Business Environment Analysis Of Nalco Essay

3.2.6 Likely impact of the current business environment on NALCO

From the analysis of different scenarios, it suggests that for the next five years and may be afterwards, the LME prices per ton of aluminium will be in the range of US $ 2150-2250 with premium and likely to continue with a steady global demand of 7 %, and more than 10% CAGR in GCC and China. The domestic demand will remain within 8-9 % CAGR and likely to improve in the coming years due to industrial off take and rapid urbanization. The supply of coal, availability of cheap source of energy will continue to be the major roadblocks for the growth of aluminium industries in India. The coal supply and demand gap is expected to increase in the coming years making it difficult for the aluminium industries to rely solely on the linkage coal from CIL. Since, the smelting operation is not commercially viable with the use of imported coal, and the new smelting operation is not viable even with 80 and 20 % blending of coal; the possibility of Greenfield expansion and growth of the aluminium industries will be a remote possibility. The major bailout package for the aluminium industries shall be the clearing of the land acquisition bill, exclusive allocation of coal mines for the captive power generation, or ensuring 100 % supplies of coal from CIL through FSA for the captive power generation. Within these limitations in the background, NALCO will be equally impacted by these developments and accordingly, there is a pressing need to reorient its strategy and business plans

Figures 18-23 show the company's historical data on production, sales, net income, and other financial measures.

Figure 18. Historical Data on Primary Metal Production