Hindalco Plans ₹800 Cr EV Battery Foil Unit in Odisha

Hindalco Industries, a key player in aluminium manufacturing, recently unveiled plans for a ₹800 crore investment in a facility geared towards producing high-quality aluminium foil crucial for rechargeable batteries. The proposed plant, set to be located near Sambalpur in Odisha, is scheduled to commence operations by 2025.

The company disclosed that investment will be financed through internal accruals, as stated in their stock filing. Initially targeting an output of 25,000 tonnes, the plant's production capacity aims to meet the future demand for battery-grade aluminium foil, projected to skyrocket to 40,000 tonnes by 2030 in India alone. This spike in demand is primarily driven by the rapid expansion of gigafactories involved in advanced cell manufacturing.

Satish Pai, the Managing Director of Hindalco Industries, highlighted the company's promising progress, emphasizing ongoing collaborations through MoUs and confirmed capacity bookings with customers worldwide. He emphasized the pivotal role of high-performance aluminium foils as essential components for current collectors in cathode materials used by cell makers.

Industry Insights

Highlighting industry data, the report underlines India's expenditure on importing kWh-grade lithium-ion batteries. The figures for 2022-23 indicate a growing trend, with imports of $1.8 billion for 548.6 million units during April-November 2022, compared to $1.83 billion spent on 616.7 million units for the entire fiscal year of 2021-22.

Hindalco's investment aligns with industry trends, with other players like Shyam Metalics and Energy Ltd also venturing into battery-grade aluminium foil manufacturing. Hindalco's successful production of fine-quality battery foils at its Mouda unit in Maharashtra has set the stage for collaborations with lithium-ion cell manufacturers in India, Europe, and the US.

Vision and Technological Advancements

Hindalco's investments signify a transformative shift from a metal manufacturer to a provider of advanced metal solutions. Satish Pai reiterated the company's commitment to bolstering 'Aatmanirbhar Bharat' by swiftly developing high-performance battery foil. The company is focused on enhancing mechanical strength, adjusting thickness, and refining surface characteristics of these foils, while also exploring innovative coatings to elevate performance standards.

Hindalco is collaborating closely with original equipment manufacturers (OEMs) to co-develop critical components like battery enclosures, motor housings, and lightweight load bodies, thus pioneering India's foray into these innovations.

Financial Performance

Despite a flat consolidated profit in Q2FY23 at ₹2,196 crore and a slight decrease of 3.7% in consolidated revenue from operations primarily due to global copper price declines, Hindalco reported a 6% rise in consolidated Ebitda to ₹6,096 crore, with an Ebitda margin of 11.25%.

The commissioning of the battery foil plant by July 2025 holds immense promise, initially producing 25,000 tonnes of this critical component vital for Lithium-ion and Sodium-ion cells. This substantial investment positions Hindalco at the forefront of the rapidly evolving landscape in the EV and energy storage sectors, signaling a pivotal step towards sustainable growth and technological innovation.