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AV Birla group kicks off value creation at Indal

BS Corporate Bureau

The AV Birla group has initiated an integration process at Indal to augment shareholder value. "We have implanted cash value added system at Indal. To institutionalise enabling processes that help us benchmark with the best in the world, we have extended CVA as our measurement metric to Indal in a phased manner," Kumar Mangalam Birla, chairman of Hindalco, said at the company's annual general meeting in Bombay on Wednesday.

"CVA is the cornerstone of the value management structure, which we have assiduously built in all our group companies. It is a measure of shareholder's value creation to which I am personally committed, focusing as it does on three aspects namely, profitability, asset-productivity and growth," he said.

The process of deriving value from synergies between Hindalco and Indal has begun well. Integration of logistics, product rationalisation and transfer of best technologies has been initiated, Birla said.

With the ongoing growth initiatives, improved economies of scale and continued emphasis on cost reduction, the company's outlook for 2001-02 looks positive. Aggressive marketing strategies to enhance presence in the value-added segment besides the synergies that stem from Indal and the brownfield expansion will be growth drivers.

Hindalco has already embarked on a brownfield expansion in Renukoot. As per the plan, it will enhance the smelter capacity by 100,000 tonne per annum and the alumina refining capacity by 2.1 tpa.

"On the completion of the brownfield expansion, Hindalco will be able to further consolidate its position in the domestic as well international markets in a big way," Birla said.

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