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Ajay Kapur

CEO

Vedanta Aluminium & Power Business

1 Rating

ALUMINIUM INDUSTRY Aluminium will play a significant role in supporting critical and new-age industries

Dec 1, 2020

Vedanta Aluminium & Power Business, a producer of aluminium, directs its efforts towards increasing its production of aluminium and is investing in the development of high-quality value-added products that enable the company to create a wide range of offerings. In this interview with Juili Eklahare, Ajay Kapur, CEO, Vedanta Aluminium & Power Business, shares how the competitiveness of the domestic aluminium industry is pivotal, how the demand for aluminium will rise on the account of infrastructure for serving EVs and how the company is working towards a sustainable future. Excerpts...

You say that the work from home hack, because of COVID-19, works for you, such as it helping in excelling at digital technologies, becoming more agile or simply saving travel time, leading to more opportunities to reflect, innovate and strategize. How have you turned this pandemic into an opportunity instead of a challenge for your company?

As a company, we came to terms very quickly that COVID-19 was not going to disappear overnight and so, had to adapt almost immediately by switching our thinking from it being a challenge of unknown proportions to an opportunity of limitless potential. Technology formed the backbone for our operations, making us nimbler, enabling seamless working across diverse geographies. From a personal standpoint, it accorded more face time with colleagues across all our locations. The time saved on travel allowed for more opportunities to reflect, ideate, innovate, strategize, and do some deep thinking across teams.

When this pandemic broke out, a war room was immediately set up to monitor the progression of the impact and respond appropriately. Staying nimble in decision-making was key, leading to the empowering of all the teams across locations, which went a long way in keeping our businesses running without any interruptions. Several digitalisation initiatives have also been undertaken in numerous operational areas to unlock the business’ latent potential. The company has adopted image & video analytics, contextual analytics, situational awareness, safety & security risk analysis available in real-time, with accuracy. This makes monitoring of operations more efficient and accurate, with minimal human intervention. Besides, several integrated digitalisation initiatives in smelter operations, power plant operations, logistics & marketing for unprecedented agility, visibility and business excellence throughout the organisation have been enabled. All our aluminium & power facilities were categorised as essential services and continuous process industries by government authorities, resulting in continued operations at current production levels.

You believe that industries can get through the pandemic through the 4 Cs: Calmness, Collaboration, Cooperation, Communication. While these are all valid approaches, can you elaborate on how collaboration is going to help the manufacturing industry in the pandemic, especially in the aluminium and power business? Has your company taken up any collaboration in the current period?

We are determined to work in close collaboration with our technology partners, consultants, and customers to lead a globally competitive aluminium industry in the post-pandemic world that places India at the summit of all the global powerhouses. In the journey towards a $5 trillion economy, aluminium will play a significant role in supporting critical and new-age industries.

How do you think aluminium producers in India can deliver to the domestic demand of the country, with the Atmanirbhar Bharat Abhiyan and the present dubiety with China? What are the challenges that stand in the way and how can they be overcome?

India’s unique advantage of abundant raw material availability and abundant bauxite & coal reserves need to be leveraged to develop a globally competitive aluminium industry. Having a strategic geographical location, the country has immense potential to become a global aluminium hub offering a strong global alternative to China.

As a global leader and major supplier in aluminium, India can double the metal’s exports to the tune of $10 billion in forex earning soon. Due to its promise as a strategic metal, aluminium has also been identified by the government as a champion sector. This makes it imperative to develop capacity to produce enough high-quality aluminium to ensure self-reliance in order to be able to combat global volatility in supply & price. Increased domestic mineral production can help in attracting fresh investments of ₹ 1.8 lakh crores ($25 billion), in the aluminium sector alone, by tapping into the growing demand for the metal, which is expected to double to 8-10 million tonnes in the next five to seven years.

The real benefit of the Atmanirbhar Bharat Abhiyan, however, is to dovetail it with the ‘Make in India’ initiative. In this context, the centrality of metals, particularly, ‘strategic’ metals (critical in providing an economic edge to a nation) becomes key. Aluminium is a strategic metal that is extremely critical to the success of the ‘Make in India’ initiative. It supports downstream industries and has a strong employment multiplier effect (backward and forward linkages) on other key sectors of the Indian economy as well. The competitiveness of the domestic aluminium industry is pivotal to the success of all government initiatives, like ‘Make in India’, smart cities, ‘Power for All’ and the indigenous space programme. To overcome the challenges the sector is facing, it requires a strategy for security of raw materials, like proper infrastructure, competitive rates of power & energy requirements, preference for domestic industry & domestically produced aluminium and safeguarded measures against increasing non-essential aluminium scrap imports with BIS standards for imported aluminium scrap. A National Aluminium Policy along the lines of the National Steel Policy, which focuses on a holistic short-term, medium, and long-term vision, identifying growth targets for demand & capacity augmentation and encouraging domestic industry is the need of the hour.

Can you share some insights on aluminium in the automotive industry?

Considered a green metal, the metal’s usage in the transportation sector has been rapidly increasing as it offers an environment-friendly and cost-effective way to increase performance, boost fuel economy and reduce emissions while maintaining & improving safety & durability. It is non-corrosive and substantially lighter than its counterparts, yet extraordinarily strong, which has a direct impact on fuel consumption and carbon emissions. This quality becomes even more important for lightweight electric vehicles.

The metal also has a higher strength-to-weight ratio compared to traditional materials, enabling it to absorb twice the crash energy of mild steel, ensuring that vehicular performance enhancements do not come at the cost of safety. As a further testament of aluminium being the metal of the future, nearly 90% of all the aluminium used in a vehicle is recycled at the end of its lifecycle. The energy required to recycle aluminium is only 5% of the energy required to produce the metal. With all these advantages, it can play a pivotal role in the changing face of the automotive sector.

For more than a decade now, concerns about fuel efficiency have encouraged OEMs to replace steel with aluminium in vehicle bodies, doors, trunks, hoods, bumpers, crash boxes, brakes, cables, and wheels. OEMs worldwide are focusing on exploring & applying new uses of aluminium, like the need for lightweight battery casings and heat exchangers in EVs. Using aluminium in EVs has several advantages, as lighter the vehicle, the longer is its range. Plus, it is ideal for battery frames, thanks to the metal’s thermal and anti-corrosion properties. Demand for aluminium will also rise on account of infrastructure for serving EVs, since the metal is commonly used as a housing material for EV charging stations as well. While India is waking up to this future of automobiles, partnerships between different automotive industry bodies/institutions & auto companies for sharing knowledge & expertise will help fast track the development of EVs in the country.

Vedanta has been very active in its sustainability initiatives. With the 'new normal' and social distancing norm surrounding us now, how have your company's initiatives in sustainability enhanced?

Keeping in mind our vision to shape a sustainable future, we have integrated smart innovation, best-in-class digital technology, robust environmental safeguards, and sustainability-focused operating procedures across all our operations & townships. As an organisation, we strongly believe in ‘Zero harm, zero waste and zero discharge’. We have adopted and implemented a wide range of environmental safeguards backed by innovation and state-of-the-art technologies to work towards a sustainable future. Some of that has resulted in improving the overall environment in and around our units.

  • Online and continuous environment monitoring systems with real-time data acquisition & monitoring to ensure that parameters, like ambient air quality, emission levels, etc remain well within the stipulated norms

  • Effluent Treatment Plants (ETP) augmented with Ultra-Filtration & Reverse Osmosis (UF & RO) systems to ensure 100% treatment of water, which is then recycled for usage in ash-handling, horticulture, etc

  • Exploration of renewable energy sources, like solar power, biomass & biogas to build capacity & potentially replace thermal power as the primary source of energy

  • Extensive digitalisation of processes to minimise paper usage & ‘in-person’ monitoring

  • Helping farmers in the community to adopt drip-irrigation, treadle pump, solar powered water pumps, rainwater harvesting structures, like percolation tanks, etc to boost irrigation potential & reduce dependency on monsoons for cropping

What is your outlook for your company in the coming year? What are your long-term prospects for the aluminium industry?

Vedanta Aluminium and Power is most impacted by falling metal prices at the London Metal Exchange. This has been countered by rapidly bringing down the cost of production. The company is India’s largest producer of aluminium and value-added products, commanding 40% market share in the country. It is well equipped to meet the new India’s ambitions of becoming a self-reliant country. With its world-class smelters, alumina refinery and power plants across India, our company fulfils its mission of spurring emerging applications of aluminium.

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  • An economics graduate from St Xavier’s College, Mumbai, Ajay Kapur holds an MBA with specialisation in marketing from KJ Somaiya Institute and is an alumnus of Wharton’s Advanced Management Program. He has won several accolades from apex bodies for sustainability initiatives and is the Chairman of Assocham’s National Council on Mines & Minerals.

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