Hindalco, the Aditya Birla group flagship, is planning to enrich its product mix and evaluating investments in aluminium downstream facilities.

Addressing shareholders at the company’s annual general meeting on Friday, Hindalco chairman Kumar Mangalam Birla said he expected local demand to recover significantly during the current financial year.

According to Birla, Hindalco is keeping a close watch on input prices and has secured around 3.2 million tonnes of coal in the linkage auctions, which makes up 71 per cent of its annual coal requirements.

“We will continue to keep a close watch on input prices. These have a bearing on the cost of production, including that of coal. We will make efforts to mitigate these by utilising its resources well,” Birla said.

Highlighting coal linkages, Birla said, “Hindalco has secured around 3.2 million tonnes of coal in the linkage auctions that concluded during 2017-18. With this, the total quantity of secured coal via linkages comes to 11.9 million tonnes. This accounts for 71 per cent of the annual coal requirements of the company.”

The overall annual requirement of coal is currently secured at more than 90 per cent, through long-term linkages and captive mines.

At present, three captive mines namely Gare Palma IV/4, Gare Palma IV/5 and Kathautia are operational. The fourth captive mine at Dumri is in the process of obtaining necessary statutory clearances. It will hopefully be operational by the end of 2018-19, he said.

On the outlook for the future, Birla said the company has a strong focus on strengthening the balance sheet through deleveraging, allocation of capex towards growth strategies and generating positive free cash flows.

Birla said the outlook for aluminium prices is also bullish due to deficit of 1 million tonnes (mt) in the global market outside China and 0.5 mt in China.