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A DETAILED STUDY OF NALCO AND PROCESS MAPPING

AND DATA VISUALIZATION OF INPUTS OF VARIOUS


MODULES AT NALCO

Project report submitted in partial fulfillment of the requirements


for the award of the

POST GRADUATE DIPLOMA IN MANAGEMENT of


XAVIER INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP

By

Jnanendra Kumar Sahoo.

Under the guidance of


Dr. N. M. BHATTA
Dean (Research)

Xavier Institute of Management and Entrepreneurship


2018

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Xavier Institute of Management and Entrepreneurship
Dr. N.M. Bhatta Dr. Selvam
Dean Research & the Guide Dean(Academic)

CERTIFICATE

This is to certify that this project report entitled “PROCESS MAPPING AND
DATA VISUALIZATION OF INPUTS OF VARIOUS MODULES”, which has been

submitted in partial fulfillment for the award of PGDM of Xavier Institute of


Management and Entrepreneurship, Bangalore was carried out by
Jnanendra Kumar Sahoo under the guidance of R. N.M. Bhatta. This has
not been submitted to any other University or Institution for the award of
any degree/diploma/certificate.

Date:

Signature of the Guide

Place:

Signature of the Dean

2
Declaration of the Student

Jnanendra Kumar Sahoo


II Year, PGDM
Roll # 23066
Xavier Institute of Management and Entrepreneurship

DECLARATION

I hereby declare that this Project report entitled ““PROCESS MAPPING AND DATA
VISUALIZATION OF INPUTS OF VARIOUS MODULES” submitted to Xavier Institute of

Management and Entrepreneurship, Bangalore in partial fulfillment of requirements


of PGDM is a bona fide work carried by me under the guidance of Dr. N.M. Bhatta.
This has not been submitted earlier to any other University or Institution for the
award of any degree/diploma/certificate or published any time before.

Date:
Place:
Signature of the Student

3
1. INTRODUCTION:
Vision
To be a Premier and Integrated company in the Aluminium value chain with strategic
presence in Mining both domestic & global, Metals and Energy sectors.

Mission
To sustainably grow multi-fold in Mining, Alumina and Aluminium business along with
select diversification in Minerals, Metals and Energy sectors, while continuously improving on
efficiency and business practices thus enhancing value for all stakeholders

1.1. Core Values : ' BEST '

 Benefitting Stakeholders
We provide our customers, suppliers and other stakeholders with utmost level of value, service
and satisfaction.
 Excellence and quality
We ensure that our products, manufacturing & business processes adhere to the highest quality
levels and standards.
 Sustainability
We relentlessly pursue sustainable practices and create a positive impact on the communities
we engage with.
 Trust & Integrity
We conduct ourselves with dignity, integrity, equity, transparency and accountability to build
trust.

1.2. Evolution of Industries


After world war II, there was a serious necessity for an enormous amount of reconstruction
and rehabilitation. This led to the speeding up of the second industrial revolution with increasing
demands of power generation, construction, infrastructure, and transport. The exponential growth
of industries led to extensive use of fossil fuel, which paved way for the requirement of metals
especially steel, aluminum and copper. The distinctive advantageous properties of Aluminium
including light weightedness made it a substitute for steel.

In the early 80s, India had adopted trade practices in line with the international charter of
demands. With economic liberalization, India for the first time opened up for trade and commerce.

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The socialist patterned mixed economy remained flexible for the trade policies. Simultaneously,
due to the rapid rise of industrial revolution elsewhere in the world and increasing import cost of
fuel and Aluminium for power distribution made Indian government give a serious thought of being
self-reliance in Aluminium.

1.3. Why Was Nalco Formed?


The following factors lead to the formation of the National Aluminum Company Limited:

 Electrification Demand in India:


 As per source, in 1980s the huge electrification was initiated by the then
government of India. Hence for the distribution, the demand of aluminium was
huge. And it was unable on the part of existing plant to meet the demand.
 Apart from the huge need of aluminum for the domestic consumption, the
international price of aluminum also made it viable for a green field project and
GOI (Government of India & Ministry of Mines) started the bulwark of an optimistic
journey to self-reliance.
 Inability to fulfil the Increasing Aluminium demand in the Country by BALCO:

Fig. 1 : production of aluminium from 1950 to 2004

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Looking at the figures of production in 1980s, it was 199,000 tons. It was not
sufficient to meet the demand in India. Hence the government under Mrs. Indira Gandhi
had proposed the plan for extension of BALCO at Odisha. Some of the Engineers and
staffs were transferred to NALCO plant.
After forming NALCO the production graph increased to 465000 tons in 1993.

 The availability of raw material reserves in the East coast:

 Between 1905 and 1975, the presence of flat hills in the Eastern Ghats, especially
in the hill ranges of Odisha had led many geologists (William Fox (A British
Geologist-1904) to explore the possibility of bauxite here. By 1970, the potential
bauxite reserve in the hills was called the East Coast Bauxite.
 India was the fifth largest deposit of Bauxite .It was contributing only 3% in metal
production in the world. This led to the decision of manufacturing Aluminium in the
country.
 Hirakud Hydro project and other thermal power plants were able to satisfy the
need of electricity for Aluminium plant.
 Availability of Coal in the Korba, jharsuguda, raigarh Belt were ample to fulfil the
demand of coal for the Plant.
Besides these reasons the following was found:
 Between 1976 and 1986, global consumption of primary aluminium increased at the rate of
1.6 percent per annum, while the consumption of scrap increased at the rate of S.2 per
cent per annum (Minerals and Metals Review, August 1989, p.40). In 1988 total production
of primary aluminium in non-socialist countries was about 14 million tonnes. The
production of secondary aluminium in these countries was over 5 million tones
1.4. GROWTH RATE OF GDP AND T'S SUB-SECTOR OVER SUCCESSIVE DECADES
INDUSTRY 1950/51- 1960/61- 1970/71- 1980/81-
1959/60 1969/70 1979/80 1986-87
Mining & Quarrying 4.1 5.0 4.6 10.2
Manufacturing 6.1 4.7 4.9 5.4
Electricity, gas and water supply 10.2 11.5 7.4 9.9
Construction 5.9 6.9 3.1 3.0
Fig. 2: growth rate of GDP and subsector

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The growth rate of GDP in the manufacturing industry showed a slight increase during sixties and
seventies and a significant increase in the eighties after the formation of Nalco during that decade.

The growth rate of GDP in the Mining and quarrying industry almost doubled in the eighties after
the exploitation of the east coast bauxite reserves in Orissa.

2. HISTORY OF ALUMINIUM INDUSTRY IN INDIA

 Indian Aluminium Production Company Limited otherwise known as Indal, was


incorporated on December 17, 1938 to start production of aluminium sheet at Belur near
Calcutta.
 Five years later in 1943 India’s first primary ingot was produced by the same company at
Alupuram (Kerala) smelter with an installed capacity of 2500 mtpa. The production of
primary metal was a meagre of 1292 tonnes in 1943. In 1950 the total aluminium
production was 4000 tonnes.
 The impetus to growth came with the commissioning of Hindalco’s smelter in 1962 at its
sprawling location at Renukoot. There was some developments during sixth plan period. It
added about 41,000 tonnes of aluminium raising the installed capacity to 3.621akh tonnes
against 3.50 lakh tonnes in private sector.
Despite the advantage of large bauxite deposits the growth was witnessed only after
eighties with progressive increase in capacity of both metal and semi - fabricated
products.

 Balco is the first totally integrated aluminium complex in the public sector incorporated in
1965, with objective of constructing, operating and managing aluminium projects.
 In the private sector Indal and Hindalco were two major players. These companies
produce aluminium in primary sectors besides a few others in secondary sector. The
capacity except Hindalco was not remarkable.
 During sixth plan, Nalco, (another public sector giant) came to scene. It was registered on
January 7, 1981 with technical collaboration from Aluminium Pechiney of France with an
outlay of Rs. 2408 Crore. It came to operation in 1987-88

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 Hindalco (Aditya Birla group) made best aluminium and was one of the most co-efficient
producers in the world. It was operating in almost full capacity.

Until late eighties, the aluminium industry was highly regulated by the Government of India.
There was strict government control on the entire operations including capacity addition, input
pricing, volume to be produced and distribution.
 However, in 1989, aluminium prices controlled by Aluminium Control Order (1970) was
decontrolled. After opening up of the Indian economy permitting Indian corporates to
access the financial markets abroad and the spurt in aluminium prices at London Metal
Exchange (LME) all these have forced some structural developments in the aluminium
industry.
 But the pulling factor for development of aluminium industry is power. The Parliamentary
Standing Committee on Mines has said that the actual production of aluminium has been
around 4.5 lakh tonnes during 90s due to lack of availability of power for bauxite
processing.
 India had an ambitious energy programme aiming at installing 1,00,000 MWs of additional
power generating capacity by 2015 with investment of Rs. 5,00,000 crore.
 The Indian aluminium industry seems well set after passing through a bad time in 1992
and1993.

2.1. FORMATION OF NALCO:

In January, 1980 the visit of the president of France to India saw the signing of a
memorandum of understanding for technical collaboration and financing of the largest integrated
alumina, aluminium complex with Aluminium Pechiney of France.
Government of India approved the investment proposal in September, 1980 and on
January, 1981 National Aluminium Company (Nalco) was registered under Companies Act, 1956.
The erstwhile Prime Minister of India late Indira Gandhi laid the foundation stone of Nalco
on 29th March 1981. The AP prepared feasibility report for an integrated aluminium complex after
unearthing the largest bauxite deposit along India’s east coast covering 25000 sq. Kms. The wholly
government owned company with its registered office at Bhubaneswar, Orissa, plant at Damanjodi

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in Koraput district of Orissa for producing 2,18,000 tonnes of aluminium per year for domestic
consumption and 3,75,000 tonnes per year aluminium for export. The capital cost Rs. 2408 crore
has been financed by Rs 1119 crore equivalent of euro dollar loan raised through a consortium of
international banks and Rs. 1289 crore coming from the Government of India. Plan funds which of
course included Rs. 156 Crore equivalent French credit on plants and equipments purchased from
France.
Setting up of Nalco considered to be a turning point in the history of Indian aluminium
industry. In a major leap forward Nalco has not only addressed itself to the country’s need for self
sufficiency in aluminium but also has given the country the technological edge in producing this
strategic metal on the best of world standards. Nalco is the fifth aluminium company in India and
second in public sector after Balco. It is one of the largest integrated aluminium projects of the
world.

Installed Capacity for Aluminium Production in India : (’000 tonnes)

Fig. 3: Installed capacity of aluminium production In India


As per the figure we can interpret the success of Government’s dream project NALCO’s
success.

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2.2. FUNCTIONAL UNITS

a) Registered & Corporate Office, Bhubaneshwar -751013, Odisha


b) Mines & Refinery Complex, Damanjodi -763008, Odisha
c) Smelter Plant, Nalco Nagar, 759145, Angul, Odisha
d) Captive Power plant, Angul , 759122, Odisha
e) Port Facilities, Port Area,Visakhapatnam – 530035, Andhra Pradesh
f) Wind Power Plants
i) Wind Power Plant-I : Gandikotta, Andhra Pradesh
ii) Wind Power Plant-II: Ludarva, Rajasthan
iii) Wind Power Plant-III : Devikot, Rajasthan
iv) Wind Power Plant- IV : Jath ,Maharastra
g) No. of Port Offices: 03 (Visakhapatnam, Kolkata, Paradeep)
h) No. of Regional Offices : 04(New Delhi, Mumbai, Chennai, Kolkata)
i) Branch Office: 01(Bengaluru)
j) No. of Stockyards :11 (Jaipur, Faridabad, Baddi, Kolkata, Bengaluru, Chennai,Visakhaptnam,
Bhiwandi, Silvassa, Vadodara, Delhi)
Fig. 4: Functional units of NALCO.

 The company’s bauxite mine is located at Panchpatmali Hills in Koraput district of Orissa.
It is a fully mechanized open–cast mine, in operation since 1985. It serves feed–stock to
alumina refinery. The capacity of mine has increased from 24,00,000 tonnes per year (tpy)
to 48,00,000 tpy.

 Nalco’s alumina refinery is located at Damanjodi in Koraput district, which began


operations in 1986. It is amongst the top ten alumina refineries in the world. The refinery
operates three production streams, each of 5.25 lakh tpy and 3x18.5 MW co–generation of
power. The capacity of the refinery has increased from 8,00,000 tpy to 15,75,000 tpy.

 Its aluminium smelter is located at Angul in Orissa, which is in operation since 1987. It
comprises integrated casting & rolling facilities and energy–efficient state–of–the–art

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Pechiney technology (France). The capacity of smelter has increased from 2,18,000 tpy to
3,45,000 tpy

 A captive power plant is located close to smelter. It also has captive rail system for coal
transport from Talcher Coalfields. The plant feeds uninterrupted power to smelter and is
connected to state grid for sale of surplus power. The capacity of power plant has
increased from 600 MW to 960 MW.

 Port facilities are also located on the inner harbour of Visakhapatnam Port with
mechanized storage and ship handling facilities for exporting alumina and importing
caustic soda. The storage capacity is of 75,000 tonnes of alumina and 30,000 tonnes of
caustic soda and can handle up to 1 million tonnes of alumina export per year.

 Nalco operates a rolled product unit, which is a 100% export oriented unit and is located
close to the smelter plant at Angul. The company acquired this unit from IAPL in March
2000. It has a product mix of aluminium alloy coils and sheets with capacity of 50,000 tpy.

2.3. TECHNOLOGY ADVANCEMENT OF NALCO:

Nalco’s plants and machineries erection, engineering works, TEFR studies, had been
assigned to EIL, MECON from time to time. The technology of the Nalco plant (supplied by
Pechiney) is suitable for processing gibbsitic bauxites.
India has developed the competence to operate sophisticated bauxite mines. The
Panchpatmalli mines of Nalco and Durgmanwordi mines of INDAL use sophisticated and the latest
mining technology.
The Bayer’s process for the production of alumina from bauxite is more than a century
sold. The Bayer process is based on the preferential dissolution of alumina from bauxite in a
caustic soda solution, which under conditions exactly opposite, precipitates out the alumina
hydrate.
Depending on the mineralogy of bauxite (gibbsitic AI203, 3H20, boehmitie AL203H20, or
diasporic AL203.H20) the process would involve either low temperature in low pressure or high

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temperature in high pressure digestion conditions. Various unit operations such as crushing,
grinding, settling, washing, filtration and unit process such as desilication, digestion, precipitation,
calcination, salt removal, liquor purification are common subsystem of alumina production which
are existing in Nalco Plants.
The technology for production of alumina from bauxite by both the European (high soda
concentration) and American processes (low soda concentration) is available in India. Even though
Bayer process has remained the same for the past 100 years, development/improvement in the
unit operations of the process have enabled alumina producers to improve the productivity
Considerably by:
♦ Decreasing raw material consumption
♦ Improving energy efficiency; and, or
♦ Reducing overhead/variable costs

The technology adopted by Balco, Hindalco, Indal are of the late fifties and early sixties.
The technology of Nalco is advanced one in Indian aluminium industry. However all Indian
aluminium plants require upgradation/modification because of age old and no more efficient
enough. The plants are generally operating at capacities ranging from 85-110 per cent with
operating costs comparable with the prevailing international level.

Other than the smelter grade alumina a variety of special grade alumina and hydrates can
also be produced by modifications in the Bayer’s process and/ or in the calcination technology.
These products find extensive applications in chemical refractory, fertiliser, machine tool, and
electrical fields. Currently 8-10 per cent of the alumina produced is used for this purpose.

Hindalco, Indal, Nalco are producers of special grade alumina in India and of them Indal is
the major producer. This is an area where considerable efforts are needed in India particularly in
view of the fact that the existing technology is insufficient to cater to the needs of both the
producers and the consumers.

The production of alumina by the Bayer’s process also results in the generation of by-
products and coproducts such as vanadium sludge, gallium etc. which can be economically

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recovered. The extraction of vanadium sludge and gallium improves the economics of the
operation and at the same time purifies the liquor. The plants in India have facilities in one or other
form for vanadium sludge and gallium recovery while Balco, Indal, and Hindalco have vanadium
sludge separation systems, Hindalco and Malco have gallium separation systems.

Nalco is in the process of setting up gallium recovery plant. The process of vanadium
sludge separation technology at Hindalco has been developed by their plant engineers.

Nalco does not have any Vanadium Sludge recovery system as its bauxite has a low
vanadium content and hence the process of liquor impurities are still insignificant in concentration.

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2.4. COMPANY RECOGNITIONS

1988 • First Mines Safety Award-1988 by DGMS

• Indira Priyadarshini Vrikshamitra (IPVM) Award-1994 from MOEF, Govt. of India, for
1994 afforestation and wasteland development

• Best Eco-friendly Factory Award 1994-95 to the Mines and Refinery Complex by Orissa
1994
-95 State Factory Inspectrate
• State Award-1995 to Captive Power Plant from state Factory inspectorate for Environment
1995
Management
1996 • FICCI Environment Award for Environment Conservation and Pollution Control
-97
• WEC-IIEE-IAEWP Environment award -1997 for contributing towards environment
1997 protection
• Gem Granite Environment Award for -1997-98 by FIMI, New Delhi for Mines
1997
-98 • Shri Sita Ram Rungta Memorial Social Awareness Award-1997-98 by FIMI, New Delhi
• Pollution Control Excellence Award - 1998 by Orissa State Pollution Control Board for
Mines
• Special Commendation under Golden Peacock Environment Management Award 1998
1998 Scheme by World Environment Foundation
• State Award for Best Occupational Health Centre to S&P Complex
1999 • Best Safety Performance Award to CPP by CII (ER)
-00
•2nd Best Practice in Environment, Safety & Health in industries of Orissa award by CII-ER to CPP -
2006 2006-07.
-07 •Best Environment Management Award to CPP for 2006-07.
• Pollution Control Excellent Award 2008 to Panchpatmali Bauxite Mines from State
2008 Pollution Control Board, Bhubaneswar
• 2nd Best Practice in Environment Management instituted by Confederation of Indian
2008
Industry (CII) to Alumina Refinery
-09
• Pollution Control Excellence Award 2009 by OSPCB to Alumina Refinery.
2009

• NALCO) received the Best Listed Central Public Sector Enterprises Award.
2010

Fig.5: Company recognition of NALCO

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Milestones

NALCO has a rich history of achievements and milestones.

 1981 – Foundation–stone laid by late Indira Gandhi in March 1981.


 1985–87 – The company commissioned its units between September 1985–March 1987.
 1987 – The company commenced sale of aluminium in May.
 1988 – Nalco commenced alumina export in the month of January.
 1989 – In the month May, the company registered itself on London Metal Exchange.
 1998 – The company achieved zero–debt status in the month of September.
 1999 – The companys equity capital was restructured from Rs 1288.62 crore to Rs 644.31 crore
in the month March.

2.5. NATIONAL ALUMINIUM COMPANY LTD - FINANCIAL RESULTS:

PARTICULARS ( CR) DEC 2017 DEC 2016 % CHG

NET SALES 2388.82 1988.13 20.15

OTHER INCOME 878.08 75.85 1057.65

TOTAL INCOME 3266.9 2063.98 58.28

TOTAL EXPENSES 2045.11 1740.02 17.53

OPERATING PROFIT 1221.79 323.96 277.14

NET PROFIT 721.78 143.92 401.51

EQUITY CAPITAL 966.46 966.46 -

Fig. 6: financial records of NALCO

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2.6. NATIONAL ALUMINIUM COMPANY LTD - SHAREHOLDING PATTERN

5% 0% PROMOTERS
7% BANKS/FIS
0% 10%
FIIS
7%
INSURANCE
11% 60%
MUTUAL FUNDS
INDIAN PUBLIC
CUSTODIANS
OTHER

Fig 7: Shareholding Patern of NALCO

2.7. ALUMINIUM EXPORT:

Italy Bahrain Germany


China Philippines Pakistan
Sri Lanka Nepal Bangladesh
Myanmar Thailand Malaysia
Singapore Indonesia Hong Kong
Taiwan South Korea UAE
Japan Turkey
USA Vietnam

ALUMINA EXPORT:

USA Georgia Iran


China Russia Australia
Indonesia UAE

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3.0. COMPETITOR ANALYSIS

Fig 8: competitor analysis of NALCO

Fig. 9: comparison between HINDALCO and NALCO

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India is worlds 5th Largest Aluminium producing country in the world. Average production is more
than 2,100 thousand tons per annum.

India also has got some of the world’s best Aluminium manufacturing companies of the world!

1. HINDALCO:

Hindalco is most profitable and the leading aluminium manufacturing company of India. It has the
largest market share counting to a mammoth 39% in Indian aluminium industry.

Company is a profit making segment of Aditya Birla Group. Four of its production units are in Uttar
Pradesh. These 4 manufacturing units make foils, extrusions wheels, rolled products and primary
aluminium.

Hindalco is reputed to have all the ultra-modern equipment and technology. It also boasts to have a
strong skilled team of engineers- focused on manufacturing quality products.

2. STERLITE:

Sterlite is another leading aluminium manufacturing company of India. The Company is flourishing
at an incredible rate. Its USP is its ability to produce top quality aluminium in minimum price. The
aluminium business of Sterlite Industries Limited comprises of two Indian aluminium giants –
BALCO and MALCO. While BALCO is a partially integrated, MALCO is a fully integrated producer
of aluminium. Sterlite has got a market share of around 32%.

3. Bharat Aluminium Company Limited (BACL):

Bharat Aluminium Company Limited is rated among the top aluminium producing companies of
India. Established in 1965, and the company has become a leading player in country’s Public
sector. BACL is ISO 9001:2000 certified company and is very well known for manufacturing high
quality aluminium products.

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4. Madras Aluminium Company:

Madras Aluminium Company is another prominent name in the aluminium production segment of
India. It is a subsidiary of Vedanta Resources.

As its name says the company has got a production plant in Tamil Nadu. The company is engaged
in diverse activities like mining as well as refining and smelting in the aluminium industry.

5. Indian Aluminium Company Limited (IACL):

Indian Aluminium Company Limited is a well reputed aluminium production company in India. It is
now merged with Hindalco Industries Limited. It is also known for its quality products in aluminium
industry.

6. Kennametal India:

Kennametal India was established in the year 1964. With more than 50 years of experience the
company is well trusted aluminium producing player. The is formally known as Widia India Limited.

7. Hindustan Zinc:

Also known as HZL, Hindustan Zinc is another preeminent aluminium producing company in India.
It is public listed company. It started its operation in 1966 and with 50 years of experience in
aluminium industry.

8. Sujana Metal Products:

Established in the year 2000, Sujana Metal Products has become a foremost Aluminum
manufacturing company in Southern region of India. Company has many products such as
international trade, structural steels, TMT bars, and tower manufacturing.

9. Gujrat Foils LTD. (GFL):

Gujarat Foils Ltd. or GFL is a part of the $1.1 Billion company known as Topworth Group. It is the
3rd largest manufacturer of aluminium foils as well as sheets in India. GFL is company is publicly
listed in the BSE or Bombay Stock Exchange. The company covers a range of products such as
thin gauge sheets and coils meant for closure stock that are used in the Brewery and
Pharmaceutical Sectors. It also bares foils such as Fin stock for heat exchanger fins, lidding foil for
the Food & Beverage Sector, etc.
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4.0. PRESENT ONGOINGS
NALCO signs MoU on commercial use of Nano based Emrion tech

The company today signed an MoU with Hyderabad based Eesavyasa Technology Pvt Ltd so that
it would get royalty for setting up defluoridation plants in various industries for removal of fluoride to
provide chemical free water for drinking purpose.

National Aluminium Company's (NALCO) Q2 earnings were steady and in-line with expectations. In
an interview to CNBC-TV18, TK Chand, CMD of NALCO spoke about the results and his outlook
for the company.

Aiming for 1.2 mt alumina sales in FY18, prices to hover in $500-550/tn range: Nalco

Although the prices of aluminium have a softened a bit now, they are expected to hover in the
range of USD 2050-2150 per tonne, said TK Chand, CMD, Nalco.

NALCO posts record net profit of Rs 722 crore in Q3

The company produced 15.51 lakh tonnes of alumina hydrate, against 15.27 lakh tonnes achieved
in the corresponding period of the previous financial year.

NALCO lines up 3 projects, invests Rs 25,000 crore

The aluminium major will dedicate three major projects readied at a total cost of about Rs 660
crore, to the nation, during its upcoming foundation day celebrations, CMD of the Navaratna
company, T K Chand told reporters here today.

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4.1. CURRENT TREND IN NALCO

Bauxite growth 7.65%

Aluminium Hydrate 7.53%

Steam Generation 4.53 from 3.4% growth

Aluminium Smelter 4.03% growth

Captive Power Plant 3.85%

Wind Power 32.05%

SALES 1294900 MT

TOTAL EXPORT 1243103 MT

Fig. 10: current trend in NALCO

FINANCIAL PERFORMANCE ( IN CRORES)


INCOME NET PROFIT 7771 7933
7247 7024 7157
6927
6370
5474 5331 5310

1632
1272 1322
1069 850
814 593 642 731 669

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

FIG. 11: Financial growth in NALCO

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4.2. INFERENCE:
From the above Financial performance graph , it is seen that the Revenue has increased
over the years from 5494 cr (2007-08) to 7933 cr (2016-17) , but the profit is not showing any
significant growth , rather it is declined from 1632 cr (2007-08) to 669cr (2016-17).

The reason behind the change in profit to Revenue ratio can be inferred by the following
two factors.

1. Changes in price of Aluminium at the LME

2. Increase in price of Raw Materials.

CHANGES IN PRICE OF ALUMINIUM AT THE LME:


 Aluminium prices sank to a five-year low on Tuesday, breaching $1,500 a tonne,
amid fears about deteriorating demand in China and the US. The benchmark
London Metal Exchange three-month aluminium contract dropped 4 per cent to
$1,435 a tonne, the lowest level since October 2003, before recovering to end at

Fig. 11: LME Historical Aluminium price Chart

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$1,485, down 0.7 per cent.
 Aluminium inventories have risen to their highest levels since 1994, creating a
stock overhang that could take considerable time to erode as consumption
continues to fall. US aluminium orders plunged 24 per cent year on year in
November, according to the US Aluminium Association, on the back of falling
demand from carmakers and continuing weakness in the US property market.
 In China, the slowdown has been abrupt, with growth in industrial production
dropping to 5.4 per cent year on year in November, the weakest since 1999.
Attempts by producers such as Rusal and Rio Tinto Alcan to curtail output have
had little success in stabilising prices.

REASON FOR 2008 STOCK MARKET CRASH:


The stock market crash of 2008 occurred on September 29, 2008. The Dow Jones
Industrial Average fell 777.68 points in intra-day trading. Until 2018, it was the largest point drop in
history. It plummeted because Congress rejected the bank bailout bill. But the crash had been
building for a long time.

The Dow hit its pre-recession high on October 9, 2007, closing at 14,164.43. Less than 18
months later, it had dropped more than 50 percent to 6,594.44 on March 5, 2009.

That wasn't the greatest percentage decline in history. During the Great Depression, the stock
market dropped 90 percent.

INCREASE IN PRICE OF RAW MATERIALS:

The changing dynamics of bauxite and alumina markets have demanded an evolution in
the means of pricing them.

The alumina market – and the way it is priced – has transitioned over the past 10 years.
Fixed-price, long-term contracts, agreed as a percentage of the aluminium price on the London
Metal Exchange, have instead transformed into contracts tied to third-party reference prices or
indices, including that published by Metal Bulletin.

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Discounts or premiums are agreed, alongside volumes, for the year ahead, depending on
the strength of the alumina market itself, and a month’s business is settled against the preceding
month’s index average. An index is a tonnage-weighted calculation of spot market data, giving
greatest weighting to concluded spot transactions. Such a way of formatting long-term contracts
gives both buyers and sellers rolling exposure to the alumina-specific market fundamentals of the
day, and the prevailing spot prices as they adjust accordingly.

5. PROCESS
Electricity plays a big role in Aluminum production.
Average electricity costs fluctuate at $0.015 per KWH.
Transportation also forms an intrinsic and expansive part of the process.
Average transportation cost US$33.36 per Ton. Global mining wage stands at $87.56 / ton.

5.1. RAW MATERIAL

The major raw material required for aluminium production is alumina, carbon, power, aluminium
fluoride and cryolite.

Raw Material Alumina Carbon Cryolite Aluminium Energy


fluoride
Theoritical consumption(kg per 13460
ton of aluminium 1930 415 2 20
KWH/T-Al.

FIG 12: Raw materials for Aluminium production

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5.2. Bayer process:-

The Bayer process dissolves the aluminium component of bauxite ore in sodium hydroxide
(caustic soda); removes impurities from the solution; and precipitates alumina tri hydrate, which is
then calcined to aluminium oxide. A Bayer Process plant is principally a device for heating and
cooling a large re circulating stream of caustic soda solution. Bauxite is added at the high
temperature point, red mud is separated at an intermediate temperature, and alumina is
precipitated at the low temperature point in the cycle. Alumina (aluminium oxide Al2O3) obtained
is a fine white material similar in appearance to salt. Alumina is also used in abrasive, ceramics
and refectory industries.

2NaOH + Al2O3.xH2O = 2NaAlO2 + (x+1) H2O

Fig 13: Bayer’s process

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5.3. Hall-Hérault Process: - alumina is dissolved into a mixture of molten cryolite, and then
electrolyzed to end up with pure aluminum. For the Hall- Hérault process to function, an electric
current of low voltage but from 200,000 to 500,000 amperes must pass continuously through each
cell. On average it takes about 15.7 kWh of electricity to produce 1 kg of aluminum

Process of Aluminium Reduction

Fig 14 : Hall herault process


Total reaction:

3 Na2CO3 + 4 AlF3 = Al2O3 + 2 Na3AlF6 + 3 CO2 (g)

An aluminum smelter consists of a large number of pots, steel containers lined with carbon, in
which the electrolysis takes place; smelting is run as a batch process, with the aluminum metal
deposited at the bottom of the pots and periodically siphoned off. Power must be constantly
available, since the pots have to be repaired at significant cost if the liquid metal solidifies.

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A typical smelter contains anywhere from 300 to 14720 pots, each of which produces about a ton
of 2010. Besides labor, Electricity constitutes a lion’s share (in Million Tonnes) some countries up
to 44%) of the production cost in aluminum as it is required in all three stages. Due to its non-
corrosive nature it is used in 90%of manufacturing around globe.Besides labor, Electricity
constitutes a lion’s share (in Million Tonnes) some countries up to 44%) of the production cost in
aluminum as it is required in all three stages. Due to its non-corrosive nature it is used in 90%of
manufacturing around globe.

6. Waste Utilization

6.1. Red Mud

Fiber-reinforced polymer composition (door and window panels, tiles and sheets etc.)
successfully developed
Soil conditioners/fertilizers synthesized in lab scale
Ferrite cement developed in lab scale

6.2. Fly Ash Utilisation

 Power Plant (CPP), NALCO, Angul has been making continuous efforts to increase fly ash
Utilisation in an environment friendly manner through various methods. In the current year
2015-16 the fly ash utilization has been 62.75% upto December’2015.
 Fly ash generated in the CPP is used for various activities like manufacturing of bricks, use
in cement industry, asbestos manufacturing, agriculture, concreting work, road
construction work etc. Fly ash is supplied to manufacturers of fly ash brick and ash based
products free of cost. As part of its long term planning a project has taken up for filling of
abandoned coal mines of Bharatpur (South) of MCL, Talcher As per the directive of
Government of Odisha, CPP, NALCO is pleased to inform all fly ash Brick manufacturers
in Odisha that it will be providing subsidy of Rs. 150/- per MT of fly ash to brick
manufacturers.
 Nalco has tied up with IIT, Kharagpur & IMMT, Bhubaneswar for development of new
segments like development of tile & extraction of Alumina having long term potential of Ash

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Utilization. All of these activities will enable NALCO to achieve 100% ash utilization in not
too distant a future.
 NALCO also has an incentive scheme to give Rs. 130/M3 of ash lifted from ash pond to be
used within radius of 7km and Rs. 150/ M3 for use beyond 7km. CPP, NALCO. This
scheme can be used for road construction and other uses as approved by statutory
authorities.

 Nalco has tied up with IIT, Kharagpur & IMMT, Bhubaneswar for development of new
segments like development of tile & extraction of Alumina having long term potential of Ash
Utilization. All of these activities will enable NALCO to achieve 100% ash utilization in not
too distant a future.

 NALCO also has an incentive scheme to giveRs. 130/M3 of ash lifted from ash pond to be
used within radius of 7km and Rs. 150/ M3 for use beyond 7km. CPP, NALCO. This
scheme can be used for road construction and other uses as approved by statutory
authorities.

Ash Management

NALCO always manages the ash disposal in a environmental friendly manner. In line with this
CPP, NALCO has installed High Concentration Slurry Discharge system in its expansion project
and have constructed a new ash pond (Ash Pond-IV) for discharging ash in HCSD mode.

6.3. Pollution Control efforts At Plant Level


Mines

 Periphery barrier of 15m width having green cover around mines


 Garland drains and drainage control within the mines
 Dust suppression at source and sprinkling of water
 Total overburden excavated with top soil used for reclamation and rehabilitation of mined
out areas with vegetation cover.

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Alumina Refinery

 Highly efficient ESPs at Calciners and steam Generation Plant


 Multistage washing of red mud and its storage in specially designed pond
 Use of dust collectors at handling and transport areas of bauxite, coal, lime and alumina
 Recycling of waste water

7. SOME CRITICS ON NALCO:


 NALCO’s Power problems with Coal Imports :NALCO claimed that there was fuel
shortages, therefore three units of its Captive power plants had been shut in October2017.

According to Nalco,

 It needed 17,500 metric tonnes of coal per day, Bharatpur mines only supplied 13,000
metric tonnes. The linkage coal that came from Chhattisgarh, Maharashtra and Andhra
Pradesh was also not accessible to the company.
 Nalco sustained by borrowing 120-megawatt power from GRIDCO. Even then there was a
deficit of 240-megawatt of power. Only 875 aluminium smelter pots were working out of the
960 due to lack of power supply.
 The labour leader said only 70,000 metric tonnes of coal is left in the stock yard which has
the capacity to store 5 lakh metric tonnes of coal.

On the other hand, according to the Coal ministry,

 Ample quantity of coal had been dispatched to NALCO with regular supply of 4.7MTPA dry
fuel which was more than the committed quantity by Coal India i.e. 130% of the the pro
rata bridge linkage quantity, when the commitment by MCL was to supply a minimum of
75% of the linkage quantity.
 Although there had been many law and order issues highlighted related to land constraints
and frequent work stoppage by local non-employees of MCL.
 Despite these problems hampering the targeted coal production , the coal supplies to the
different power plants in Odisha have been maintained by MCL.

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 NALCO’s Angul unit witnessed a major fire at its captive power plant (CPP) on 11th july
2017 that gutted a more than ten year generator transformer. The generator transformer
belonged to the Unit-8 of the aluminium makers CPP and is attributed to a short circuit.
 The power situation had been normalised by starting the stand-by unit claimed the
company. It did not however share an estimate of the financial loss on account of
this fire, which may run into more than a few crore which is said to be above Rs
10crore.

 Unit-8 of the power plant had resumed operations only 15 days back after its
renovation at a huge amount of money.Nalco CPP has 10 120 MW units but
only seven are in operation. It provides uninterrupted power supply to the
smelter plant here. When the mishap took place, all seven units were in
operation.

 2000 Fly Ash Issue:


 Large quantities of ash, at the rate of 4,000 tonnes per day, were being dumped in
slurry form in vast areas close to power plants. The disposal of fly ash into a pond
was a source of pollution. These ponds got filled up after sometime raising the
requirement of another disposal pond. Thus, apart from huge expenditure on fly
ash pond construction, a large track of land was also wasted which could
otherwise be gainfully utilized.

 Although the water from these ponds were treated and re-used, the fly ash was
not being utilised for gainful applications. Nalco had been promoting R&D activities
in the field of fly ash utilisation, focused towards development of useful value-
added products based on fly ash as a major component. But it has not met with
much success as far as developing a market for these products is concerned
because of the lack of support from the Government.

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8. FUTURE PLANS
 As part of the expansion plan, the capacity of Nalco’s smelter at Angul is being increased
to one mtpa with an investment of Rs 20,000 crore.
 The company plans more wind power plants of 120 MW besides installing solar units.
 Another greenfield plant with .6 mtpa capacity is also proposed to be set up at nearby
Kamakshya Nagar, he said adding work was already underway to inrease the capacity of
alumina refinery at Damanjodi by one mtpa with an investment of Rs 5,400 crore. Its
capacity now is 2.275 mtpa.
 The navratna PSU is setting up a new smelter at Kamkahyanagar in the vicinity of this
power plant at a capacity of 0.6 million tonne per annum.

Expansion plans

 The ground-breaking ceremony for the company’s one million tonne alumina stream at its
Damanjodi refinery in Odisha is expected to happen soon.

 Nalco, which has an existing capacity of 2.27 million tonnes, is investing close to ₹5,500
crore on this expansion.

 NALCO has received all the necessary clearances. It hopes to go for the ground-breaking
soon. This expansion will shore up our revenues and profits are likely to increase by ₹250
crore.

 The company also hopes to commence mining from its captive Utkal-D and E coal blocks
by the first quarter of FY19.

 NALCO currently buy close to 1.2-2 million tonnes of coal through auction. Once we
commence our mining, our cost would come down by ₹2,000 a tonne resulting in overall
savings of close to ₹400 crore.

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9. Process Mapping of NALCO’s Aluminium Manufacturing

9.1. Introduction

Process mapping is the act of creating a workflow diagram with the goal of gaining a
clearer understanding of how a process and its parallel processes work.

Mapping out business processes is a great way to understand all the steps needed to complete a
workflow. With process maps, employees–especially in upper-level management, can easily gain
an overview of how processes are carried out, how they can be improved or constrained, and how
many of the steps taken are necessary to drive the process to its end.

9.2. Why process maps are used:

Generally, process mapping is done in order to establish company execution standards or


procedures. Some organizations use process maps as guides, or diagrams, for procedural tasks
and to enforce employees to follow the steps of a workflow in the correct order. However, when
relying on maps alone to enforce process standards, many telling metrics go untracked. That’s why
process mapping is usually a precursor to setting up a workflow management tool, workflow
engine, or business process management software.

9.3. Process details in NALCO:

9.3.1. Buxite mining:

Preparation Buxite
Crushing Ore conveyer Rehabilitation
of land Mining

Fig. 15 : buxite mining flow chart

NALCO’s bauxite mine is located at Panchpatmali Hills in Koraput district, Orissa. It is fully
mechanized open cast mine.. It serves bauxite to alumina refinery. The capacity of mine is
48,00,000 tonnes per year.

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9.3.1. Refinery:

NALCO’s alumina refinery is located at Damanjodi, Koraput district, which began operations in
1986. The capacity of the is 15,75,000 tonnes per year

 Bayer process is the process of refining alumina from bauxite (aluminum ore containing
30- 50% of hydrated aluminum oxide) by selective extraction of pure aluminum oxide
dissolved in sodium hydroxide.
 Prior to the Bayer process bauxite is crushed and ground in mills to fine particles (max.
size 0.06”/1.5mm). A hot solution of the recycled sodium hydroxide (caustic soda, NaOH)
is then added to the ground ore forming a bauxite slurry, which is stored in holding tanks
and then pumped to the further processing stage.
 Refined aluminum oxide (Al2O3) is obtained from the the bauxite slurry by the Bayer
process comprising four steps:
 Digestion
 Clarification
 Precipitation
 Calcination
Digestion
In this step the bauxite slurry is pumped from the holding tanks to the autoclaves
(digester vessels) where it is mixed with hot concentrated caustic soda liquor. The
digestion temperature and pressure depend on the mineralogical composition of the
bauxite. Most bauxitic ores are composed of gibbsite (Al(OH)3 or AlO(OH)*H2O), boehmite
(γAlO(OH)) and diaspore (α-AlO(OH)).
 Gibbsite bauxite may be digested at 275-300ºF (135-150ºC) under atmospheric
pressure:
AlO(OH)*H2O + 2NaOH = 2NaAlO2 + 4H2O
 Boehmite bauxite may be digested at 400-475ºF (205-245ºC) under atmospheric
pressure:
AlO(OH) + 2NaOH = 2NaAlO2 + 2H2O

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 Diaspore bauxite may be digested at a temperature above 482ºF (250ºC) under a
pressure of about 35 at.:
AlO(OH) + 2NaOH = 2NaAlO2 + 2H2O

Clarification:

Except alumina and silica all other bauxite components (calcium oxide, iron oxide,
titanium oxide) do not dissolve in the caustic soda liquor. Silica dissolved in the liquor is then
precipitated from it by slow heating. The undissolved solid impurities form red mud, which
settles down at the bottom of the mud thickeners (settlers, clarification tanks).

After the settling operation has been completed the red mud is separated from the clear
liquor solution of sodium tetrahydroxoaluminate (NaAlO2*2H2O), NaAl(OH)4).

Precipitation:

Precipitation Crystals of aluminum hydroxide (Al(OH)3)are recovered in this step:

 The clear liquor is pumped from the settlers to the precipitators (thickening tanks)
through heat exchangers, which transfer the heat from the solution to the cold spent
(processed) liquor.
 Precipitation of aluminum hydroxide is promoted by seeding the liquor with pure alumina
crystals acting as nuclei for the precipitation process.
 The crystals of aluminum hydroxide/alumina trihydrate (Al2O3*3H2O) grow and
aggregate. The coarser particles are separated from the fine particles and transferred to
calcination.
 The finer particles are filtered from the slurry and then used as seeding (nuclei) crystals.
90% of aluminum hydrate is recovered from the liquor. Calcination The aluminum
hydrate crystals are washed, dried and then heated to a temperature 1850- 2300ºF
(1010-1260ºC) in a rotary kiln or fluidized bed calciners to drive off the molecules of
hydrated water:
Al2O3*3H2O = Al2O3 + 3H2O or 2Al(OH)3 = 2Al2O3 + 3H2O At 750-1110ºF (400-
600ºC) chemically active low temperature γ-Al2O3 forms.

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At the temperatures above 2100ºF (1150ºC) γ-alumina transforms into α-alumina
(corundum), which is chemically inert.

Calcination:

The final product is a dry white anhydrous α-alumina powder with the particles 0.02-0.4 m
inch (0.5-10μm).

DIGESTION
STEAM

BUXITE
STORAGE FILTERING MUD
BALL MILL SETTLER

NAOH
Pregnant liquor CLARIFICATION
Slurry Mixing

CALCINATION CRYSTALLIZATI PRECIPITATIO


ON N RED MUD

Fig. 16 : Alumina Refinery flow chart


9.3.3. Aluminium smelter:

NALCO’s aluminium smelter is located at Angul, Orissa, which is in operation since 1987. It
comprises integrated casting & rolling facilities and energy efficient state–of–the–art Pechiney
technology (France). The capacity of smelter is 3,45,000 tonnes per year.

In the Hall-Heroult process aluminium is produced by the electrolytic reduction of alumina dissolved
in an electrolyte containing cryolite. For the reduction process carbon anode has been used. The
remaining parts of spent anodes from the aluminium production are called anode butts. There are

35
two anode butts, the raw anode butts and the pre-baked anode butts. The cleaned anode butts are
crushed and reused in the production of new anodes (about 20% of the anode is recycled).

It requires DC current supply of 13000-14000 KWh. The base of the pot cells forms the cathode
made up of carbon which does not degrade. While the carbon anodes get used up in the
electrolysis process. The Alumina gets reduced to molten alumina and settles at the negatively
charged cathode at the bottom. The carbon anode gets oxidized into Carbon dioxide and other
gases which include fluorine. In 32 hours instant tapping of molten metal is done. In one tapping
about 1950-2000 kg of molten metal is tapped using a snout attached to a collector which uses
pressure to suck the molten metal from one end of the pot cells. Fluoride is required to maintain the
bath temperature.

The fume treatment plant recovers fluoride by passing the fumes of the potcells through the
alumina storage which comes from Damanjodi. Alumina captures all the fluoride fumes and the the
CO2 rich fume is sent to the dry scrubber. The captured Fluorine will be used up in the pot cells
because it is required to maintain the bath temperature.

Fig. 17. Aluminium production flow chart.

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.9.3.4. Captive power plant:

Fuel
Boiler ESP CHIMNEY

Coal

TURBINE SUBSTATION

ECONOMIZER

CONDENSER COOLING TOWER


WATER HANDLING
PLANT

RAW WATER

Fig. 18. Flow chart of captive power plant.

The NALCO CPP consists of 6 units of 120MW each to meet the power requirements of
the smelter plant. The plant is connected to the GRIDCO grid via NALCO-CPP 220kV bus. Power
consumption of each pot is 0.8 MW. The total power requirement of smelter plant including
auxiliaries is 420MW. The electrolysis process requires a constant DC current of 180kA.

NALCO sources its major coal requirement for captive thermal power plant from the Talcher
coalfields of Mahanadi Coalfield Ltd. (a subsidiary of Coal India Ltd.), located approximately 15 km
from Angul. The 18.5-km captive railway system links the captive thermal power plant to the
Talcher coalfields, enabling transport of the critical and bulk requirement of coal.

9.4. Model on process map in EXCEL:


Data regarding various parameters was collected from the data base which contained
information on all the units of NALCO. This includes the bauxite mines, the refinery, the smelter,
the captive power plant.The data includes various input and output parameters such as efficiency,
cost, and productivity for ten years. The data included actual and target values for these
parameters. The Process map was designed on excel for all the units.

The data was segregated and structured in a worksheet, forming a model out of it by linking all

37
The parameters to the process diagram. The following are the models of all the units:

Fig. 18. Process mapping of Mines


As advised by guide the whole process is to be subdivided into different units and module. And
they have to be placed in a work sheet to have a comparative study on both the inputs and outputs
(both primary and residual products, waste and emission). The whole process was to be conducted
with the help of set of steps.
1. Identification of the process and segregation
2. Data Collection
3. Placement in Excel work sheet
4. Proper visualization.
5. Comparative analysis
9.4.1. Identification of process and segregation:
NALCO’s operation is divided into several units like mining, refinery, smelting and captive
power plant. Each of process has lots of inputs and several output. Among them some inputs
are important keeping eye on the cost and availability and criticality.
9.4.2. Data Collection:
The critical inputs and outputs are collected from NALCO’s director office. The confidential
data was to be decoded so that only user can access the same. Our guide provided data only
after encoding it. We are advised to make a flexible excel worksheet fetching the same. The
data consists of a number of input and numbers of output and actual and target quantity of last
10 years.

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9.4.3. Placement of data in Excel sheet:
The encoded raw data was to be placed in worksheet for different modules like mining,
refinery, smelting and captive power plant. Both combined and separate sheet was to be
created for giving an aesthetical view
9.4.4. Visualization:
After placing in excel sheet the actual quantity was to be compared with the target quantity
and the color coding is used to identify the criticality. 3 scale color coding is used for danger
zone acceptance zone and good zone. Each data was also to be shown along with the
maximum and minimum quantity throughout the 10 years and name of the respective year.
9.4.5. Comparative analysis:
The worksheet was so formed that it is easy to identify the drawbacks and lacuna in
particular factors. But we are not allowed fetch the data and analyze the same.

Fig. 18: Process Mapping of refinery

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Fig.19: process mapping of Smelter

Fig. 20: Process Mapping of captive power plant

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10. Conclusion:
According to the requirement the process model shows an aesthetical visualization of the
important factors. The important factors can be changed according to required condition and what
the user wants to do. The worksheet is helpful for quick identification and will help user to take
necessary steps for the problematic areas.

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