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ëluminium is a unique metal with remarkable features and versatile
applications in every range of life. ëluminium can be formed into different
shapes by any of the usual processes in industry. It is a good reflector of
thermal, optical and electromagnetic radiation. Even minor addition of iron has
no significant magnetic field of aluminium. ëluminium weighs only 0.34 times
as much as iron. Pure unalloyed aluminium alloys may surpass the tensile
strength of steel. ëluminium surface can be reinforced to protect from weather
and chemical corrosion. ëluminium is equivalent in conductance while being
50% lighter. ëluminium permits rapid heat dissipation. The metal and its
sources are non-toxic and it is, therefore, an important packaging material for
food. Many possibilities are available for treating and texturing aluminium
surface. 

In the last several years, aluminium has accelerated its applications in a

multiple of sectors by replacing other metals. The demand of aluminium is
based on its enviable combination properties. While rate of growth in other
countries is low due to the fact that they have reached towards the peak, the
same in ësia and in particular India is increasing. Presently the per capita
consumption of aluminium in India is only 0.5 kg compared to 32 kg in Japan,
27 kg in USë and 3.6 kg in Brazil. But with the population growth of 2.5% and
per capita income growth as 8%, in a highly optimistic scenario, the per capita
consumption figure of aluminium will grow by 10% in the coming days.
ëluminium industry is in the growth period of life cycle and till another five
decades it is predicted that the demand in aluminium will remain buoyant.





$$
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ëluminium is the third most abundant metal and constitutes 7.3% by mass. In
nature, however, it only exists in very stable combinations with other materials
and it was not until 1808 that its existence was first established. It took many
years of painstaking research to unlock the metal from its ore and many more
to produce a viable, commercial production process. 
 a In 1808, Sir Humphry Davy (Britain) established the existence of
aluminium and named it.

a In 1821, P. Berthier (France) discovers a hard, reddish, clay-like

material containing 52 per cent aluminium oxide near the village of Les
Baux in southern France. He called it bauxite, the most common ore of
aluminium.

a In 1825, Hans Christian Oersted (Denmark) produces minute

quantities of aluminium metal by using diluted potassium amalgam to
react with anhydrous aluminium chloride, and distilling the resulting
mercury away to leave a residue of slightly impure aluminium.

a In 1827, Friedrich Wohler (Germany) describes a process for

producing aluminium as a powder by reacting potassium with
anhydrous aluminium chloride.

a In 1845, Wohler establishes the specific gravity (density) of

aluminium, and one of its unique properties - lightness.

a In 1854, Henri Sainte-Claire Deville (France) improves Wohler's

method to create the first commercial process. 

a In 1855, a bar of aluminium, the new precious metal, is exhibited at

the Paris Exhibition.

a In 1885, Hamilton Y. Cassner (USë) improves on Deville's process.

ënnual output was 15 tonnes.

a In 1886, Hamilton Y. Cassner (USë) improves on Deville's process.

They discovered that if aluminium oxide is dissolved in a bath of molten
cryolite and passed a powerful electric current through it, then molten
aluminium would be deposited at the bottom of the bath.

"
 

a In 1888, the first aluminium companies were founded in France,
Switzerland and the USë.
 a In 1889, Karl Josef Bayer (ëustria), son of the founder of the Bayer
Chemical Company, invented the Bayer Process for the large scale
production of alumina from bauxite.

In 1900, the annual output was 8 thousand tonnes; in 1913 it was 65 thousand
tonnes; in 1920, 128 thousand tonnes; in 1938, 537 thousand tones and in
1946, it was 681 thousand tonnes respectively.

ëluminium has only been produced commercially for 146 years and is still a
very young metal. ënnual primary production in 1999 was about 24 million
tonnes and secondary - recycled - production to some 7 million tonnes. 

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The ëlumina industry is highly concentrated, with just five plants in India
accounting for the entire production capacity of 702000 tonnes per annum.
The capacity and production figures for these producers are given below:

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BëLCO Korba 720000
HINDëLCO Renukoot (U.P) 660000
INDëL Belgaum 240000
MëLCO Mettur  200000
NëLCO Damanjodi 1575000
Total  27,97,000


The per capita consumption of aluminium in India is only 0.5kg as against

25kg in USë, 19kg in Japan and 10kg in Europe. Even the world¶s average
per capita consumption is about 10 times of that in India. The reason of low
consumption in India is vastly different from that of developed countries. The
demand for aluminium is expected to grow by about 9 percent per annum
from present consumption levels. This sector is growing through a
consolidation phase and existing producers are in the process of enhancing
their production capacity so that a demand supply gap expected in future is
bridged. However, India is a net exporter of alumina and aluminium metal at
present. 

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ëluminium industry in the country is mainly controlled by two private groups
and one public sector unit. Bayer-Hall-Heroult technology is used by all
producers. The primary energy inputs are electricity, coal and furnace oil. ëll
plants have their own captive power units for cheaper and un-interrupted
power supply. The energy cost is 40% of manufacturing cost for metal and
30% for rolled products. Plants have set internal target of 1-2% reduction in
specific energy consumption in the next 5-8 years. Energy management is a
critical focus in all the plants. Two plants have declared formal policy. Each
plant has an Energy Management Cell. ëchievements in energy conservation
are h  


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ëluminium industry can be broadly classified into 2 different segments,
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who buy aluminium metal in the form
of ingot, slab, wire rod etc. from the primary producers. The secondary
segment is further divided into different sub-segments depending up on
different usage pattern of aluminium. The industry structure in primary market
is oligopolistic in nature. There are only a few big players in primary aluminium
market who dominate domestic market and also have a considerable position
in export market.

In primary segment the aluminium is sold in the form of slabs, ingots, wire
rods, strips, and coils etc. the major players in primary market in India are
HINDëLCO, NëLCO, BëLCO, INDëL, and MëLCO.

In secondary aluminium market there are many fabricators who buy

aluminium from the primary aluminium producers and fabricate into different
down stream products. In the downstream there are several companies in
small and medium scale. In the secondary fabrication units the product can be
divided into three categories, e.g.

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rolled products and 

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extrusion products.

Each category can again be sub-divided into different segments.

The secondary segments can be broadly classified as follows:

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ëutomotive market.

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Packaging.

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Infrastructure.

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Consumer durables




Defence production.

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Other aluminium products.

The aluminium consumption is increasing in the automobile manufacturing

and packaging industries especially in food products, soft drinks and beer
industries. ës the economy is growing the world over, the usage of aluminum
in infrastructure like in power sector, buildings, roads, telecommunication,
aviation etc. is increasing leaps and bounds. Due to the excellent electrical
characteristics of aluminium metal, its usage in making electrical bus bars and
cables is increasing by leaps and bounds. Now a days, aluminium containers
are being manufactured for being light weighted. In the consumer goods
segment, aluminium is also used extensively. Due to its excellent conducting
properties, aluminium cables and bus bars are getting increasing acceptance.

$$
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" % of uses
Electrical 33
Consumer Durable 11
Transport 20
Building & Construction 09
Industrial 04
Packaging 12
Others 11
TOTëL 100












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From the elements of industry structure it can be ascertained that there are a
few players due to high entry barrierssuch as highcapital cost, restricted
access to high technology and long gestation period. ës the cost of capital is
very high the investment cost is also consequently very high. ëlso, the
economy of scale can not be achieved for small size plants. Economy of scale
playa a very important role and crates a barrier for new entrants. However due
to lowering of import duties since 1992 the domestic prices of aluminium is
now linked to prices of London Metal Exchange (LME) and hence primary
market can be considered to be competitive in spite of limited number of
players. But there always has been a gap between demand and supply
position; hence the pricing of aluminium, determined by market forces, always
favours the producers.

Buyers do not have much bargaining leverage. The buyers are normally not
very price sensitive due high demand for the product. Cost of investment
being very high, buyer¶s ability to integrate backward is very remote. Suppliers
play a major role as they affect the cost of production. Hence most of the
major primary players have integrated aluminium plants starting from mining
to final products of aluminium. Since big players like NëLCO and HINDëLCO
etc. have their own alumina refinery and power plants, for major items they do
not depend upon outside sources. This advantage definitely reduces the
transaction cost of the companies. The cost of switching suppliers for other
raw materials is very insignificant or involves very little risk. Other raw
materials are easily available and hence brand of supplier does not play any
role.

The threat of substitution determines the future of aluminium industry. There

can be threat for product substitution and / or generic substitution for
aluminium metal. In comparison to wood, steel, concrete, bricks, paper, plastic
etc. aluminium is expensive, so it is difficult to compete with these products.
However it has some special properties which other materials can not match.
In power sector it competes with copper which is more expensive than
aluminium. Till now no better substitute for aluminium has been developed.
However the threat of substitute has a bearing on the demand for aluminium
products and this in turn limits the margin for both primary and secondary
producers.
The competitive rivalry among the firms is not extensive but slowly it is gaining
momentum. It can be said that in the primary segments the competitors are in
balance. ës far as collaboration between competitors is concerned, the recent
takeover of INDëL by HINDëLCO can be seen as an indicator of the things to
come. The coming together of the two aluminium majors has brought about a
dramatic change in the overall scenario and is a pointer towards the effects of
liberalization on the aluminium industry in India.

Industry structure in secondary value added market segmentis fragmented

with large number of secondary producers. The market is highly competitive in
the secondary segments because of large number of players and quality and
cost sensitive customers.

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Trends in Indian raw alumina and aluminium production show an increased
demand and plans production sites. Enlarging the production facilities is
planned in Orissa and Bharat. The bauxite mining capacity will be increased
to 6.3
million tons per annum. Increase in production capacity is planned for
both aluminium products at Hindalco as well.

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The prospects of the aluminium industry seem bright. While the demand for
the metal is expected to show a steady growth of 3%-4% globally, on the
domestic front, the prospects are even better with growth expected to be in
the vicinity of 6%. The government's thrust on infrastructure in itself could
emerge as a crucial growth driver in the long run. The power sector is the
sector's largest consumer. Passage of the Electricity ëct 2003 is another
positive indicator for the sector, as it encourages players to venture not only
into generation of power, but also set up transmission and distribution
facilities. Besides, economic recovery will aid demand from packaging and
consumer durable sectors, and consequently fuel revenue growth. Thus,
considering the fact that the per capita consumption of aluminum in India is
very low and India is an emerging market, the long-term demand outlook
remains positive. 

For the first time in the past five years, the aluminium industry is moving with a
sense of purpose and direction. 
The process of consolidation, sparked off in the primary metals segment with
the acquisition of Indian ëluminium Company (Indal) by Hindalco Industries
and Bharat ëluminium Company (Balco) by Sterlite Industries in recent years,
is slated to reshape the markets dynamics significantly. That, coupled with the
moves by the integrated aluminium majors to aggressively expand into the
downstream segment, has helped a few key players emerge as vertically
integrated producers. 

,

'

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ës a public sector major, Nalco has not moved as aggressively as its private
sector peers Hindalco and Sterlite. But within its limitations, Nalco has created
three drivers to earnings growth. Unlike Hindalco, Nalco has all along
contemplated the brownfield expansion model for growth. The first driver is
the expansion of the bauxite mines and alumina refinery to provide inputs to
its expansion project for primary metal. The first phase of expansion of
alumina refinery was completed in June 2000 and that enhanced the alumina
refinery production capacity to 1.575 million tonnes from 0.80 million tonnes
earlier. In the second phase expansion, the capacity of aluminium refinery is
going to be 2.1 million tonnes per annum.

The company has also doubled bauxite mining capacity from 2.40 million
tonnes to 4.80 million tonnes, which is going to be further expanded to 6.3
million tonnes per annum. 

In completing the first phase expansion, Nalco has paved the way for the
second driver of earnings growth. The smelting capacity has been expanded
from 2.30 lakh tpa to 3.45 lakh tpa, which is going to be further expanded to
4.60 lakh tpa. The capacity of Captive Power Plant which was raised from 720
MW to 960 MW, is now going to be expanded to 1200 MW. 

Since Nalco had no downstream production to create scope for value addition,
it decided to create its third engine of growth by taking over International
ëluminium Products, a joint venture originally promoted by Mukand, FëTë
Hunter and Global Emerging Markets, a foreign investor. Nalco earlier held a
35 per cent equity stake in the venture and this project, located adjacent to its
smelter in ëngul, Orissa, has a capacity of 50,000 tonnes of cold rolled
products. The project has since been commissioned as a Rolled Product Unit.

)



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The Indian aluminum industry had a modest beginning in the 1930s and has
since grown steadily. Indian aluminium plants suffer from disadvantages of
limited size, relatively high energy consumption and lower productivity
compared to some of the plants abroad. However cost of bauxite is a
favorable factor and the cost of production compares well with those best
plants abroad. Energy consumption and current efficiency in the Indian
smelters are somewhat unfavorable and there is ample scope for
improvement. Waste treatment in alumina and aluminium plant has received
considerable attention. The following graphical representation will give a clear
scenario of the growth of aluminium industry:

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a Thus, the world ëlumina production and consumption grew by 6.2% and
6.6% approximately during the year 2004-05 as compared to the previous
year.

a The world supply and consumption grew by 6.6% and 6.9%

approximately during this year as compared to the previous year.

a Chinese consumption is estimated to have risen by 15 and

production by 20% during 2004-05.

a The high demand from USë, Europe, Brazil, China and South Korea
helped strengthen the international prices during the year 2004-05.

























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The discovery of over one billion tones of bauxite deposits in the east coast
of India in the mid-seventies has placed India on the world bauxite map. ës a
major step towards exploiting these vast bauxite deposits, the Government of
India established National ëluminium Company Limited (NëLCO) as a public
sector enterprise on January 7, 1981. The foundation stone of the project was
laid by the Prime Minister of India, Late Mrs Indira Gandhi on March 29, 1981
at Damanjodi in the tribal District of Koraput, Orissa. It is ësia¶s largest
integrated aluminium complex, encompassing bauxite mining, alumina
refining, aluminium smelting and casting, power generation, rail and port
facilities.

Today, NëLCO has completed 25 glorious years of corporate excellence. It

is one of the most prestigious industrial projects in the field of alumina and
aluminium making. Its impact has already been felt both in the national and
international horizon. NëLCO is considered to be a turning point in the 55 year
old history of Indian ëluminium Industry. In a major leap forward NëLCO has
not only addressed itself to the country¶s need for self sufficiency in ëluminium
metal, but also given the country the technological edge in productivity. This
strategic metal is the best of world metals. The production of aluminium metal
started just a century ago. Though youngest of all metal, there has been
strong demand in the country and international market. 

Efficient planning, implementation and monitoring of the project activities as

well as speedy decision making in the organization are responsible for the
success and growth.

The entire paid-up equity capital was held by Central Government. This was
one of the biggest public sector undertakings set up by the Government in the
eighties. ëluminium Pechiney of France, a world leader in the field, provided
the technology and basic engineering for bauxite mines, alumina refinery and
smelter. The complete and firm reliability of project financing was another
hallmark.

The initial total capital cost of Rs.2408 crore was partly financed by Rs. 1119
crore equivalent Euro-dollar loan raised through a consortium of international
banks and the balance RS.1298 crore coming in from the Government of India
Plan Funds. Ever since the setting up of the company and commencement of
commercial production, the company has been growing by leaps and bounds
including earning a considerable foreign exchange for the country by export of
its products namely ëlumina and ëluminium and achieving a high degree of
productivity and efficiency as well as financial performance. The company has
won many laurels including Star Trading House Status, ëPEXIL ëwards etc.
The profit of the company has steadily increased from Rs.18.92 crore in 1988-
89 to Rs.1564.65 Crore (PëT) in 2005-06. 

NëLCO has chartered a course of international confidence in Indian

industrial capability. NëLCO is credited for its well-managed integrated
operations in as many diverse areas as bauxite mining, alumina refinery,
aluminium smelting, power generation and managing port facility. NëLCO
constantly produced high quality aluminium products at completive prices for
both domestic and overseas customers and established itself in national and
international market in a short span of time. This in turn, helped in earning
precious foreign exchange and profits for the company brought from its 2nd
years of commissioning. 

Leveraging the technical collaboration with ëluminium Pechiney of France,

ISO 9002 certification of quality management, LME registration of products,
environment care conforming to ISO 14001, low cost operations, international
base, NëLCO has continued to add value and is poised to grow further. By
1998, the company not only achieved a zero debt status but it has gone
steadily with an internally funded major expansion plan involving an
investment of over Rs.3700 crores.

The company has five multi-locations, well-integrated, segments viz. Bauxite

Mines, ëluminium Refinery at Damanjodi, ëluminium Smelter, Captive Power
Plant at ëngul and Port Facilities at Vizag. With low cost operations and
international customer base, Nalco enjoys the status of a Five-Star Export
House and a Mini Ratna company.

In order to strengthen its market position, Nalco has started the second
phase expansion after the successful completion of the first phase. The
present Rs.4091 crore expansion will considerably raise the capacities of its
various segments.

Thus, NëLCO heralded a new era of ëluminium making in the country, not
only in the use of modern technology but also in production of world standard
aluminium products.

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.

>to achieve growth in business with global competitive edge providing

satisfaction to the customers, employees, share holders and community at
large´. This has been clearly spelt out in the Company¶s Memorandum &
ërticles 0f ëssociation. Thus, employee satisfaction is a part of the Company¶s
broad mission and is a thrust area.

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a To maximize capacity utilization.

a To optimize operational efficiency and productivity.

a To maintain highest international standards of excellence in product

quality, cost efficiency and customer service.

a To provide a steady growth in business by technology up gradation,

expansion and diversification.
 a To have global presence and earn foreign exchange.

a To maintain leadership in domestic market.

a To maximize return on investment.

a To develop a strong R&D base and increase business development

activities.

a To maximize internal customer satisfaction.

a To foster high standards of health, safety and environment friendly

products.

a To participate in peripheral development of the area.

a To instill financial discipline at all level for achieving cost and

budgetary controls, optimize utilization of working capital and effective
cash flow management.

a To promote a result oriented organizational ethos and work culture

that empowers employees and helps realization of individual and
organizational goals.


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The main activities of Nalco are production of alumina and aluminium. For
this the company has the following units of activities:

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The corporate and registered office of Nalco is situated at Bhubaneswar, the

capital city of Orissa. It is housed in a magnificent building named Nalco
Bhawan built in lines with the temple architecture of Orissa.

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Nalco¶s bauxite mining, on Panchpatmali hills of Koraput district in

Orissa, is among the most sophisticated and eco-friendly mining
operations to be found worldwide. Highly mechanized, the open cast
 bauxite mining of Nalco features geo-statistics application and
computerized mine planning. The transportation of ore to alumina
refinery, located downhill, is done through a 14.6 kilometer long, single-
flight, multi-curve, cable belt conveyor of 1800 tph capacity. Taking
advantage of the topography, this conveyor is an engineering marvel.
Nalco¶s bauxite mining facility is capable of producing 48,00,000
tonnes of bauxite per annum, from a captive deposit of about
310million tonnes, spread over 16 square kilometers, with an average
overburden thickness of 3 meters. The capacity of bauxite mining is
presently being expanded to 63,00,000 tonnes per annum.


a
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The 15, 75,000 tpa energy efficient alumina refinery, having three
parallel streams of equal capacity, is located in the picturesque valley
of Damanjodi, in Koraput district of Orissa. One among the top ten
alumina refineries in the world, this plant utilizes time tested Bayer
Process technology of atmospheric pressure digestion at low
temperature. Manufacturing of 26,000 tpa special grade alumina and
hydrate as well as 10,000 tpa detergent grade zeolite are well
integrated with the main process streams. ëpart from distributed digital
process control, co-generation of power from process stream, using
3x18.5 mw back pressure turbo generator sets, is yet another unique
feature of the refinery.

a $$
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Based on the state-of-art 180 Kë cell technology of ëluminium

Pechiney, the smelter has a capacity to produce 3,45,000 tonnes of
ëluminium per annum. Located at ëngul in Orissa, the smelter complex
consists of two pot-lines with 240 electrolytic pot cells in each, along
with integrated facilities for production of carbon anodes, casting of
ingots, sows, billets, strips and wire rods. The self-reliance of smelter
comes from the assured supply of calcined alumina from the
company¶s refinery at Damanjodi and 410 mw of uninterrupted supply
of power from the captive power plant located nearby. Capacity of
smelter is presently being expanded to 4,60,000 tpa.

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 The captive thermal power plant at ëngul is another showpiece in
efficient and reliable power generation. It¶s also connected to the state
grid for sale of surplus electricity. The 960 mw unit, comprising a
cluster of 8x120 mw turbo generator sets, features micro-processor-
controlled burner management, computerized data acquisition and
process control, automated turbine run-up, brushless excitation of
generators and continuous coal handling systems for optimum,
efficiency and quality in power supply. To meet future needs the
capacity is being expanded to 1200 mw.

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Nalco has a dedicated port facility at the inner harbour of Visakhapatnam

Port on the Bay of Bengal with integrated handling and storage facilities for
bulk export of alumina and import of caustic soda lye. Ships up to 35,000 dwt
cargo holding capacity can be berthed here. The storage facility is up to
75,000 tonnes and this gateway to overseas market can reliably handle export
of about one million tones of alumina per annum.

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The marketing / regional offices of Nalco are located in New-Delhi, Kolkata,

Mumbai, Chennai, Bangalore and Paradip.

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Nalco¶s R&D centre at Damanjodi is recognized by DSIR, Ministry of Science

and Technology, Government of India. The in-house Research &
Development efforts in the direction of process improvement, energy
conservation, promotion of indigenous technologies, commercial utilization of
wastes and development of value added products, have been beneficial to the
company¶s operation. 

Nalco¶s collaboration with premier research laboratories of the country has

resulted in several research initiatives in alumina and aluminium.
Development of indigenous technology for production of detergent grade
zeolite has leadership to the establishment of 10,000 tpa Zeolite-ë Plant by
the company. ëlso based on the collaborative research, Nalco has set up
facility for making 26,000 tpa special grade alumina and hydrates.

Development of synthetic granite, wear-resistant ceramics from fly ash and

synthetic wood, ferrite cement, wear-resistant cast iron and micro alloyed
steel from red mud are some of the other achievements on pilot scales.
Recovery of iron from red mud with Romelt process is under feasibility study.

While continuing its R&D efforts in right earnest, the company has already
obtained patents for certain special types of aluminas and hydrates. 

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ëlong with standard aluminium ingots and sows, which are registered with
London Metal Exchange, the Nalco product enjoys world wide reputation on
account of high standard of customer services. The product-mix is given
below:

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a ëluminium hydrate

a Calcined alumina

a Specialty aluminas & hydrates

a Detergent grade zeolite

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a Standard ingots

a Sow ingots

a ëlloy ingots

a Wire rods

a Billets

a Cast strips, etc.

a Flat Rolled Products (coils and sheets)

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 Nalco is a responsible steward for the protection and care of the
environment. Use of eco-friendly process, safe handling of materials,
monitoring of occupational health, efforts at greening-of-the-land,
preparedness for disaster management are all integral to the company¶s

Commitment to nature and society. Extensive care is taken in the

management of fly ash, caustic red mud and fluoride ± the three major
pollutants associated with Nalco¶s operations. The highest level of ecological
performance is a standard requirement for the company and the responsibility
of the entire workforce. The ISO 14001 certification of all production units and
winning of Indira Priyadarshini Vrikshamitra ëward, a national honour, bear
testimony to Nalco¶s concern for environment.

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Nalco as a responsible corporate citizen has been undertaking development

of peripheral villages¶ right from the inception of the project and has been
fulfilling its social responsibility to the surrounding community through
promoting agriculture, health, education, cultural and sports and building rural
infrastructure. Nalco is spending 1% of its annual profit towards peripheral
development every year thereby increasing the quality of life of the people of
villages surrounding its units of activities.

!
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Nalco is a reservoir of 7000 plus high-value human resources, whose

knowledge and skill-base are among the best in India. Professionalism and
teamwork are fused with personal responsibility to enhance performance at all
levels, through appropriate organizational structures and empowerment. The
compensation and reward systems, as well as the employee¶s welfare and
social security schemes provided by the company are among the best in the
country.














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ED (M&R) :- Overall in charge of M&R complex and all7 functional levels
GMs 

are reporting.

GM(Mines) :- In charge of mines operation & maintenance.

GM(Project):- In charges of respective area of operation and i.e; 

head of production, mechanical, Electrical, Steam generation 

department (HOD) plant, Electronic & Instrumentation, civil , 

Purchase stores, Finance, Human Resources Development,

ëdministration, Training, Peripheral Development.

GM (ëR) & GM (O&M) :- In charge of ëlumina plant operation &

maintenance.

GM (Materials) :- In charge of purchase & stores function of M&R Complex.

GM (H&ë) :- In charge of HRD & ëdministration of M&R Complex.

GM (Finance) :- In charge of Finance & ëccounts of M&R Complex. 



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The Bauxite Mines and the ëlumina refinery situated at Damanjodi in the
district of Koraput (Orissa) constitute the Mines & Refinery Complex, headed
by Executive Director (Mines & Refinery). The productions units, namely
Bauxite Mines and ëlumina Refinery are headed by General Manager (Mines)
and General Manager (ëlumina Refinery) respectively, who report to the
Executive Director (Mines & Refinery). The common services of Mines &
Refinery Complex like HRD & ëdministration, Finance and Materials
Management are headed by General Manager (HRD & ëdministration),
Genera; Manager (finance) and General Manager (materials) respectively and
they also report to the Executive Director (Mines & Refinery).

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The ëlumina Refinery is situated at an altitude of about 3000 feet from mid
sea level in the District of Koraput. The Unit operators under the
administration Control of General Manager ( ëlumina Refinery) who is
assisted by General Manager (Operation & Maintenance) and other Heads of
Department like Operation, Steam & Power Plant, Mechanical Maintenance,
Electrical Maintenance, Control & Instrumentation, Civil Maintenance,
Environment & Safety, TQM, Research & Development, HRD &
ëdministration, Finance, Materials Management etc. The functions of various
departments are indicated below briefly:

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 This department is headed by DGM (Operation) and is mainly responsible for
production of ëlumina Hydrate, Calcined ëlumina. In addition to the above, a
special grade alumina is also produced which has a high demand in the
market. Recently, a zeolite plant has also been ser up under the operation
department which has also started production. The department runs in three
shifts. 

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This department is headed by DGM (SPP). The functions of this department

are to produce steam and electric power that are required in the process of
production of alumina. The steam is generated by way of coal gasification and
electricity is produced as a bi-product with the help of three turbo generators
of 18.5 MW each. In addition a De-mineralized Water Plant which is required
for the boilers. 

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This department functions under DGM (Mechanical). The main components

of the Mechanical Maintenance department are Plant Maintenance and
Mechanical Workshop. The field maintenance staffs attend to various
maintenance of plant & machinery. The mechanical workshop has all modern
machineries and various equipment are brought to the workshop for repair. 

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This department is responsible for maintenance of electric distribution lines

in plant and township as well as electrical repair of various equipment like
motors, fans etc. This department has a central distribution station through
which distribution of electricity is ensured. This department is headed by DGM
(Electrical). 



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ëlumina Plant being a sophisticated process plant, there are a good number
of control equipment and electronic instruments. The control and
instrumentation department under DGM (C&I) is responsible for repair and
maintenance of these equipment / instruments. Further, an intercom
telephone exchange also functions under DGM (C&I). 

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 This department takes care of the maintenance of plant & non-plant
buildings, residential houses in the township, roads and other infrastructure of
the company. The water supply to plant & township is also looked after by
this department under the leadership of DGM (Civil).


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This group is headed by DGM (R&D).The department has a modern

sophisticated laboratory with latest equipment along with a fleet of highly
qualified chemists. Samples taken from various stages of the process are
taken and tested in the laboratory based on the test results the various
production parameters are kept within normal units.

The Research & Development wing is manned by highly qualified and

component researchers who are continuously engaged in Research &
Development work. The zeolite plant and the special grade alumina plant set
up inside the alumina plant premises are based on the projects developed by
Nalco¶s own R&D department. The R&D department has, to its credit,
developed a number of projects on manufacture of ash bricks out of the fly
ash, red oxide paints, flow tiles, door panels etc from red mud and so on.

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This department is headed by CM (E&S). The department is in charge of

Safety Management, Environment Management, Pollution Control and
liaisoning with statutory bodies under the Factories ëct and other applicable
laws. The E&S department has successfully worked in getting ISO-14001
certification for the plant. The OHSëS (Occupational Health and Safety
Management System) has also been implemented in the plant with active
involvement of E&S department. The safety aspects of the plant are regularly
monitored through the Safety Committee, while the environmental aspects are
monitored through Environment Management Committee. Disposal of solid
wastes like lime grit, dry mud etc, are monitored strictly. The ash & red mud
generated from the plant are transported through pipes in slurry form to avoid
pollution control.

The E&S department works closely with the Occupational Health Centre. The
Occupational Health Centre is headed by a qualified doctor in the line
supported by an industrial hygienist and other para-medical staff. The centre
is equipped with modern testing / diagnostic equipment for ëutomatic Test,
Eye Test, ECG, ëuto ënalyzer etc, to diagnose any diseases arising out of
occupational hazard if any. The Occupational Health Centre which is attached
to Nalco Hospital conducts periodical medical examination of all employees at
regular intervals. In addition the effects of noise, dust and chemicals on
human body are also studied regularly to avoid any occupational health
hazard. 

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Quality forms the core of the business philosophy of Nalco. Meeting the
needs and expectations of the customer and consistently improving the
systems and work ethos are the chosen path in achieving excellence in
business and fulfilling the social obligations. Therefore a full-fledged
department known as Total Quality Management (TQM) department has been
created in ëlumina Refinery under the charge of CM (TQM). The department
through continuous education, workshops, presentations etc, has created a
quality consciousness among the people and elicited trust among the
customers. With active involvement of the department, alumina plant has got
ISO-9001: 2000 certification for its process. ë number of quality circles have
been formed in the plant which have participated in National and International
level conventions and have won laurels for their contribution to quality circle
movement. Presently, total productivity maintenance (TPM) has been
introduced in the plant.

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This department is headed by the general manager (finance). The

department looks after the financial requirements of the other departments
and allots the finance to them respectively. It co-ordinates the financial
activities of them M&R complex with the corporate office which allots the
finance for the activities in this segment. It has to prepare reports regarding
the expenditure in details and submit it to the corporate office at
Bhubaneshwar. Before the amount of money is allocated to each department,
every department has to submit a report mentioning the financial requirements
and then according to the feasibility the finance is allocated. The departments
have to keep the finance department updated with the various transactions by
the means of monthly statements.

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The materials department is responsible for purchase of materials, stores,

inventory control, scrap disposal, taxes & duties, excise etc. the maintenance
segments of the department are Purchase, Central Store and Excise, each
headed by a DGM / Chief Manager under the control of General Manager
(Materials) of M&R Complex.


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This department is headed by GM (HRD & ëdmn.) assisted by DGM (HRD &
ëdmn) and a team of other executives. The HRD Department looks after
Manpower Planning, Recruitment, Employee Establishment Matters, Wage &
Salary ëdministration, Industrial Relations, Welfare, Contract Labour
Management, Training & Development and Statutory Reports & Returns. 

The ëdministration Wing deals with Estate & Township ëdministration , Law
& Order, Security, Protocol, Hospitality, Transport Pool, Liaison with
Government agencies, Rehabilitation, Peripheral Development , Furniture &
Stationery, Raj Bhasa Cell, Sanitation and Horticulture etc.

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In any organization HRD department plays an important role in managing

and controlling the overall administration of the organizational activities. The
internal organizational structure of HRD department varies widely in different
companies depending upon their size and philosophy. In NëLCO, the Head
of HRD & ëdministration reports to the Head of Mines & Refinery Complex i.e.
Executive Director (M&R).While the GM (HRD & ëdmn) renders functional
advice to Executive Director (M&R), the DGM (HRD & ëdmn) supported by
Chief Manager (HRD) and a team other HR executives renders functional
advice to General Manager (ëlumina Refinery) in matters relating to HR of
ëlumina Refinery. Functions like Recruitment, Promotion, Training &
Development etc. are handled by a separate group under DGM (HRD &
ëdmn) commonly for Mines & ëlumina Refinery. Manpower Planning is looked
after by the Industrial Engineering Wing which reports to GM (HRD & ëdmn).

 
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The HRD Department has staff relationship with other departments /

managers in the total organization. It is responsible for advising line
management and top management on all areas relating to the Human
Resource Management. There has been a sea change in the role of H R
Manager to-day. He is no more confined to welfare and industrial relations
functions. With the change in the business scenario giving rise to stiff
competition among industrial organizations and advancement of technologies,
the human resources have to be kept ready all the time to face the challenges
and development of human resource is one of the key roles of an HR
Manager. To-day the role of HR Manager is that of a change agent and he is
regarded as the employee champion.

Keeping the above in view, the HRD Department in Nalco has gone beyond
its traditional roles and has embarked upon a slew of new functions. With ISO
9001: 2000 certification and implementation Total Productivity Maintenance
(TPM), training and development has assumed great importance.
Competency mapping and bridging the gap in competency through well
devised training programmes has been the thrust of the time.


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NëLCO has a well defined comprehensive policy on HR, which states as

under:

a To attract competent personnel with growth potential and develop

there skills and capabilities in a congenial work and social environment
through opportunities for training, recognition, career advancement and
other incentives.

a To develop and nurture favorable attitudes among the employees

and to obtain their best contributions to the organization by providing
stable employment, safe working conditions, job satisfaction, quick
redressal of grievances and through good pay and welfare amenities
commensurate with the company¶s capacity to spend and the
government¶s guidelines.

a To foster fellowship and sense of belongingness among all sections

of employees with the management through closer association of
employees with the management and by encouraging healthy trade
union practices.

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Policies are general statements that guide thinking and action in decision-
making. ë policy is a plan of action. Each organization has its own policy. In
Nalco, the company has a codified personnel policy, which is circulated in the
form of a manual known as HRD manual. Further a hand book entitled >The
Company You Keep´ codifying salient points of various rules, has been made
and issued to each employee. Moreover, the rules are also available in the
Company¶s intranet and website. The various functions in HRD department
are carried on in line with the guidelines provided in the policy. This policy is
formulated by the Board Of Directors of the company and implemented by
various levels of management as per the delegation of powers.

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The HRD policy covers the areas of manpower planning, recruitment,

placement, maintenance function, wage and salary administration, training
and development, separation etc. with emphasis on human resource
development. The company regards its employee as assets and keeps on
upgrading their skills, knowledge and competence so as to make the human
potential match with the organizational needs. Policies get amended from time
to time depending upon the need of the organization within the framework of
law and Government guidelines.

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The functions of HRD may also differ from one organization to another
depending upon the size of the organization, management philosophy and HR
policy followed by the company. In Nalco, the HRD department has overall
responsibility for dealing with human resources in the company. 

The main functions of HRD are: 

‰
Manpower Planning

‰
Recruitment and Selection 

‰
Employee Relations/ Establishment functions

‰
Wage and salary administration.

‰
Industrial Relations

‰
Welfare

‰
Contract Labour Management

‰
Training & Development

 ‰

Performance ëppraisal

‰
Employee Motivation.


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Nalco is sensitive to the recent trends in industry and has understood that for
success to be permanent, there must be constant change. Nalco as a
corporate citizen has been trying to come to terms with the speed and
frequency of the ongoing changes in the market. It is relentlessly redefining its
role vis±a-vis the fleeting and fluctuating demands of the market in order to
survive and grow. The company has realized that competitiveness is no
longer confined to markets only, but it includes people as well.

Nalco is consolidating its position as a leader in ëlumina / ëluminium

industry by aggressively expanding its activities and introducing various
schemes to upgrade human competency.

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ëfter successful completion of first phase expansion, Nalco has started the
second phase expansion after the successful completion of the first phase.
The company is planning further brownfield expansion as well as new
greenfield projects in India and abroad. This will ensure better value addition
of its surplus alumina that will be available after the second phase of
expansion. The present Rs.4091 crore expansions will raise the capacities of
its various segments as under:

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Keeping in mind future growth plans, Nalco has applied to the state
government for lease of additional mining areas at Pattangi having deposit of
about 75 million tonnes, Kodingamali having deposit of 90 million tonnes and
Gandhamardan hills having deposit of about 150 million tonnes of Bauxite.

Nalco is also hoping for setting up export oriented joint venture projects, for
which interest has been shown by overseas producers.

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Products and processes change so fast that most of the skills become
obsolete within 4 to 5 years. There should be constant effort to upgrade the
skills and competencies of the employees. ës a part of ISO certification,
competency mapping has assumed great significance in Nalco. The
competency of all the employees is being regularly assessed keeping in view
his/her skills, key performance area, etc. Gap if any, is bridged through
suitable training programmes. 


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ëfter tremendous success in implementation of total quality management

(TQM), the company has moved to implementation of total productive
maintenance (TPM). The alumina plant is first to implement the TPM. 

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Nalco has been representing a better quality of life for communities residing
in the vicinity of its plants and facilities. ëfter addressing the problems of
rehabilitation of displaced families with adequate compensation, housing and
employment, the company has created infrastructure in the surrounding
villages for communication, education, health care and drinking water. With
stabilization of production, the company has enhanced its thrust on peripheral
development by diverting one percent of its profit every year. The company
firmly believes that its ultimate reward is happiness in the human heart. ë
massive plantation programme has already started in the peripheral area.

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NëLCO has remained the forerunner with best quality of products over the
years. Financial results of the company reflect the company¶s robust
performance in production and marketing. Sales turnover and net profit have
grown over the years.
 Zero debt status of the company has made the position of the company very
strong for any fresh borrowing market. Government of India has also given
green signal to Nalco¶s proposal for equity restructuring. Hence Nalco¶s
position in the financial market has become strong, all these have enthused
Nalco to invest further in down stream facilities to diversify and spread its
operations.

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 2005-06 2006-07 2007-08

Sales turnover 5324 6515 5474

Net Profit(PëT) 1562 2381 1632

Export Earnings 2306 2585 2134

Equity Capital 24.25 36.96 25.33

644 644 644

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GROSS SëLES 5,474.45 6,514.51
LESS: EXCISE DUTY 485.65 574.32
NET SëLES
4988.80 5,940.19
FINISHED GOODS INTERNëLLY COMSUMED/ CëPITëLIZED
31.65 12.35
OTHER INCOME
554.77 401.65






























































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DECRETION/(ëCCRETION) TO STOCK OF FINISHED/
INTERMIDIëRY PRODUCTS/ WORK-IN-PROCESS (21.85) (15.13)
RëW MëTERIëL CONSUMED
574.36 557.59
POWER ëND FUEL
994.69 851.02
REPëIRS ëND MëINTENëNCE
231.54 230.34
OTHER MëNUFëCTURING EXPENSES
163.82 152.66
EMPLOYEES' RENUMERëTION ëND BENEFITS
552.97 392.88
ëDMINISTRëTIVE EXPENSES
106.74 85.37
OTHER EXPENSES
113.97 72.55
SELLING ëND DISTRIBUTION EXPENSES
84.74 76.98
INTEREST ëND FINëNCING CHëRGER
1.51 1.12
PROVISIONS
(0.35) (5.25)
DEPRICIëTION
281.10 317.13






























































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3 :;3>= > 9>99@
  
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2491.98 3626.43
ëDD: PRIOR PERIOD ëDJUSTMENTS(NET)
(25.39) (6.03)
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2,466.59 3,620.40
LESS: PROVISION FOR TëXëTION-CURRENT 849.80 1248.97
LESS: PROVISION FOR TëXëTION-FRINGE BENIFIT 10.64 7.03
LESS: PROVISION FOR TëXëTION-DEFERRED (5.31) (17.30)
LESS: EëRLIER- YEëRS  (20.06) 0.32

835.07 1,239.02
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1,631.52 2,381.38
BëLëNCE OF PROFIT BROUGHT FORWëRD FROM PREVIOUS
YEëR 36.12 10.49
TRëNSFER FROM CëPITëL RESERVE
0.04 0.04
TRëNSFER FROM GENERëL RESERVE -
23.04
PROVISION FOR DIFFERENTIëL ëCTUëRIëL LIëBILITY 
(23.04)
ëMOUNT ëVëILëBLE FOR ëPPROPRIëTION
1,667.68 2,391.91
ëPROPRIëTION:  
INTERIM DIVIDEND 289.94 332.15
PROPOSED FINëL DIVIDEND 96.65 161.08
TëX ON DIVIDEND 65.70 72.56
TRëNSFERRED TO GENERëL RESERVE  1,200.00 1,800.00

1,652.29 2,355.79
BëLëNCE CëRRIED TO BëLëNCE SHEET
15.39 36.12
EëRNING PER SHëRE (Rs.)
25.32 36.96



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SHëRE CëPITëL 644.31 644.31
RESERVE ëND SURPLUS 8230.14 7050.91
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  9,481.88 8307.96
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GROSS BLOCK 9137.26 9304.06
LESS: DEPRICIëTION 5606.31 5323.18
NET BLOCK 3530.95 3710.88
FIXED ëSSET WëITING DISPOSSëL :;@ ?>@
CëPITëL WORK-IN-PROGRESS 2334.59 840.41
 5866.40 4552.49
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INVENTORIES 686.65 634.96
SUNDRY DEBTORS 60.65 34.13
CëSH ëND BëNK BëLëNCES 3516.46 3686.53
OTHER CURRENT ëSSETS 236.47 212.04
LOëNS ëND ëDVëNCES 541.10 406.42
 5041.33 4974.08
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LIëBILITIES 1,318.31 872.02
PROVISION 222.57 346.59
 1540.88 1218.61


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Nalco has won many laurels over the last 25 years of its existence. It has
proved its excellence by adding more and more feathers to its cap. Some of
the major achievements of Nalco are indicated below: 

a Received CëPEXIL Export award consecutively for 17 times since

1988.

a Obtained LME Registration since May, 1989 and Star trading House
Status since 1992.

a ëll production units of NëLCO are certified to ISO 9001: 2000

Standards for maintaining Quality Management System

a ëll production units of NëLCO are certified to ISO 14001 standards

for maintaining the Environment Management standards.

a Received Indira Priyadarshini Vrikshamitra ëward in the field of

afforestation and waste land development in September, 1996 and
March, 2000.

a The bauxite mines obtained Pollution Control Excellence ëward by

Orissa State Pollution Control Board in ëugust, 1998.

a Five Technologies of Nalco honoured with United Nations¶ World

Intellectual Property Organization (WIPO) for development of Process
technology for manufacturing of Detergent Grade zeolite (Eco-friendly)
using Sodium ëluminium Liquor in ëugust, 1998.

a Received Engineering Export Promotion Council (EEPC) ëward for

last 3 years.

a Nalco¶s ëlumina Refinery bagged State Pollution control excellence

award -2002.
 a Received the Best Exporter¶s of Orissa ëward for the year for 3rd
time in succession.

a NëLCO Bauxite Mine bags FIMI Environment ëward for 2002 for
outstanding contribution to the national goal of sustainable
development through environment conservation & rational utilization of
natural resources.

a NëLCO has got a Star Trading House Status on January, 1992.

a Received Indira Gandhi Rajbhasa ëwards in 1993 and 1995.

a NëLCO has also received the excellent public sector enterprise

award during 1996-97.

a NëLCO was also rewarded by FICCI ëward for pollution control and
environment during 1996-97.

a In 2005 it has received the Udyog Rattan ëward.