 1.400 0.610 1.064 Production 5.554 2.030 3.432 3.156 1.556 0.516 0.019 1.300 0.470 1.044 Operating Rate (%) 87 94 84 86 92 77 93 77 98

PER CAPITA CONSUMPTION OF ALUMINIUM IN INDIA AND OTHER COUNTRIES

COUNTRY CONSUMPTION (Kgs/PERSON) JAPAN USA GERMANY SWITZERLAND UNITED KINGDOM SPAIN MEXICO ARGENTINA BRAZIL 29.40 27.50 26.10 19.40 13.80 7.60 2.90 2.82 2.10

 CAMAROON INDIA

1.30 0.50

There are five primary aluminium-producing companies in India. They are as follows-

PRODUCER

LOCATION

YEAR OF COMMENCEMENT
1985

OWNERSHIP

NALCO

ANGUL

Public sector

HINDALCO INDAL BALCO MALCO

RENUKOOT ALUPURAM KORBA METTUR

1958 1943 1965 1965

A.V.Birla Group A.V.Birla Group Sterlite Sterlite

Aluminium today is the most sought after metal of the century for two reasons. One, the ore Bauxite is in abundance and seconds its growing applications. Bauxite is the chief source of aluminium and India is the 5 th largest producer of Bauxite in the world, next only to Australia, Guinea, Brazil and Jamaica. The number of mines in India today has risen to 224, as against 209 in 1991. Aluminium is being used in around 3000 products in developed countries like USA, Japan and Canada. Where as in India, only 300 products find use in aluminium. Hence, India definitely is a potential place for developing and nurturing new markets for the metal.

Today aluminium is find-growing application in auto-sector. However, aluminium faces challenges from cheaper substitutes like plastic in key usage sectors like construction, transport and packaging. Plastics have an added advantage of being 2 to 3 times lighter in weight. But being nonbiodegradable, poses a major threat to environment. It is reckoned that the aluminium will be able to overcome the challenges that it faces from competing materials, with increased stress on Research & Development, more customer-oriented applications and value additions. Hence, Industry experts feel that the aluminium industry is bound to grow with the growing consumption of this environment-friendly metal.

COMPANY WISE CAPACITY OF ROLLED PRODUCT IN INDIA (2002)

COMPANY CAPICITY (Ton)

HINDALCO INDAL BALCO MALCO PENNAR STERLITE LIGHE METAL OTHERS Total :

80,000 90,000 40,000 7,000 30,000 20,000 10,800 15,000 292,800

History of aluminium is related to earth.

Earth contains about 8% aluminium metal compared to 5% Fe clay having greater aluminium compounds provides better /longer serving utensils made from that clay

Various scientists tried to separate out aluminium

1809 He named it aluminium by checking properties of its oxide 1825 He was successful in obtaining clay metal by reducing AlCl3 with Kamalgam 1845 Wohler He made it and checked its properties light, ductile, stable, low m.p. 1854 Deville Extra ordinary efforts of these scientists resulted in releasing Al from slavory of oxygen 1855 1859 Aluminium bars were exhibited next to crowns jewels at Paris exibition and public got a chance to see aluminium in its metallic form Total world production was 2 tones only in that year compared to Indias present production over 6 lakh tones and world production over 20 million tones. charles Martin Hall & Paul Heroult independently and simultaneously developed electrolytic reduction process for Aluminium production. Both were born in 1863 and died in 1914 In their process, a sol of Al2O3 was electrolysed in molten cryolite with carbon electrodes. After their invention, Karl Joseph Bayer of austria panted his process HC Oersted Levisor

1886

for alumina from bauxite ore in 1888. Both the above processes are used extensively even today. Bauxite derived its name from Les Baux villege of France where it was found for first time. In simplest terms, when earth and energy come together aluminium takes birth. Bauxite is abundant in earths crust, refined by caustic soda, yields alumina which when charged by energy delivers aluminium metal. That is beginning. Real magic of human creativity makes the metal flow into many thousands of application from cookware to spacecraft. The smooth drive for applications comes from ingenuity of human mind and market place through demand fuelled by versaile properties of aluminium. Aluminium recently as a highly versatile material on the world market with has established itself only little over a hundreds years of history; this metal is one of the latest arrivals to reach mass levels of consumption. Unlike steel, whose own development marked a fundamental step in the industrial revolution, aluminium importance began to grow significantly only in this century. Extracted for the first time in 1825 by ORSTED and produced in very modest quantities through the years 1850 1860, aluminium became truly industrialized only after 1880, when HALL in USA and HAROULT in France almost simultaneously invented and introduced the manufacturing process named after them, which is a reliable and repeatable method for production on an industrial scale. In lees then century aluminium has seen a remarkable development as to both production & uses, and is now second only to steel in its importance for todays industrial society. A few figures give a clear idea of the rapidity of this growth. In 1920 the annual production of primary aluminium was less than 200000 tones; today it is running at over 18 million tones compared with steel production, with is 1950 stood at 40 times the output of aluminium, the ratio is currently only around 18 to 1. It is evident that the period of fastest growth of aluminium was 1950 to 1970 after which the rate of expansion slowed, due to the overall economic downturn & because the industry had reached maturity with the major market at saturation levels.

To forecast the demand for aluminium over the next few years, trends will depend on the overall level of economic and industrial activity. There is no doubt, however that in competition with other materials in aluminium will continue to play a leading role due to its peculiar capacity not only to grow in quantitative terms, but also to add increasing value to its alloys, products and its applications. In this context material analyst are forecasting a phase of consolidation for aluminium by the year 2000, owing to the growing demand for lightweight construction materials. The prerogative of this inherent aptitude for the widest variety of application mean that the penetration of aluminium various dramatically across the world. The historical data of production and consumption of aluminium clearly show that the development & penetration of light alloys is closely correlated with the level of industrial development. Thus aluminium began its march in the advanced countries of North America and Europe, spreading later to developing countries. The average distribution for consumption of aluminium and its alloys across the various industries. The building and construction industries clearly represent the most important outlets. Household fittings and applications, Electrical engineering, packaging and general engineering are the other outlets for the consumptions of aluminium & its alloys across the various sectors of economy.

ALUMINIUM STATUS IN INDIA

India enjoys a commanding position regarding minerals for aluminium. Today the country is in a position to export Bauxite, but also alumina, the primary metal, its alloys and a variety of finished goods. Aluminium occupies second position after iron in abundance among the structural metals in the earths crust. The metal has a high affinity for oxygen and so is available in the nature in the form of hydrated oxides. In the world aluminium scenario countries like Guinea, Brazil, and Jamaica are known to have abundant resources while the USA, JAPAN, FRANCE, GERMANY,the UK and the C.I.S. re the major manufacturers and users of the metal. India has also abundant reserves of Bauxite but the current production of the metal is about 6,00,000 tones per year and so the per capita consumption of aluminium in the country is very low. It is felt that the country has great potential to become a major producer and user of the metal. Serious debates have been held to find out the constraints to become a major player in the industrial sector in India. Ramachandran suggest that the country has to take a long-term perspective and carry out investigation to characterize the R & D to make

the currently adapted p production practices become efficient and highly productive. There is need to model the processes and automate the operations. A regular training for updating the technology information of industrial staff should be practiced. Future growth in demand for aluminium depends on various factors, prominently on the available forms (sheet, foil, forging, casting etc.), properties[of alloys and composites] and cost. Gokhale finds that the production of new alloys/products is related to the availability of suitable equipment for continuous and cost effective manufacturer. New aluminium based materials particularly the composites have high demand potential in automotive and aerospace industry. Pai & Das say that these products have low density, high strength, good thermal conductivity and iso topic properties. Growth of aluminium industry in the country is also associated with various problems like standardization, characterization of raw material and products used by civil and architecture construction industry, electrical conductor wires and cables and automotive industry.

THE MANAGEMENT ASPECT:

One of the major inputs required in aluminium industry is electrical energy. It ismade available either from local /state agencies, or from captive power plants. It is said that the success of some aluminium plants in the country is due to setting up of captive power plants and minimum dependence on state agencies. In the changing scenario of generation and supply of electrical power, this aspect requires a detailed evaluation and analysis. The other important aspects are social cost associated with mining transportation of bauxite and alumina to smelter pollution control, recovery of chemicals from cell discards etc.

RESEARCH AND DEVELOPMENT:

Health grow of aluminium industry depends on a sound R & D base. The fact has been well recognized, both by the government and private and public sectors in the country. JNARDDC is well-equipped laboratory having facilities for preparation, analysis and characterization of raw material including bauxite and coke. Laboratory is equipped with a test facility for smelting, modeling, data collection (acquisition at the plant sites) and analysis. The research center at HINDALCO takes care of the process and product developments, energy conservation, cost reduction, product quality, waste recycle population control, import substitution and market development aspects. NML is a national laboratory of high standards. It has been associated with development of conductor grade and other products in aluminium. NALCO has set up an R&D center to attend to the needs of the industry. NALCO is reported to have carried out extensive R&D on development of special grade alumina. Aluminium in association with magnesium offers a weight and strength to weight ratio advantages in many applications. Future industrial growth will be visualized for the industry contributions of organization like HAL, NAL, DRDO and VSCC in this area is well

acknowledged. It is noted by experts that aggressive R&D have to be carried out in the following areas. a) b) c) d) e) Increasing efficiency and productivity of industry. Cost reduction of the products. Reduction of waste generation and also its utilization/disposal. New alloy and products to meet emerging technologies. Characterization of raw material, red mud, vanadium sludge etc.

A number of R&D activities therefore have been taken up based on the international trends in the process/product development & to some extent based on the changing world scenario the R&D scientist are under pressure from all direction. It is noted that India is an important player in aluminium industry and the country has dreams to reach high to become a global player. The dreams perhaps can become a reality, if issue like R & D, industrial training and technology and management are viewed in an integrated manner. The words in the context of aluminium in India may therefore be R & D scientist, quality, policy, management, and to set goals to achieve.

AluminiumApplication and consumption trends in India (Past, Present and Future)

Aluminium initially was used as a kitchenware in early twenties. Even now every rural/urban household has few articles made of aluminium. Aluminium alloys are currently used extensively in various strategic applications by BARC,ISRO and for many defence department. Total production in 1960 18245 tones 2000-01 639935 tones World production presently over 20 million tones

From use of aluminium in kitchenware, it has graduated to many Aluminium components being sent in space by ISRO. Though it was

used extensively for electrification (Cables and Conductors) in last fifty years. Emerging application requirements will be in transport, packaging, building, communications etc.

Countrys Production Capacities and Production (M.T.)

Producer
HINDALCO

NALCO INDAL BALCO MALCO TOTAL

Cap. 2000-01 242,000 230,000 110,000 100,000 25,000 707,000

PROD. 1999-00 248,930 212,663 43,458 94,349 18,907 618,307

PROD. 00-01 251,492 229,362 43,924 86,530 28,627 639,935

PROD. 01-02 269,000 230,000 45,000 75,000 30,000 649,000

PROD. 02-03 284,000 258,000 45,000 95,000 30,000 712,000

PROD. 03-04E 337,000 320,000 45,000 95,000 30,000 827,000

PROD. 04-05E 350,000 345,000 45,000 100,000 40,000 880,000

The Indian aluminium business:

The Indian primary aluminium industry comprises of five producers in the private & government sector as given in figure. This table provides a prospective of Indian aluminium industry as well as the Companys Indian competitors. Products such as Rolled products, Extrusions and foil comprise of tailor made items manufactured against specific requirements.

Indian Aluminium Business FY 03(000 MT)

Primary Aluminium Producer Hindalco Indal Balco Nalco Malco Others Total
# * $ @ Cap. Prod.

Rolled Product
Cap Prod. .

Extruded Product
Cap. Prod.

Wire rod
Cap. Prod.

Foil
Cap. Prod.

275# 45* 100 230 30 66 736

261 44 70 232 29 32 636

80 70 90 69 44 25 50$ 7 0 0 66 32 330 203

14 8 9 0 0 189 220

16 8 1 0 0 75 100

40 10 42 50@ 24 70@ 236

52 .4 37 42 24 70 225

5 10 0 0 0 40 55

17 7 0 0 0 22 46

Commissioned in Sept, 2002 Effective Capacity Under Commissioning Effective Capacity

The market for Aluminium products in India is very widespread a) Geographically & b) By diversity of end use . Further,there are a large number of small and medium consumers, and a select a few large consumers. The smallest consumer would be consuming as little as 1 MT/Month . However , the largest number of hindalcos customrrs are in the consumption range of 5-50 MTs/Month. Aluminium is being used in around 3000 products in developed countries like USA, Japan ,Canada , etc. Where as India , only 300 products find use in aluminium. Moreover, the per capita consumption of aluminium in the country is very low (0.5 Kg/year) . Hence there is large potential for introducing the nwer uses and the increasing the consumption. As a strategy therefore , Hindalco decided to cater to as many consumers as possible. Their distribution system therefore , is designed to the object. Hindalco manufactures the products with vary specifications , as desired by the various customers . Hindalcos market may be segmented in the following manner. A) MARKET SEGMENTATION BASED ON THE PRODUCT GROUP On the basis of product groups, Hindalco market may be segmented in the following manner PRIMARY PRODUCTS : IGNOTS WIRERODS BILLETS ROLLED PRODUCTS : SHEETS

CHEQUERED SHEETS ROOFING SHEETS COILS HOT ROLLED PLATES CIRCLES EXETRUDED PRODUCT : GENERAL SOLID SECTIONS TUBINGS STRUCTURALS ARCHITECTURALS MOULDINGS OTHERS : VANADIUM SLUDGE (By product) GALLIUM (By product) B) MARKET SEGMENTATION BASED ON THE DEMAND PATTERN Based on the size and frequency of orders , Hindalco market may be segmented as below: I. Bulk Customers : Bulk customers are those customers , whose demand is very high and consistent . Some of the bulk customers are Hawkins, TTK, Foil Division Silvassa, Jugraj Tejraj , Bajaj Auto etc. II. Small And Medium Customers : Small and Medium customers may be bracketed as those customers , whose demand is comparatively low and not so consistent . Some of the small customers of Hindalco include ITI Allahabad, Defence Organisation , Dockyards etc. C) MARKET SEGMENTION BASED ON THE PRIORTY On the basis of priorty given to various orders Hindalco market may be segmented in the following manner

I.

Routine Customers : Routine customers are those customers , who are regularly sourcing the company .Their orders are processed in the normal course of working. II. Special Customers : Special customers are those customers , whose orders are for products under developments . Since their demand is usually urgent in nature they are given priority under routine customers . Exeport customers , Government organisation like Defence Establishment etc . continue this category. D) MARKET SEGMENTION BASED ON SECTOR Until 1989 , Aluminium was a commodity controlled by the government . The act stipulated that 50% of the aluminium production by any manufacturer , should be of the electrical grade and the retention prices of this grade of aluminium was fixed by the government . The aluminium industry has been significant changes post deregulation .There has been a down slide in the use of metal in the electrical sector and an upward trend in its use in the transport and packaging sector. The table given below presents comparitive sector wise consumption of aluminium in India before and after decontrol. SECTOR-WISE CONSUMPTION OF ALUMINIUM IN INDIA , BEFORE & AFTER DECONTROL (UNITS IN % ) SECTOR CONSUMPTION BEFORE DECONTROL (1989) 52 10 05 19 _ CONSUMPTION AFTER DECONTROL 36 19 13 12 12

Electrical Transport Construction Consumerdurables MachineryComponents

Packaging Others TOTAL

08 06 100

09 06 100

However , in India the electrical sector is expected to continue as the single largest end-user , since power generation and transmission capacity is inadequate in the country and investment in this sector is definite to grow.

THEORITICAL ASPECT OF CHANNEL OF DISTRIBUTION Most producers do not sell their goods directly to the final users. Between producers and final users stands a marketing channel, a host of marketing intermediaries performing a variety of functions and bearing a variety of names. Some intermediaries such as whole sellers and retailers buy, take title to, and resell the merchandise, they are called merchants. Others such as brokers, manufacturers representatives, and sales agents-search for customers and may negotiate on the customers behalf but do not take title to the goods; they are agents. Still others such as transportation companies, independent warehouses, banks, and advertising agencies-assist in the distribution process but neither take title to goods nor negotiate purchases or sales; they are called facilitators. Thus, A channel of distribution for a product may be defined as the route taken by the title to the goods as they move from the producer to the ultimate customers or industrial users . In simple words, Marketing channels are set of interdependent organizations involved in the process of making a product or service available for the use or consumption. The primary objective of channel of distribution is to bridge the gap by resolving spatial (geographical distance) and temporal (relating to time) discrepancies as to supply and demand.

Marketing channel decisions are among the most critical decisions facing management. The companys chosen channels intimately affect all other marketing decisions. A distribution system has designed carefully, as it normally takes years to build and is not easily changed.

CHANNEL LEVELS Each intermediary that performs work in bringing the product and its title closer to the final buyer constitutes a channel level. When the product being manufactured and sold is industrial in nature, direct channel of distribution is useful because relatively smaller number of customers need personnel attention, after sale service etc. However, in case of consumer products, indirect channel of distribution, such as wholesalers retailers etc. is more suitable. Some of the commonly used, consumer and industrial marketing channels are given below(a) CONSUMER MARKETING CHANNELS

(b) INDUSTRIAL MARKETING CHANNELS VARIOUS MODES OF DISTRIBUTION IN HINDALCO

Hindalco emphasizes on, Taking the product to the market Distribution of products in Hindalco is carried out through a network of zonale offices carried out through a network of zonale offices, Area offices, and Agents, Stockists and company operated depots, located throughout the country. A brief description is given below

1. ZONAL AND AREA OFFICES- Hindalco has established 5 zonale offices, in various parts of the country. There is a network of area offices, functioning under various zonale offices. Zonale offices carry out the various Marketing and Sales functions of the company. They provide all necessary assistance to all the customers. A contract is signed between all the zonale offices and the customers, writing all the details of the product, quality, packaging, transportation, mode of payment etc. This contract becomes the basis of production for Hindalco. This network of zonale and area offices helps the company to cater to the needs of the customers, who have specific needs. Zonale and area offices enable the company to earn additionally profit, by eliminating intermediaries and establishing direct contract with the customers.

2. AGENTS AND STOCKISTS- Agents are those persons/institutions, who provide orders to Hindalco, on behalf of the customers. The company has appointed number of agents, all around the country to sell certain products. They are paid commission on the generated sales Agent being a local person/institution, can use his contacts and influence, to generate sales in a local market. Agents function as an important mode of distribution, as they enable the company to minimise distribution set-up costs. Certain products of the company are sold through a network of stockists, appointed in various part of the country. Stockists are those persons/organizations, to whom HINDALCO makes confirm sale. After buying the products from HINDALCO, the Stockists are free to make sale to any customer, at any price. Thus stockists also help the company to cover the wide geographical market, without incurring any extra distribution set-up costs. 3. DEPOTS HINDALO operates 9 depots in various parts of the country. Depots send the estimated requirement at the work-office and thus, maintain suitable inventory to cater to the demand of the market. This mode of distribution has the following advantages-

a) TAX-SHIELD In many state, state sales tax is less than the central sales tax. In these states sales of products through depots, leads to tax saving. b) Emergency needs of the customers fulfilled immediately by the depots, at a premium the depots can also provide price small off takes of the scattered customers easily. c) Depots provide a foundation to the production department, by keeping inventory of the various products. For example, in the event of surplus stock, products can be transferred to the various depots. Similarly, ProductionSchedules can be planned with greater accuracy, with the help of estimated requirements, sent by the depots

MAJOR DOMESTIC MARKETS (GEOGRAPHICALLY) In order to cater the demand of geographically scattered market, Hindalco has broadly divided its domestic market into the following five zones ZONE NORTH SOUTH EAST WEST CENTRAL ZONAL SALES & MARKETING OFFICE DELHI BANGALORE KOLKOTTA MUMBAI RENUKOOT

DISTRIBUTION CHANNEL OF HINDALCO

Marketing activities of the company are carried out through a network of zonale offices, company operated depots, Agents and Stockists, located through the country. In the light of major geographical markets, Distribution channel of products in Hindalco, may be studied as under ZONE HEADQUARTER AREA OFFICE DEPOTS AGENTS/STOCKISTS North New Delhi Chinderah Delhi, Faridabad, Chandigarh, Jaipur. 29

TERRITORY COVERED

Delhi , Rajasthan, Haryana Himachal Pradesh, Jammu & Kashmir, Western U.P. Parts of Northern M.P. South Bangalore Chennai, Hyderabad. Pondicherry, Hyderabad 18 Karnataka, Tamil Nadu, Pondicherry, Kerla and Andhra Pradesh. East Kolkatta Nil Nil 16 West Bengal, Orissa, South Bihar and Northern Eastern States.

ZONE HEAD-QUARTER AREA OFFICES DEPOTS AGENTS/STOCKISTS TERRITORY COVERED

ZONE HEADQUARTER AREA OFFICES DEPOTS AGENTS/STOCKISTS TERRITORY COVERED

 ZONE HEADQUARTERS AREA OFFICES DEPOTS AGENTS/STOCKISTS TERRITORY COVERED

West Mamba Pune, Nagpur, Ahemedabad Bhiwandi, Silvassa, Indore 20 Maharashtra, Gujrat Goa, Western M.P. Central Renukoot Nil Nil 10 Northern Bihar, Eastern U.P. & Parts of Eastern M.P.

ZONE HEADQUARTERS AREA OFFICES DEPOTS AGENTS/STOCKISTS TERRITORY COVERED

HINDALCOS GLOBAL MARKET

Hindalco is domestic oriented company. Exports normally constitute 10 to 15 % of the total sales value. The company has its Export office, located at Kolkatta. Today, HINDALCO presence in around 26 countries of the world. Export enable the company to test the quality of its producers in the international market . High quality standards , prevelant in foreign markets constantly encourage the Management to achieve higher quality dimensions. Today , Hindalco has its marketing activities , spread over following countries of the world 1- USA 2- UNITED KINGDOM 1- MEXICO 2- FRANCE 3- BAHRAIN 4- TURKEY 5- UGANDA 6- KENYA 7- GERMAN 10- MUSCAT 11- UAE 12- MAURITIUS 13 -BANGLADESH 14- SRILANKA 15- INDONESIA 16 - MALAYSIA 17 - NEW ZEALAND 18 - SINGAPORE 19 - PHILIPINES 20 - JAPAN 21 - TAIWAN 22 - HONGKONG 23 - KOREA 24 - VIETNAM 25 - THILAND 26 - CHINA

IMPLEMENTATION OF CHANNEL
FORMULATION OF CHANNEL OBJECTIVES:
Achievement of the best possible coverage of the target market. Ensuring that the consumer incurs the minimum extension in procuring the product. Ensuring that the firm is able to carry on with its manufacturing activities, confident that the channel will take care of the distribution job. Ensuring that the distribution is cost effective.

IDENTIFICATION OF THE CHANNEL FUNCTION:

Working out a channel or model is the clear identification of the function to be performed by the channel. The channel functions have to be in tune with the predetermined channel; objectives. Channel functions must be identified in the specific context of the concerned firm in order to get practical direction in designing the channel for the firm.

ANALYSING THE PRODUCT CHARACTERSTICS AND LINKING CHANNEL TO THE PRODUCT:

The firm should analyse the characteristics of the product and choose the channel design that is most suited to the product. Within each of these broad categories of products channel choices can vary in relation to specific products/product types. The product features, after all changes in a graded manner as one move through the spectrum from the simplest consumer softs to the most complex among industrial equipment.

Note:
Consumer products Vs industrial products. The case of industrial products. The product must have a sizable customer base. It must be standardized to a reasonable extent.

 It must be stock able items. It must be non custom-made item. The unit value should not be too high. It should not be too complex: Need for specialized distributor must be appreciated; after considering all such factors, if a given industrial product lends itself for marketing through distributors, it must still be remembered that; As a general rule industrial products require specialized distributors and entrusting them with the general purpose (consumer product) distributors does not produce the best result. Different industrial products need different types of distributors.

EVALUATION OF THE DISTRIBUTION ENVIORNMENT:

Selection of channel model has to necessarily take into account the distribution environment obtaining in the country/region and in the specific business in which the firm is engaged. A firm has to evaluate the vital features of the distribution environment and ensure that the channel model to be adopted is compatible with them. Distribution environment in the broader sense includes the legal environment as well in so far as its implications an distribution are concerned.

EVALUATION OF COMPETITORS CHANNEL PATTERNS:

The firms should also study the competitors channel patterns before deciding its channel. While the firm may not necessarily follow the competitors it will be worthwhile for the firm to analyse in depth the plus and minus of the channel patterns adopted by each of the major competitors.

EVALUATION OF COMPANY RESOURCES MATCHING THE CHANNEL TO THE RESOURCES:

AND

On the other hand firms with larger resources and large size marketing operation will be in a position to go in for highly intensive distribution committing a good deal of resources to the distribution task.

IDENTIFICATION OF ALTERNATIVES CHANNEL & SELECTION OF THE ONE THAT SUITS THE FIRM BEST:

Two important consideration are cost and efficiency. Often though not necessarily they are directly proportional. The channel that its efficient but relatively less expensive has to be chosen. Two types of evaluations an economic evaluation and a conceptual evaluation may be necessary. The firm should also examine whether the channel members in the desired alternatives would be willing to work enthusiastically for the firm and the product.

PURPOSE OF DISTRIBUTION CHANNEL

From the customers point of view: Ensure early delivery. Minimize Customers inventory. Cost saving from Customers point of view. Customer gets material at a lower price due to sales-tax structure.

From the Industrys point of view: Improve or enhance customer base. Inventory Management such as ABC analysis etc. Faster delivery makes us more competitive to the competitors. Organizations use a variety of communication media. Sales people, who directly come in contact with customers is one such medium. Their behavior, knowledge, competence and personality determine the communication quality. In the process of interaction they also gain knowledge about the Customers plans and requirements. By providing regular feedback to the organization they help in assessing the relationship with the customers. These inputs are vital for strengthening the relationship with the customers. Sales people are also expected to solve problems and defuse crisis with the customers. Here, they rely on the amount of trust, good will and friendship that they establish over time. The concept of ZERO DEFECTION is vitally important for the organizations. It means ensuring that all the customers are satisfied all the time and they are committed to strengthen the links with the supplier-organizations. The concept of ZERO DEFECTION essentially envisages a loyal customer base. To achieve the idea of zero defection the sales persons should fully understand the Mission and the Objectives of the organization.

 Try hard to match employers strategic objectives to the market. Be innovating in developing quality partnership of high commitment with long term objectives.

Establish relationship and use problem solving techniques for prevention of crisis and preventing customer dissatisfaction. Gather quality intelligence on customer dissatisfaction and provide this information to management.

ON TIME DELIVERY:
Consumers will be happy, if the material is delivered on time. OTD has come into sharper focus, for it has become a competitive weapon in almost all industries. For example Nissan offers a guaranteed ten-day delivery to its dealers, Caterpillar delivers replacements parts within 72 hours, 99.7% of time. OTD customer satisfaction gap has three components. Calibration Gap Operations Gap Organization Gap

Calibration Gap: - The customer may measure OTD in a different manner

as compare to the supplier. It may so happen that the supplier may measure OTD by product category but the buyer may measure it in terms of complete order. The customer may measure OTD in terms of the initial order date where as then supplier may measure it from a negotiated date.

Operations Gap: - Businesses that face variability from one manufacturing

phase to another or from operations to ware house normally have an operations gap. Operations gap can also result from too many stages in production process, too many suppliers or too many people involved in order filling.

Organization Gap: - If people do not have incentives to improve OTD it

will probably result into organization gap. In other words organization gap results from the priority accorded to OT

Dealing :-

Manufacturer

customer

It includes Ex-works price+ excise duty (16 % for aluminium rolled products ) + sales tax (inside U.P. it is 2.5 % & outside U.P. it is 4 % ) + freight charges + Insurance (0.0399 %). Through Depots:Manufacturer Godown Customer

It includes Ex-works price + Godown Handling charges + freight charges +Excise duty. Note:- it includes local sales tax from depots. Consignments Agents Manufacturer consignment agents customer

It includes Ex-works price +Godowns handling charges+ Freight charges + Excise duty. Note:Commission:- For consignments agent it is Rs. 3000MT for cold Rolled Products& 8000MT for Hot rolled products. STOCKIST:MANUFACTURER STOCKIST CUSTOMER

It includes ,Ex works price + Freight charges + Excise duty +Sales Tax.

NOTE:COMMISSION -: FOR STOCKIST IT IS RS. 1500 MT Detail of Distribution process at Hindalco There are different tasks involved in distribution process. These are as follows Order Processing. Packing &Insurance, Banking, Bills. Ware Housingh. Godowns sales procedure Order Booking:- Every purchaser has to book his order giving details hich aluminium rolled products they want such as Plain Sheet ,Cold rolled coils, Milk can Sheet , Circiles chequered sheets etc. Mode of transport and dispatch destination is also mentioned .Technical wing of Hindalco examines thei application and if necessary also makes inspection of the facing and decided quality to be offered.Thereafter,terms of payments are finalised and his order is finally booked .This order is passed ton the relevant personnels officials with relevant details. Priority:- A priority list of all categories of consumers Has been fixed in consultation with all concerned. Consumers get delivery in order to their priority, Which is also followed by transporting agents. Order processing :- Hindalco procure order either Directly from the customers or through the agents/ Stockist. The order contains the name of product Quality, size, clearance etc. After the receipt of orders From the customers or agents company scriutinizes the order.A production planning programmed is prepared for rolled production monthly basis. This monthly report is sent to the respective production department i.e rolling mills by the end of the proceeding month.The produced material is sent to the inspection and packing department. WARE HOUSING:- Every company has to store its goods while they wait to be sold. A storage function is necessary because production

and consumption cycles rarely match ware housing is the responsibility of ware house incharge in Hindalco.the work starts when ware house officials receive finished goods from production.Hindalco ware housing in charge dispatches the material to respective customers on advice of CSMO and follows the guidelines given to them.the guidelines are:-

AT WARE HOUSE: While taking delivery from inspection and packing to ensure packages are intact and dry. If packages are damaged or in loose condition, get it repacked. If packages are wet, do not accept it. DURING LOADING AT WARE HOUSE: Trucks floor should be clear and flat. There should not be any hole or damage in the floor of the truck. Floor should be covered with Tarpaulin. Packages being loaded should be intact and dry. Proper stocking of packages should be done while loading. Heavy packages to be kept at bottom and lighter packages over heavy. PACKAGES:- No vertical stocking of packages After loading truck should be covered with Tarpaulin. DURING STORAGE: Out doors storage should be avoided. Do not store packages directly on the floor, use

wooden pallets. Check condition of metal every few hours to ensure no water condensation. If possible, forced hot air circulated is provided. Proper arrangement of air circulation, inside Godown desired. BUYING AGENCIES:- The Buying Agencies of Hindalco Inustries Liomited for rolled products are Prestige Pressure cookers, Hawkins pressure Cookers,and India foils ltd., Telco Jamshedpur etc.

MODE OF LOADING: Mode of loading is a part of the distribution system. There are two types of modes of loading : Manual Loading. Automated Loading. Now a days every where the automated loading system is used because it is time arising and also very economical than manual loading.in HIL, there is good system of i.e. automated loading system. They use forklifters cranes to load goods in to the trucks. They also use some manual labors for small products.By these automated loading system HIL saves a lots of money and time, and they are able to reach their products at time to their customers. TRANSPORTATION:- In distribution system without proper mode of transportation the products cannot be reached to the market at time as a result of which he company must face failure.

IN HIL the products are transported only by road. Rail mode is only used to bring the raw materials, which is used to the produce Aluminium in the industry. By observing the mode it can be said 100 % of the products of Hindalco Industries are transported by road,which is given in the Table.

TABLE BY ROAD 100% BY RAIL 0%

SALE OF MATERIAL
They make a contact with potential customer for sales of product after receiving the order they prepare an invoice for material sold. They obtain payment from customer and or negotiate the documents as per mutually agreed terms on the basis of the payments /negotiation of documents they deliver order in favour of the party. DELIVERY OF THE MATERIAL They deliver the material as per the delivery order. Then they note down the delivered material in the godown register. Then they send delivery report daily to zonal office. UP DATING OF STOCK They will up date the stock on the basis of delivery report &arrival report on daily basis in the stock register. BANKING INSURANCE BILLS&OTHER DOCUMENT

Hindalco enjoys the facilities of three public sector banks &a private sector bank in its town Renukoot. United Commercial Bank. (UCO Bank) State Bank Of India. (SBI) Allahabad Bank. Industrial Bank Of India.(IDBI) Banking services at Renukoot is punctual. Banks help the company in carrying the documents to the party. It helps in quicker payment realization. INSURANCE Every material is dispatched duly insured. There are two types of insurance. Carrier Risk. Owner Risk. Hindalco arranges insurance facilities for its customers.If there is any damage in the transportation they will issue a damage certificate & and the customer can claim its insurance from insurance company on the basis of damage certificate. GODOWNS SALES PROCEDURES Godowns sales procedures describes the sales procedures of Hindalcos products through its Godowns. The respective zonal head exercise control over all activities related to the Godown sales. This sales procedures is followed by all the Godown of the company situated at Delhi, Faridabad, Chandigarh, & Taloja etc., There is clearing agent in the Godown,which is appointed by Hindalco for the operayion &maintenance of the Godown.

Consignment Agents and Stockiest

Hindalco covers wide area through its consignment agents and stockiest in different zones: Zone
Central

City
Kanpur Varanasi Kolkata Dibrugarh Guwahati Sibasagar Cuttack Delhi Noida Faridabad Jaipur Bangalore Chennai Pondicherry Secundrabad Yanam Mumbai Ahemdabad Indore Baroda

No. Consignment agent

8 1 2 1 1 13 2 1 1 1 1 6 7 2 2 1 12

No. Of Stockist
6 3 9 2 2 17 1 5 2 25 3 1 4 3 1 4

Eastern

Northern

Southern

Western

Role of Central Sales and Marketing Office (CSMO)

Pricing and Costs central. Logistics and Transportation. Financial Control. Product Development. Market Intelligence.

Role of Zonal Offices

Propose, initiate and develop sales forecasts and implementation plans. Procure orders as per target and guidelines. Realise payments. Bring in new customers. Ensure customer satisfaction. Create goodwill with customers and build strong customers relationships.

Distribution Process at Hindalco

There are different tasks involved in distribution process. These are as follows: Order Processing Packing & Insurance, Banking, Bills. Ware housing Transportation Godown sales procedure.

Order Booking: Every purchaser has to book his order giving details
which aluminium rolled products they want such as Plain sheet, Cold rolled coils, Milk can sheet, Circles, Chequered sheets etc. Mode of transport and despatch destination is also mentioned. Technical wing of Hindalco examines their application and if necessary also makes inspection of the facing and decided quality to be offered. Thereafter, terms of payments are finalised and his order is finally booked. This order is passed to the relevant personnels officials with relevant details.

Priority: A priority list of all categories of consumers has been fixed in

consultation with all concerned. Consumer gets delivery in order to their priority, which is also followed by transporting agents.

Order Processing: Hindalco procure order either directly from the

customers or through the agents/stockists. The order contains the name of product, quality, size, clearance etc. After the receipt of orders from the customers or agent Company scrutinizes the order. A production planning programmed is prepared for rolled production monthly basis. This monthly report is sent to the respective production department i.e. rolling mills by the end of the proceeding month. The produced material is sent to the inspection and packing department.

Ware Housing: Every Company has to store its goods while they wait to
be sold. A storage function is necessary because production and consumption cycles rarely match. Ware housing is the responsibility of warehouse incharge in Hindalco. The work starts when warehouse officials receive finished goods from production. Hindalco ware housing in charge dispatches the material to respective customers on advice of CSMO and follows the guidelines given to them. The guidelines are: At warehouse: While taking delivery from inspection and packing to ensure packages are intact and dry. If packages are damaged or in loose condition, get it repacked. If packages are wet, do not accept it. During loading at Ware House: Trucks floor should be clear and flat. There should not be any hole or damage in the floor of the truck. Floor should be covered with Tarpaulin. Packages being loaded should be intact and dry. Proper stocking of packages should be done while loading. Heavy packages to be kept at bottom and lighter packages over heavy.

Packages: No vertical stocking of packages. After loading truck should be

covered with tarpaulin.

During Storage:
Out doors storage should be avoided. Do not store packages directly on the floor, use wooden pallets? Check condition of metal every few hours to ensure no water condensation. If possible, forced hot air circulated is provided. Proper arrangement of air circulation, inside godown desired.

Buying Agencies: The Buying Agencies of Hindalco Industries limited for

rolled products are Prestige pressure cookers, Hawkins pressure cookers, and India foils ltd., Telco Jamshedpur etc.

Mode of Loading: Mode of Loading is a part of the distribution system.

There are two types of modes of loading: Manual Loading. Automated Loading. Now a days everywhere the automated loading system is used because it is time arising and also very economical than manual loading. In HIL, there is good system of loading i.e. automated loading system. They use forklifters cranes to load goods into the trucks. They also use some manual labors for small products. By these automated loading system HIL saves lots of money and time and they are able to reach their products at time to their customers.

SALE OF MATERIAL:- They make a contact with potential customer

for sales of product after receiving the order they prepare an invoice for material sold. They obtain payment from customer and or negotiate the documents as per mutually agreed terms on the basis of the payments/negotiation of documents they deliver order in favour of the party.

Delivery of the Material: They deliver the material as per the delivery
order. Then they note down the delivered material in the godown register. Then they send delivery report daily to zonal office.

Banking Insurance Bills & Other Documents: - Hindalco enjoys

the facilities of three Public sector banks & a Private sector bank in its town Renukoot. United Commercial Bank(UCO Bank). State Bank of India (SBI). Allahabad Bank. Industrial Development Bank of India (IDBI). Banking services at Renukoot is punctual. Banks help the company in carrying the documents to the party. It helps in quicker payments realization.

Insurance: - Every material is despatched duly insured. There are two

types of insurance. Carrier risk.

 Owner risk. Hindalco arranges insurance facilities for its customers. If there are any damages in the transportation they will issue a damage certificate & the customer can claim its insurance from insurance company on the basis of damage certificate.

Godown sales procedure:- Godown sales procedure describes the sales

procedure of Hindalcos products through its godowns. The respective Zonal head exercise control over all activities related to godown sales. This Sales procedure is followed by all the godown of the company situated at Delhi, Faridabad, Chandigarh, & Taloja etc. There is a clearing agent in the godown, which is appointed by Hindalco for the operation & maintenance of the godown.

CHANNEL CHOICE - A FRAME WORK

Based on:- Channel Selection For New Industrial Product
For the choice of distribution channel for industrial products a framework has been developed. For this purpose 8 genetic channel functions are identified. As step one the new product is analysed in the context of these genetic functions the choice can be made more useful is selected customers, distributors, sales-people and other are involved in analysis. A cumulative judgement can be consolidated in a profile for each new product on various dimensions. Customers who are early adopters can also be questioned about these dimensions to identify what is it that they expect from the channel. Within the organization Managers and others can also be involved. All responses can be combined with the help of experts using techniques such as Delphi Methods. Once a profile of required channel on each dimension is obtained it can be translated into concrete channels alternatives. Any decision must however consider factors such as typical constraints cost involved in initiating or building up new channel and opportunity costs or start up costs.

Customers requirements of channel function

Production information

Product market factor Identified

Searching time, rate of technological change technical complexity. Adjustment customization customer importance Product criticality Assurance signification Of purchase. Purchasing effort, Unit Value extent of usage order-size. Assortment, one step shopping

Direct if

Indirect if

High

Low

Production Customization Product quality

High Imp.

Low Un Imp.

Large Non essential Non critical Non critical Complex

Small Essential Critical

Lost size

Assortment Availability

Frequency of usage, time of consumption, rate of replacement. Waiting time need for Consumption replacement rate Need for special equipment, transportation convenience.

Critical Simple

After sales service Logistics

Channel Choice functions for Hindalco products

Consignment agents:
Consignment agents are appointed by HINDALCO on a need basis. Prior to their appointment they are scrutinized by the zonal office or the CSMO for their credit worthiness, past experience in trading metals etc. they are usually appointed on reference of a person known to HINDALCO. This reference is used if any financial disputes arise between the consignment agents and the company. They are required to sign a detailed agreement with HINDALCO specifying the terms and conditions in which to operate. The consignment agents are to keep godowns for facilitating the sale. Godown handling charges are reimbursed to them. These charges are actually borne by the party, which are billed to them. Consignment agents are not appointed in the cities where we have our own godowns. HINDALCO does not know about the customers for whom they indirectly book orders, else it would be a case of predetermined sale and that would imply the sale has to be made through Renukoot. The invoice are raised by the consignment agents on the party, therefore local sales tax is applicable. Whereas if the sale to the same party is made directly from the factory, then Central Sales Tax would be levied. Although if the customer insists, consignment agents can also accept direct purchase orders on HINDALCO behalf. Then the material is sent directly to the customer. In this case indirect commission is paid to the consignment agent.

Stockiest:
Similarly to the consignment agents stockiest are also appointed in various parts of the country. They are also appointed in a similar manner. The difference is that invoice is raised against them, whereas a debit note is sent in case of the consignment agents. They are given credit depending on their credit worthiness. They are entitled to the same commission as the consignment agents. Sale made through stockiest are in effect a two step sale. First, from HINDALCO to stockiest, and secondly from stockiest to the customer.

Godown Sales:
HINDALCO has godowns in eight cities of the country. They are Delhi, Faridabad, Jaipur, Chandigarh, Pondicherry, Indore, Silvassa & Mumbai. Some customers do not want to place bulk orders and want to procure material on daily/weekly basis. To cater to these customers we stock some material in our godowns. Stock which is standard in nature and has a regular off take are generally stocked in the godowns.

Zonal offices & CSMO:

The four zonal offices are located in Delhi, Mumbai, Calcutta, Bangalore, the CSMO at Renukoot also function as the zonal office for the central region. The zonal office is responsible for the entire sales operation in their region, including those of the consignment agents and stockiest. They collect the order from various customers, consignment agents and stockiest and pass them on to the CSMO. The zonal office also appoints new consignment agents, stockiest in their region. This implies the entire process of assessing the credit worthiness, capability, rating etc. would be their responsibility. They also keep track of ughai(receivables) of various parties, consignment agents and stockiest.

HINDALCO DISTRIBUTION CHANNEL

CUSTOMER

ZONAL OFFICE

AGENTS / STOCKIEST

HINDALCO PLANT PRODUCTION INSPECTION & PACKAGING WHAREHOUSE DESPATCH GODOWN AGENT / STOCKIEST CUSTOMER

RECOMMENDATION & CONCLUSION

IMPORTANT OBSERVATION OF THE STUDY-

It is quite clear from the study that Hindalco is achieving greater heights,
day by day, in the various spheres of its business activities. The distribution channel of the company has been elaborately explained, in the previous section of the report. Certain important observation of the study, are intended to be made known to the readers .The table presents detailed sales break up of the financial year 2002-03.
A) DETAILED SALES- BREAK UP OF THE FINANCIAL YEAR 2002-03 (Qty. IN MT)

PRODUCTS

SALES VOLUME (M T)
FY03 FY02 114,558 9,498 52,537 49,017 16,119 16,857 CHANGE (-)4 29 (-)4 5 18 14

NET SALES (Rs.Million)

FY03 8,343.1 967.3 4,146.3 5,040.3 1,921.6 2,560.6 FY02 8,744.1 712.8 4,461.6 5,010.4 1,609.3 2,245.7 CHANGE (-)5 36 (-)7 1 19 14

INGOTS: BILLET: REDRAW RODS:

109,417 12,296 50,268

ROLLED PRODUCTS: 51,343 EXTRUSION: FOILS: 19,001 19,243

OTHERS: TOTAL SALES: VALUE ADDED PRODUCTS EXPORTS ((FOB)

1,451 263,019

906 259,492 1

760.3

529.7 2

23,740.2 23,313.6

58% 46,861

56% 43,639 7

62% 3,711.3

60% 3,373.8 10

B.

RAPIDLY RISING DEMAND- A PROBLEM FOR THE COMPANY, IN NEAR FUTURE

Aluminiums demand growth rate is one of the highest amongst basic

metal s, in the country today. That the demand of the aluminium is rapidly rising in the country, is evident from the fact that Hindalco has expanded its metal-capacity by more than 12 times within a span of around 40 years .It has been mentioned earlier that, in India per capita consumption of aluminium is very low and only a few products find use in Aluminium. Hence there is a large potential for introducing newer uses and increasing the consumption. Hindalco has an established image in the market and it is quite certain that demand for its products is to increase rapidly in near future (57years). There are two important questions to which the company can seek an answer, at this juncture of time1. 2. Is the present production- capacity, adequate to meet the present and near future demand? Is there any expansion needed? Is the present distribution - system adequate to meet the present and near future (5-7 years) demand? Dose the distribution system need to be expanded? If yes then how and what form? SWOT ANALYSIS The given below are the various strength, weaknesses opportunities and threats, associated with the distribution channel of Hindalco. STRENGTHS

C.

a)

A distribution system, covering the geographically wide and scattered market of India. Intelligent location of Zonale offices, Area offices, Depots, Agents and Stockists, across the country . These locations are in tune with the demand in various areas and are well connected by road and rail. Maximum use of zero level channel, by the company . Seas through Zonal offices, Area offices and depots, prove out to be economical, as there are no intermediaries involved. The network of depots helps the company to maintain equilibrium between demand and supply, by providing a foundation to the production department. A well-established network of Agents and Stockists.

WEAKNESSES A) The present distribution system has not been able to tap many areas of potential demand. Many untapped areas, especially in Northern and Southern Zones, still exist. The present distribution system is not adequate to meet the demand of Aluminium in the coming years. It is in this light, that the present distribution system needs to be updated. Certain recommendations, with regard to the same have been suggested ahead. OPPORTUNITIES a) The demand of the companys products is rapidly increasing, in the country. There is a necessity to expand the distribution network, if the company wants to avail the benefits, out of the fast growing market. There is a tremendous scope for the company to expand its exportsmarket (both geographically and sales, volume-wise), as it already has presence in around 25 countries of the world.

b)

THREATS The major threat is from the competitors like BALCO, NALCO etc. because the company may loose its market leader position, if it does not take timely steps to modify its present distribution system in the wake of fast growing demand.

RECOMMENDATIONSIt is quite clear by now, that the production capacity and distribution system are not adequate to meet the present and near future demand. It effete happens that, the orders exceed the production capacity, at the work office Renukoot. The company cannot afford to adopt a conservative outlook, if it has to be defined its market-share. However, expansion, in case of both productioncapacity and distribution system is an expensive affair. Hence it has to be planned and carried out with great care. Both the expansion must be undertaken simultaneously on a continual basis. Expansion is not an overnight process, so the various activities have to be synchronised carefully. Like, modified distribution system should be able to generate high demand, by the time expanded production start. Certain recommendations, with regard to distribution channel of Hindalco are given as under: 1. Western Zone is the key market of the company. This portion of the country is industrially advanced and the company has a good hold, over this region. The company has a strong distribution network in this zone. Zonale office, Area office and depots are intelligently located, which very well cover this zonale market. Distribution network in this region is adequate to meet the present demand prospects to the company. The company is therefore advised to establish a depot in Nag pur, which would enable it to cover western zone, more effectively. This depot would also enable the company to serve better, to the adjoining areas of Southern Madhya Pradesh and Andhra Pradesh.

2. Eastern and Central Zone are the small markets of the company, in terms of the percentage of total sales-volume covered by them. The territories covered by these zones, have a variety little scope of industrial expansion in the near future. Thus, future demand-prospects of the company are not so bright, in this market. The company are not so bright, in this market. The company has done a wise thing, by not establishing any Depots and area Offices, in these two zones. However, there is a scope to identify untapped areas in these zones. The company is advised to expand the distribution network marginally, in these two zones by appointing more Agents and stockists at strategically important locations to spot untapped areas. In the light of the present and immediately expected industrial activities in these zones, it is advisable for the company, to not to incur any setup costs in the form of area offices and depots in this region. 3. Northern and Southern zones are the fast- growing markets of the company. Both these market are into their growth stage and offer bright prospects to the company in terms of future demand. Both these zones are undergoing rapid industrialization and are expected to have the highest rate of industrial expansion in the near future. The company will have to target both these zones effectively, in order to protect its market share in the future .The company is advised to expand its distribution network by appointing more agents and stockiest in these two zones. Northern zone, a price-conscious market, should be expanded further by establishments of depots at Kanpur and Kota, in Uttar Pradesh and Rajasthan respectively. A depot at Kanpur would enable the company to consolidate its market in Uttar Prudish , where as depot at Kota would enable it to generate greater demand in Southern Rajasthan and adjoining areas of Northern Madhya Pradesh. This would further lead to better market coverage, by ensuring timely delivery of products. The present distribution system is not adequate to cover effectively, the quality- conscious market of the Southern zone. The company is advised to establish two new depots at Manglore and Madurai, in Karnataka and Tamilnadu respectively. This would enable the company to cope up with the rapidly increasing demand of the Southern zones in the near future.

4.

Hindalco is into the process of establishing itself in the international market. Exports of this domestic oriented company normally constitute 10 to 15 % of the total sales volume. Today Hindalco has registered its presence in around 25 countries of the world. The company is making concerted effort to attain, the best quality standards prevalent around the globe. While concentrating on the fulfillment of domestic demand, the company must keep a constant vigil on the international market and avail a ripe moment to increase exports. An established exports market would enable the company so maintain equilibrium between demand and supply, in the events of tight domestic demand.

CONCLUSIONThe above study makes it clear that Hindalco has a well-established market fir its products. The company is making a rapid progress, in the various spheres of its business activities. Besides, the company adopts a favourable attitude towards safety environment and quality considerations. The company has also been undertaking various community development programmes, in the nearby-located areas. It has been a learning- exercise to complete this project. Working on this project, has been an enjoyable and fruitful experience to me. I certainly find a more practical student in myself after a 1.5 month long interaction with this organization. The study is intended to be concluded with the help of Strength, Weaknesses, Opportunity, and Threat Analysis of Hindalco, which will present a summarised view of the whole study.

SWOT ANALYSIS OF HINDALCOSTRENGTHS1. 2. 3. A high demand of products in a well established market. A well-established distribution network, covering the geographically wide and scattered market. The companys favourable attitude towards safety, environment and quality considerations. A high degree of quality consciousness is the core competence of company. ISO 9002 and ISO14001 have added more prestige to the company. Sound financial position of the company is indicated by an impressive Net profit of Rs. 580 crore in the financial year 2002-03 Proximity to raw material and easy availability of power from company owned Renusagar thermal power plant. Industrial peace, as there has been no major strike, in the last 20

4. 5. 6.

years.

WEAKNESSES-

1. 2.

Present distribution system and production- capacity is not adequate to meet the present and near future demand. A low moral and a sense of dissatisfaction with regard to original policies, was observed by me during my course of interaction with the various workers

OPPORTUNITIES1. Rapidly increasing demand of aluminium and its products, both in India and abroad provides the company with an opportunity to expand its production and distribution facilities There is a large potential to introduce newer use of aluminium in India. This provides the company, with an opportunity to venture into related value added products such as, manufacturing aluminium cans, Hi-Tec Aluminium Casting etc. Hindalcos global presence in around 25 countries of the world, offers it tremendous opportunities to increase its exports quantum, which presently constitutes only about 10 % of the total sales- volume.

2.

3.

THREATS-

1.

The company will have to cope up with the rapidly increasing and diversifying demand, in order to protect its present market- share of 44%. If the company adopts a conservative outlook in this regard, its various competitors would constitute a major threat to its present market leader position. Various substitute-material of aluminium, like steel and plastics, pose a threat to the companys business.

2.

SUGGESTION
Hindalco with its vision & quality policy provides an excellent blend of technology innovation and cultural values. But in this age of direct competition there is no limit to any effort. Hindalco is fully aware of this fact. Still, I feel that if the following suggestion were implemented, Hindalco will progress more and more and provide the world with best quality of aluminium the metal for today & tomorrow. After studying the distribution channel of Hindalco, I found that structurally it is very sound but the implementation parts needs enhancement. In today scenario when raw material cost all over is same we need to distinguish our products from the rest in terms of quality, in terms of distribution, in terms of customer satisfaction. Hindalco must be aware of the threats of aluminium posed by many upcoming organic substitutes. To counters out all these everybody in HIL must start thinking in terms of HINDALCO. In short, we must try to follow the example of Japanese. Always strive for betterment of production quality & distribution goals are met only when each and everyone co-ordinates his efforts with those of others"

BOOKS : 123456ANNUAL REPORT (2002-03) OF HINDALCO INDUSTRIES LTD. CORPORATE PRINCIPLES OF ADITYA BIRLA GROUP. INDUCTION GUIDE , PROVIDED BY THE TRAINING CENTRE OF HINDALCO INDUSTRIES LIMITED. MARKETING MANAGEMENT BY PHILIP KOTLER MINERALS & METAL REVIEW. PRINTED MATTER PROVIDED BY THE VARIOUS DEPARTMENTS & THE WORKS LIABRARY OF HINDALCO INDUSTRIES LTD

MAGZINES/ ARTICALES:
Status of aluminium industry in India, Industrial Product Finder, June 1998 Beware of organic future, Metal Bulletin, May 2000. Aditya Kiran, May 2003, Hindalco Journal, April 2003,.

WEB SITE/INTERNET :

www.adityabirla.com

www.aluminium.com

www.aluminium.org

www.hindalco.com

Summer Training Report ON DISTRIBUTION CHANNEL OF ALUMINIUM PRODUCTS

.
RENUKOOT, SONEBHADRA (U.P.)

Guided By :
Mr. M. C. MAHAPATRA
Asst. MANAGER (SALES) Marketing) HINDALCO INDUSTRIES Ltd.

Submitted By : RAVI SHANKAR MISHRA

(MBA

INTERNATIONAL INSTITUTE OF MANAGEMENT & TECHNOLOGY MEERUT