Mr. J.C.Laddha expressing his views during "" India Copper Forum - New Delhi" organized by "International Copper Association India"

1. “We Manufacture Materials That
Make the World
GREENER – STRONGER – SMARTER”
Purpose
India Copper Forum – New Delhi
Organized by ICAI
24th October 2018
Mr. J.C. Laddha
CEO (Copper Business)
Hindalco Industries Limited
Revenue $ 18 Billion Market Cap: $7.5 bn
EBITDA $ 2.3 Billion Asset Base: $ 19.2 bn

2. India – Growing Better Than World
2
Source : IMF
India has grown well ahead of rest of the world and is becoming a bigger player in Global Economy
Indian economy to reach $5 trillion by 2025
1.68%
2.48%
3.22%
4.14%
2005 2013 2018 2023
1.9
2.8
4.7
2013 2018 2023 (P)
India
76.6
86.9
113.5
2013 2018 2023 (P)
World
GDP at Current Prices (Trillion $) Share of India in Global Economy (%)
India World
CAGR = 9.5% CAGR = 4%
CAGR = 5.1%
Source : Morgan Stanley
(P)

3. Post two successful major reforms (Demonetization
& GST), India is poised well to touch 7-8% GDP
growth consistently.
3
India – Fastest Growing Economy & Famous Destination for Foreign Investors
-2
0
2
4
6
8
10
12
14
16
2003 2005 2007 2009 2011 2013 2015 2017 2019
World ASEAN-5 Middle East and North Africa China India
Source : IMF
GDP Growth (%)
India per capita GDP – $ 1800
34.3 36.0
45.1
55.6
60.1
64.0
FY13 FY14 FY15 FY16 FY17 FY18 (P)
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)

4. India – Young Country Moving Towards Urbanization
4
25.5
27.7
30.9
34.8
39.5
44.8
50.3
1990 2000 2010 2020 2030 2040 2050
Source – United Nations Population Division (2014)
 Vibrant democracy with stable political environment & robust financial institutions.
 Working age population to reach peak of 64% by 2021
 Low cost labour force - nearly 530 million
 Middle class population – 256 m in 2015 to 586 m by 2025 - growth of 129%.
India’s Pace of Urbanization (%)

5. Excellence by Design
Indian Copper Industry & Challenges
Faced by it

6. 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
6
Source: Ministry of Mines Source: Industry Source
94% 100%

7. 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
7
Source: Production Figures HCL & ICSG and Consumption: Industry Source Source: Freedonia Group
693 652
766 795 796
843
476 496
560
665 653 642
FY13 FY14 FY15 FY16 FY17 FY18
Refined Copper Market (KT)
Production Consumption
Share in
consumption
of
key user
industries in
India
37
25
20
13
5
Building &
Construction
Consumer Goods
Electrical &
Electronics
Industrial Equipment
Transportation

8. Challenges of Indian Copper Industry – Primary & Secondary
Key
Challenges
Production
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 and 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 is increasing
significantly
o Unregulated Scrap lead to safety and
environmental hazards
8

9. 9
Benefits Enjoyed By FTA Partners over Indian Industries
Import of copper concentrates attracts a MFN duty of 2.5% in India thereby
make domestic products less competitive
Under FTA especially from ASEAN, Japan and South Korea duty on finished
products is Nil or going to be Nil
Firms in ASEAN countries receive various incentives like energy subsidy, low
interest rates, good infrastructure, better ease of doing business and other
domestic and foreign market incentives
Many non-tariff barriers (stringent Standards) imposed by different countries
on India’s copper products. such as electrical products, table ware such as
plates, utensils, etc.
Closures of VAP units in India and low capacity utilization rate – 10% increase
in output increases employment by 26%
1 1 1
2
3
4 4 4
11
Philippines
Thailand
UAE
SaudiArabia
Japan
EU
Malaysia
USA
China
Total of 31 TBT (Technical Barriers to Trade)
Imposed on India By Trading Partners Including
FTA Countries
Under the current FTA structure it is difficult to achieve “Make in India” vision

10. 10
India’s experience with FTAs- Key takeaways
India’s exports to FTA countries has not gone up in the same propotion as imports because the pace of
duty reduction in India was much faster compared to most of other FTA countries.
FTAs have led to increased imports and exports, although the imports in to India has been greater.
Trade deficit has widened post FTAs with ASEAN, Korea and Japan
According to Economic Survey, FTAs have had a bigger impact on metals on the importing side and
textiles on the exporting side.
A 10% reduction in FTA tariffs for metals increases imports by 1.4 %
Utilisation rate of RTAs by exporters in India is very low (between 5 and 25%)

11. Indian Copper Industry
To unleash full potential, Govt – industry partnership is the key

12. 12
Copper – Critical for development of segments
Copper
Growth
NPE target of zero net imports by 2020
Electronics
5th largest position in the consumer durables market in the world
by 2025
Consumer Durables
5th largest electricity producer
globally
Power (Wire & Cable)
No. 1 passenger & 4th largest freight carrier globally; employs 1.3 million
Railway
Auto
2nd largest employer in the country; goal of 100+ Smart
Cities and 500 AMRUT cities
Construction
- 3rd largest auto market globally
Target generation of 100 GW by 2020
Solar Energy
156 KT
473 KT
36 KT
3 KT
83 KT
32 KT
Not Estimated
By 2026, additional 783 KT per annum of demand will make India a market of ~ 1.5 million MT of refined copper per year.

13. Dedicated Ministry for
Copper / non ferrous
industry
Track global developments in the
copper sector and craft policy in
collaboration with industry
Coordinate with program managers of
campaigns like Make in India, National
Solar Mission, Smart cities, National Capital
Goods Policy etc. to promote copper
Devise and implement regulations
and mechanisms to ensure
economical and environmentally
viable handling of scrap
Liaise with key stakeholders in major end-use
industries to ensure adoption of copper through
awareness and policy setting
Safeguard against predominately import
by means of standards, N.T.B, encourage
growth of Downstream capacity, India
friendly F.T.A.s etc
13
Key policy interventions, if undertaken, will enable the copper sector to play a
critical role and contribute effectively to India's economic development

14. Thank You…
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