Setting standards

Print edition : April 25, 2008

The bucket wheel reclaimer at Nalcos plant at Damanjodi, Koraput district, Orissa, feeds bauxite to a ball mill at the rate of 1,000 tonnes an hour for the production of alumina.-ASHOKE CHAKRABARTY

The National Aluminium Company Limited has travelled a long way since its incorporation in 1981 by the Centre.

WHEN it comes to corporate social responsibility, the Orissa-based National Aluminium Company Limited (Nalco) is a name to reckon with. While surging ahead in terms of production, marketing, profitability and subsequent expansion, the company is way ahead of many other companies operating in Orissa. Until recently, corporate social responsibility was quite an unknown term for many companies running their businesses in the State. This had led to people opposing the setting up of new industries in their areas. But Nalco has always fulfilled it with great zeal and care.

A total of 635 families were displaced when Nalco started its alumina refinery and mining works in Koraput district and its smelter and power plant in Angul by acquiring a total of 11,230 acres (5,444 hectares) of land. Besides, 1,530 families were also affected by having to part with one-third or more of their land for the project. Apart from offering financial compensation, employment and rehabilitation packages, Nalco has so far spent more than Rs.100 crore towards various social sector development activities. According to C.R. Pradhan, Chairman-cum-Managing Director of Nalco, the companys periphery development plan always accords priority to the creation of infrastructure in the surrounding villages for communication, education, health care and drinking water facilities. In line with the Central governments rules, Nalco has also been allocating 1 per cent of its net profit for the year for social sector activities in the succeeding year. Besides Nalcos commitment to social responsibility, its endeavour to protecting the environment around its refinery at Angul and mines at Damanjodi has been laudable.

Nalcos technological partner, Aluminium Pechiney (AP) of France, with its experience with stringent pollution control standards in Europe, has ensured eco-friendly process technology. The company claims that it has stuck to the approved environmental management plan since its inception, and constant monitoring has resulted in a vibrant natural world around its facilities. Even the green belt in Damanjodi has become greener because of the companys efforts.

For this effort, it has been awarded the Indira Priyadarshini Vrikshamitra Award by the Union government. Its contributions towards afforestation and wasteland development are well recognised. The 960-megawatt (MW) captive thermal power plant of the company received the prestigious Indira Gandhi Paryavaran Puraskar for its outstanding performance in environmental management. At a time when Orissa has been receiving huge investments in the steel, thermal power and alumina sectors, the company has set a benchmark for others to follow in terms of keeping the environment in good health.

Moreover, Orissas sportspersons have benefited from the presence of Nalco. The company has encouraged sportspersons such as Olympian Anuradha Biswal (athletics), Sradhanjali Samantray (captain of the Indian womens football team), Shiba Prasad Das (captain of the Indian badminton team for the disabled), Ranjita Mohanty (goalkeeper of the Indian womens football team) and Debasis Mohanty and Shiv Sundar Das (both of whom represented India in cricket). Its other contributions to sports include organising tournaments, encouraging rural talent and helping train members of Olympic contingents. Interestingly, Nalco emerged as the champion in football among Central public sector undertakings (PSUs) in 2007.

Incorporated in 1981 by the Central government to exploit the rich bauxite reserves in Orissa, Nalco has since travelled a long way. After it carried out its first phase of expansion, the companys mining capacity increased to 4,800,000 tonnes, its refinery capacity to 1,575,000 tonnes, its smelting capacity to 3,45,000 tonnes and its power generation capacity to 960 MW. The company has never stopped chasing growth and innovation.

Its second phase expansion is already under way at a cost of Rs.4,092 crore. Likely to be completed by the end of this year, the second phase expansion will help the company increase its mining capacity to 6,300,000 tonnes, its refinery capacity to 2,100,000 tonnes, its smelting capacity to 4,60,000 tonnes and its power generation capacity to 1,200 MW.

Thanks to excellent man-management, Nalco has reported 104.12 per cent capacity utilisation of its aluminium smelter at Angul, with a production of 3,59,213 tonnes of aluminium cast metal in 2007-08 compared with 3,58,734 tonnes in the previous year.

Similarly, the alumina refinery at Damanjodi reported 100.04 per cent capacity utilisation, with a production of 1,575,500 tonnes of alumina hydrate as against 1,475,200 tonnes in the previous year. The company has also achieved the highest ever metal sales of 3,58,878 tonnes in 2007-08, earning the highest ever export turnover on primary aluminium at $270.46 million against the previous high of $247.05 million in 2006-07. This means an increase of 3.12 per cent against the memorandum of understanding (MoU) target of 3,48,000 tonnes set by the Ministry of Mines.

Nalco has also played a pioneering role in the export of alumina and aluminium from India. Since its inception, the company has constantly increased its exports and foreign exchange earnings. At present Nalco products are exported to more than 30 countries. It is the first Indian company to be registered with the London Metal Exchange. It has ISO 9000: 2001 and ISO 14001 certifications for all its units, such as mines, alumina refineries, aluminium smelters and captive power plants.

Nalco recently signed an MoU with the Government of Indonesia to set up a five-lakh-tonne aluminium smelter and a 1,250 MW captive power plant in that country. Nalco plans to invest around $3.4 billion (approximately Rs.14,000 crore) in this greenfield project. The company is also planning further expansion in Orissa. It has already submitted a proposal to the Orissa government to set up a greenfield project to exploit the bauxite reserves at Gandhamardan hills, in the western region of the State.

Venturing into a new area, Nalco recently entered into an agreement with Bharat Earth Movers Limited to collaborate with it for the production of aluminium rail wagons and, subsequently, aluminium rail coaches and metro coaches. According to the agreement, the products will be jointly developed by these two PSUs. Nalco is to supply the aluminium extrusions through a third party after conversion from its billets and ingots. Aluminium wagons and coaches have several advantages: light weight, high carrying capacity, environment friendliness and relatively low life cycle cost.

Nalco is a Central-government-run PSU. But its successful operation and response to the needs of local people have made it a household name. That was perhaps why there was a State-wide agitation when the Centre proposed the companys disinvestment a few years ago.

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