Hindalco Expands Global Footprint with $125M AluChem Acquisition

As it enters the high-tech alumina market, Hindalco Industries Ltd plans to pay $125 million to acquire US-based speciality alumina manufacturer AluChem Companies Inc.

According to Saurabh Khedekar, CEO of Hindalco's alumina division, the acquisition will allow the company to expand its product line and get access to the US market, among other synergies.

Aditya Holdings LLC, a step-down wholly owned subsidiary of Hindalco, will execute the transaction. Subject to the usual regulatory permissions, it should be finished by the next quarter.

This would be the business' third US metal firm acquisition. Novelis Inc., a world leader in the production of rolled aluminium products, was purchased by Hindalco in 2007. Aleris Corp., which manufactures a variety of aluminium products, notably those for the aerospace sector, was acquired by Novelis in 2020.

Acquisition will Expand Hindalco’s Global Reach

An intermediate raw material used to make aluminium is alumina, a white, crystalline compound of aluminium. Through the acquisition, AluChem's three manufacturing plants in Arkansas and Ohio will increase their capacity by 60,000 tonnes annually.

In order to increase its worldwide market share, Khedekar stated that Hindalco intends to increase production of ultra-low soda alumina products and collaborate with AluChem's high-performance technological solutions.

Precision ceramics, semiconductors, and electric cars all require AluChem's specialised alumina. According to Ronald Zapletal, the founder of AluChem Companies Inc., this collaboration with Hindalco gives AluChem the resources and capacity to expand more quickly and establish a presence in North America.

Satish Pai, MD of Hindalco Industries, stated that the acquisition "deepens our high value-added portfolio with differentiated products that drive profitability."

Hindalco's capacity to cater to these rapidly changing markets will be greatly improved by AluChem's advanced chemistry Pai continued, as alumina becomes more and more important in the critical and clean-tech industries.

Hindalco’s Growth and Future of Global Specialty Alumina Market

The Aditya Birla Group's metal division presently produces 500,000 tonnes of speciality alumina annually in India with plans to increase that amount to 1 million tonnes by FY30.

According to their June analysis, ICICI Securities kept a bullish view on Hindalco, pointing to aggressive plans for both domestic and overseas capacity development in the face of structural demand drivers for copper and aluminium. For the quarter that ended in March, Hindalco's consolidated net profit increased by 66% to INR 5,283 crore from INR 3,174 crore during the same period last year.

The desire for customised solutions in industries ranging from electronics and ceramics to aerospace and medical applications is expected to drive considerable growth in the worldwide speciality alumina market. By FY30, Hindalco hopes to have scaled up to 1 million tonnes of speciality alumina from its current 500 thousand tonnes of capacity.

Depending on regulatory clearances and standard closing conditions, the deal is anticipated to be completed in the next quarter. With this acquisition, Hindalco takes a significant step ahead in creating better futures through innovation, sustainability, and high-tech manufacturing as it expands its downstream value-added strategy across aluminium, copper, and speciality alumina.