Leading Indian aluminium companies are turning to the cluster model to tap downstream investments and diversify aluminium applications in the country.
Both state run entities National Aluminium Company (Nalco) and Vedanta Ltd, the Indian arm of London listed metals conglomerate Vedanta Resources Plc, are developing aluminium parks to offer a conducive ecosystem to players in the downstream space.
To lure the downstream industries, both primary aluminium producers are offering a suite of incentives ranging from discounted molten aluminium supplies to concessional land plots at the parks. India’s aluminium growth story is robust. Between 2015 and 2016, the country’s total aluminium consumption expanded by 18.75 per cent, riding on increased offtake in the electrical, transportation and construction sectors.
India’s current aluminium demand is 3.3 million tonnes each year but is projected to reach 5.3 million tonnes by 2021. Much of this demand has to be met by the flat rolled segment, arguably the fastest growing segment in terms of usage across industries. According to a study by Vedanta, by 2021, the transportation segment will contribute 55 per cent to the country’s total aluminium consumption, up from 21 per cent now.
The transition is expected to be led by the Indian government’s shift to electric vehicles by 2030 to reduce India’s carbon footprint and tap low carbon growth at a time when concerns about car emissions due to lax norms are mounting. The automotive sector has set its eyes on an ambitious target to sell 10 million electric powered cars by 2030.
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