Global economic overview:
Global growth is projected to grow from $168.84 billion in 2022 to $255.21 billion by
2029, at a CAGR of 6.1% in the forecast period, 2022-2029.The global COVID-19 pandemic has
been unprecedented and staggering, with aluminium experiencing lower-than-anticipated
demand across all regions compared to pre-pandemic levels. The Aluminium Extrusion market
is expected to register fluctuating growth trends in the long term, while inflation and
supply chain concerns are expected to continue in 2023. Shifting consumer preferences in a
projected economic downturn scenario, amendments to industrial policies to align with
growing environmental concerns, huge fluctuations in raw material costs triggered by
prevailing geo-political tensions, and expected economic furbulences are noted as key
challenges to be addressed by the Aluminium Extrusion industry players during the short
and medium term forecast. Crude oil prices fluctuating to the tune of $60/barrel in one
year are emerging to be a key concern for the Aluminium Extrusion market, as fuel and
chemical prices are impacting many other segments. Concems of global economic slowdown,
the Impact of war in Ukraine, lockdowns in China with resurging COVID cases, and the Risks
of stagflation envisaging numerous market scenarios are pressing the need for Aluminium
Extrusion industry players to be more vigilant and forward-looking. Robust changes brought
in by the pandemic COVID-192 in the Aluminium Extrusion supply chain and the burgeoning
drive for a cleaner and sustainable environment are necessitating companies to dlter their
strategies. Dominating presence of major manufacturing sectors of aluminum extrusionsin
countries, such as Ching, India, Vietnam, Japan, and South Korea are positively
influencing the demand for the same. Chinaiis projected to play a crucial part for
increasing the sales of aluminum extrusion owing to its extensive construction sector. The
Chinese government is planning to invest in transport and energy infrastructure. This, in
tum, is likely to increase the demand for aluminum extrusion. Thus, Asia Pacific is
expected to possess nearly 70% market share for aluminum extrusion. Resumption of
industrial operations post-pandemic is projected to provide a push to the market growth.
In addition, initiatives by government regarding economic development is expected to
create lucrative opportunities for aluminum extrusion in North America. COVID-19 IMPACT
During COVID-19 pandemic, extended lockdowns in key manufacturing industries such as
construction, automotive, electronics, industrial machinery, and consumer appliances
across all regions led to short- term production halts. Thus, demand for Aluminium from
the industrial sector suddenly went down. Due to supply chain disruptions across key
consuming countries across all regions, in 2020, the year-on-year growth rate of the
global market considerably dropped as compared to 2019. Moreover, the demand for bauxite
ore across all regions was significantly impacted due to shortage of raw material &
inventory, short-term production halt, economic slowdown, trade restrictions, and changing
consumer behavior with response to the COVID-19 outbreak and other reasons. The
post-Covid-19 pandemic recovery is being hit by a potentially huge global supply shock
that will reduce growth and push up inflation. The war in Ukraine has triggered a costly
humanitarian crisis that demands a peaceful resolution. Economic damage from the conflict
will contribute to asignificant slowdown in global growth in 2023. A severe double- digit
drop in GDP for Ukraine and a large contraction in Russia are more than likely, along with
worldwide spill overs through commodity markets, trade, and financial channels. Even as
the war reduces growth, it will add to inflation. Fuel and food prices have increased
rapidly, with vulnerable populations particularly in low-income countries most affected.
Elevated inflation will complicate the trade-offs central banks face between containing
price pressures and safeguarding growth. Interest rates are expected to rise as central
banks tighten policy, exerting pressure on emerging market and developing economies.
Moreover, many countries have limited fiscal policy space to cushion the impact of the war
on their economies. The invasion has contributed to economic fragmentation as a
significant number of countries sever commercial ties with Russia and risks derailing the
post-pandemic recovery. It also threatens the rules-based frameworks that have facilitated
greater global economic integration and helped lift millions out of poverty. In addition,
the conflict adds to the economic strains wrought by the pandemic. Global Aluminium Market
Oullook: ALUMINUM MARKET - GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2022 - 2027)
The Aluminium Market is Segmented by Processing Type (Castings, Extrusions, Forgings, Rods
and Bars, Sheets and Plates, and Other Processing Types (including Pigments and Powders)),
End-user Industry (Automotive, Aerospace and Defence, Building and Construction,
Electrical and Electronics, Packaging, Industrial, and Other End-user Industries), and
Geography (Asia-Pacific, North America, Europe, South America, and Middle-East and
Africa). Market Overview The aluminum market was evaluated at USD 112 billion in 2021 and
is projected to register a CAGR of over 6% during the forecast period 2022-2027. Over the
medium term, the major factor expected to drive the market studied includes increasing
construction activities in the Asia-Pacific region. Growth in the electric vehicles market
will likely provide new growth opportunities. On the flip side, the slowdown in the global
automotive industry is expected to hinder the growth of the market in the forecast period
2022-2027. The Asia-Pacific region represents the largest market, and it is also expected
to be the fastest-growing market over the forecast period due to increasing consumption
from countries such as China, India, and Japan. Aluminum Market size reached USD 160
billion in 2022 and is poised to depict over 5% CAGR through 2023- 2032. The rising
preference for aluminum packaging in the food and pharma sectors will propel the global
market demand. Key Market Trends Increasing Demand from the Building and Construction
Industry; In the building and construction industry, aluminium is the second most widely
used metal. It is extensively used in windows, curtain walls, roofing and cladding, solar
shading, solar panels, railings, shelves, and other temporary structures. Increasing
construction activity worldwide is one of the key factors driving the market studied in
recent times. The Asia-Pacific construction sector is the largest globally, and it is
growing at a healthy rate, owing to increases in the population, middle-class incomes, and
urbanization. This has accelerated the demand for hotels, shopping malls, high-rise
buildings, arenas, and stadiums (both outdoor and indoor), in turn boosting the
construction industry and driving the demand for aluminium in the region.
In addition to this, Asia-Pacific has the largest low-cost housing construction
segment, led by Ching, India, and various Southeast Asian countries. China includes the
largest construction market in the world, encompassing 20% of all construction investments
globally. China is expected to spend nearly USD 13 trillion on buildings by 2030. In North
America, the US is the largest market for residential construction and is one of the major
growth markets in the world. Almost 80% of individuals prefer single-family housing as an
end goal, and almost 70% of people are executing this goal, thus, resulting in an increase
in the number of houses being constructed every year. Overdll, the recovering construction
activities worldwide are expected to drive the demand for aluminium from the building and
construction industry during the forecast period. The Indian electronics market is
expected to reach USD 400 billion by 2025. Additiondlly, India is expected to become the
worlds fifth-largest consumer electronics and appliances industry by 2025. The Indian
packaging industry is expected to grow at 22% during the forecast period. Moreover, the
Indian packaging market is expected to reach USD 204.81 billion by 2025, registering a
CAGR of 26.7% between 2020 and 2025. In Japan, it is estimated that by 2025, the retail
sales in the packaged food market are expected to reach USD 204.5 billion, a growth of
3.6% or USD 7 billion. Such projected growth in the packaging industry will likely drive
the demand for aluminum used as foils during the forecast period. Indian Aluminium &
Aluminium Extrusion Market Outlook The India aluminium extrusion market size was valued at
$1.3 billion in 2019, and is projected to reach $2.5 billion by 2027, growing at a CAGR of
8.3% from 2020 to 2027. Increase in demand for lightweight materials in various end-user
industries is the major growth driver of the aluminium extrusion market in India. However,
high capital cost and slow productivity of aluminium extrusion restricts the market
growth. Based on product, anodised extrusion is expected to witness highest India
aluminium extrusion market growth. This is attributed to high chemical resistance of
anodized extrusion, which are becoming increasingly important forindustrial applications.
Due to the thick layer of aluminium oxide, it is highly resistant to corrosion. India has
400 die casting companies, making it one of the major suppliers of die cast parts in
global market. Of these, over 25 units produce around 12000 tonnes of die cast parts per
year. Aided by the 1.3 million tons of aluminium production, the Indian industry consumes
over 0.28 million tons of die-castings. In general, the die casting market is highly
correlative to automobile industry. Availability of skilled, cheaper labour force and the
goverment incentives for small and medium scale industries, stringent emission norms, and
favourable domestic environment for automobile industry is expected to drive die casting
market in India. OPPORTUNITIES AND THREATS
We are constantly on the lookout for opportunities that knock on our doors, while
keeping tab on the likely threats to our business. Opportunities - Low penetration of
motor vehicles in developing economies and growing industrialization in emerging economies
provide wider opportunities for the growth of the Aluminium sector. Threats- Competition
from low cost manufacturers is likely to continue.
COMPANY OVERVIEW AND GROWTH STRATEGY
Improved service, prompt response and wider reach to dealers, distributors and the
satisfaction of customers have been our continued endeavour for business development.
Success Drivers Our Legacy: With an experience spanning a rich 33 years, our Company
enjoys a number of first mover advantages comprising a comprehensive understanding of the
aluminium and aluminium extrusions market, reputed brand and a strong customer base.
Integration: We possess in-house facilities for
- Melting, casting and homogenization of billets,
- Extrusions manufacturing with three press lines
- Die manufacturing,
- Manufacturing various value added products of extrusions for engineering
applications, and
- Manufacturing Power Transmission & Distribution Hardware
With 3 extrusion press lines, the Company has a capacity to produce 15000MT of
Aluminium Extrusions, which as per the information available with the Company. Die
Library: The Company possesses an inventory of more than 5000 dies to manufacture over
3500 profiles. The Company maintains back-up dies for meeting the requirements of fast
moving profiles. Avdilability of raw material: The Company accesses raw material
(aluminium ingots and billets) from two renowned and proximate primary metal
manufacturers- Vedanta Aluminium, and NALCO, The Company is one of Indias largest
institutional aluminium ingots/billets consumers with corresponding purchase economies.
Qudlity assurance: The Companys manufacturing facility is accredited with the prestigious
1SO-9001:2015 certification endorsing its strong qudlity systems. Our Company continues to
emphasize on maintaining the utmost quality and safety standards in its factory. Our
Company is AS9100D (technically equivalent to EN 9100:2018 and JISQ9100:2016) also ISO
14001:2015 and ISO 45001:2018 certified. The Company supplies extrusions as per tolerances
laid down by the Bureau of Indian Standards in accordance with BIS: 2673-1979, BIS:
3965-1981 and BIS: 6477-1983, and with even stringent tolerances as per customer needs
based on mutual agreement. The sharp focus on Quality in all its initiatives has enabled
our Company to launch some specific value- added services Product applications: We
manufacture extruded products for varied applications, viz.:
- Profilesfor Architectural Applications such as Building Systems, Structural Glazing,
Curtain Walls, Aluminium Rolling Shutters, Windows, Doors, Partitions, False Ceilings,
Tower Bolts, Hand Rails, Door Handles, Hinges, Drapery Rods, Modular Furniture, etc.
- Profiles for Aluminium Form work
- Profiles for Road Transport Sections
- Profiles for Rail Coach Windows & Doors
- Profiles for manufacture of Automobile Components
- Profiles for Heat Transfer in Electronics & Electrical Gadgets
- Profiles for Electrical applications such as Tubes and Fats for Bus Bars,
Transmission Line Hardware such as P.G. Clamps, H-Connectors, Repair Sleeves, Lugs, Solar
Panels etc.
- Profiles for Engineering Applications such as Motor Housings, Gear Pump Casings,
Ferrules, A.C.Louvres, Machinery Parts, Elevators, Pneumatic Actuators, Pneumatic
Cylinders, Valve Bodies, efc.
- Profiles for various Defence Applications and many more.
The Company also has necessary set up to supply extruded & cold drawn round bars
and hexagonal bars in straight lengths for various engineering applications. It also has a
set up to supply extruded & cold drawn rods/wires in coil form to be used as armour
rods, lamp pin stock, metallizing wire, rivet stock, welding filler wire (MIG & TIG),
etc. Customer profile: The Company possesses a portfolio of over 500 reputed customers.
The Company has retained most of the customers over a period of 32 years. Our Company has
an installed capacity to produce 15000 MT of extrusions per annum. As against this, our
production for the financial year 2022-23 was 12486 MI. We have a significant spare
capacity to increase production and sales volume. Our Company is planning to minimise the
gap of installed capacity and actual production during the financial year 2023-24. The
segment-wise expected demand growth is given hereafter: Power Sector Power and
infrastructure sectors in India are witnessing and would continue to witness strong growth
in the coming years with the boost from policy measures and budgetary allocations. Our
country faces continuing power shortage. More investments to plug the gap means more
aluminium extrusions. Engineering Applications- Aluminium Extrusions are increasingly
being used to manufacture forged and forged & machined components for use as parts of
machinery, fastners, rivets, wire rope ferrules, motor housings for domestic pumps,
hydraulic gear pump casings, heat sinks, ladders, elevators, etc. The Sustained
Agriculture Emphasis in our Country More investments in irrigation mean more aluminium
extrusions. Solar Energy Industry is an emerging opportunity, which implies significant
consumption opportunities for aluminium extrusions from solar panels over the years to
come. Century Extrusions Ltd. Indian Defence Sector: Aluminium extrusions are consumed in
a wide range of applications in this sector, comprising tail-end fuse connectors for
detonator shells and grenades, frame-work for tents and as aroll-over ‘mattress for
tanks to navigate difficult terrains. Given the significant supply deficits, high growth
potential and conducive government policies, a large opportunity. Power T & D Hardware
India today stands at the threshold of being an economic superpower. Power is one of the
key requirements to support and sustain our economic growth. Power is a key ingredient in
driving growth in manufacturing & services. Aluminium finds growing use in this space
as it is directly used in the overhead transmission and distribution lines. Power
Transmission and Distribution Hardware Fittings are required for use on Overhead
Transmission and Distribution Lines for connecting Insulators with Tower/Pole Cross Arms
and Insulators with conductors. The Company has manufacturing facilities for casting of
Aluminium Alloys, manufacturing of Extruded products in Aluminium & its Alloys, Wire
Drawing, Helical Products, Fabrication of Ferrous & Non-Ferrous
Components, Argon Welding, Electric Arc Welding, Machining, Bundle Spacer Assembly,
Vibration Damper Assembly, Conductor Accessories, Clamp Connectors for Hardware Assembly,
and manufacturing of Tools, Dies & Moulds. Aluminium is also used in insulated and
underground cables laid in large populated urban areas and in reserved forests (to avoid
deforestation), Round Tubes are used for corona control rings, grading rings, mid-span
compression joints, dead-end clamps and jointing sleeves, among others, signifying huge
opportunities for extrusions in the power sector. The Company has successfully registered
itself as a supplier of its products with a number of State Electricity Boards during the
year and the process is continuing. The process will get further momentum as company
achieves requirements of minimum years of supply track record and experience, with each
passing year. The Company has received substantial orders from the said State Hectricity
Boards, Transmission and Distribution Line State based utilities and Erection Contractors.
FINANCIAL PERFORMANCE
The Company reported a sales turnover in the financial year 2022-23 of Rs. 37,201 lacs
as against Rs. 32,246 lacs in the previous financial year, recording increase of about
15.36% in the sales turnover of the Company.
RISKS AND AREAS OF CONCERN
The Companys capability to assess and manage business risks is crucial in achieving
targets. In the current economic scenario, the Company perceives the following risks and
concems. a) Market Competition: The Company is operating in a highly competitive market as
market dynamics are forever changing with entry of new players in the field of extrusion
manufacturing. New players are targeting resellers consequently old players who were
earlier in reseller markets are turning towards end users creating competition for the
Company. With free market economy now prevailing in India, high quality imported
extrusions are freely available in the local market. Hence unless Indian Extrusion
Industry, particularly in the unorganized sector undertakes technological up-gradation in
the foreseeable future, over next five years, this sector may be wiped out of the market
by availability of cheaper and superior quality imported products. b) Delay in
clearances/approval by Govt. agencies: There are delays in obtaining lease renewals for
land mortgaged with financial institutions and banks. This adversely affects the financial
facilities obtained from the Banks. c) Competition from local manufacturers: Some of the
customers prefer local suppliers for faster deliveries. Further to compete with local
suppliers, we have to sacrifice our margin to neutralize the effect of higher Freight and
Central Sales Tax. We are located in a comparatively under-developed part of the country
and the demand in this part is not good enough to account for our capacity. We have to
sell a substantial quantity (over 70%) in other parts of India where our redlization is
lower compared to local supplies due to impact of the high freight and Central Sales Tax.
d) Retention of experienced manpower. Company faces a challenge in retaining the trained
work force. The Company has created employee friendly policies and a conducive environment
for work life balance. e) Price Inflation Risk: Fluctuating raw material prices have been
witnessed too often over the past few years. Continuous monitoring of aluminium metal
inventory in order to get maximum benefit or alternatively to minimize loss by keeping
ideal inventory levels in each circumstance is a major challenge, and this is regularly
monitored at the highest level in the Company.
RISK MANAGEMENT
Your Company has a system based approach to business risk management. Backed by a
strong intemal control system, the current risk management framework consists of the
following elements: A strong and independent Internal Audit Function carries out risk
focused audits enabling identification of areas where risk management processes may need
to be improved. The Audit Committee of the Board reviews Internal Audit findings and
provides strategic guidance on internal controls. The Audit Committee closely monitors the
internal control environment within the Company and ensures that Internal Audit
recommendations are effectively implemented. The Senior Management of the Company
periodically reviews the risk management framework to effectively address the emerging
challenges in a dynamic business environment. The Company strives to identify
opportunities that enhance Organizational values while managing & mitigating risks
that can adversely impact its future performance.
-WISE / PRODUCT-WISE PERFORMANCE
The Company has two business segments i.e. manufacturing of Aluminum Extruded Products
and manufacturing of Power Transmission and Distribution Line Hardware. However, the
Company does not fall under any of the criteria laid down under AS-17 and hence Segment
Reporting is not applicable.
INTERNAL CONTROL SYSTEM
The internal control systems and procedure are continuously monitored to enhance its
effectiveness and to be commensurate with the scale and nature of its operations. M/s SK
Agrawal and Co., Chartered Accountants LLP, Suite 606-08, The Chambers, 1865 Rajdanga Main
Road, Kolkata 700107, continue as the Companys internal auditors, directly reporting to
the Audit Committee. During the year the Audit Committee of the Board regularly met to
discharge its functions. The Audit Committee reviews compliance to the Revenue Recognition
of the Company. Internal audit activities are undertaken as per the Annual Audit Plan as
approved by the Audit Committee and the committee reviews compliance with the plan. The
Audit Committee regularly meets with the statutory auditors to review their observations
on the financial reports.
DEVELOPMENT IN HUMAN RESOURCES & INDUSTRIAL RELATIONS
The Company continues to maintain a cordial and healthy relationship with its
workforce. The number of people employed by the Company on its pay roll as on 31st March,
2023 was 399. To attract and retain good employees in the company, we are ensuring the
best place to work. We at Century Extrusions Limited are striving towards attracting,
retaining, training, multiskiling employees and working towards the welfare of our
resources. In the meantime, all efforts are being made to control cost so as to maintain
present level of profitability. Industrial relations remained stable throughout the
financial year 2022-23.
CAUTIONARY STATEMENT
Statements forming part of the Management Discussion and Analysis covered in this
report may be forward- looking within the meaning of applicable securities laws and
regulations. Actual results may differ materially from those expressed in the statement.
The Company takes no responsibility to publicly amend, modify or revise any forward
looking statements on the basis of any subsequent developments, information or events.
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