Target 20% volume growth in alumina in FY14: NALCO

National aluminium company (Nalco) expects around 20 percent volume growth in FY14. During the year gone by, the firm's alumina refinery produced 18.02 lakh tonne of alumina hydrate, which is an all-time high, against the previous best of 16.87 lakh tonne achieved in preceding year.

In an interview with CNBC-TV18, Ansuman Das, CMD, Nalco said that the firm is expecting 20 percent volume growth in alumina segment in current year. Nalco reported better than expected performance in Q4 While its sales grew by 4.6 percent YoY to Rs 1,835 crore against street estimate of around Rs 1,650 crore. Its aluminium segment reported a positive EBIT of Rs 59 crore, compared to an EBIT loss of Rs. 6 crore YoY which led to improvement in the performance. Read This: NALCO Q4 net profit dips 13% to Rs 246 crore The firm reported an EBITDA growth of 37.6 percent Y-o-Y to Rs 421 crore due to lower power costs. "At least 40 percent of my total cost of production is from the power and fuel. In the last quarter, we are able to reduce the power and fuel cost by 16 percent." Below is the verbatim transcript of Das' interview with CNBC-TV18. Q: Can you take us through alumina margins and alumina performance because that seems to have led to the positive surprise? A: The alumina performance for the quarter was quite good. In fact, our production went up and the realisation was also much better. In case of alumina, the realisation has been about 18,000 metric tonne as against the production cost of about Rs 12,000 per metric tonne. During last one or two years od quarterly performance, this has been one of the best. Q: Even the volume growth for alumina was stronger than expected, what do you think you could point to for the rest of FY14 in terms of what kind of volume growth you expect to see from alumina and what kind of average realisations you can hold even for the first half of FY14? A: As far as FY13-14 is concerned, we are targeting a volume growth of about 20 percent. We produced about 18 lakh tonne in the last fiscal. Therefore, we are expecting close to 20 percent volume growth in alumina. We are not aiming at a high volume growth. We may close at the similar level as last year unless the London Metal Exchange (LME) prices move upwards. However, in alumina, our net sales will be up by about 8-10 percent. Q: Can you explain how your power and fuel costs were kept under control and whether you expect margins to be boosted sustainably because of lowering of costs? A: Absolutely. The power and fuel cost are important. At least 40 percent of my total cost of production is from power and fuel. In the last quarter, we were able to reduce power and fuel cost by 16 percent.