“Our company has a dynamic supply chain system in place that is designed to adapt to any challenging situation. We achieved this through global partnerships to bring in the latest technology across all aspects of our operations, including the procurement, manufacturing, and delivery of high-quality finished goods. The digital transformation of our plants and processes is driving increased efficiencies, with a particular focus on strengthening our supply chain. We were among the first to implement multi-constraint-based analytics modelling in our alumina control tower. By using data analytics and robotics process automation, these digital control towers have helped us achieve significant cost savings in logistics, improved efficiencies, more effective procurement planning, and greater predictability in business operations,” elaborates Mr. Rahul Sharma, CEO, Vedanta Limited – Aluminium Business, during this free-wheeling interview…
What’s your take on aluminium facilitating world’s transition to a low-carbon economy?
According to the World Bank, the shift to a net zero economy will be metal intensive, with sustainable metals like aluminium being ubiquitous to the transition to clean technologies. With versatile and unique features such as a high strength-to-weight ratio, exceptional design flexibility, excellent electrical and thermal conductivity, high corrosion resistance, and the ability to be recycled indefinitely, aluminium offers a plethora of uses. These make it an essential raw material for a diverse array of sectors key to the emergence of a low-carbon economy, such as hightech manufacturing, battery and storage solutions, electric vehicles, renewable energy, green buildings, sustainable packaging and more. Aluminium will therefore play a crucial role in the development of clean energy solutions, as we transition to a cleaner future.
Sustainability is at the core of Vedanta Aluminium. We would like to know from you the initiatives taken on this front…
At Vedanta Aluminium, climate action is a business imperative that requires urgent and efficient action. We are committed to growing our business in a sustainable manner by responsibly using resources, maximizing the efficiency of our assets and processes, and targeted efforts to reduce our carbon footprint. We have set ambitious targets to achieve net-zero carbon emissions by 2050 and become net water positive by 2030.
We are the first aluminium producer from India to manufacture low-carbon aluminium, branded ‘Restora’. Under this brand, we offer Restora (low carbon aluminium) and Restora Ultra (ultra-low carbon aluminium) to meet the growing global demand for green aluminium. In FY 2022, we were India’s largest industrial consumer of renewable energy, at 3 billion Units. We have also signed a Power Delivery Agreement for 380 MW of renewable energy supply to our aluminium smelters. Our Alumina Refinery, Aluminium Smelters and Power Plants rank among the most energy efficient plants in the country. By virtue of these efforts, we were able to reduce our greenhouse gas emission intensity by 24% in 2022, from a 2012 baseline. This also makes us the second most sustainable aluminium producer globally, as per the latest Dow Jones Sustainability Index (DJSI) 2022 world rankings for the aluminium industry.
What’s your take on the government’s ‘Make in India’ movement and how has been its impact on the manufacturing expanse of the country?
Post Covid, the world is looking at a China+1 alternative for manufacturing. India offers all the right levers to become the manufacturing and value-addition hub of the world, especially in aluminium. It boasts rich mineral reserves (fifth largest in bauxite & coal), strategic geographic location for trade, a young and talented workforce, huge manufacturing capacity, a vibrant ecosystem of SMEs and downstream producers, a large captive market, and a collective vision for self-reliance.
The ‘Make in India’ movement has definitely provided an impetus to the domestic manufacturing sector, given rise to thousands of new start-ups in manufacturing/ancillary areas, and encouraged foreign investment in the country. The Indian aluminium industry in particular has enormous potential to contribute as a wealth creator for the nation’s economic growth, with its expansive value-chain, customer, and supplier ecosystems.
Vedanta has always been a front runner in strengthening industry-friendly policy measures. What factors have helped or will help India gain the tag of ‘Manufacturing Power of the World?’
Presently, the domestic aluminium industry is battling headwinds in the form of rising cost of raw materials, an inverted duty structure and imbalanced competition from foreign imports. The existing duties ranging from 7.5% to 10% on key industry inputs such as calcined pet coke and caustic soda lye are prohibitively high and must be rationalized substantially to ensure cost competitiveness of domestic aluminium production. Globally, to promote domestic value addition and generate employment, governments have provided duty reliefs and incentives to their aluminium industries, which has made it difficult for Indian aluminium producers to compete in the global market. Further, due to the absence of stringent quality standards in India, and tough quality checks in EU, US & China, India has become a destination for the dumping of substandard aluminium scrap. This is a major challenge curtailing the local market access for the domestic aluminium producers. To act as a deterrent against making India a dumping ground of substandard foreign scrap, it is necessary to impose stringent quality standards, along with a duty of at least 10%. This would otherwise continue to put additional pressures on the sector as a whole, having a regressive impact on the nation’s potential as an early adopter of several modern technologies and leave us trying to catch-up in the coming years.
Kindly elaborate on the latest launch – Vedanta Aluminium Park.
The Vedanta Aluminium Park is an upcoming state-of-the-art industrial facility near our mega aluminium smelter at Jharsuguda, in Odisha. It will be one of India’s largest metal parks. The park will allow aluminium-based companies to establish their manufacturing units and obtain high-quality hot metal (molten aluminum) directly for their plants from our aluminium smelter to produce aluminium products. The Park is strategically located, well-connected and offers a plethora of advantages to industries, from raw material to waste processing to value-added services like R&D and Centre of Excellence (CoE). This project also comes with significant sustainability benefits, such as considerable energy & fuel savings by eliminating the need for remelting andcross-country logistics.
This will enable companies to significantly grow their businesses through reduced time, increased productivity, and lower working capital requirements. Additionally, the presence of a Special Economic Zone (SEZ) Smelter at our Jharsuguda complex will provide a unique opportunity for export oriented industries to access hot metal for producing their goods. With quality, excellence and sustainability as its ethos, the Park will usher in a new era of Indian manufacturing and make India a highly desirable destination for manufacturing around the world.
We would like to know from you the innovative strategies implemented to build a robust supply chain.
Our company has a dynamic supply chain system in place that is designed to adapt to any challenging situation. We achieved this through global partnerships to bring in the latest technology across all aspects of our operations, including the procurement, manufacturing, and delivery of high-quality finished goods.
The digital transformation of our plants and processes is driving increased efficiencies, with a particular focus on strengthening our supply chain. We were among the first to implement multi-constraint- based analytics modelling in our alumina control tower, which provides us with complete visibility of our raw material movement. By using data analytics and robotics process automation, these digital control towers have helped us achieve significant cost savings in logistics, improved efficiencies, more effective procurement planning, and greater predictability in business operations. In addition, our vertical integration program, including expanding the capacity of our Lanjigarh (Odisha) alumina refinery and acquiring mines, has given us a competitive edge over other players in the industry. These steps have helped us navigate through difficult times.
How tech-savvy is Vedanta’s operations and supply chain framework? What are the tools you have implemented to drive growth?
Vedanta Aluminium is now in a growth phase where it is geared to bring a disruptive step-change and become future-ready, from assets to employees, to the vertical integration of operations. Our aspirations to be the world’s best and most sustainable aluminium producer is seeing us harness the potential of Industry 4.0 and Web3 for manufacturing excellence and build future-ready capabilities in our talent pool, from hiring talent in emerging tech-first specialisations and upskilling our existing talent base.
For example, deep learning algorithms and sophisticated modelling techniques allow for Advanced Asset Performance Management at our smelters and power plants. Digital twin technology for predictive and prescriptive maintenance helps ensure greater efficiency, avoid downtimes, and reduce safety risks with minimal or zero human touch. A robust Manufacturing Execution System gives us visibility of all critical plant operations, allowing for remote decision-making. These are but a few examples of how we are leveraging leading-edge technology solutions for extracting maximum productivity.
Through Vedanta Spark, the group’s corporate innovation and ventures program, we are working with a whole host of new age start-ups, leveraging the power of innovation and digitalisation in manufacturing. The business cases where these start-ups are involved range from operational efficiency to energy storage solutions, water and waste management, smart inventory management, quality excellence, asset optimization & predictive maintenance, people safety & wellbeing, and many others.
With many global upheavals constantly challenging operational efficiency, how is Vedanta Aluminium making its operations future-ready?
Producing 2.27 million tonnes in FY22 was not only a historical milestone for us, but also a demonstration of our ability to adapt during the pandemic, lockdowns, disruptions in the supply chain, and global challenges in commodity prices. We are expanding our business to take advantage of the full potential of our resources and to add new product lines to meet the emerging demands of the market. This growth phase will involve using cutting-edge technologies to make our operations more responsive, reliable, and future-ready. Industry 4.0 is allowing us to rethink and retool our business. By accelerating our digitalization programs, using intelligent automation, and developing in-house innovations, we have been able to enhance our manufacturing excellence, use resources efficiently, and improve workforce safety, making us more agile in responding to market changes.
How can aluminium make mobility ‘Green’ & Sustainable and facilitate a sound EV ecosystem in the country?
Aluminium offers the fastest, safest, most environmentally friendly, and cost-effective way to increase performance, boost fuel economy and reduce emissions in the automotive sector. These attributes have made it the dream metal for automakers. Its versatility is being leveraged by Original Equipment Manufacturers (OEMs) to create radiators, wheels, cylinder blocks for engines, transmission bodies, battery casing, and body parts like hoods, doors, and even frames. Aluminium usage in EVs extends their driving range by offsetting battery weight, thereby reducing the total cost of ownership even with extra safety features. Interesting research revealed that every kg of aluminium used in a car reduces the overall weight by one kg. This translates to an increase in driving range (100 kg saved on any EV can translate into an additional 10-15% increase in range), critical to drive higher EV adoption amongst consumers.
Plus, aluminium is significantly cheaper and easily available, compared to alternatives like carbon fibre-reinforced composites and titanium. Aluminium is also ubiquitous for the development of EV charging infrastructure because of its applications in infrastructure and electrical transmission & distribution networks. The industry will see more primary aluminium, extrusions and rolled products entering the EV segment for light-weighting vehicles and improving battery technologies.
What can we expect from Vedanta Aluminium’s portfolio for the next year and beyond?
Our plans are to operationalise the entire installed capacity at our aluminium smelters at Jharsuguda (Odisha) and BALCO (Chhattisgarh), and also increasing the production capacity of our alumina refinery unit. This will help us add new product lines and further diversify our product mix to meet the growing demand in strategic and sunrise sectors alike. Our strategic focus will be on significantly expanding our Restora and value-added product portfolios. Alongside this, we are also investing in the digital transformation of our plants & processes, leveraging green technologies, diversifying our energy mix to include renewables, and working towards realizing our focused vision of net zero carbon operations.