A Study On Jindal Aluminium LTD

A study on Jindal Aluminium ltd
INDUSTRY PROFILE
History
Indian aluminium industry was started in the year 1808 and it took 46 years to
make its production commercially applicable, the research work took several
years and resulted in extracting the aluminium from ore. Aluminium is the
third most element constituting almost 7.3% by mass on the earth. Aluminium
is also second most used metal in the world after steel.
Aluminium production in India commenced in 1938 with the commissioning of

Aluminium Corporation of India’s (Indal) plant in technical and financial
collaboration with Alcan, Canada having a capacity of 2500 tonnes per annum.
The plant started with sheet production using imported aluminium ingots.
In 1959 the Hindustan Aluminium Corporation (Hindalco) was set up at

Renukoot in UP with an initial capacity of producing 20,000 tonnes per annum.
In 1965 a public sector enterprise Malco was commissioned with production
capacity 10,000 tonnes per annum. In 1987 National Aluminium Company
(NALCO) with a capacity of 0.218 million tonnes was commissioned in technical
collaboration with Pechiney of France.
In the 1970s, the government regulated and controlled the aluminium industry
through price distribution control and barriers to entry. In 1970 Aluminium
Control Order compelled the Indian companies to sell 50% of aluminium
produced for electrical purposes.
The government decontrolled the industry in 1989 with the removal of the
Aluminium Control Order. The industry was de-licensed in 1991 and was
allowed liberal import of capital goods and technologies.
Introduction
Indian Aluminium Industry is a highly concentrated industry with the top 5
companies constituting the majority of the country’s production. With the
growing demand of aluminium, the industry is also growing at an enviable
SIT-PGDMS & RC Page 1

pace. Aluminium production in India is outpacing the demand. India stands at

the eight position in the list of leading primary aluminium producers in the
world.
Size of the industry

The global requirement is estimated at around 7.4 million tonnes, against that
consumption in India as only around 110000 tonnes.
Output per annum

Demand in the domestic market is expected to grow by 8-10, India is expected
to have an installed aluminium capacity of 1.7 to 2 million tonnes per annum
by 2020.
Market capitalisation
Consumption is estimated to have increased to a 5 year CAGR of 12.9%
Top leading companies

 Hindustan Aluminium Company(HINDALCO)
 National Aluminium Company(NALCO)
 Bharat Aluminium Company(BALCO)
 MALCO
 INDAL

Company Capacity(in Production(in

(location) tonnes) tonnes)
FY09 FY10
Hindalco 445000 523400
NALCO(Angul) 345000 360000
BALCO(Korba) 345000 357000 125000
MALCO 40000 23000
(Mettur)
VAL 250000 82000
(Jharsuguda)
Total 1345400
Market share
According to Aluminium Association of India (AAI), Import increased from
878kt in FY11 to 1750kt in FY17 (at 12% CAGR)(mainly from china and middle
east) Domestic Aluminium Producer’s Market Share is down from 60% to 47%.
The capacity utilization of primary producers is just less than 70%.
PEST Analysis

Political factors
 Increase in import duty.
The Aluminium Association of India, representing domestic

manufacturers of the metal, has asked for an increase in import duty of
aluminium metal to 10% from the existing 5% and aluminium scrap to
10% from the existing 2.5%.
 Increase export duty on bauxite ore.
India’s alumina production capacity is 6.1 million tonnes per annum. The
requirement for bauxite is around 18 million tonnes per annum. Since no
new major bauxite mines could be started in the last 20 years, Alumina
refineries in India are finding it difficult to source indigenous bauxite and
are forced to import. On the other hand merchant mines are exporting
huge quantities of bauxite. Even though the government has increased
the export duty to 20% on bauxite in Union Budget 2014-15, it has failed
to stem the outflow of bauxite. Bauxite exports in FY14 and FY15 were
3.3 and 6.4 million tonnes respectively. To ensure domestic value
addition within India, export of bauxite must be discouraged.
 Reduction in basic custom duty on critical raw materials.
Reduction in basic custom duty on critical raw materials for aluminium

industry value chain: Alumina (28182010)- 5% to Nil, Coal Tar Pitch
(27081090)- 5% to 2.5%, Caustic Soda Lye (28151200)-7.5% to 2.5%,
Aluminium Fluoride (28261200)- 7.5% to 2.5%, Anodes (85451900)- 7.5%
to 2.5%.
 GST compensation cess on coal to be eliminated.
Coal is required in mass numbers by numerous industries all over India.

Coal is primarily transported through trains as India has one of the best
railway networks. Transportation of coal from the coal mines to the
factory or construction sites is an expensive affair due to the service tax
charged at the rate of 15% on the transportation services. Under GST,
the tax rate on transportation services through rail has been charged at
the rate of 5%. Clean environment cess would not be subsumed under

GST. The coal industry would have fewer logistics cost due to the
reduction in the tax rate on both goods and service and a better-
regulated tax system.
Economic factors
 GDP growth rate.
Aluminium consumption in the country is slowly picking up in the backdrop

of an increase in GDP to 7.3 to 7.5% this fiscal.
 Reduction in custom duty.
Imposition of additional duties to reduce import of aluminium may erode

the competitiveness of downstream sectors like power, transport and
construction.
 Recycling produces high-value economic impact.
The production of secondary (recycled) aluminium saves more than 90%

of the energy costs associated with primary production.
 Jobs are increasing.
This includes work generated in core American manufacturing sectors

including primary, secondary, smelting and alloy production.
Social factors
 Rural urban divide.
 Higher disposable income.
Technological factors
 Automotive sector.
Demand continues to increase for aluminium in several sectors, including

the automotive sector where reduced weight is significant for emission
control.

 Optimizing furnace insulation.
Aluminium furnaces use a large amount of energy and there is a need to

maintain a constant temperature to improve quality, so efforts to reduce
energy loss during the melting process are welcomed.
 Coating technology.
Aluminium casting could be contaminated through the crucible in which the

aluminium is melted. Fragments can break off or melt from the crucible,
especially in older products, when exposed to high operating temperatures
and fall into the molten aluminium, ruining the purity, and leading to poor
casting quality, which may not be discovered until the last minute.

Company profile
Jindal Aluminium Limited

Jindal aluminium limited (JAL) establish
ed in 1968, and it was set up as a private limited company in the year 1970 by
taking over the aluminium extrusion factory of Jindal India (P) Ltd Jindal nagar,
tumkur road, Bangalore.
The JAL board is headed by Dr.S.R.Jindal, chairman, and Managing Director,

who has over 6 decades of experience, particularly covering aluminium
industry and renewable energy sectors. The Board of Directors consists of
senior and experienced professionals.
Current Board of Directors
Name Designation
Dr.S.R.Jindal Chairman and managing director
Shri. Pragun Jindal Khaitan Managing Director
Shri. K.R.Raghunath Vice Chairman and Whole time
Director
Shri. B.D.Garg Executive director
Shri. Dharam Pal Jindal Director

Smt. Vaidehi Kanoria Director

Shri. M.K.Bansal Whole time Director
Shri. Ravinder Jindal Director
Shri. Pratik Praveen Agarwal Director
Over the last four decades, the company has been able to build a large pool of
highly productive and skilled manpower and an experienced management
team in engineering, finance, marketing, corporate planning and other areas.
JAL is an ISO 9001:2008 certified company, the first company in the country to
get IS/ISO certification in the aluminium extrusion industry.
Vision
To become number one supplier of quality Aluminium sheets rolled foils and
extrusions in the years to come, not only in the domestic market, but also in
the global market.
Mission
It is our mission to provide customers of both in domestic market as well as
global market with what they need at a price, which to them represents value,
and delivered in a manner that exceeds their expectations.
JAL commitment to
 Customer satisfaction
 Adoption of latest technology
 Reliability
 Excellence in quality and innovation.
Locations
Jindal Nagar, Bangalore (registered work office)
The company maintain branch offices at
 Ahmedabad
 Chennai
 Kochi
 Mumbai
 New Delhi
 Pune
Products of JAL
Product Name About Product Product image
Plain sheet and It is the most demanding
product in today’s
coils market. By seeing the
market and customer
requirement, JAL
achieved the highest level
of quality in plain sheet
and coil. This product is
majorly used in general
engineering, transport,
electrical, etc.
Pattern sheet It is also one of a key
product in aluminium 5 bar
industry. It is light weight
and design pattern
product. This product is
having good weldability
and formability. JAL are
supplying this product
Diamond
majorly in transport
industry.
The product comes in 2
different patterns: 5 Bar
and Diamond.


Closure sheet When it comes to the

pharmaceutical packaging
industry, the first top most
priority gives to the safety
and security. To meet this
requirement, JAL has come
up with a pilfer proof
material which is also
known as closure material.
It is mainly used for
forming screw caps for
bottles.
Aluminium This product is considered
as premium range product
composites panel in aluminium rolled
products. The material
requires 100% flatness and
catered this criteria by
putting most advance
equipments in our state-
of- the-art plant. This
product mainly used in
architectural and
construction industry.
Roofing sheet This product comes in mill

finish and colour coated.
The roofing sheets provide
a performance proven
metal roofing system and
are effective in rough and
varied environment. It has
also good features like
non-combustible and non-
flammable and therefore

Bare foil Aluminium foil is one of a

prime products in rolled
products.it is used in many
applications in various
industries. JAL is providing
extensive packing for food
packing also, as many of
the customers require
moisture free packing.
House foil JAL is offering this product

in several specifications
and length, width and
thickness to meet specific
client requirement. The
product finds usage in
home food and roti/ bread
packaging, restaurant food
packaging and many more.

Slugs and circles JAL is offering this product

in wide range and as per
customer specific
diameter and thickness
ranges for application in
the manufacture of
pressure cooker, non-stick
and coated cookware.
State-of-the-art high speed
punching line with
automatic stacker for
protected surface finish
ensures top grade product
quality and durability.
JAL products offers more than 10000 different shapes and sizes of aluminium
extruded sections/profiles meeting the requirement of Aviation, Architectural,
Transport, Electronics, Defence, Solar, Roofing, Cladding, Insulation, Closure
stock, Foils etc.
Jindal also makes customised shapes on specific request from customers with
promising off-take.
Production facilities
Aluminium extrusions
JAL have installed capacity, from 5000 TPA of aluminium extrusions in 1970 to
110000 TPA at present. JAL plant on Bangalore comprises extrusion presses of
750 UST, 1600 UST, 2200 UST, 2200 UST, 1650 UST and 4000 UST capacities
and Dabaspet factory comprises extrusion presses of 1150 UST, 2000 UST and
1650 UST. Thus it makes JAL to largest aluminium extrusion manufacturer in

the country. One of the JAL extrusion press of 4000 UST capacity has a billet
size of 12” dia and can extrude profiles up to 16”/425 mm width. This is the
largest and latest (most modern) press in India imported from SMS, Eumuco,
Germany, the world leaders in manufacture of extrusion presses.
Die making section, using precision CNC machines and tools together with
efficient and robust production facilities enable JAL the capability to meet the
needs and wants of consumers from various segments of the aluminium
extrusion market, in the shortest possible time.
Aluminium Sheets and Foils
The company has setup a most modern and advanced technology rolling plant
at Dabaspet, Bangalore, Karnataka (about 35 km from the extrusion division)
with an average installed capacity of 40000 TPA for manufacture of aluminium
sheets, foils, slugs, circles, roofing sheets, chequered sheets, etc. The
investment on this plant is Rs.500 crores. This plant is manufacturing
aluminium foils up to 7 micron thickness
Marketing Network
Jindal have strong dealer network of over 125 dealers across the country, with
sound financial background and expertise to sell our products. It also
established branch offices in 7 major cities in the country to facilitate sales
coordination.
Jindal have an array of satisfied customers, include both public sector and
private sector units, some of satisfied clientele are
 NTPC
 BHEL
 MICO Bosch
 Daimler
 Essar Power

 Reliance
 TATA
 Vedanta
 JSW Steel
 Hindustan Zinc
 BGR Energy
 ACGL
 LMW
 HAL
 VSSC
 ITI
 ISRO
 Ordnance Factories
 Kirloskar
 Godrej
 Videocon
 Siemens
Exports
Jindal started exporting aluminium extrusions in1994 on a small scale
which went up to 9418 MT in 2015-16. JAL is one of the largest exporters
of aluminium extrusions in India. The company has been granted Export
House status by the Ministry of Commerce, Govt of India. Jindal export
our products to UK, USA, Australia, Middle East, Sri Lanka, South Africa
and South East Asian countries. It is exporting aluminium sheets and foils
also to various countries. Total exports for the last 5 years is as under

Year Aluminium Aluminium rolled Total exports

extrusions products
MT Rs.crores MT Rs.crores MT Rs.crores
2012-13 4086 71.01 4086 71.01
2013-14 4260 73.03 1400 28.36 5660 101.39
2014-15 4472 84.28 2963 48.96 7435 133.24
2015-16 4913 88.00 4505 71.16 9418 159.16
2016-17 4773 89.00 6027.79 96.13 10801.79 185.13
Production and sales turnover

The production and sales turnover during the last 5 years are as below
Year Production (MT) Turnover including wind and solar

energy (Rs.crores)
Aluminium Aluminium Domestic Exports Total
extrusion sheets, foils
and others
2012-13 50268 1948 923.93 71.01 997.98
2013-14 53692 19195 1303.17 101.39 1404.57
2014-15 60991 24270 1653.21 133.24 1786.45
2015-16 80305 31318 1990.25 159.16 2149.51
2016-17 83425 35670 2174.85 185.13 2359.98
JAL achieved the highest production of 83425 MT of aluminium extrusions

during the year 2016-17, which is highest amongst secondary aluminium
extrusion manufacturers. Similarly, it has achieved production of rolled
products to the extent of 35670 tons in the year 2016-17, which is second
highest among secondary producers of aluminium rolled products.

SWOT Analysis
Strength Weakness
SWOT
Opportunity Threat
Strength
 Highest presses in the factory with high capacity of production.
 A most modern tool shop having sophisticated CNC machines to manufac-
ture dies through AutoCAD drawing.
 A strong financial background.
 A strong quality control facility with computerised lab having spectrometer.
 It has a huge library of approximately 15000 readymade dies to meet the
requirements of the customers.
Weakness
 Non availability of skill manpower and high turnover.
 Old industry needs to upgrade technology.
 Lack of trained manpower.

Opportunity
 High increase of demand in usage of aluminium extrusion in modern
world.
 Currently available technologies will continue to generate new
opportunities for JAL capable of delivering responsive and quality
service.
Threat
 Vulnerable industrial relations.
 Climate in and around the city and interference of different political par-
ties.
 Competition is increasing in the market with existence of many unorgan-
ised extrusion industry producing sub-standard materials.
 With increase in population in extension of city area, the industry may
have to be shifted to a designated industrial area.
Financial structure and strengths

The company has a strong capital and asset structure. It has fine-tuned its
working capital cycle.
The company’s Just-in-time purchase and production strategy has helped to

maintain a very low working capital cycle. As on 31-03-2016 the net working
capital was Rs.64.51 crores which is just 11 days working cycle for a turnover of
Rs.2149.52 crores and is considered very efficient.
SI.NO Particulars 2013 2014 2015 2016 2017

1 Gross sales 99798 140457 178645 214951 235980
Percentage of growth 12.74% 40.75% 27.19% 20.33% 9.78%
over previous year
2 Profit before interest 11629 12226 14788 21956 31427
and depreciation
3 Interest 1361 4483 4310 5399 3946

4 Depreciation 1089 3208 4784 6001 6438

5 Profit before tax 9179 4535 5694 10556 21043
6 Provision for tax(net) 2748 1754 1566 2956 5466
7 Profit after tax 6431 2781 4128 7600 15576
8 Dividend 1275 0 0 1020 1020
Dividend % 25% 0% 0% 10% 10%
9 Share capital 5100 5100 10200 10200 10200
10 Reserves & surplus 76452 76466 69426 76783 87160
Net worth 81552 81566 79626 86983 97660
Quality policy
JAL are committed to comply with requirements of ISO 9001:2015 to ensure
good quality meet customer requirements and enhance customer satisfaction
in the manufacture and supply of extrusions of aluminium and its alloys.
In order to accomplish this, JAL will
 Detect and prevent any non-conformance during production.
 Identify risk and opportunities in all processes for improvement.
 Train and motivate all employees to sustain their continual awareness

on Quality System.
 Upgrade technology continually to meet expectations of customer.
 Establish and review quality objectives and take necessary action as

needed.
 Effectively communicate the quality policy to our employees and other

relevant interested parties.
 Improve quality of life of the communities living around us by providing

basic needs like health, water, education, etc.

Research and Development

The company has a fully modernised R&D Laboratory, with a dedicated team
which focuses on an on-going basis on several new R&D projects to improve
quality of products and efficiency of the manufacturing process. Benefits of
R&D that have accrued include
 Improved operating efficiency by cutting down time, rejections and

labour cost.
 Longer die life and thus saving foreign exchange on purchase of die
steel.
 Improved product consistency.
 Upgrading quality of final and intermediate product.
 Reduction in fuel/electricity consumption.
 Automation to reduce manpower.
 Change of alloy has become easier.

A Study On Jindal Aluminium LTD

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A study on Jindal Aluminium ltd

Aluminium production in India commenced in 1938 with the commissioning of

In 1959 the Hindustan Aluminium Corporation (Hindalco) was set up at

SIT-PGDMS & RC Page 1

pace. Aluminium production in India is outpacing the demand. India stands at

Size of the industry

Output per annum

Top leading companies

 National Aluminium Company(NALCO)

 Bharat Aluminium Company(BALCO)

SIT-PGDMS & RC Page 2

Company Capacity(in Production(in

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 Increase in import duty.

The Aluminium Association of India, representing domestic

 Increase export duty on bauxite ore.

 Reduction in basic custom duty on critical raw materials.

Reduction in basic custom duty on critical raw materials for aluminium

 GST compensation cess on coal to be eliminated.

Coal is required in mass numbers by numerous industries all over India.

SIT-PGDMS & RC Page 4

 GDP growth rate.

Aluminium consumption in the country is slowly picking up in the backdrop

 Reduction in custom duty.

Imposition of additional duties to reduce import of aluminium may erode

 Recycling produces high-value economic impact.

The production of secondary (recycled) aluminium saves more than 90%

 Jobs are increasing.

This includes work generated in core American manufacturing sectors

 Rural urban divide.

 Higher disposable income.

Demand continues to increase for aluminium in several sectors, including

SIT-PGDMS & RC Page 5

 Optimizing furnace insulation.

Aluminium furnaces use a large amount of energy and there is a need to

Aluminium casting could be contaminated through the crucible in which the

SIT-PGDMS & RC Page 6

Jindal Aluminium Limited

The JAL board is headed by Dr.S.R.Jindal, chairman, and Managing Director,

Current Board of Directors

SIT-PGDMS & RC Page 7

Smt. Vaidehi Kanoria Director

 Adoption of latest technology

 Excellence in quality and innovation.

The company maintain branch offices at

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Closure sheet When it comes to the

Roofing sheet This product comes in mill

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Bare foil Aluminium foil is one of a

House foil JAL is offering this product

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Slugs and circles JAL is offering this product

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Aluminium Sheets and Foils

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Year Aluminium Aluminium rolled Total exports

Production and sales turnover

Year Production (MT) Turnover including wind and solar

JAL achieved the highest production of 83425 MT of aluminium extrusions

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