InvestorQ : Can you tell me about the recent agreement between Hindalco and Ultratech?
Deepa Salunkhe made post

Can you tell me about the recent agreement between Hindalco and Ultratech?

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Arya Nanda answered.
4 months ago
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Hindalco Industries belong to the Aditya Birla Group signed an agreement with another group company, UltraTech Cements, to supply 1.20 million tons of bauxite residue annually. This will be used by Ultratech as raw material for cement and also be environment friendly.

Apart from Ultratech, which is a AV Birla group company, Hindalco will supply bauxite residue or red mud to a total of 40 cement manufacturers to reduce their dependence on laterite, which is commonly used and is environmentally quite devastating.

The Hindalco spokesperson said that the first idea is to see how they can match up to the price of laterite as most cement companies opt for laterite due to its low cost. Price competitiveness is a key element as otherwise it may not have too many takers.

This is also an environment concern for Hindalco. A by product of bauxite processing is red mud, which is considered dangerous for marine life. This environment disaster was first seen Brazil and India wants to avoid that.

In the case of Hindalco, the problem is acute as it generates 4.5 million tonnes of red mud every year. Using them for road construction and in brick kilns and embankments would be like hitting two birds with one stone. Now, it is over to cost management.

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