Hello, and welcome to 2024!

 Mr. Satish Pai

Transformation has an exciting energy and momentum. And that’s the mood at Hindalco as we move ahead on our journey of ‘metALmorphosis’ – a word coined to describe our transition from a metals company to a sustainability leader. MetALmorphosis is our journey towards soaring higher, transforming for the better, performing at new heights.

There will be an exciting new growth landscape taking shape in the near future, and we have been preparing for it and setting building blocks in place. So it’s worthwhile to take some swift glances at what worked well in 2023.

First, let me offer a big Thank You to our colleagues at the plants for delivering an excellent safety record. Let’s keep the focus on safety strong and unwavering.

Business beyond the usual

The mood is high across all businesses. Despite pressure on metal prices and an uncertain environment, Hindalco delivered an exceptional performance across all businesses – Aluminium India, Copper and Novelis. Primary Aluminium saw domestic volume share exceeding 50 per cent. Growing volumes of high purity and low carbon aluminium products – with their higher margins – should add to profitability in the coming year. The Foil and FRP businesses modified product mix and developed new products. A shout out to Hindalco’s Alu Alu foil, which has registered impressive growth.

Eternia completed 4 years this month. In this short period, Eternia has established itself as an end-to-end solution provider in both B2B and B2C space - with marquee customers like L&T Realty, Rustomjee, Runwal, and many others giving repeat business.

Powering mobility

There’s an exciting new momentum as we join hands with new partners. A key feature of the year has been the joint product and technology development engagement with major auto companies and OEMs. We see a growing demand for customised products such as cargo boxes, battery cases for swappable batteries and battery enclosures for electric cars. Thus, our strategic investments in Aditya FRP, Silvassa Die Shop, Taloja coating line and the Battery Enclosure plant will come online in due course to ride this wave.

Aiming higher

Birla Copper celebrated 25 years of operations, and I was delighted to interact with the top 20 customers – with whom we have hit a great quarter century in partnership. Birla Copper is on track for another record year (despite a 65-day shutdown), with approximately 30 per cent increase in volume. Driven by reliable operations, improved quality and customer connect, the business maintained its market share at 65 per cent even as the market expanded. The Precious Metals and Sulphuric Acid/DAP businesses delivered stable performances. The other exciting news was the business’s plans to set up India’s first copper and e-waste recycling facility.

New ambitions

The Specialty Alumina business has seen its share of excitement. Profitability has improved on the back of increased global access and high-end new product development. The Business expanded its reach in Japan through a local company supported by three warehouses near customer clusters. It has replicated this model in USA and Europe by signing up local warehouses, thereby improving its ability to serve customers at short notice with minimal supply chain or currency risks. The Business also launched seven new product series and 11 grades of products to enhance its stature as a truly high-end specialty alumina producer with the ability to customise solutions and deliver sophisticated products for advanced applications like thermal conductive fillers and batteries.

Reaching new heights

Novelis too is a ‘shining’ example of positive energy. It established its first onsite solar park, aiming to reduce carbon emissions by an impressive 1,450 tonnes annually. Other noteworthy sustainability milestones include a 14 per cent reduction in absolute CO2 emissions and 61 per cent level of recycled content. The Business has shown a strong recovery with EBITDA per tonne returning to $500 level.

Transformative growth

Across Hindalco, there are transformative projects on the horizon. Novelis has growth projects totalling $3.3 billion underway in the US, South Korea and Brazil.

Hindalco’s India business has ongoing projects of around $1.13 billion under execution which include high-growth downstream projects in e-mobility, packaging, building and construction, and resource securitisation. Recently, we held the stone laying ceremony for the 2 million tonne Aditya alumina refinery, our second in Odisha.

Future readiness

As we look ahead to the future, I am happy to share that Hindalco’s advances in sustainability were notable – once again we were recognised as the Most Sustainable Aluminium Company in the World, 4th year in a row, on the DJSI Sustainability Indices. The year’s highlights: Hindalco received the Energy Transition Changemaker Award at COP28 for helping set up the world’s first pumped hydro storage plant for aluminium smelting in Odisha. In India, Renukoot Cluster bagged the Prestigious National Energy Conservation Award-2023, presented by Hon’ble President of India.

There are three important initiatives that I am looking forward to – Renukoot achieving Zero Liquid Discharge status; Utkal completing its red mud backfilling; and Aditya and Mahan enhancing their energy transmission capability by migrating from existing 220 KV to 400 KV systems – which will help both plants transition their energy portfolios, draw more renewable energy from green power suppliers, and take Hindalco forward in its goal of achieving Net Zero by 2050.

People driven performance

Hindalco’s metALmorphosis is a people story more than a metals story. Our journey to being a solutions-focussed company is being driven by people – and we are working to build People Capacity and Capability enabled by a High Performing Contemporary Culture. With large and complex projects for transformative growth coming up, execution will require existing and new people to perform with even greater discipline and ownership. For this, we are driving home the message of accountability – just as the right behaviours (Accountability, Learning, Empowerment, Responsiveness and Teamwork or ALERT in short) are being recognised through Bhoomika cards etc., inappropriate behaviour and integrity deviations are being addressed strictly. All segments of employees are expected to be  hands-on, collaborative and committed – working together to form a meritorious workplace built on excellence, respect and compliance.  

Building a talent pipeline

The talent taking Hindalco further as a high-performance organisation are our high performing people. Recognising their ability and commitment, we are building our leadership pipelines by offering more opportunities to grow internally and minimising lateral hires. Employees who demonstrate potential are being encouraged to take on different roles and higher responsibilities. For example, an HR specialist from Renukoot is now heading the Cycle component manufacturing business, a young ABGLP is today heading our Batteries and Renewable energy vertical, an EA from Eternia is now leading recruitment in another business, and a secretary has moved as TM in Primary exports! Over 1,000 role changes have already happened in this calendar year across units, departments, functions and businesses.

Developing capability

Training is key to the Hindalco transformation story. People invested over 260,000 training hours, with an average of 42.72 hours per employee. More than 8,700 people participated in technical training events held largely at our units, towards building technical capability. A key area is digital capability for enabling our ‘Plant of the Future’ vision; HTU conducted 33 digital capability programs for approximately 1,800 unit employees.

Shillim goes viral

Our culture journey, ‘Shillim’, went deeper and wider as ‘Shillim 365’ and we expanded coverage through distributed meets across units and clusters to strengthen inclusivity and deepen cultural transformation at all levels. As many as 2,516 employees participated in Shillim meets across Hindalco this year, and five ALERT behaviours were reinforced to become default habits. ‘Parivartan’ at Renukoot helped achieve transformation from a grassroot level, and the Birla Copper transformation journey ‘Tamrodaya’ is being taken forward in sync with Shillim’s key concepts.

The impact of the cultural transformation journey is evidenced in our Vibes scores. In the latest survey, compared to last Vibes, Hindalco’s scores for Engagement have seen one of the strongest growth among ABG companies of +7 points (from 85 to 92 per cent). We registered strengths in agility, empowerment, workplace safety, and business focus on sustainability. Some areas for improvement were feedback from managers and township infrastructure.

More excitement awaits

As you can see, 2023 was exciting, and we are gearing up to take on 2024 with more passion and commitment. Hindalco is transforming – we call it metALmorphosis  – to become more agile, relevant and resilient. An analogy would be Indian cricket – the way our players have evolved to play cricket in multiple formats - Test, ODI, T20 and IPL. Hindalco too is changing - at our core we are metal, but what we create is a world that is greener, stronger, smarter.

I would like to thank each and every one of you for your support and active participation in taking Hindalco on this exciting path.

I wish you and your families all the best. Have a great New Year!

Satish Pai