14th asia copper conference

“We Manufacture Materials That
Make the World
GREENER – STRONGER – SMARTER”
Purpose
Mr. J.C. Laddha
CEO (Copper Business)
Hindalco Industries Limited
14th ASIA COPPER CONFERENCE
Shanghai
15th November 2018

EXCELLENCE BY DESIGNHindalco Industries Limited |November 2018
Aditya Birla Group – A Conglomerate
Carbon Black
Fertilizers
Acrylic
Fibres
Insulator
Telecom
Pulp and Fibre
Metal
Cement
E-commerce
Retail, Textile
& Apparels
Trading
Renewable
energy
Chemicals
Financial
Services
Mining
35
Countries Employees
42 Nationalities
$ 44 bn
Revenues
120,000$ 50 bn
Market Cap
Presence in Manufacturing, Agriculture & Service Sectors
Above figures based on FY18 data – Aditya Birla Group

EXCELLENCE BY DESIGNHindalco Industries Limited |November 2018 3
About Hindalco Leading Global Industry Player
Hindalco Industries Ltd
Integrated Aluminium Copper: Major player in India
Alumina
Primary Metal
VAP including
Wire Rod
2.9 mt
1.3 mt
479 Kt
Copper Cathode
Copper Rod
500 Kt
410 Kt
Aluminium Downstream
#1 Rolled Products Supplier Worldwide
Global Presence
Global leader in Aluminium
recycling
Shipments
Focused on premium
segments
3.1 mt
Revenue of USD 3.5 billion
DAP 400 Kt
Copper Business
Located at Dahej,
Gujarat
Aleris Acquisition – New Feather in Hindalco Hat
Revenue
EBITDA Market Cap
$ 18 Billion
$ 2.3 Billion $ 7.5 Billion
Asset Base $ 19.2 Billion

India – An Unparalleled OpportunityECONOMIC
by 2025
(BCG Study)
Huge Consumer Market
3.6
$ Trillion
SOCIAL
Youngest Nation
29
Years
POLITICAL
Deregulation
1000+ From offering “Red-tape” to “Red-Carpet”
Substantial GDP
20
$ Trillion
by 2025
(Purchasing Power
Parity)
by 2025
(BCG Study)
Fastest growing
Economy in the
World
7.6%
Phenomenal GDP Growth
Average age
in 2025
more added to
middle class by 2025
Upward mobility
150
Million
Literacy
rate
by 2025
Skilled work force
99%
Archaic laws repealed
Source: indianembassyIndia – On path of rapid growth

Advantage India – Strong Economic Growth
Projections of a strong economic growth amongst global slowdown
5.6
6.6
7.2
7.6
6.6
7.2
7.7 7.8 8 8.1
7.8 7.7
7.3
6.9
6.7 6.5
6 6 5.9 5.8
2.2
1.5
2.4 2.4
1.6
2.3 2.5
1.9 1.7 1.6
2013 2014 2015 2016 2017 P 2018 P 2019 P 2020 P 2021 P 2022 P
GDP Growth Rate Comparison
India China US
India remains an oasis of
growth amongst slowing
global outlook
India is the fastest growing
major economy surpassing
China
Income levels is expected to
triple by 2025
• P = Projected Source: International Monetary Fund
Highest GDP Growth

22,236
16,952
5,499
4,629
3,477
3,196
3,121
2,363
2,340
2,029
United States
China
Japan
Germany
India
France
United Kingdom
Brazil
Italy
Canada
2020 (P)
6
World Top 10 Economies – Change from 1990 to 2020 (P)
5,980
3,133
1,593
1,279
1,193
1,170
594
534
455
399
327
United States
Japan
Germany
France
United Kingdom
Italy
Canada
Spain
Brazil
China
India
1990
India – 5th Largets Economy by 2020. Likely to be 3rd largest by 2025
Rank 12
Rank 05
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
GDP in USD Billion

Key Reforms by Government of India
Digital India
Smart Cities
Awaz Yozna
Skill India
GST
24X7 Power for All
Start up India
Make in India
Key
Reforms
Above Reforms have successfully made India Famous Destination for Foreign Investment

34.3 36.0
45.1
55.6
60.1
64.0
FY13 FY14 FY15 FY16 FY17 FY18 (P)
8
FDI Inflow – Major Sectors Benefitting
FDI Inflows in to India(Billion $)
World CEOs have identified India as 5th Most
important country for their organization’s growth.
(Source- PwC, 21st Annual Global CEO Survey)
Copper is expected to be one of the major
benefiter

Ease of Doing Business – World Bank’s Ranking
India is the only nation to have made it to the list of top 10 improvers for the second consecutive year in World Bank’s Ease of
Doing Business 2019 survey.

Overview – Indian Copper Industry
143
2372 2515
Domestic Produce Import Total
Demand of Copper Concentrate FY17 (KT)
6%
o India imports ~94% of the raw material from far-distant countries like Chile, Indonesia, Peru.
o Available Indian copper concentrate comprises low grade of copper.
1,000
35
965
Refining Capacity Mining Capacity Gap
Refined Copper Capacity (KT/pa) v/s Copper
Mining Capacity (KT)
• Indian Copper Industry is ~Rs 50 -60 Thousand Cr employing 01 lac directly and many lacs indirectly
• Industry serves >1000 SMEs that form the backbone of Power and other Infrastructure Industries
• Industry has made India self sufficient in copper, which spurred the growth of downstream industries
10
Source: Ministry of Mines Source: Industry Source
94% 100%

Indian Copper Industry – Demand & Supply Scenario
o India’s production of refined copper has been increasing but at a diminishing rate. As a result, India’s
capacity utilization rate is 80% against the global average of 86% in 2016.
o India’s demand for overall copper has risen rapidly over the years and is expected to rise further as a
result of various projects like Make in India, infrastructural investment etc.
According to Wood Mackenzie, India is expected to be the 6th largest copper market by 2020
11
Source: Production Figures HCL & ICSG and Consumption: Industry Source Source: Freedonia Group
Share in
consumption
of
key user
industries in
India
37
25
20
13
5
Building &
Construction
Consumer Goods
Electrical &
Electronics
Industrial Equipment
Transportation
693
652
766 795 796
843
450476 496
560
665 653 642
700
FY13 FY14 FY15 FY16 FY17 FY18 FY19 (P)
Refined Copper Market (KT)
Production Consumption

Challenges of Indian Copper Industry
Key
Challenges
Manufacturing
Low Grade Concentrate
of Domestic Copper
and Import
Dependency
High working capital
with high cost of capital
Major Value Addition in
Primary Stage and Low
in Later Stages
Market
Continuous Surge in
Imports under FTAs
Inflow of Unregulated
Scrap
o Exposed to change in regulatory norms
of concentrate exporting nations.
o An average source-to-sale cycle time of
100 days makes the business highly
working capital intensive
o Upto 70% of the value addition is done
till the production of concentrate. It is a
complex and skewed value chain.
o From 2010 to 2017
o Export CAGR: 6.8%
o Imports CAGR: 17.4%
Imports from FTAs countries significant
o Unregulated Scrap lead to safety and
environmental hazards
12
Industry working with Government to address Regulatory Issues

Shift in Refined Copper Import Trend – Last 05 Years
6%
0%
28%
41%
25%
53%
11%
26%
0%
10%
ASEAN Japan UAE Russia Others
Imports in to India (%)
FY13 FY18
• Post implementation on FTAs, ASEAN and Japan imports in to India has grown significantly
• This increase is in Value Added Products which is impacting SME and MSME Sector adversely
• To address FTA related issues during review process
Impact of FTAs

65%
72%
60% 59%
36%
28%
40% 41%
Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19
% Share of Domestic Players
% Share Domestic % Share Imports
Supply
India is facing supply Disruptions as a result of closure of one of the
smelters
Impact of Supply Disruptions
Imports coming in to India have gone up from ASEAN, Japan &
Middle East to take benefit out of this disruption
Rise in Imports
Share of Imports have gone up to 41% from earlier 28%.
Supply Disruptions – A Temporary Phase (Shutdown of One Smelter)
14
Supply Situation to Improve from
Next Financial Year
Prior to Disruptions Post Supply Disruptions

Total 404 KT
Copper 235 KT,
58%
Brass 169 KT,
42%
180 KT,
77%
55 KT,
23%
115 KT,
68%
54 KT,
32%
235 KT 169 KT
Scrap Imports in to India
For secondary copper, approximately 3/4th of the supply is from domestic sources, whereas for copper alloy only 1/3rd is
sourced domestically
Source: Industry Input

650
1433
473
156
83 36 32 3
1 2 3 4 5 6 7 8
In spite of Challenges – Indian Copper Industry Poised to Grow
This does not include copper consumption in Evs – Likely to be Significant
All numbers are in KT
FY18
FY26

India – The upcoming World’s
Strongest Economy

14th asia copper conference

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