Vedanta’s aluminium business was a big outperformer during the quarter ended June 2021, with the company being able to structurally reduce costs, helping the business evolve.

Speaking to CNBC-TV18, Sunil Duggal, Group CEO of Vedanta said that the company now aims to further reduce the cost of production for the aluminium business and maintaining its quarterly run rate for EBITDA.

“We have been able to structurally address this cost by the internal efficiency and adding the value-added product portfolio, now changing the overall EBITDA contribution, which was around USD 300 per tonne about a year ago, it is touching almost USD 1,000 per tonne. Along with that, we have been able to ramp up our production from 1.8 million tonnes to 2.2-2.5 million tonnes run rate. This trajectory is going to continue. This will go to say 2.3 to 2.4 millions tonne as the year will progress,” Duggal said.

The company aims to reduce the aluminium cost of production by USD 300/tonne to USD 400/tonne.

“Overall, we want to reduce and shave off the cost by around USD 300/tonne to USD 400/tonne per tonne going forward and whatever and whichever way the commodity prices go up and down, we will become a sustainable business,” he added.

The company has a capex plan of USD 1.8 billion for FY22.

“We have announced some more projects also which were not a part of the business plan. Still, we feel that we will be able to contain our capex within USD 2 billion,” Duggal added.

He is hopeful that the volumes will pick up as the year progresses and the company’s performance to improve if the commodity prices stay at this level.

“And there will be a further opportunity of reducing the debt from the current level,” he stated.

Vedanta has no intention of any further inter-corporate deposits to the promoter entity. The promoter has repaid part of the inter-corporate deposits given earlier, he informed.

On the Government of India’s stake sale in Hindustan Zinc, Duggal said that the company was comfortable with the government process of auctioning its stake in Hindustan Zinc and Vedanta will participate in compliance with regulations.

He said that the PSU acquisitions will be done through special purpose vehicles (SPVs).

“We keep evaluating whatever comes in the market. Some of the companies we have shown interest in, some smaller companies we have taken over. But it will be very difficult for me to comment on specific as to what we will do, we will take the view as required – an asset to asset basis and our own intention which will be there at that point of time,” he explained.

“BPCL and SCI - we will evaluate whether we will participate or not, whether we will bid or not. But that decision broadly lies not with Vedanta Ltd but with the entities which are above Vedanta Limited. That is the purview of my Chairman,” he further stated.

For the full interview, watch the accompanying video.

(Edited by : Ankit Gohel)

First Published:Jul 27, 2021 1:49 PM IST