SALES AND DISTRIBUTION CHANNELOF HINDALCO

2012
HINDALCO ALUMINIUM BUSINESS

SURAJ PRATAP SINGH

SHAMBHUNATH INSTITUTE OF ENGINEERING & TECHNOLOGY

6/20/2012
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SALES AND DISTRIBUTION CHANNEL

HINDALCO ALUMINIUM BUSINESS

SUMMER TRAINING REPORT ON SALES AND DISTRIBUTION CHANNEL

SUBMITTED TO: Mr. MANVIR AJAD (Sales officers) (HINDALCO INDUSTRIES LTD.)

SUBMITTED BY; SURAJ PRATAP SINGH, SIET, ALLAHABAD Roll No.- 116270026
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SALES AND DISTRIBUTION CHANNEL

PROJECT REPORT ON SALES & DISTRIBUTION CHANNEL MANAGEMENT OF HINDALCO INDUSTRIES LTD.

2012

SURAJ PRATAP SINGH SALES AND DISTRIBUTION CHANNEL

Mr. G. D. Birla and Mr. Aditya Birla

SURAJ PRATAP SINGH

SALES AND DISTRIBUTION CHANNEL

EXECUTIVE SUMMARY
A sale fixes everything. As long as you have sales, cash will flow, and as long as cash flows, (a) You will have the time to fix your team, your technology, and your marketing; (b) The press will not be able to say much because customers are pouring money in to your offers; (c)Your investors will leave you alone because (1) They will focus on companies with weaker sales and (2) They will not want to jinx your success. This project titled Sales and Distribution Management of HINDALCO involves through study of the sales and distribution management. I went to great lengths to evaluate the various aspects of sales as well as distribution of the organization; a quantitative and qualitative research was done with questionnaires as a mean to reach the target. I considered various parameters. Primary mode of data collection was used. Questionnaires helped me a lot in acquiring the most valuable insights in sales & distribution scenario of the company. Personal interview of various company officials were also held to collect information regarding company and their support offered. The respondents were only from sales team. The various products heads were the key information source regarding information about sales and distribution as a whole.

The methodology adopted to study the distribution systems was interviewing all the members in the channel so that an insight into the systems could be achieved and looking for information from secondary source such as websites so that a perfect picture of the whole systems could be developed.

Questionnaire were not largely used as it was the live project, personal interviews with predetermined questions were used on a greater extent. The study gave me the answers of all the questions, for which I am looking for. In fact, all the question are enclosed in this report as annexure at the last.

SALES AND DISTRIBUTION CHANNEL

Acknowledgement

I would specially like to thanks Mr. S. K. Das (GM, Training) Mr. Ajay Jouhary (A. G. M. Sales), Mr. Manvir Ajad of HINDALCO Industries Limited, Renukoot, (Sonebhadra) for their time and knowledge and all the members of HINDALCO marketing team for providing the relevant information. My special thanks to sales officers Mr. Manvir Ajad, for guiding me throughout the training period.

I am indebted to all those who have been helpful throughout the process of writing this report but as the clich goes, I am solely responsible for any errors or facts or judgments.

Last, I would like to thanks all those who helped us directly or indirectly to complete this project successfully.

SALES AND DISTRIBUTION CHANNEL

PREFACE
The report is hard intends to reflect some of the basic issues covered under the SALES AND DISTRIBUTION CHANNEL of HINDALCO, EXTRUSIONS a first truly MNC of India. The total aspects have been formulated and presented on the basis of ideas and information gathered by this investigator during a shorter span of project training i.e. an important portion of the MBA curriculum leading to an opportunity for the participant to have a practical exposure of the contents under the topic beyond what has already been studies during the class-room interaction. This report has been written in response to a comprehensive study, conducted on the SALES AND DISTRIBUTION CHANNEL of HINDALCO INDUSTRIES LIMITED. The report mentions and evaluates the various aspects, pertaining to the distribution channel of the company. After a thorough analysis of the various facts stand figures, a set of recommendations has been given at the end of the report. Accuracy and precision has been given the prime consideration, while compiling the report, are authoritative and authentic. I am confident that anyone who goes through the report will learn how much I have learnt & benefited during this period.

SURAJ PRATAP SINGH SIET, ALLAHABAD

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SALES AND DISTRIBUTION CHANNEL

Table of Contents
Methodology..
Defining the study objective... Developing the study plan Collection of Information. Quantitative Measure of Sales & Distribution Management...

Company Profile... Profile of Industry. Profile of HINDALCO INDUSTRIES LTD. .. Findings and Data Analysis... Logistics... Conclusions.
The Distribution Channel...

Recommendations..

Bibliography....

SALES AND DISTRIBUTION CHANNEL

METHODOLOGY

Defining the study objective;

The objective behind carrying out this study was to basically identify sales strategies, channel of distribution existing in the industry and fields in which they can be improved.

Our study also includes studying the importance of sales report and its management.

Not only has this but also how supply chain management helps to improve their sales and distribution.

I also wanted to know how a company like HINDALCO runs without investing huge in advertisement.

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Fig. shows the methodology used for making summer training report.

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SALES AND DISTRIBUTION CHANNEL

Objective;
The objective or purpose of this study is-

To understand the current sales and distribution functioning of

HINDALCO. To map the change in the SALES AND DISTRIBUTION strategy for the company. To carry out a critical and comparative analysis of these changes

Sector Chosen;
Manufacturing Sector, Aluminium Industry The company chosen HINDALCO

Developing the study plan;

Data collection methods: 1. Primary Data Sources

Questionnaire. Open-ended (left open for the information) (A) First hand information from company sales persons.

Interview.
(B) Interview with company executives. 2. Secondary Data sources; Internet.
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 In- House Publications

Contact Method
Under contact method, personal interview were used to collect the information. For the interview purpose the questions to be asked were predefined and structured. Personal interview was arranged and telephonic interview ere used.

1) Arranged Interview;
We took appointments in advance and then met the concerned persons for collecting the information.

2) Telephonic Interview;

On the telephone a pre- defined questions were asked to collect the information.

SALES AND DISTRIBUTION CHANNEL

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SALES AND DISTRIBUTION CHANNEL

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INTRODUCTION

A US $40 billion corporation, the Aditya Birla Group is in the League of Fortune 500. It is anchored by an extraordinary force of over 133,000 employees, belonging to 42 different nationalities. The Group has been ranked Number 4 in the Global 'Top Companies for Leaders' survey and ranked Number 1 in Asia Pacific for 2011. 'Top Companies For Leaders' is the most comprehensive study of organisational leadership in the world conducted by Aon Hewitt, Fortune Magazine and RBL (a strategic HR and Leadership Advisory firm). Over 53 per cent of its revenues flow from its overseas operations. The Group operates in 36 countries Australia, Austria, Bangladesh, Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Indonesia, Italy, Ivory Coast, Japan, Korea, Laos, Luxembourg, Malaysia, Myanmar, Philippines, Poland, Russia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Turkey, UAE, UK, USA and Vietnam. Globally, the Aditya Birla Group is: :: A metals powerhouse, among the worlds most cost-efficient aluminium and copper producers. Hindalco-Novelis is the largest aluminium rolling company. It is one of the three biggest producers of primary aluminium in Asia, with the largest single location copper smelter. :: No.1 in viscose staple fibre :: No.1 in carbon black
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:: :: :: :: ::

The fourth-largest producer of insulators The fifth-largest producer of acrylic fibre Among the top 10 cement producers Among the best energy-efficient fertiliser plants The largest Indian MNC with manufacturing operations in the USA

In India: :: A top fashion (branded apparel) and lifestyle player :: The second-largest player in viscose filament yarn :: The largest producer in the chlor-alkali sector :: Among the top three mobile telephony companies :: A leading player in life insurance and asset management :: Among the top two supermarket chains in the retail business :: Among the top 10 BPO companies Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh, to keep experimenting. Beyond business - The Aditya Birla Group: :: Works in 3,000 villages. :: Reaches out to seven million people, annually through the Aditya Birla Centre for Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla. :: Focuses on healthcare, education, sustainable livelihood, infrastructure and espousing social reform in India, Asia, Egypt, Philippines, Thailand, Laos, Indonesia, Korea and Brazil. In India:
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:: Our Group runs 42 schools, which provide quality education to 45,000 children. Of these, over 18,000 children receive free education. :: Its 18 hospitals tend to more than a million villagers. :: In line with its commitment to sustainable development, has partnered with the Columbia University in establishing the Columbia Global Centres Earth Institute in Mumbai. :: To embed CSR as a way of life in organisations, has set up the FICCI Aditya Birla CSR Centre for Excellence, in Delhi. Transcending the conventional barriers of business because we believe it is our duty to facilitate inclusive growth.

SALES AND DISTRIBUTION CHANNEL

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Global its ranks as;

A metals powerhouse, among the world's most cost-efficient aluminium and copper producers. Hindalco-Novelis from its fold is a Fortune 500 company. It is the largest aluminium rolling company. It is one of the three biggest producers of primary aluminium in Asia, with the largest single location copper smelter. No. 1 in viscose staple fiber. The 4th largest producer of insulators. The 4th largest producer of carbon black. The 11th largest producer of cement and the largest in a single geography. Asias largest integrated aluminium producer. The worlds largest single location world-scale Copper smelter. Among the worlds lowest cost Aluminium producers. Among the world's top 15 BPO companies and among India's top three. IN INDIA Indias largest integrated Aluminium producer. Indians premier branded garments player. 2nd largest producer of viscose filament yarn. Among the top five mobile telephony companies. A leading player in life insurance and asset management. Among the top three supermarket chains in the retail business.

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ADITYA BIRLAS GROUP COMPANIES

OVERSEAS MANUFACTURING COMPANIES
Country Company Products/Services

Thailand

Thai Rayon Indo Thai Synthetics Century Textile

Viscose Staple Fiber (VSF) Spund & fancy yarns

Fabrics Thai Acrylic Fibre Thai Carbon Black Thai Polyphosphates Thai Epoxy Thai Peroxide Thai Sulphates Sodium Phosphates Specialty Phosphates Epoxy Resins Hydrogen Peroxide Thai organic Chemicals Sodium Sulphate Sodium Metal-Sulphate Caustic Soda Chlorine, Epichlorohytrin Philippines Indo Phil Textile Mills Yarn Indo Phil Cotton Mills Indo Phil Acrylic MFG. Yarn Acrylic fibre

Carbon Black

Yarn

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Corporation

Indonesia

Pt Indo Bharat Rayon PT Elegant Textile Industry Pt Indo Liberty Textile PT Indo Bumi Textile PT Indo Rayan Kimia

Visco Staple Fiber (VSF)

Yarns

Textile

Textile

Carbon di- sulphide Malaysia Pan Centtury Edible Oils Pan Century Oleochemicals Refined Palm oil, Palm Olein, Stearin and PFAD Fatty Acids, Glycerine

Egypt

Alexandria Carbon Block

Carbon Black

Alexandria Fibre

Acrylic Fibre

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China

Liaoning Birla Carbon Co LTD

Carbon Black

Canada

AV Cell Inc

Softwood Pulp (for VSF manufacture)

Australia

Birla MineralsBirla Nifty Birla Mount Gordon

Copper Mines

Group companies:
Grasim Industries Ltd. Hindalco Industries Ltd. Aditya Birla Nuvo Ltd. Shree Digvijay Cement CO. Ltd Ultra Tech Cement

Indian companies:
PSI Data Systems TransWorks Essel Mining & Industries Ltd. Shree Digvijay Cement Ltd. Idea Cellular Ltd.
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 Birla NGK Insulators Bihar Caustic and Chemicals Ltd.

International companies: Thailand:

Indo Thai Synthetics Century Textiles Thai Acrylic Fibre

Thai Carbon Black Philippines:

Indo Phil Textile Mills Indo Phil Cotton Mills Indo Phil Acrylic Manufacturing Corporation

Indonesia:
PT Indo Bharat Rayon PT Elegant Textile Industry PT Sunrise Bumi Textiles

PT Indo Liberty Textiles Egypt:

Alexandria Carbon Black Company S.A.E Alexandria Fiber Company

China:
Liaoning Birla Carbon

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Canada:
AV Cell Inc AV Nackawic Inc

Australia:
Aditya Birla Minerals Ltd. Laos Birla Laos Pulp and Paper Plantation Company Ltd.

Joint Ventures:
Birla Sun Life Insurance Birla Sun Life Asset Management Company Ltd.

Birla Sun Life Distribution Company Ltd. Sectors:

Aluminium Copper Cement Carbon Black Textiles Fertilizers Chemical Insulator Gas Software BPO Telecom Retail Finance And Insurance

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POLICY HIGHLIGHT Our vision; To be a premium global conglomerate with a clear focus on each business. Our mission; To deliver superior value to our customers, shareholders, employees and society at large. Our values;
Integrity Commitment Passion Seamlessness Speed Group`s Philosophy;

Custom arise

Institu tional

REST ON FOUR PILLARS

Strate gies

People -ize

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HINDALCO INDUSTRIES LIMITED

OVERVIEW;
A GLIMPSE OF HISTORY
HINDALCO INDUSTRIES LIMITED, a flagship company of the ADITYA BIRLA GROUP, is structured into two strategic business- Aluminium & Copper, and is an industry leader in both these segments. A non-ferrous metals powerhouse, close to globe scale, it ranks among Indias top 10 companies in terms of market capitalization. In Financial year 2006-07, HINDALCO recorded a turnover of Rs18313.00crore. It was set up in collaboration with KAISER ALUMINIUM & CHEMICALS CORPORATION USA, in a record time of 18 months. The plant started its commercial production in the year 1962 with a capacity of 20,000 tons per annum. The company has grown manifold and is managed by Board of Directors, with Mr. KUMAR MANGALAM BIRLA as the Chairman of Board of Directors. Day to day affairs of the company is managed by Professional Executives headed by Sri D.K KOHLI as the Chief Operations Officer- Aluminium & Power.
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NOVELIS ACQUISITION
Aditya Birla Groups Hindalco Industries Limited, NOVELIS Inc have entered into a definitive agreement for HINDALCO to acquire NOVELIS in an all cash transaction which values NOVELIS at approximately US6$ billion, including approximately US2.4$ billion of debt. NOVELIS is the worlds largest producer of rolled Aluminium, and recycle of Aluminium cans, with 12500 employees in all 11 countries, a market value of $2.9 billion and $3.2 billion of debt. It was spun off from Canadian Aluminium Company Alcan but incorporated in Atlanta, USA.

Carbon black
The group entered the carbon black business in 1980 with its first plant in Thailand. Eight years later, it built another plant at Renukoot in Uttar Pradesh. In 1994 the group commenced carbon black production in Alexandria in Egypt. After its new plant at Goomidipoondi near Chennai going on stream, the AV Birla group`s carbon black capacity has expanded to 3.1 lakh tpa.

EXTRUSION
Hindalco has two extrusion plants in India, one at Renuloot, Uttar Pradesh, and the other at Alupuram, Kerla. Both plants have well-established manufacturing processes and Q. A. systems honed over five decades of experience.

FACTFILE
Aluminium;
Worlds largest aluminium rolling company. One of the biggest producers of primary aluminium in Asia. Market share of 48 percent. One of the lowest-cost producers of aluminium in the world.
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Over 58 percent of sales in value-added products. Fully integrated aluminium plant at Renukoot, UP. Aluminium wheels plant at Silvassa, in Dadra & Nagar Haveli. Foil plants at Silvassa. Foil unit of Indal at Kollur. Alumina refining capacity of 1,160,000 tpa going up to 1,500,000 tpa. Aluminium metal producing capacity of 445,000 tpa.

PRODUCT LINE UP OF HINDALCO

1) 2) 3) 4) 5) 6) 7) 8) Aluminium Metal Flat Rolled Products Extruded Products Redraw Rods Aluminium Foils Alloy Wheels Copper Cathods Cast Copper Rods

HEAD OFFICE
Head office of HINDALCO is located at Mumbai.

REGIONAL OFFICE OF HINDALCO IN INDIA MUMBAI DELHI BANGALORE KOLKATA UNITS OF MANUFACTURING HINDALCO IN INDIA
BELPUR, HOWRAH (WEST BENGAL) MOUDA, NAGPUR (MAHARASHTRA) RENUKOOT, SONEBHADRA (UTTAR PRADESH) TALOZA, NAVI MUMBAI (MAHARASHTRA)
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Logistics
Market-logistics means getting the right goods to the right places, at the right time, for the most effective cost. Four major decisions must be made with regard to market logistics; 1. 2. 3. 4. Order processing Warehousing Inventory Transportation

Now on the basis of our study we will explain HINDALCO market logistics decisions.

Order Processing
How should orders be handled? The most important factor is order to payments cycles. This means the elapsed time between the order received, delivery and payments.

Order processing time

The HINDALCO orders the vendors and it is processed either same or next day.

Warehousing
HINDALCO has there its own warehouses at all manufacturing units. All expenses are beard by the company as all the warehouses are company owned & insured.

Inventory

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How much stock should be held is the objective of inventory. Sales people would like their companies to carry enough stock to fill all their customers order immediately.

Transportation
How the goods are to be shipped is solved by transportation decisions. There are five transportation modes; rail, air, truck, water, way. Criteria such as speed, frequency, dependability, capability, availability and cost help in the choice of transportation.

Mode of transportation
From company to dealers in truck, size of truck depending on order. Today, containerization is used as the effective way of transferring goods. So all these companies use it for transporting their respective goods. Containerization consists of putting the goods in boxes or trailers that are easy to transfer between two transportation modes.

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LOCATION;

Renukoot

Renusagar
(CPP)

Silavasa
(Foils & Wheels)

Bauxite Mines
(Jharkhand & Chattisgarh)

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About Our Chairman;

Mr. Kumar Mangalam Birla

Chairman, The Aditya Birla Group
Mr. Kumar Mangalam Birla (44) is the Chairman of the US$40 billion multinational Aditya Birla Group, which operates in 36 countries across six continents. Over 53 per cent of its revenues flow from its operations outside India. Mr. Birla chairs the Boards of all of the Group's major companies in India and globally. Among its clutch of companies globally feature Novelis, Columbian Chemicals, Aditya Birla Minerals, Aditya Birla Chemicals, Thai Carbon Black and Alexandria Carbon Black among others. In India, he chairs the Boards of Hindalco, Grasim, Aditya Birla Nuvo, UltraTech, Idea, Aditya Birla Financial Services and Aditya Birla Retail. The Group's businesses are spread across a swath of industries. These include aluminium, copper, cement, textiles (pulp, fibre, yarn, fabric and branded apparel), carbon black, insulators, natural resources, power, agribusiness, telecommunications, financial services, IT/ITeS, retail and trading. Business record Mr. Birla took over as Chairman of the Group in 1995, at the age of 28, after the untimely demise of his father. As Chairman, Mr. Birla has taken the Aditya Birla Group to an altogether higher growth trajectory. In the 17 years that he has been at the helm of the Group, he has accelerated growth, built a meritocracy and enhanced stakeholder value. In the process he has raised the Group's turnover from US$ 2 billion in 1995, to US$ 35 billion today. Mr. Birla has restructured the businesses to emerge as a global/national leader in the sectors in which the Group operates. He has made 22 acquisitions in 17 years in India and globally, the highest by an Indian multinational in India. The acquisition of Novelis, a global metals major, in 2007, the second largest acquisition ever by an Indian company, led to a new found respect for Indian companies and stoked a higher level of interest in the country as well. Recently, the acquisition of Columbian Chemicals, a US based company and the world's 3rd largest carbon black manufacturer positioned the Group as the No. 1 player in this sector, given its own sizeable carbon black
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operations today. Likewise, the acquisition of Domsj Fabriker, a leading Swedish speciality pulp manufacturer enables the Group's pulp and fibre business to further consolidate its global position. Besides these, over the years Mr. Birla has acquired manufacturing plants in Canada, China, Indonesia, plantations in Laos, and mines in Australia, set up new plants in Egypt, Thailand and China. Alongside, he has expanded capacities in all of the Group's manufacturing units. In India as well, he has made major acquisitions, the most notable being the cement division of Larsen & Toubro; Indal from Alcan; Madura Garments from Coats Viyella and the chlor alkali division of Kanoria Chemicals. Under his stewardship, the Aditya Birla Group enjoys a position of leadership in all the major sectors in which it operates. Over the years, Mr. Birla has built a highly successful meritocratic organisation, anchored by an extraordinary force of 133,000 employees belonging to 42 different nationalities. In key responsible positions on various regulatory bodies Mr. Birla holds several key positions on various regulatory and professional boards. He is a Director on the Central Board of Directors of the Reserve Bank of India. Earlier, he was Chairman of the Advisory Committee constituted by the Ministry of Company Affairs and also served on The Prime Minister of India's Advisory Council on Trade and Industry. As the Chairman of Securities and Exchange Board of India (SEBI) Committee on Corporate Governance, he authored the first report on corporate governance titled "Report of the Kumar Mangalam Birla Committee on Corporate Governance". Its recommendations were path breaking and became the basis of corporate governance norms. Furthermore, as the Convener of the Prime Minister's Task Force on administrative and legal simplifications, the extensive recommendations made by him in his report, have been implemented in totality. Mr. Birla also served as Chairman of SEBI's committee on insider trading, which formulated corporate governance principles for Indian corporates. He is on the National Council of the Confederation of Indian Industry and the Apex Advisory Council of the Associated Chambers of Commerce and Industry of India. On the board of educational institutions Mr. Birla is deeply engaged with educational institutions. He is the Chancellor of the renowned Birla Institute of Technology & Science (BITS), with campuses in Pilani, Goa, Hyderabad and Dubai. He is a Director of the G. D. Birla Medical Research & Education Foundation. He serves on the London Business Schools Asia Pacific Advisory Board and is a Honorary Fellow of the London Business School.
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Accolades conferred on Mr. Birla Mr. Birla has won recognition for his exemplary contribution to leadership processes and institution/systems building. A selective list: NASSCOM's 'Global Business Leader Award' 2012. 'CNBC-TV18 India Business Leader Award 2012' for "taking India abroad". 'GQ Business Leader of the Year Award - 2011' from Cond Nast India, an affiliate of Cond Nast Global. 'CNN-IBN Indian of the Year 2010 - Business' for being the most outstanding business person and making a success out of most of the businesses including the sunrise sector. The All India Management Association's (AIMA), Managing India Awards 'Business Leader of the Year' 2010. The 'AIMA-JRD Tata Corporate Leadership Award' 2008. The Honorary Degree of Doctor of Science (honoris causa) in 'recognition of his invaluable contribution in the field of business administration' by the G. D. Pant University of Agriculture & Technology, 2008. "For the development of technology and also for the involvement in the field of industries in bringing the country at par with other countries in the field of industries", the SRM University in Tamil Nadu conferred the Degree of Doctor of Literature, 2008. The Asia Pacific Global HR Excellence 'Exemplary Leader' Award, 2007. 'The Global Indian Leader of the Year' by NDTV Profit in their Business Leader Awards category, 2007. The Lakshmipat Singhania IIM Lucknow National Leadership Award, Business Leader, 2006. Represented India at the Ernst & Young World Entrepreneur Award in Monte Carlo, Monaco in June 2006, where he was inducted as a Member of the Ernst & Young World Entrepreneur of the Year Academy. 'The Ernst & Young Entrepreneur of the Year' Award, 2005. 'Young Super Performer in the CEO Category' by Business Today, 2005. Chosen by the World Economic Forum (Davos) as one of the Young Global Leaders, 2004. 'The D. Litt (honoris causa) Degree' by the Banaras Hindu University, 2004. 'Honorary Fellowship' by the All India Management Association, 2004. 'The Business Leader of the Year', The Economic Times Awards for Corporate Excellence 2002-2003. 'Business Man of the Year - 2003' by Business India. 'The Rajiv Gandhi Award' for "business excellence and his contribution to the country" by the Mumbai Pradesh Youth Congress, 2001. The National HRD Network, 'The Outstanding Business Man of the Year', 2001.
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The Institute of Directors' 'Golden Peacock National Award for Business Leadership', 2001. The Hindustan Times', 'Businessman of the Year', 2001. The Bombay Management Association's 'The Management Man of the Year 19992000'. 'Among the 10 super stars of corporate finance' - Global Finance, 1998. 'Among the top 10 of India's most admired and respected CEOs and the top CEO of the coming millennium', Business World, 1998. Beyond business: Reaching out to the marginalised sections of the society A firm practitioner of the trusteeship concept, Mr. Birla has institutionalised the concept of caring and giving at the Aditya Birla Group. With his mandate, the Group is involved in meaningful welfare driven activities that distinctively impact the quality of life of the weaker sections of society, surrounding hundreds of villages that are among the poorest in India, Thailand, Philippines and Egypt. In India, the Group is engaged in 3,000 villages, reaching out to seven million people annually and making a difference to their lives through meticulously conceived projects focusing on healthcare, education, sustainable livelihood, infrastructure and social causes. For instance, the Group runs 42 schools, which provide quality education to 45,000 children. Of these, over 18,000 children receive free education. Additionally, over a 100,000 youngsters benefit from bridge educational programmes and vocational training. Educational background A commerce graduate from the Mumbai University, Mr. Birla is a chartered accountant. He earned an MBA from the London Business School. Personal details Born on June 14, 1967, in Kolkata, Mr. Birla was raised in Mumbai. Mr. Birla and his wife, Mrs. Neerja Birla have three children, Ananyashree, Aryaman Vikram and Advaitesha .

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MILESTONES OF PROGRESS

Date of Registration 15th December, 1958 Industrial license received For setting up of 20000 tones.

Integrated Aluminium Plant Commencement of construction Rihand Power Satiation of UP Gov. Commissioned Aluminium Production Started (Capacity 20000 TPA.) Properzi Wire Rod Mill (1st unit) commissioned Extrusion press & Rolling Mill Commissioned

September 1959 September1960

February1962

23rd May 1962

January 1964

March Aug. 1965

1st Generation of Renusagar power plant commissioned (67.5MW) August 1967 3rd Properzi Mill Commissioned March 1968

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Aluminium Production Capacity Expanded to 80000tpa. May 1969 Aluminium Production Capacity Expanded to 95000tpa. August 1972 3rd Generation Commissioned (67.5MW) 4th Generation Commissioned (67.5MW) Alumina Plant Capacity Expanded to 300000MT Conform Extrusion Press Commissioned 5th Generation Commissioned (67.5MW) Continuous Caster installed November 1981 April 1983

October1986 December 1988 March 1989 August 1990

Aluminium Production Capacity Expanded to 1,50,000MT March1991 Davy Cold Rolling Mill commissioned Aluminium Plant Capacity expanded to 350,000 MT Continuous Ingot Casting Machine commissioned September 1993

June1994

Jan 1996

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Blirs hot and cold mills fully Revamped Co-Gen. Power Plant of (37MW) 6th Generator Commissioned (74MW) Aluminium Production Capacity expanded to 242,000MT 7th & 8th Generators Commissioned (75MW) Acquisition of India Aluminium Production Capacity expanded to 275,000MT 2001

March 1997 March1997 March 1997

March 1998 March 1998 March 2000

September

Awards won by Hindalco in Different fields. National Safety Award 2003:

By Minister of Labor and Employment. Rajiv Gandhi National Quality Award 2003:
Joint award winner of R.G.N.Q.A. 2003 in large scale manufacturing category. The award is instituted by Bureau of Indian Standard, Ministry of Consumer Affairs, and Government of India CIOL Dataquest Award: For best performance in the pioneer category for 2004-05 by CIOL, an IT portal along with Dataquest Magazine.

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 Green Tech Gold Award 2003-04:

By Greentech Foundation, New Delhi for organizational Health & Safety. Qualtech Award 2004: For Quality Management by Quimpro college, Mumbai. CII National Award: For Excellence in Energy Management-2004. IMC Rama Krishna Bajaj National Quality Award 2004: Certificate of merit. National Energy Conservation Award 2004: In aluminium sector Government of India, Ministry of Power. Aditya Birla Planet Award 2004: Jt. Winner of Aditya Birla Planet Award 2004 for community initiative &Rural Development Works. Training & Development (HR) Practices 2004: Renusager Power has declared winner of Innovation Training & Development (HR) Practices 2004. Award given by Indian Society for Training & Development, New Delhi.

National Award for Excellence in Energy Management 2005:

Belure Sheet Plant received the National Award for Excellence in Energy Management 2005 (Energy Efficient Unite) from CII Sohrabji Godrej Green Business Center. National Safety Award 2004: Owned by Renukoot Plant, given by the Ministry of Labor and Employment, Government of India. Vishkarma Rashtriya Puraskar: Awarded to Five workmen of our smelter, Mr. Rajesh Pal, Mr. A.K. Gupta, Mr. R.K. Singh, Mr. H.N.

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Singh, & Mr. S.K. Singh, given by the Ministry of Labor and Employment, Government of India.

National Energy Conservation 2005:

Renukoot plant won the 1st Prize in Aluminium sector, given by Ministry of power, Government of India.

ICWAI National Award for Excellence in Cost Management-2005:

Hindalco was awarded by Institute of Cost and Works Accountants of India.

Mr. Kumar Mangalam Birla, Chairman, has been

named "Business Today young super performer in the CEO category in 2005.

HINDALCO POLICY HIGH LIGHT

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 & SOCITY AT LARGE
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HINDALCO STRATEGY
EFFICIENCY FOCUS: To be one of the lowest cost producers globally. EFFECTIVENESS FOCUS: To Continue to remain the market leadger domestically. GROWTH FOCUS: To pursue value adding growth opportunities in aluminium

HINDALCO VALUES
INTEGRITY
Honesty in every action.

COMMITMENT
Doing whatever it takes to deliver, as promised.

PASSION
Missionary zeal arising out of an emotional engagement with work.

SEAMLESSNESS
Thinking and working together across functional silos, hierarchy levels business and geographies.

SPEED
Responding to stakeholders with a sense of urgency

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QUALITY POLICY
We at Hindalco shall aim to achieve and sustain excellence in all our activities. We are committed to Total customers satisfaction by providing products and services, which meet or exceed the customers expectations. Modernization of the manufacturing facilities, stress on technological innovation and training of employees at all levels shall be a continuous process at Hindalco A motivated work force with a sense of pride in the organization shall lead us towards total quality.

ENVIORONMENT POLICY
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; lube oils, red mud, and fly ash.

SAFETY POLICY
Use appropriate technology and other resource 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 and regulations but also strive to achieve beyond and set new standards.
41

 To continuously monitor and control work places hazard and protect employee and community from them. To create an awareness and concern for safety amongst employees through active involvement, participation.

FINANCIAL FOOTPRINTS: Hindalco announces Q3 FY 2011-12 standalone results

Superior results despite adverse macro-economic condition and steep inflationary cost pressure Financial highlights (In Rs. crore) Net sales Other income PBITDA Depreciation Net interest Profit before tax Provision for taxes Net profit Basic EPS - rupees

Q3FY12 6,647 90 805 175 79 551 100 451 2.35

Q3FY11 5,975 61 801 171 52 578 118 460 2.41

42

9MFY12 18,950 444 2,695 524 214 1,958 360 1,597 8.34

9MFY11 17,013 212 2,483 512 164 1,807 379 1,429 7.47

Hindalco, the Aditya Birla Group flagship company, has announced its unaudited results for the third quarter (Q3) ended December 31, 2011. Net sales and operating revenue at Rs. 6,647 crore in Q3FY12 are up 11 per cent over Q3FY11, driven by higher volume and marginally better realisation. PBITDA is maintained at Q3FY11 levels. The benefits of higher volume and realisation have been negated by the cost surge of over Rs. 300 crore. Other income is higher by Rs. 29 crore due to improved treasury yield and enhanced corpus. This has been offset by higher interest and financing charges on account of higher rates. Net profit is marginally lower at Rs. 451 crore in Q3FY12 from Rs. 460 crore in Q3FY11. For the nine months ended December 31, 2011, revenues rose by 11 per cent, PBITDA increased by 9 per cent with an increase in net profit by 12 per cent. Higher volumes and slightly improved realisations resulted in 13 per cent improvement in aluminium revenues. However, the EBIT is lower at Rs. 310 crore due to spiralling input cost of around Rs. 250 crore. The capital employed for aluminium business at Rs. 21,172 crore as on December 31, 2011 includes Rs. 13,631 crore relating to Mahan, Hirakud Rolled and Aditya Aluminium projects. The balance largely relates to the existing aluminium operations. In the copper business, revenues stood at Rs. 4,418 crore vs. Rs. 4,000 crore in Q3FY11, on the back of higher LME and by-product credits. Copper volumes also rose on account of improved efficiency. Profit before interest and taxes increased by 51 per cent to Rs. 216 crore from Rs. 143 crore due to improved efficiencies, higher Treatment and Refining Charges (TcRc) and by-product credit, offset to some extent by higher energy costs. Operational review Aluminium Alumina and aluminium production registered growth of 7 per cent and 8 per cent respectively backed by improved operating efficiencies. Metal production rose on the back of continued focus on asset-sweating.

43

Downstream production also grew in the latter part of Q3FY12. Extrusion production was lower, consequent to the lock-out at the companys Alupuram unit in Kerala. This has since been lifted (December 24, 2011). In tonne Alumina Metal Wire rods FRP Extrusions Q3FY12 343,086 146,374 25,247 55,598 7,190 Q3FY11 320,310 135,829 23,672 46,188 9,292 9MFY12 1,010,056 430,077 73,092 157,581 21,665 9MFY11 1,008,800 399,215 71,155 151,603 28,546

Copper Quarterly cathode production was successfully ramped up after the planned shutdown in the last quarter. Cathode production was up by 9 per cent. Value-added CCR production was higher by 11 Kt. In tonne Cathode CCR (own) Q3 FY12 87,748 38,426 Q3 FY11 80,224 26,996 9MFY12 235,528 106,707 9MFY11 250,637 111,465

Expansion projects All the projects are progressing well. There is no material development to report since the last quarterly press release. Industry outlook The sentiment in the financial markets has improved since the beginning of this calendar year. The improvement is, however, vulnerable to the looming macro-economic risks pertaining to the European crisis and slowing global growth momentum. These risks could have implications for the commodity prices, including metals even though energy inputs have an upside risk pertaining to geo-political developments. Aluminium World aluminium consumption growth in Q3FY12 was 6 per cent over the corresponding period last year. Other than Europe, most of the economies witnessed growth in consumption with China growing in double digit. Aluminium prices on the London Metals Exchange (LME) averaged US$2,089
44

in Q3FY12 a drop of 13 per cent from the previous quarter. LME stocks were at the higher level of 4.9 million tonne, an increase of 0.4 million tonne in December, attributed to attractive warehousing deals and low interest rates. In response to low metal price and high operating cost, some of the major producers have announced production cuts, which are expected to support and boost the metal prices in the next quarter. While the macroeconomic environment has weakened significantly, the outlook for aluminium demand appears positive and will be led by North America, China and major emerging nations. Indian consumption is at levels similar to that of 2010 due to lower demands in the automotive and building and construction sectors in this quarter. Copper Global refined copper consumption was virtually flat during the quarter, reflecting the overall weak economic conditions. Recently, copper prices on LME have hardened on account of falling trend in exchange inventories, sharp rise in Chinese imports and the improvement in the risk appetite. The continuation of the momentum of Chinese imports is, however, uncertain. Indian refined copper market, which was earlier exhibiting weakness, improved in Q3 due to demand from the cables sector. Other user segments like winding wire, automobile and transformers were relatively flat. In the concentrates market, supplies are encouraging after resumption of normal production in most of the mines hit by strikes or technical issues in Q2FY12. This years annual negotiations for term contracts have not been able to produce a single benchmark. Annual settlements of TcRc between miners and smelters for the next year are 7-13 per cent better than those in the previous year. The outlook on realisation of co-products like sulphuric acid and DiAmmonium Phosphate (DAP), which were generally robust in 2011, remains softer for the coming quarters. Company outlook Volatile LME and foreign exchange fluctuation along with spiralling energy cost is posing a major challenge in the short term context. Hindalcos portfolio of LME - neutral copper smelting operation and integrated aluminium operation is providing the strategic balance in the volatile commodity cycle.
45

Capacity expansions under implementation will enable the company to grow at a rapid pace and consolidate its leadership even further. The focus continues to be on timely completion of the projects and successful ramp-up of production.

Hindalco reports commendable Q4 FY 2012 ;

Consolidated net sales touches Rs. 80,000 crore up 12 per cent Consolidated net income at a record Rs. 3,397 crore up 38 per cent Consolidated Capex spending at over Rs. 12,500 crore

Financial highlights (audited)

(In Rs. crore) Revenue from operations Other income PBITDA Depreciation PBIT Finance costs Provision before tax Tax expenses Profit before minority interest Minority interest Share in profit/(loss) of associates (net) Net profit EPS (Basic) (Rs.)

Standalone Consolidated FY12 FY11 FY12 FY11 26,596.8 23,859.2 80,821.4 72,202.3 615.8 347.5 783.1 513.3 3,720.6 3,502.2 8,972.5 8,442.0 690.0 687.5 2,869.6 2,759.5 3,030.6 2,814.7 6,102.9 5,682.5 293.6 220.0 1,758.0 1,839.4 2,737.0 2,594.7 4,344.9 3,843.2 499.8 457.8 786.2 963.8 2,237.2 2,136.9 3,558.7 2,879.4 211.3 365.9 49.6 ( 57.1) 2,237.2 2,136.9 3,397.0 2,456.4 11.69 11.17 17.74 12.84

Hindalco Industries Limited, the flagship company of the Aditya Birla Group, today announced its standalone and consolidated audited financial results for the year ended 31 March 2012. Consolidated net revenue for the year touched US$17 billion and net income exceeded US$700 million. Consolidated results Hindalcos consolidated revenue at Rs.80,821 crore has been the highest ever, a growth of 12 per cent year-on-year, aided by better product mix and
46

depreciating rupee. Profit before depreciation, interest and taxes stood at Rs.8,973 crore as against Rs.8,442 crore in FY11. Net profit attributable to the shareholders increased to Rs.3,397 crore, up by 38 per cent over FY11. The increase in profit is primarily attributable to the strong performance at Novelis and copper business in India. Despite economic headwinds, the balanced portfolio approach, low cost operation and strong value added businesses resulted in commendable performance. With low cost advantage and formidable global presence in aluminium downstream, Hindalco is well set for being the 'Last Man Standing' and the 'First Man Forward'. Segment performance Of the total annual revenues of Rs.80,821 crore, aluminium business contributed Rs.62,119 crore, up 11 per cent over the last year. Earnings before Interest and Taxes (EBIT) for aluminium business for FY12 remained flat at Rs.4,495 crore compared to Rs.4,469 crore in FY11. Strong growth in Novelis EBIT was offset by lower EBIT in Indian aluminium business. Copper business revenue is higher at Rs.18,379 crore, a rise of 16 per cent from Rs.15,887 crore in FY11, mainly on account of higher copper LME and by-product credits. EBIT of Rs.1,119 crore vs. Rs.1,082 crore in FY11 was on the back of superior performance of custom smelting operations in India. Standalone results Standalone revenue for the year crossed the Rs.25,000-crore mark and stood at Rs.26,597 crore driven by higher volume and realisation. Profit before interest and depreciation was Rs.3,721 crore, an increase of over 6 per cent compared to FY11, on account of higher volumes in aluminium business and better Treatment and Refining Charges (TcRc) in copper business, along with improved efficiencies and higher other income. Novelis Inc (wholly owned subsidiary) Novelis reported strong operating results in FY12 despite challenging market conditions globally. The premium product portfolio, long-term customer base and focused business model enabled Novelis to produce solid results for the year.

47

Net sales for FY12 were $11.1 billion, a 5 per cent increase compared to the $10.6 billion reported for the same period a year ago, mainly the result of favourable conversion premiums across all regions and an increase in average aluminium prices. Noveliss robust business model, good cost management and focus on premium products resulted in a record EBITDA per tonne of $371 for the year and the second straight year of $1 billion plus adjusted EBITDA. Shipments of aluminium rolled products totalled 2,838 Kt for FY12, compared to 2,969 Kt in FY11. Lower shipments were primarily the result of the overall economic slowdown and de-stocking by customers. The continued optimisation of Novelis footprint will improve its competitive position; these include the divesture of three foil plants in Europe and closure of an aluminium sheet mill in Canada. During the year, Novelis invested in major recycling initiatives in all the four operating regions, including advanced equipment and technology to process diversified scrap inputs, which will enable Novelis achieve recycled content of 50 per cent by 2015. During FY12, Novelis completed the acquisition of 31.3 per cent of the outstanding shares of its Korean subsidiary for US$344 million, raising Novelis ownership to 99 per cent. Aditya Birla Minerals Limited (51 per cent subsidiary) Production of copper remained flat at 59.7 Kt in FY12. Net profit for the year at AUD 27 million was against AUD 57 million in FY11. The profitability of the subsidiary was impacted due to lower production at Nifty mines on account of the decline in mine grade (which was in line with the mining plan) and slower-than-expected ramp-up at Mt. Gordon mines. Dividend The board of directors of the company has recommended dividend of Rs.1.55 per share aggregating to Rs.344.89 crore (including dividend distribution tax of Rs.48.14 crore) for the year ended 31st March 2012. Expansion projects in India Project Hirakud smelter expansion Location Hirakud Capacity Power plant 161 KTPA 367 MW to to 213 467 MW
48

Timelines 2012

Hirakud Flat Rolled Products (FRP) project Utkal Alumina (UAIL)

Hirakud

KTPA 135 KTPA NA

2012

Rayagada, Odisha

Mahan Aluminium Aditya Aluminium Aditya Alumina

Mahan, Madhya Pradesh Lapanga, Odisha Koraput, Odisha

Jharkhand Aluminium

Sonahatu, Jharkhand

1.5 mio90 MW CPP tonne alumina refinery with integrated bauxite mines 360 KTPA 900 MW CPP aluminium smelter 360 KTPA 900 MW CPP aluminium smelter Alumina refinery with integrated bauxite mines Aluminium smelter

2012

2012

2013

2014

2015

All of the above smelters (Mahan, Aditya, and Jharkhand) have dedicated coal blocks. Both Utkal and Aditya Alumina have captive bauxite mines. Financial closures have already been achieved for UAIL and Mahan Aluminium. Financial closure for debt portion of Aditya Aluminium is currently being pursued. Mahan Coal: The Group of Ministers, constituted by the Government of India to consider environmental and developmental issues related to coal mining etc, has reported to have recommended granting of forest clearance by the Ministry of Environment and Forest (MoEF) for Mahan Coal block on certain conditions.
49

Novelis Brazil: The previously announced expansion of Pinda facility in Brazil is expected to be commissioned by the end of 2012. Additionally, plans have been announced to install a new coating line for beverage can end stock and to expand recycling capacity in the Pindamonhangaba, Brazil facility. Asia: The expansion of rolling and recycling capacity in Yeongju, South Korea and Ulsan, South Korea is on schedule and expected to become operational at the end of 2013. Plans have been announced to invest $100 million, during the fourth quarter of FY12, in an aluminium automotive heat treatment plant in China. Construction of the new facility, which will have an annual capacity of approximately 120 Kt, is expected to begin in the fall of 2012. The plant is expected to be operational in late 2014.

TEN YEAR BALANCE SHEET OF HINDALCO;

1011

1011

0910

0809

0708

0607

0506

0405

0304

0203

0102

US Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. D cror cror cror cror cror cror cror cror cror cror Profitab in e e e e e e e e e e ility Mn * Net sales and operatin g revenues Cost of sales 5,2 23,8 19,5 18,2 19,2 18,3 11,3 9,52 6,20 4,98 2,33 46 59 22 20 01 13 96 3 8 6 1

4,5 20,6 16,5 15,1 15,8 14,2 8,79 7,24 4,70 3,74 1,33 46 74 72 84 00 98 1 7 8 1 7

Operati 700 3,18 2,95 3,03 3,40 4,01 2,60 2,27 1,50 1,24 994 ng profit 5 0 6 1 5 5 6 0 5 Depreci 151 687 667 645 588
50

638

521

463

317

264 154

ation and impairm ent Other income Interest and finance charges Profit before tax and exceptio nal items Exceptio nal items (Net) Profit before tax Tax for current year Tax adjustm ent for earlier years (Net) Net profit 70 48 317 220 260 278 637 337 493 281 370 242 244 225 270 170 240 177 218 211 136 46

571 2,59 2,26 2,69 3,02 3,50 2,10 1,91 1,24 1,06 1,00 5 5 0 6 5 3 3 6 3 5

(3)

163

571 2,59 2,26 2,69 3,02 3,50 2,10 1,90 1,24 5 5 0 6 5 6 4 6 103 469 462 611 705 940 450 575 407

899 1,00 5 317 319

(2)

(11) (113) (151) (541)

470 2,13 1,91 2,23 2,86 2,56 1,65 1,32 7 6 0 1 4 6 9

839

582 686

51

Financial position Gross fixed assets (includi ng CWIP) Depreci ation and impairm ent Net fixed assets Investm ents Net Current Assets Capital employe d Loan funds Deferre d tax liability (Net) Net worth Net worth represen
52

5,3 23,7 17,4 14,7 13,7 12,7 11,2 10,0 7,12 6,47 3,73 35 51 96 83 28 29 51 96 6 0 6

1,5 6,70 6,05 5,50 4,79 4,24 3,63 3,16 1,91 1,60 1,04 06 3 9 6 9 6 5 9 8 7 1

3,8 17,0 11,4 9,27 8,92 8,48 7,61 6,92 5,20 4,86 2,69 29 48 38 7 9 3 6 7 8 3 5 4,0 18,2 21,4 19,1 14,1 8,67 3,97 3,70 3,37 2,64 1,98 99 47 81 49 08 5 1 2 7 8 5 666 2,96 2,71 5,06 4,05 3,74 4,15 1,95 1,83 1,92 1,30 4 6 8 1 1 0 8 3 3 3 8,5 38,2 35,6 33,4 27,0 20,9 15,7 12,5 10,4 9,43 5,98 94 59 34 93 88 00 37 87 18 5 4 1,6 7,27 6,35 8,32 8,32 7,35 4,90 3,80 2,56 2,39 958 34 2 7 4 9 9 3 0 5 5 289 1,28 1,36 1,41 1,32 1,12 1,23 1,13 7 6 1 4 6 3 0 995 849 444

6,6 29,7 27,9 23,7 17,4 12,4 9,60 7,65 6,85 6,19 4,58 71 00 11 58 36 15 1 7 8 1 2

ted by :Share capital Share warrant s/ suspense Reserves and surplus # 43 -

191
-

191 -

170 -

123 140

104 -

99 -

93 -

92 -

92 -

74 -

6,6 29,5 27,7 23,5 17,1 12,3 9,50 7,56 6,76 6,09 4,50 28 09 20 88 74 11 2 4 5 9 7

6,6 29,7 27,9 23,7 17,4 12,4 9,60 7,65 6,85 6,19 4,58 71 00 11 58 36 15 1 7 8 1 2 Dividen d Preferen ce shares (includi ng tax) Equity shares (includi ng tax)

- 0.03

73. 4

334

301

269

265

202

247

212

172

141 101

Ratio and statistics Uni t Operati ng margin Net % 10- 0911 10 0809 0708 06- 0507 06 0405 0304 0203 0102

13.3 15.1 16.6 17.7 21.9 22.8 23.9 24.1 24.9 42.6 5 1 6 1 2 6 0 7 7 4

% 8.96 9.81 12.2 14.9 14.0 14.5 13.9 13.5 11.6 29.4
53

margin Gross interest cover Net interest cover ROCE ROE Basic EPS $ Diluted EPS $ Cash EPS $ Dividen d per share

Ti 10.5 11.1 12.4 13.5 5.74 5.23 5.48 6.08 8.77 7.51 mes 0 9 7 0 Ti 15.9 11.5 10.9 13.8 18.0 12.6 14.9 10.7 26.4 9.82 mes 2 5 0 8 9 5 8 2 3 % 7.36 7.14 9.04 % 7.19 6.86 9.39 Rs. Rs. Rs. 12.2 17.9 14.7 16.5 13.6 12.7 17.5 1 3 9 5 6 1 6 16.4 20.6 17.2 17.3 12.2 14.9 9.40 1 6 4 6 3 7

11.1 10.8 14.8 22.2 25.5 16.7 13.4 8.53 5.92 8.67 7 2 2 3 2 9 8 11.1 10.8 14.8 22.1 25.5 16.7 13.4 8.53 5.92 8.67 6 1 2 1 2 9 8 14.7 14.5 19.1 26.8 31.8 22.0 18.1 11.7 10.6 8.61 6 8 0 0 7 7 8 6 2 150 135 135 185 170 220 200 165 135 135

Capital Rs. 6,31 2,86 1,12 1,04 1,51 1,18 1,09 expendit in 4 0 1 9 6 8 7 ure Cr. Foreign exchang e earning on export Debt Equity Ratio Book value

669

1,03 701 7

Rs. 7,09 5,26 5,14 6,43 6,97 3,64 2,60 1,29 1,02 in 337 6 8 8 4 3 3 5 5 8 Cr.

Ti 0.24 0.23 0.35 0.48 0.59 0.51 0.50 0.37 0.39 0.21 mes Rs. 155. 145. 139. 142. 118. 97.4 82.5 74.1 66.9 61.5 14 87 73 09 97 0 4 6 5 3
54

per share $ Market capitalis ation Rs. 40,0 34,6 8,85 20,2 13,9 19,1 12,0 11,2 4,94 5,73 in 40 82 0 60 63 96 02 56 3 4 Cr.

Number of equity Nos 320, 339, 435, 335, 520, 396, 117, 117, 153, 35,9 sharehol . 965 281 064 337 019 766 721 124 606 55 ders Number of Nos 19,3 19,5 19,8 19,6 20,3 19,5 19,6 13,6 13,7 12,9 employe . 41 39 67 67 66 93 87 75 52 55 es Average cash LME (alumini um) Average cash LME (copper)

US 2,25 1,86 2,23 2,62 2,66 2,02 1,77 1,49 1,35 1,39 D 7 8 4 3 3 8 9 6 4 5

US 8,14 6,11 5,88 7,52 6,98 4,09 3,00 2,04 1,58 D 0 2 5 1 5 9 0 6 6

* Balance sheet items are translated at closing exchange rate and Profit and Loss items are translated at average exchange rate. # Including Employee Stock Options Outstanding but Net of Miscellaneous Expenditure $ Figures recomputed for all the years prior to 2005-06 for stock split in the ratio of 10 : 1 (Face value Rs. 10/- to Re. 1/-) effected in 2005-06. Figures for 2002-03 onwards include figures relating to the copper business of Indo Gulf Corporation Limited acquired pursuant to Scheme of Arrangement with effect from 01.04.2002.

55

Figures for 2004-05 onwards include figures relating to de-merged Units of Indian Aluminium Company, Limited acquired pursuant to Scheme of Arrangement with effect from 01.04.2004. Figures for 2007-08 onwards include figures of Indian Aluminium Company, Limited amalgamated pursuant to Scheme of Amalgamation with effect from 01.04.2007.

HINDALCO PRODUCTS;
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 aluminium product.

56

 ROUND BILLETS:

These are use for making extrusion. CAST SLABS: Slabs are used input in Hot Rolling Mill, which is converted into thinner sheets, plates or coils.

SEMI FABRICATED PRODUCTS: Hindalco produces 900

different rolled product items of which 40 are standard.

HOT ROLLED PRODUCTS: These are the product which are used after the process of ht rolling according to their specification and requirements, these products are as follows: Hot Rolled Plates: These plates are supplied in alloys 6351, 5052, 5086. These are supplied flat with sheared milled. Hot Rolled Plates For Electrical application: These electrical application plates are used as Bus Bar. They are supplied in Alloy 1050, 1060 an 1070. Standard Temper is F (As Fabricated) Hot Rolled Coils: These are supplied in alloy 5005, 60611, 6351, 5052, and 5086.

57

 COLD ROLLED PRODUCTS

(A)PLAIN SHEETS (B)COLD ROLLED COILS SLUG STOCK: Hindalco also produces slug stock needed for punching slugs for the manufactured of collapsible tubes etc. They are manufactured in allow 1050, 1060, 1070, and in temper o. CIRCLES: This product is made as sheet cut to circular cross section before subjecting it to deep drawing or other form of operation. MILK CAN CIRCLE: They are supplied in allow and temper o. They are used to make milk cans.

CHECKERED SHEETS:
These checkered sheets are also known as flooring sheets because there are use to join floor in buses etc. CIRCULAR CORRUGATED SHEETS: Corrugated sheets are supplied in allow 3003, 40800 with temper 114. For roofing and siding, corrugated sheets in allow 8011 is ideal. FOIL STOCK: It is a semi finished coil strip used for further rolling to manufacture foils. LITHO STOCK: It is semi-fabricated coils used for lithography printing. Extremely high required with emphasis on almost complete absence of surface defects. ALKALOID SHEET: It is also known as brazing sheet and extensively used air passenger radiators, automotive air conditioning evaporators air condensers, alkaloid sheets consist of a Bramble Aluminium Allow (AA4045) Clade (10% of total thickness).

58

HINDALCO PRODUCT RANGE

Ingots

Hindalco produce high purity ingots through smelting. Alloy ingots of various grades are also produced and mainly used for the production of casting in the auto industries and electrical applications. Both these products are remelted and future proceeds into a large number of products for various downstream applications

Wire Rods
Hindalco manufactured wire rod in a continuous casting and rolling process electrical conductor wire rod use for the production of cable. Alloy wire rods are used to produce AAAC conductors.

Billets
Hindalco aluminum billets are produce by a stat of the art wag staff casting process using airship technology. These are top quality billets with a smooth finish. They are used mainly to produce extrusion and forgings.

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Extrusions

Aluminum extrusions A leading player in the extrusions industry in India, Hindalco offers a wide range of alloys, including hard alloys and some special alloys for the defence and space sectors. Our extrusions capacity stands at 31,000 TPA. We have two extrusion plants in India, one in Renukoot, Uttar Pradesh, and the other in Alupuram, Kerala. Both plants have well-established manufacturing processes and QA systems honed over five decades of experience. Our extrusions are manufactured from high-quality billets made out of virgin in-house metal and offer the widest range of shapes and alloys. Hindalco Extrusions is a leading brand for a wide spectrum of industries, including architectural, electrical, industrial, transport, defence and consumer durables industries. We export extrusions primarily to the US, Canada, Germany, the UK, France, the Netherlands, South Africa, UAE, Singapore, Malaysia, Sri Lanka and Bangladesh. Quality accreditations ISO 9001:2000 Quality Management System ISO 14001 Environment Management System OHSAS 18001:1999 Occupational Health and Safety Assessment Series

60

Extrusions product range Section weight range

Standards 0.058 kg/m to 117 kg/ Other profiles 0.08 kg/m to 100 kg

Alloys Alloys 6005, 6060, 6061, 6063, 6066, 6082, 6101, 6351 1050, 1060, 1070, 2014, 2017, 2014 5052, 5083, 5086, 7018, 7039, 7075 3003, 4043, 4047 plus customized alloys for special applications Length range 94 mm to 13,500 mm Standards: Typical range available Rods Equal leg angles from 12.00mm to 153mm

Channels from 6.00mm to 260mm width

Flats from 8.00mm to 330mm width

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Rectangular tubes from 20mm to 165mm width

Rods from 6.35mm to 289mm diameter

Round tubes from 9.50mm to 225mm O. D.

Square tubes from 12.70mm to 127mm

Squares from 6.35mm to 206mm

62

Rolled products
Hindalco has become the world's largest aluminium rolling company with its acquisition of Novelis, the global leader in value-added high-end aluminium flat rolled products and aluminium can recycling. The combined volume of sales of flat rolled products in the world market is about 3 million tonnes, and the market share is more than 20 per cent. Superior quality, delivery and customised service capabilities have helped us in growing market share globally. We are India's largest manufacturer of the entire range of flat rolled products. Our aluminium sheet is produced from our own cast slabs or continuous cast coils, rolled down to customised thickness, gauge and tolerances. In India we enjoy a dominant market share. Our rolled products are widely used in various segments such as packaging, transportation, building and construction, electrical, defence and general engineering applications. Our commitment to quality and service, along with extensive infrastructure, has made us a prime source for best-selling brands. Continuous improvements in manufacturing processes, practices and systems ensure that customers' needs and expectations are fully met. We ensure efficiency and product quality by using state-of-the-art equipment and a strong research and development setup, supported by dedicated and motivated employees and the Oracle ERP system. Wagstaff Air Slip slab casting technology is used to guarantee consistent quality and surface finish of
63

stock feed, which in turn ensures quality finished products.

Foil and packaging

Delivering 'never-before-tried' solutions to customers in India and across the globe, Hindalco has the distinction of being India's premier supplier of foil and foil laminates plain, lacquered and printed. Our foil and packaging division operates out of three modern, well-equipped plants located at Kalwa in Maharashtra, Silvassa in Dadra and Nagar Haveli and Kollur in Andhra Pradesh, India. These well-equipped foil rolling and converting facilities provide a veritable 'one-stop-shop' for packaging solutions. The plants also employ high-end technology and professional expertise to develop visually appealing and
64

functionally useful packaging. The Kalwa Foil Plant's advanced ERP-based bar code-operated material tracking system is the first of its kind in the packaging industry, ensuring full traceability from input to final product. An impressive range of foil rolling and converting equipment is backed by strong QC systems. Adherence to the company's standard operating practices ensures that the final product conforms to the committed specifications. Our complete backward integration, right down to the raw material stage from bauxite ore to primary metal, guarantees full control over the quality of the final foil output. With over four decades of experience and expertise, we enjoy a domestic market share of more than 40 per cent in the foil and packaging business. Fostering this incredible growth is the combined effort of our plants, competently operated by a young and energetic workforce and a strong technical team.

We offer packaging solutions to well-known brands in the pharmaceuticals, healthcare, dairy, confectionery, processed foods, personal products, tobacco industries and also serve the HVAC (heat, ventilation and air conditioning) segments with radiator and AC finstock. Some of our clients are GlaxoSmithKline, Aventis, Merck, Pfizer, Johnson & Johnson, Nestle, Cadbury, Amul, Britannia, Hindustan Lever, Perfetti Van Melle, ITC, Golden Tobacco, Godfrey Philips, LG, Hitachi and Voltas. Our house foil brands include Superwrap, Freshwrapp and Freshpakk semirigid containers, which are convenient and popular with consumers.

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EXTRUSIONS What is Extrusions?

Extrusion is defined as a process in which a metal block is reduced in crosssection by forcing it to flow through a die, in order to give it a desired shape. Extrusions are performed both hot and cold. However, most commercial extrusions are performed hot. Extrusion processes maybe direct or indirect. In Direct extrusion, which is the conventional process, the billet moves relative to the container wall, while in indirect extrusions the die moves. The Extrusion process is the most economical and versatile method of producing aluminium sections of almost any desired shape and form. Hindalco extrusions offer an enormous range of shapes, wide range of alloys for decorative, structural and functional application. The present die catalogue included over one thousand die for various sections and we are fuy equipped to design and make new die as per exclusive requirement. Some of the common shapes are as follows: ROD, BAR-Flat, Square, Hexagonal STRUCTURAL SHAPES-Angles, Channels, Tee, I-beans, H sections etc. TUBES-Round, Oval, Square, Rectangular, Triangular MOUDINGS SOLID AND HOLLOW SHAPES

FOIL

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Cable Rape stock Light Gauge Foil Bare & Coated Fine stock Collapsible insulation Ducts

ALLOY WHEELS
12 to 18 inch diameters.

OTHERS: The main by products of the process included

VANADIUM SLUDGE GALLIUM

THE MARKET LEADER

Hindalco is a leading domestic player in two metals business segments aluminum and copper. The aluminum division's product range includes alumna chemicals, primary aluminum ingots, billets, and wire rods, product extrusions, foils and alloy wheels. The company has a significant market share in all the segments in which it operates. It enjoys a domestic market share of 42 per cent in primary aluminum, 63 per cent in rolled products, 20 per cent in extrusions, 44 per cent in foils and 31 per cent in wheels. As a step towards expanding the market for value-added products and services, Hindalco has launched several brands in recent years, which include Aura for alloy wheels, Fresh Rapp for kitchen foil and Ever last for roofing sheets. Our exclusive showroom, The Aluminum Gallery, seeks to promote Hindalco products to its customers. It is a platform for the company to showcase quality products to a quality audience in an appropriate ambience. The exhibits include products like windows, doors, furniture, ladder, roofing sheets and ceiling and cladding panels.
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Hindalco products are well received not only in the domestic market, but also in the international market. The company's metal is accepted for delivery under the high-grade aluminum contract on the London Metal Exchange (LME). The company exports about 17 per cent of its total sales volume of aluminum. The company's alumna chemical business is a leader in manufacturing and marketing of specialty alumna and alumna hydrate products in the country. It has a market share of 90 per cent in the country. These specialty products find wide usage in diversified industries including water treatment chemicals, refractory, ceramics, cryolite, glass, fillers and plastics, conveyor belts and cables, among others. The company also exports these alumna chemicals to over 30 countries covering North America, Western Europe and the Asian region

Birla Copper, Hindalco's copper division at Dahej in Gujarat enjoys a leadership position in India, having built over 40 per cent of the domestic market share within three years of its commissioning. It has also made successful forays into the export markets of the Middle East, Southeast Asia, China, Korea and Taiwan. The copper plant produces world-class copper cathodes, continuous cast copper rods and precious metals. Sulphuric acid, phosphoric acid, DIammonium phosphate, other phosphate fertilizers and phosphor-gypsum are also produced at this plant.

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PRODUCTION CAPACITY
ALUMINA
CAPACITY 1.15 MTPA RENUKOOT BELGAUM MURI 685,000TPA 350,000TPA 110,000TPA

SMELTER (PRIMARY ALUMINIUM)

CAPACITY 424,000MTP RENUKOOT 345,000TPA HIRAKUND 65,000TPA ALPURAM 14,000TPA

ROLLED PRODUCTS
CAPACITY 2,00,000TPA RENUKOOT BELUR TALOJA NAGPUR 80,000TPA 45,000TPA 45,000TPA 30,000TPA

FOIL
CAPACITY 14,000TPA SILVASA 5,000TPA KALWA 6,000TPA KOLLAR 3,000TPA

EXTRUSIONS
CAPACITY 27,700TPA RENUKOOT 19700TPA ALPURAM 8000TPA

ALLOY WHEELS
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CAPACITY 3,00,000 Nos. PA SILVASA 3, 00,000 nos.

Aluminium Production:
Production (MT)
Alumina Metal Wire Rod Flat Rolled Products
Extrusion

Q4 FY10
343,801 138,023 23,177 47,781
9,751

Q4 FY09
318,325 133,179 20,264 44,310
7,115

FY10
1,307,323 555,404 91,903 205,265
38,909

FY09
1,237,284 523,453 74,968 181,784
35,895

Copper : Production:
Production (MT)
Copper cathodes CC rods (own production)

Q4 FY10
74,734 36,870

Q4 FY09
86,946 30,770

FY10

FY09

333,360 297,797 130,540 122,019

BRIEF HISTORY OF ALUMINIUM

HISTORY OF ALUMINIUM IS RELATED TO EARTH. Earth contains about 8% aluminium metal compared to 5% Fe clay having greater aluminum compounds provides better\ longer serving utensils made from the clay.

Various scientists tried to separate out aluminium

1809 Levisor
He named it aluminium by checking
70

properties of its oxide

1825

HC Oersted

He was successful in obtaining clay metal Reducing AlCl3 with Kamalgam

1845

Wohler

He made it and checked its properties Light, ductile, stable, low m.p Extra ordinary efforts of these scientists Resulted in releasing AL from slavery of oxygen

1854

Deville

1855

Aluminium bars were exhibited next to crowns jewels at Paris exhibition and public got a chance to see aluminium in its metal from.

1859

total world production was two tones only in that year compared to Indias present production over 8 lakh tones and world production over 20 million.

1886

Charles Martin Hall & Paul Heroult independently and simultaneously developed electrolytic reduction process for Aluminium production. Both were born in 1863 and died in 1914.

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In their process, a sol of AL203 was electrolyzed in molten cryolite with carbon electrode After their invention, Karl Joseph Bayer of Austria panted his process for alumina from bauxite ore in 1888. Both the above processes are used extensively even today. Bauxite derived its name from Less Baux village 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 thousand of application from cookware to spacecraft. The smooth drive for applications comes from ingenuity of human mind and market place through demand fuelled by versatile properties of aluminium.

ALUMINIUM PROPERTIES
The major advantages of using aluminium are tied directly to its remarkable properties. Some of these properties are outlined in the following sections. Strength to weight ratio Aluminium has a density around one third that of steel and is used advantageously in applications where high strength and low weight are required. This included vehicles where low mass results in grater lode capacity and reduction fuel consumption. Corrosion resistance When the surface of aluminium metal is exposed to air, a protective oxide coating forms almost instantaneously. This oxide layer is corrosion, resistant and can be further enhanced with surface treatments such as anodizing.

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 Electrical and thermal conductivity Aluminium is an excellent conductor of both heat and electricity. The grate advantage of aluminium is that by weight, the conductivity of aluminium is around twice that of copper. This means that aluminium is now the most commonly used material in large power transmission lines including domestic wiring. Weight consideration means that a large property of overhead, high voltage power lines now use aluminium rather than copper. Light and heat reflectivity Aluminium is a good reflector of both visible light and heat marketing it an ideal material for light fittings, thermal rescue blankets and architectural insulation. Toxicity Aluminium is not only non-toxic but also does not release any odors or taint products with which it is in contact. This makes aluminium suitable for use in packing for sensitive products such as food or pharmaceutical where aluminium foil is used. Recyclability The Recyclability of aluminium is unparalleled. When recycled there is no digression in properties when recycled aluminium is compared to virgin aluminium. Further more, recycling of aluminium only require around 5% of the input energy required to produce virgin aluminium metal.

APPLICATION OF ALUMINIUM
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 light weight combined with high strength, good resistant 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
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lighter, cheaper cranes and other materials handling equipment. Aluminium is used in the both the structure and fittings of residential and non-residential buildings. The main uses are roofing and cladding and in window & doorframes, but there are many other uses, some are as follows: Solar panels Window door &general application Architectural hardware furniture Grills Ventilation blind Foil insulating Capping strip rain water guttering Shower boxes Casemate window Roller shutter

IN PACKING INDUSTRIES
Aluminium metal can is used in a variety of products packing. Use of Aluminium metal cans, include industrial products and consumer durable products; such as milk &milk products, fresh fishes, soft drink etc. . Innovation of Aluminium foil has also a silent future in packing the products. Foil can be used as a household or commercial wrapping, either alone or in commercial wrapping, in the from of laminates with their materials. Foil containers are widely used for the packing of food, especially frozen food. Foil layers are important in paper based packing 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 oxidizes and spoil the remaining contents. Foil is used as on oxygen-tight seal in the packing of dry powders like coffee and foil seals are also under development to provide tamper-proof seals for pharmaceuticals. Many pharmaceuticals in
74

tablet from are contained in foil packages, which permit individual tablets to be removed without opening the others up to the air. Major applications in the fields are as follows: Pharmaceutical packing Tea industries Aluminium cans for milk Dairy products packing Multiply laminates Electrical power applications Collapsible tube Powder & chemicals Colors Aseptic packing Flexible food packing

IN TRANSPORT ISDUSTRY
Aluminium alloys are used in the construction of almost all type of transport equipment. The most widely publicized application for aluminium is in aircraft, through this in one of the smelter application in term of the tonnage consumed. The largest end use in the road vehicles, both passengers car & commercial vehicles, and it is also used in railway rolling stock and in the construction of naval and merchant ships and small boats. largest outlet for Aluminium amongst road vehicles is in passenger cars, which though smaller than commercial vehicles are build in very large numbers.

Such as: Aero plane Commercial aircraft

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Passenger cars Bus and bus shelter Railways Bicycles &bikes Ship &ship building Trucks Light motor vehicles

APPLICATION OF ALUMINIUM IN TRANSPORT SECTOR

Country Europe Japan US Canada Australia India

% of consumption 29% 30% 28% 28% 25% 16%

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 body work for over 40 years, starting with him LAND ROVER 1948 than notably in the ROVE 75 and ROVER90 series (1949-1964) and ROVER 2000. 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 produce.

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The consumption of aluminium and light weight materials in the manufactures of passenger car is governed by consideration of safety of fuel efficiency, in emission control and cost Today, the per capita consumption of aluminium in automotive sectors accounts for 22% of total per capita consumption of aluminium in India. Globally, the sector holds 25% of the total consumption. Examples of parts being converted from other traditional materials to aluminium include, but are not limited to the following: Wheels Bumper beams Break drum & other break components Radiators Cylinder heads & blocks Stearing housings Chryher designee engines Doorframes, sills, steps, roof bows, ride pots. Extrusions are used for flat truck beds, tanks, van bodies, dumpier bodies and other application.

IN AVIATION INDUSTRY
Major applications are follows: Military & civil aircraft Airframe construction Aircraft gas turbines Spacecraft & satellites Missile & rocket components Light aircraft Micro light aircraft Hang gliders, etc.

IN RAILWAYS
Major applications are as follows: Wagons Doors Window
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 Decorative frames, etc As example: METRO TRAIN in India.

IN ELECTRICAL INDUSTRY:
Major applications are also in following electrical fields: Electrical components Cabinet frame Motor body Light fixture Cable core Electronic components Telephone parts Transmission tower Transmission line.

IN CONSUMER DURABLES
Major applications are also in following fields: Cookers Refrigerators Freezers Vacuum cleaners Washing machines Dishwashers Ice tray & grid Stove top pots Steam jacketed kettles Gas fired kettles A.C Filter grill Water filter Furniture Hangers Letter plates
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 Solar channel Tray etc.

Global Aluminium Production Growth forecast (mln tpa)

Year 1985 1995 2005 2010 2015 Actual 15.5 19.7 31.4 41.3 50.2 Forecast

PRIMARY ALUMINIUM PRODUCTION & CONSUMPTION BY MAJOR COUNTRIES IN 2005 Countr y

Norway Brazil

Production (KT)
1376 1499

CONSUMPTION( KT)
246 759

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Australi a Canada USA Russia Chaina

1903 2894 2480 3647 7806

380 803 6143 946 7119

PER CAPITA CONSUMPTION OF ALUMINIUM

COUNTRY JAPAN USA GERMANY CANADA ITLY FRANCE AUSTRALIA UK CHAINA BRAZIL INDIA CONSUMPTIO N (kg/person) 32.0 31.9 31.6 31.2 29.5 21.4 21.2 15.0 6.5 4.1 1.1

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consumption

35 30 25 20

32 31.9 31.6 31.2

29.5 21.4 21.2 15

consumption

15 10 5 0 6.5 4.1 1.1

INDIA-User Segments Growth FY10 over FY09

User Segment Electrical Transport Buil. & Const. Consumer Durable Packing Indus. Machinery Others Total FY09 398 234 135 46 47 37 37 934 FY10 490 308 165 53 51 41 41 1149
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Change % 23 32 22 15 9 11 11 23

FY 05

FY06

Electrical

3%
Electrical Transportation Buil. & cons.

4%
Transportation

4% 5%

4% 4% 5%

5%

43% 14%
43%

Buil. & cons.

consumer durable
14%
consumer durable packing Ind. Machinary

packing

27%
25%

Ind. Machinary

Other
Other

Major Aluminium Producer Industries in India.

Compan y Hindalco Ownershi p AB Group Location Capacit y 345,000 14,000 65,000 31,000

Renukoo t Alpuram Hirakud Belgaum

NALCO

Public Sect. Sterlight Sterlight

Angul

345,000

BALCO MALCO

Korba Mettur

350,000 40,000

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EXTRUSIONS CAPACITY, PRODUCTION & DEMAND 19912020(MT)

Particular 91-92 s Capacity Productio n Domestic Demand Export Excess Capacity 122000 61000 60000 Nil 62000 99-00 190000 109000 105000 4000 81000 03-04 202000 132000 117000 15000 70000 2010 202000 188000 166000 22000 14000 2020 400000 370000 325000 45000 30000

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DISTRIBUTION CHANNEL
A CONCEPTUAL FRAMEWORK CHANNEL SELECTION FRAMEWORK MARKET SEGMENTATION OF HINDALCO DISTRIBUTION PROCESS AT HINDALCO FACTORS FINDINGS SUGGESTION/RECOMONDATION/CONCLUSION BIBLIOGRAPHY

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DISTRIBUTION CHANNEL: A CONCEPTUAL FRAME WORK CONCEPTUAL FRAME WORK A set of interdependent organizations involved in the process of making a product available, or reached the target market or consumers.

Smooth availability of our products to the right customers, at a right place, at a right time with safe & secured quality and quantity is an important task for the customers satisfaction or goals of an organization. Organizations are spending a huge amount, about 25 to 35% of the cost of products.

Most producers do not sell their goods directly to the final users stands a marketing channel, a host of marketing intermediaries performing a variety of functions and bearing a variety of names.

Thus, A channel of distribution for a product may be defined as a route taken by the title to the goods as they move from the producer to the ultimate customers or industrial users. 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.

CHANNEL OBJECTIVES
Making smooth availability of product to the target market. Achievement of the best possible coverage of the target market. Ensuring that the consumer incurs the minimum extenuation in procuring the product. Safe in quality & accuracy in quantity. Quick services. Ensuring that the firm is able to carry on with its manufacturing activities, confident that the channel will take care of the distribution job.
85

 Ensuring that the distribution is cost effective. The primary objective of channel of the distribution is to bridge the gapby resolving spatial (geographical distance) and temporal (relating to time) discrepancies as to supply and demand.
ROLE OF CHANNEL MEMBERS

Channel members are not play only the role of sales the products to the customers but also play the role as the promote the products, gathering the customer interest, complaints, suggestion, and information to the organizations they are work as the co-ordination between the targeted customers & manufactures. Members of the marketing channel perform many key functions as follows: Gathering & distributing marketing research and intelligence information about actors & forces in the marketing environment. Helpful in making marketing strategy. Developing & spreading the promotional offer of company and promote the sales activity. Easily make a sales contact with the customers. Intermediaries are taking the title to goods, so they invest the fund. Through the intermediaries, manufactures are made physical distribution of goods. Intermediaries are taking various type of risks, in the term of storing, dispatching etc..

CONTRIBUTION OF CHANNEL
Make available on time. Reduce the cost of distribution Save the distribution time. Helpful in product design & developments. Flow of feedback from consumer. Flow of money consumers to manufacture.

VARIOUS TYPES OF CHANNEL LEVELS

While a marketers wants to sell or marketing about the products or services, requirement of design a distribution channel to make product & services available to customers in different ways. In the process of distribution of
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products, each layer of marketing intermediaries are performs some work in bringing the product and its ownership closer to the final buyer is a channel level. Generally two methods of distribution are in the practices. 1. DIRECT MARKETING CHANNEL 2. INDIRECT MARKETING CHANNEL
DIRECT MARKETING CHANNEL

DMC is a marketing channel that has no intermediary levels. Manufacture or sellers are advertise their product through the various method of advertising & make awareness about the products, then contact to the needful customers through their salesmen, internet, e-mail, telephone or by post. MANUFACTURES

CUSTOMERS

INDIRECT MARKETING CHANNEL:

IMC is a channel containing one or more intermediary levels. Manufactures or sellers are appointed various type of marketing intermediaries in the context of nature of the products & segmentation of markets.

CONSUMER DURABLE PRODUCTS

MANUFACTURER MANUFACTURER MANUFACTURER

DEPOTS, C&F AGENTS

DEPOTS, C&F AGENTS

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DISTRIBUTORS MANUFACTORS OR MEMBERS SALES REPRESENTIVE

SUPER STOCKIEST POINT

EXCLUSIVE SHOW ROOM DISTRIBUTORS

RETAILERS RETAILERS

RETAILERS

CONSUMERS

CONSUMERS

CONSUMERS

INDUSTRIAL PRODUCTS
MANUFACTURER MANUFACTURER

DEPOTS, WAREHOUSES BUSINESS DISTRIBUTORS

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RESIONAL SALES OFFICES, AREA SALES EXECUTIVES

CUSTOMERS

CUSTOMERS

TYPES OF CHANNEL MEMBERS

C & F AGENTS: It means clearing & forwarding agents. They are responsible for storage & transportation of the companys products and its distribution to the distributor and some time retailers.

DISTRIBUTORS:
A distributor is usually appointed by the company and does not sell its competitors products. He can also be a distributor of many products of the same company. A distributor is responsible for ensuring that his companys product is available at the retail stores. The distributor is very much an

89

extension of the company as he ensures that the market is properly served. A company has direct control over the distributors. Some of the following type of wholesalers:
MERCHANT WHOLESALERS:

Purchase and resell merchandise He has title to merchandise. He provides wide range of services. FULL SERVICE WHOLESALERS: Perform full range of distribution services. Provide trade credit; offer promotion assistance, personal sale force, and communication of information. Provide installation and services. RACK JOBBER: Deals with highly promoted items. Furnishes rack and shelves, price the goods, keep them fresh, set up point of purchase displays. Sell on consignment. Provide services as delivery, shelving, and inventories caring. LIMITED FUNCTIONS WHOLESALE Not provide credit, marketing research information and merchandising assistance.

MERCANDISING AGENTS & BROKERS:

They usually perform fewer services than merchant wholesalers do. Merchandising agents and brokers do not take title to product but negotiate sales for manufacture, they represent. MANUFACTURERS AGENTS
They are free to work for several manufactures. They carry non-competitive, complementary products in exclusive territories. They do not provide credit facility but at times store and deliver products. Also provide research aid and promotion support.

BROKERS:

To bring buyer and seller together To assist in negotiation.

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 They have not title to goods. But they provide the facility of financing. COMMISSION MERCHANTS Received goods on consignment They have not title to goods. To accumulate them from local markets & arrange for their sales. Offer credit & storage goods facility. To provide sales force & research aid. They do not normally promote the goods. MANUFACTURERS SALES FACILITIES Established by manufacture It is separate from manufacturing operations. Its performing the wholesaling function himself. Generally used in industrial customers.

Types of manufacturers sales facilities.

MANUFACTURERS SALES BRANCHES Carry inventory Promote the sales activities Sell to retail outlet. MANUFACTURERS OFFICE (Regional Sales Office) It does not carry inventory Perform market research, demand forecasting, etc. Collect orders from customers. Make delivery to customers from manufacturing point Collection of payments. Dispose all the disputes or claims. Create better relationship.

MANUFACTURER

DEPOTS OR WAREHAUSES 91

CLEARING & FORWARDING AGENTS

DISTRIBUTERS OR WHOLE SALERS

MERCHANT WHOLESALERS

MANUFACTURERS SALES FACILITIES

MERCANDISING AGENTS OR BROKERS

Full Service Wholesalers Rack Jobbers

Limited Function Wholesaler Manufacturers Sales Branch

Manufacturers Agents Brokers

Commission Merchants

THE CHANNEL SELECTION PROCESS

Manufacturers Sales Branch Regional Sales office

STEP-1

Identify Target Consumers

Determining STEP-2

Consumer

Buying

Habits For The Types Of Goods

Locate Potential Customers

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STEP-3

Pinpoint Channel Alternative

STEP-4

STEP-5

Evaluate Channel Alternative

STEP-6

Select Channel Members

CHANNEL SELECTION PROCESS EVALUTION OF THE DISTRIBUTION ENVIRONMENT:

Selection of channel model has to be necessarily taking 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 ensures that the channel model to be adopted is compatible with them. Distribution environment in the border sense includes the legal environment as well in so far as its implications and distribution are concerned.
EVALUTION OF COMPETITORS CHANNEL PARTERNS

The firm 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 analyze in depth the plus and minus of the channel patterns adopted by each of the major competitors.

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EVALUTION OF COMPANY RESOURCES AND MATCHING THE CHANNEL TO THE RESOURCES: On the other hand firm 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 considerations 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 member s in the desire alternatives would be willing to work enthusiastically for the firm and the product. ANALYSING THE PRODUCT CHARACTERSTICS AND LINKING CHANNEL TO THE PRODUCT: The firm should analyze the characteristics of the product and choose the channel designee that is most suited to the product. Within each of these broad categories of product channel choice can very in relation to specific products/product types. The products futures, after all changes in a graded manner as on move through the spectrum from the simplest consumer soft to the most complex among industrial equipment. NOTES: 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. The unite value should not be too high. It should not be 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 remembered that;
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 As a general rule industrial products require specialized distributor and entrusting them with the general-purpose (consumer product) distributors does not produce the best result. Different industrial products need different types of distributors. 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
Consumer will be happy, if the material is delivered on time. OTD has come into sharper focus, for it has become a competitive weapon in all most all industries. For example Nissan offers a guaranteed ten-day delivery to its dealers, Caterpillar deliver replacements parts within 72 hours.99.7% of time
OTD customer satisfaction gap has three components

Calibration Gap Operations Gap Organization Gap The customer may measure OTD in different manner as copier 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.

OPERATION 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 supplier or too many people involved in order filling

ORGANISATION GAP:
If people do not have incentives to improve OTD it will probably result into organization gap. In other words organization gap result from the priority accorded to OTD.
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MARKETING STRATEGY OLD STRATEGY

Marketing Head office (Renukoot)

EAST

WEST

NORTH

SOUTH

Vice-President Vice-President Vice-president

Vice-President

Extrusions

Rolled

Primary

Sales Manager (Territory Manager)

ADVANTAGES Cost effective Geographical area oriented. Focus on all products simultaneously. DISADVANTAGES Product promotion scheme is not applicable. Lack of information about a particular product. Over work load. No more time & scope for a particular product. Consumer satisfaction is not appropriate. The above old structure was not taking much advantage of the new global market. Analysis of the advantage and disadvantage of the regional based marketing strategy, it is not suitable in modern marketing specification era. So that, in 2003 company decided to go for opting the new marketing strategy based on product specification. For this the company transferred its marketing head office from Renukoot to Mumbai.
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The new marketing strategy structure is as follows:-

MARKETING HEAD OFFICE (MUMBAI)

CMO* (CHIEF MARKETING OFFICER)

EXTRUSIONS ROLLED PRIMARY

Vice-President

EAST Regional Manager

WEST

NORTH

SOUTH

T.M T.M T.M (Territory Manager)

ADVANTAGES
Its product based. Helpful to market research. Emphasis on more customer satisfactions. Helpful to increasing the sales performance of various products of product line. Helpful to production processes to delivery the products. Accumulation of small customers.
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 Provide quick service to customers. Enhance the sales promotion.

DISADVANTAGES
Cost ineffective. More men power required.

MARKET SEGMENTATION OF HINDALCO

The market for Aluminium products in India is very widespread Geographically By diversified of end user 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 1MT/Month. However, the largest numbers of Hindalcos customers 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 around 350 products find use in aluminium. Moreover, the per capita consumption of aluminium in the country is very low (1.1 kg/year). Hence there is large potential for introducing the new 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 manufacture the products with very specification 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
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 PRIMARY PRODUCTS
Ingots Wirerods Billets

ROLLED PRODUCTS
Sheets Chequered sheets Roofing sheets Coils Hot Rolling plates Circles

EXTRUDED PRODUCTS
General solid sections Tubings Structurals Architecturals Mouldings

FOIL
Cablewrap stock Light gauge Foil Bare & Coated Finstock Collapsible Insulation Ducts.

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 ALLOY WHEELS (AURA)

12 to 18 diameters.

(B) MARKET SEGMENTATION ON THE BASIS OF PRODUCT WISE KEE CONSUMERS. PRIMARY PRODUCTS:

Consumers:
Value added aluminium sheet producer industries. Foil Producer Industries. Extrusion Producer Industries. Electricals Equipment Automobile Industries Ferrow allows Smelter pot lining.

ROLLED PRODUCTS Consumers:

Foil & Packing Industries: box, cop, and container. Electrical Industries: bulbs, tube lights, fan blade etc Transportation industries Building & construction sectors roofing flooring etc. Defense & Marine sectors. Transportation sectors. Consumer durable: flooring & roofing General engineering: Pilper-proof bottle cops
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Pressure cookers, non-stick cookware.

EXTRUDED PRODUCT Consumers:

Automobile Industries Building & construction Sector Mines & defense Sector Transportation sectors Electrical sectors Architectural sectors Furniture sectors House holds consumer durable

FOIL Consumers:
Packing sectors (printed & multi-laminated) Pharmaceuticals Dairy products Processed food Con-fectionery Personal care products Cigarettes Box rapping Air conditioner
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Auto mobile radiator Collapsible Insulation Ducts.

ALLOY WHEELS
Consumers Automobile sectors Maruti Suzuki TATA Motors FIAT India Hindustan Motors Telco Ford India Hundai India GM India etc

(C) MARKET SEGMENTATION BASED ON THE DEMAND PATTERN.

Based on size & frequency of order, Hindalco market may be segmented as follows:

BULK CUSTOMERS
Bulk customers are those customers, whose demand is very high and consistence. Some of the bulk customers are Howkin, TTK, Foil Division Silwassa, Jugraj Tejraj, Bajaj Auto, etc.

SMALL & MIDIUM

Small & medium customers may be bracketed as those customers, whose demand is comparatively low and not so consistence, some of the small customers of Hindalco included ITI Allahabad, Defense Organization, and Dockyards etc.
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(D) MARKET SEGMENTATION BASED ON THE PRIORTY:

On the basis of priority given to various orders Hindalco market may be segmented in the following manner:

ROUTINE CUSTOMERS:
Routine customers are those customers, who are regularly sourcing the company. Their orders are processed in the normal course of working.

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. Examples: Export Customers, Government organization like Defense, Establishment etc. continue this category.

(E) MARKET SEGMENTATION BASED ON CONSUMPTION SECTOR.

Uses of aluminium metal are every where. It is not easy to categorize in some particular heads. However, we categorize in the following major sectors. Electrical Transportation Building & constructions Industrial Machinery Packing Consumer Durable Other

(F) MARKET SEGMENTATION BASED ON GEOGRAPHICAL AREAS

Aluminium consumers are spread all over the country. Different area has different type of industries, whose are used aluminium in different quantity. Here, segment the market in geographical areas based on consumption or demand pattern. (G) TRANSPORTATION FACILITY
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Smooth transportation facility is available all over the country all the time. Some area is affected by flood.some areas are block in the case of heavy rain etc.

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 Go down 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, etc. Purchaser should be fully disclose about the product such as, product name, quality, quantity, technical data, mode of transportation, desire delivery time, payment mode etc. Technical wing of Hindalco examines their application and if necessary also make inspection of the facing and decided quality to be offered. Thereafter, terms of payment 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.

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ORDER PROCESSING:
Hindalco procure order either directly from the customers or through the agents/stockiest. 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 has to store to goods while they wait to be sold. A strong function is necessary because production and consumption cycles rarely match. Ware housing is the responsibility of warehouse incharge in Hindalco. The work start when warehouse officials receive finished goods from production. Hindalco warehousing incharge 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 loose condition, get it repacked. If packages are wet, do not accept it. During loading at warehouse Trucks floor should be clear and flat. There should not be any hole or damage in the floor of the Trucks 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:

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No vertical stoking 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? Cheek condition of metal every few hours to ensure no water condensation. If possible, forced hot air circulation inside Godown desired.

Buying agencies
The Buing Agencies of Hindalco Industries Limited for rolled products are Prestige pressure cookers, Hawking 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 loding Manual Loding Automated Loding Now a days everywhere the automated loading system is used because it is time arising and also very economical than manual loding. In HIL , there is good system of loding I.e. automated loding system. They use forklifters cranes to load goods into the Trucks. They also use some manual labors for small products. By the automated loding system HIL saves 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 times as a result of which the company must face failure. In HIL the products are transported only by road. The Rail mode is only used to bring the raw materials, which is uses to produce Aluminium in the industry. By observing the mode it can be said 100% of the
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products of Hindalco Industries are transported by road, which is given in the Table

TABLE

BY ROAD 70%

BY RAIL 30%

BY ROAD
All the downward transportation of Hindalcos products carried by road due to adopting following road transportation advantages Manufactures warehouse too directly destination warehouse. Cost efficient in the case of small quantity. Cost efficient in short distances. No more loding & unloading work. Timely delivery. Safe delivery. Customers satisfaction.

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 pre mutually agreed terms on the basis of agreed terms on the basis of the payments/negotiation of documents they deliver order in favor of the party. DELIVERY OF 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.

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BANKING INSURANCE BILLS & OTHER DOCUMENTS

Hindalco enjoys the facilities of three public sector banks & 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 dispatched 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 transportation they will issue a damage certificate & the customer can claim its insurance company on the basis of damage certificate.

GODOWN SALES PROCEDURE

Godown sales procedure describes the sales procedure of Hindalcos products through its godown. The respective zonal head exercise control over all activities related to godowns sales. This sales procedure is followed by all the godown of company situated at Delhi, Faridabad, Chandigarh, Jaipur, Haryana, Bangalore, Hydrabad, Calcutta Gohati, Mumbai, Silvasa, Taloja There is a clearing agent in the godown, which is appointed by Hindalco for the operation & maintenance of the godown.

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 zonal offices, Area offices, Agents, Stockiest and company operated Depots, located through the country. A brief description is given below
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(A) ZONAL AND AREA OFFICES:

Hindalco has established five zonal offices, in various part of country. There is a network of area offices, functioning under various zonal offices. Zonal offices carried out various Marketing Sales functions of company. They provide following functions: Signed a contract between the zonal offices and customers, regarding to details of products such as quality, packing, transportation, destination, etc. Clearly mentions about the mode of payments. Eliminating intermediaries. Make a direct contact with the customers. Help the company to cater to the need of customers. Helpful the company to earn additional profits

(b) AGENTS
Agents are those persons/institutions, who provide orders to Hindalco, on behalf of the customers. The company has appointed a number of agents, all around the country to sell the 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 minimize distribution costs.

(c) STOCKIESTS
Hindalco appointed a number of stockiest in various geographical areas across the country. Certain products of the company are sold through the network. Stockiest are made conform sale for the company. Stockiest is free to make sell to any customer Free to charge any price from customers Helps the company to cover the wide geographical market. Helpful in minimizes extra distribution setup costs.

(D) DEPOTS

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HINDALCO operate 15 depots in various part of the country. Depots send the various requirements at the work office and thud, maintain suitable inventory to cater to the demand of the market. This is provided the following advantages to the company & also the customers:
TAX-SHIELD: In many states, state sales tax is less then the central sales

tax. In these states sales of products through depots, lead to tax saving. AT RANDOM DELEVERY: Emergency needs of customers full filled immediately by the depots, at a premium price small off takes of the scattered customers can also be provided easily by the depots. HELPFUL IN PRODUCTION: Depots provide a foundation to the production department, by keeping inventory of the various products. For example, in the even of surplus stock, products can be transferred to the various depots. Similarly, Production Schedules can be planned with greater accuracy, with the help of estimated requirements, sent by depots.

CUSTOMER

ZONAL OFFICE AGENT/STOCKIST

HINDALCO

PLANT

PRODUCTION

GODOWN

INSPECTION & PACKAGING

WAREHOUSE

CUSTOMER DESPATCH
110 AGENT/STOCKIST

MAJOR DOMESTIC MARKETS (GEOGRAPHYCALLY)

In order to cater the demand of geographically scattered market, Hindalco has broadly divided its domestic market into the following five zonesZONE NORTH SOUTH EAST WEST Registered Office: Hindalco Industries LTD Century Bhavan, 3rd floor Dr. Annie Besant Road Worli
Mumbai 400 030

ZONAL SALES & MARKETING OFFICE DELHI BANGALORE KOLKATTA MUMBAI Corporate office:
Aditya Birla Center

S.K Ahire Marg Worli Mumbai 400030

Tel: 91-22-6652 5000/24995000

Tel: 91-22-6662 6666 Fax: 91-22-2436 2516 / 2422 7586

Fax: 91-22-6652 5841/24995841

Marketing head office

Century Bhavan, 3rd floor Dr. Annie Besant Road Worli Mumbai 400 030
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India Tel: 91-22-6662 6666 Fax: 91-22- 2422 7586

Regional offices North

Vandhana, 5th Floor 11 Tolstoy Marg New Delhi 110 001

East
industry House, 9th Floor 10, Camac Street, Kolkata

Tel: 91-11-4220 0200 Tel: 91-33 2282 6130 Email: nutansingh@adityabirla.com Email:suresharg@adityabirla.com

South
Industry House, 7th Floor 45, Race Course Road Bangalore 560 001 Tel: 91-80-4041 6000 Email: jshankar@adityabirla.com

West
Ahura Center, 1st Floor 82, Mahakali Caves Road Mumbai 400 093 Tel: 91-22 6691 7059

Email:sanantharam@adityabirla.com

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CONSIGNMENT AGENTS & STOCKIEST ;

ZONE WAREHOUSE S 2 5 3 3 No of CONSIGNMEN T AGENTS 6 12 26 No of STOCKIEST 8 32 20 24

EASTERN NORTHER N SOUTHER N WESTERN

THE SWOT ANALYSIS OF Hindalco.

STRENGTH
Global brand image. Cost effective producer. Sound financial position. A high degree quality consciousness is the core competence of the company, ISO 9001 and ISO 14001 have added more prestige to the company. Integrated production facility at Renusagar power plant. Company has a well-established distribution network, covering a geographically wide and scattered market. A number of Brownfield & Greenfield projects. Industrial peace as, there has been no major strike in last 22 year. A well focused human resources development. Serve maximum customer satisfaction.

WEAKNESS
Present production capacity is not adequate to meet the rising high demand.
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 Technology is not upgraded to mark as compare to global giants in aluminium industry.

OPPORTUNITY
R & D collabratation with universities and another research organization. More emphasis on down stream production of value added products. Recycling should be adopted as routine production. Raising more finance from marketing for more acquisition and merger for consolidating position in the global market.

THREATS
Strong domestic and global competitors, such as TATA, POSCO, MITTLE, ESSAR etc. Innovative revolution in plastic and steel industry. Reduce in exide duty. Fall in price of Al. In neighbor country.

Annual Dispatch of Financial Year (10-11)

In Financial year 2010 & 2011 Hindalco Dispatch total 35433 tone Finished Metals. The table of dispatch asProducts FY-10 (Actual) Mt./ Month Extrusion Rolled Wire rod Ingots Total 2373 7401 7681 16234 33689 FY-11 (Actual) Mt./ Month 2666 8184 7936 16647 35433

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INDUSTRY OUTLOOK; The sentiment in the financial markets has improved since the beginning of this calendar year. The improvement is, however, vulnerable to the looming macro-economic risks pertaining to the European crisis and slowing global growth momentum. These risks could have implications for the commodity prices, including metals even though energy inputs have an upside risk pertaining to geo-political developments. Aluminium World aluminium consumption growth in Q3FY12 was 6 per cent over the corresponding period last year. Other than Europe, most of the economies witnessed growth in consumption with China growing in double digit. Aluminium prices on the London Metals Exchange (LME) averaged US$2,089 in Q3FY12 a drop of 13 per cent from the previous quarter. LME stocks were at the higher level of 4.9 million tonne, an increase of 0.4 million tonne in December, attributed to attractive warehousing deals and low interest rates. In response to low metal price and high operating cost, some of the major producers have announced production cuts, which are expected to support and boost the metal prices in the next quarter. While the macroeconomic environment has weakened significantly, the outlook for aluminium demand appears positive and will be led by North America, China and major emerging nations. Indian consumption is at levels similar to that of 2010 due to lower demands in the automotive and building and construction sectors in this quarter. Copper Global refined copper consumption was virtually flat during the quarter, reflecting the overall weak economic conditions. Recently, copper prices on LME have hardened on account of falling trend in exchange inventories, sharp rise in Chinese imports and the improvement in the risk appetite. The continuation of the momentum of Chinese imports is, however, uncertain.

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Indian refined copper market, which was earlier exhibiting weakness, improved in Q3 due to demand from the cables sector. Other user segments like winding wire, automobile and transformers were relatively flat. In the concentrates market, supplies are encouraging after resumption of normal production in most of the mines hit by strikes or technical issues in Q2FY12. This years annual negotiations for term contracts have not been able to produce a single benchmark. Annual settlements of TcRc between miners and smelters for the next year are 7-13 per cent better than those in the previous year. The outlook on realisation of co-products like sulphuric acid and DiAmmonium Phosphate (DAP), which were generally robust in 2011, remains softer for the coming quarters.

Company outlook;
Volatile LME and foreign exchange fluctuation along with spiralling energy cost is posing a major challenge in the short term context. Hindalcos portfolio of LME - neutral copper smelting operation and integrated aluminium operation is providing the strategic balance in the volatile commodity cycle. Capacity expansions under implementation will enable the company to grow at a rapid pace and consolidate its leadership even further. The focus continues to be on timely completion of the projects and successful ramp-up of production.

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RATIO OF DIRECT & INDIRECT SALES

Our sales ratio directs to customers is 55% while indirect 45% sales. Under the industrial nature products direct sales is always fruitful. Indirect sales depends on our consignment agents and stockiest. In Present era of Value Added Tax, the system of taxation all over the country tax rate is applicable by same rate. And central sales tax now going down gradually 0%. As an investigator analysis of above study, now come on the topic what should be our distribution system? Is the present distribution system adequate to meet the present demand, near future demand & serve the objective of an organization? It is a billion-dollar question. The SWOT analysis of distribution channel helps us come on the answer of the above questions.

STRENGTH

OPPORTUNITY

DISTRIBUTIO N CHANNEL

SOLUTION

THREATS WEAKNESS

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SWOT ANALYSIS OF DISTRIBUTION CHANNEL STRENGTH

Product based marketing channel. Strong distribution channel based on geographically wide and scattered market of India.. Flexible distribution process for customers via direct sales and indirect sales. Company made more than 50% direct sales. Convenient road transportation. WEAKNESS Not tapped all the potential areas especially in eastern and southern zone. A 50-40% sale depends on indirect marketing. 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.

OPPORTUNITY
The demand of the companys products is rapidly increasing. Thus, there is a necessity to expand the distribution network to avail the benefits of the fast growing market. Indirect sales should be converting in direct sales through TM sales force. The export market is the most revenue-generated market.

THREAT
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 deman

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RECOMMENDATION;
Hindalco should open more retail oulets for there products like Aluminium foil and Alloy wheels. Hindalco should target the customers which is out of INDIA. Due to more demand in other country in comparison to India Hindalco should achieve the demand target. Hindalco should promote the right mix of their products including all the products and the uniformity should be maintained because all the products are equally important. Hindalco should look for more inorganic growth in primary metals and extrusions, and grow organically within the country. Hindalco should bring new policies to attract the retain there old customers.

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CONCLUSIONS;
The Research on sales and distribution management of Hindalco.I have a detailed study of marketing mix and the sourcing strategies of Hindalco. For that we used different sources of data collections like magazines, employees of the organization, and inhouse publications etc. In our research we found that Hindalco is one of the major company of manufacturing sector & aluminium industry, without spending much amount on advertisement. They basically concentrate on primary metal rolled products, extrusions, alloy wheels and aluminium foils The financial statements of this year are given below; Hindalco, the Aditya Birla Group flagship company, has announced its unaudited results for the third quarter (Q3) ended December 31, 2011. Net sales and operating revenue at Rs. 6,647 crore in Q3FY12 are up 11 per cent over Q3FY11, driven by higher volume and marginally better realisation. PBITDA is maintained at Q3FY11 levels. The benefits of higher volume and realisation have been negated by the cost surge of over Rs. 300 crore. Other income is higher by Rs. 29 crore due to improved treasury yield and enhanced corpus. This has been offset by higher interest and financing charges on account of higher rates. Net profit is marginally lower at Rs. 451 crore in Q3FY12 from Rs. 460 crore in Q3FY11. For the nine months ended December 31, 2011, revenues rose by 11 per cent, PBITDA increased by 9 per cent with an increase in net profit by 12 per cent. Higher volumes and slightly improved realisations resulted in 13 per cent improvement in aluminium revenues. However, the EBIT is lower at Rs. 310 crore due to spiralling input cost of around Rs. 250 crore. The capital employed for aluminium business at Rs. 21,172 crore as on December 31, 2011 includes Rs. 13,631 crore relating to Mahan, Hirakud
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Rolled and Aditya Aluminium projects. The balance largely relates to the existing aluminium operations. In the copper business, revenues stood at Rs. 4,418 crore vs. Rs. 4,000 crore in Q3FY11, on the back of higher LME and by-product credits. Copper volumes also rose on account of improved efficiency. Profit before interest and taxes increased by 51 per cent to Rs. 216 crore from Rs. 143 crore due to improved efficiencies, higher Treatment and Refining Charges (TcRc) and by-product credit, offset to some extent by higher energy costs. In short we can say that Hindalco is one of the biggest aluminium manufacturing company, from the house of Aditya Birla Group.

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 ANNUAL REPORT (2010-11), HIL INDUCTION GUIDE , (TRAINING CENTRE ) PRINCIPLES OF MARKETING, KOTLER & ARMSTRONG. RESEARCH METHODOLOGY, C.K. KOTHARI & NARESH K. MALHOTRA INCAL 98 ALtrack WWW.ADITYABIRLA.COM WWW.ALUMINIUM-INDIA.COM WWW.ALUMINIUM-MESSE.COM WWW.WIKIPEDIA.COM

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