PESTLE It is as below:

1. Political: These factors determine the extent to which a

government may influence the economy or a certain industry.
[For example] a government may impose a new tax or duty due
to which entire revenue generating structures of organizations
might change. Political factors include tax policies, Fiscal policy,
trade tariffs etc. that a government may levy around the fiscal
year and it may affect the business environment (economic
environment) to a great extent.
2. Economic: These factors are determinants of an economys
performance that directly impacts a company and have
resonating long term effects. [For example] a rise in the inflation
rate of any economy would affect the way companies price
their products and services. Adding to that, it would affect the
purchasing power of a consumer and change demand/supply
models for that economy. Economic factors include inflation
rate, interest rates, foreign exchange rates, economic growth
patterns etc. It also accounts for the FDI (foreign direct
investment) depending on certain specific industries whore
undergoing this analysis.
3. Social: These factors scrutinize the social environment of the
market, and gauge determinants like cultural trends,
demographics, population analytics etc. An example for this can
be buying trends for Western countries like the US where there
is high demand during the Holiday season.
4. Technological: These factors pertain to innovations in
technology that may affect the operations of the industry and
the market favorably or unfavorably. This refers to automation,
research and development and the amount of technological
awareness that a market possesses.
 5. Legal: These factors have both external and internal sides.
There are certain laws that affect the business environment in a
certain country while there are certain policies that companies
maintain for themselves. Legal analysis takes into account both
of these angles and then charts out the strategies in light of
these legislations. For example, consumer laws, safety
standards, labor laws etc.
6. Environmental: These factors include all those that influence
or are determined by the surrounding environment. This aspect
of the PESTLE is crucial for certain industries particularly
for example tourism, farming, agriculture etc. Factors of
a business environmental analysis include but are not limited to
climate, weather, geographical location, global changes in
climate, environmental offsets etc.

1. Political factors:
Trading policies
Government changes
Shareholder and their demands
Funding,
Governmental leadership
Lobbying
Foreign pressures
Conflicts in the political arena
2. Economic factors:
Disposable income
Unemployment level
Foreign exchange rates
Interest rates
Trade tariffs
 Inflation rate
Foreign economic trends
General taxation issues
Taxation changes specific to product/services
Local economic situation and trends
3. Social factors:
Ethnic/religious factors
Advertising scenarios
Ethical issues
Consumer buying patterns
Major world events
Buying access
Shifts in population
Demographics
Health
Consumer opinions and attitudes
Views of the media
Law changes affecting social factors
Change in Lifestyle
Brand preferences
Working attitude of people
Education
Trends
History
4. Technological factors:
Technological development
Research and development
Trends in global technological advancements
Associated technologies
Legislations in technological fields
 Patents
Licensing
Access into the technological field
Consumer preferences
Consumer buying trends
Intellectual property and its laws
How mature a certain technology is
Information technology
Communication
5. Legal factors:
Employment law
Consumer protection
Industry-specific regulations
Competitive regulations
Current legislation home market
Future legislation
Regulatory bodies and their processes
Environmental regulations
6. Environmental factors:
Ecological
Environmental issues
International
National
Stakeholder/ investor values
Staff attitudes
Management style
Environmental regulations
Customer values
Market value

Extrusions
 Quick Read
Extrusion is a widely used aluminum forming process that delivers almost unlimited
possibilities in product design. The extrusion process is similar to the childhood pastime
of creating long strands of play-dough by forcing the product through a plastic-shaped
die. Fortunately, aluminums weight, strength and high thermal conductivity vastly
outweigh that of play-dough, leading to its presence in a wide range of consumer and
industrial goods. The aluminum extrusion process has the added benefit of enabling fast
product development cycles due to its low-cost and flexible tooling. Manufacturers can
accelerate prototype and testing phases by rapidly creating and evaluating different
designs.
Take-Away Facts
Reducing auto emissions while increasing safety
An automobile designed with 1 pound of aluminum extrusions instead of 2 pounds of
steel will save 3.1 gallons of crude oil, and prevent 20 pounds of CO2 emissions over its
lifetime. North American car manufacturers plan to increase the use of aluminum in
cars and light trucks by over 40% from 2012 to 2025. Aluminum tailgate frames, engine
mounts, roof consoles and running boards are also corrosion resistant and more resilient
in crashes due to their inherent strength and flexibility.
Aluminum extrusions and LEED
With buildings accounting for over 40 percent of global energy consumption, it's no
surprise that extruded aluminum is becoming a product of choice for green builders. The
use of aluminum extrusions in commercial buildings can contribute to LEED (Leadership
in Energy and Environmental Design) points in a number of areas including Energy
Efficiency, Selection of Sustainable Materials and Indoor Environmental Quality.
Consumer applications
Many everyday products get their form and function from extruded aluminum.
Aluminum extrusions make patio furniture lighter, speedboats faster and sports
equipment more durable. The innovations are sure to continuelow cost and flexible
extrusion tooling lets manufacturers experiment with new designs and applications.
Aluminum Extrusion 101
The extrusion process
Extrusion is a plastic deformation process in which a solid cylinder of aluminum (billet)
is forced by compression through a smaller die opening. The billet is typically preheated
to facilitate the deformation process.
Near infinite design possibilities
There are many factors in an extrusion process that influence the properties of the final
product, including:
Type, layout and design of the die
 Length of billet and type of alloy
Temperature of billet and container
Die and tooling temperature
Speed of extrusion
These adjustable factors, coupled with inexpensive tooling, create near limitless
possibilities for design. The strength, weight and sustainability of aluminum add to its
appeal for manufacturing and construction applications.
Forming the end product
The aluminum extrusions formed right from the press are rarely seen in commercial
applications. Extrusions typically undergo a number of fabrication and/or finishing
processes to transform them into usable components, such as an auto part or
construction material. The fabrication process generally starts with cutting the extruded
length, followed by punching, machining, bending or welding.
Extruded Aluminum in Space
Extruded aluminum tubing is playing an integral part in the most complex international
scientific venture in history. Boeing Company engineers designed an intricate aluminum
truss structure to house the International Space Station (ISS) currently weighing in at
over 400,000 pounds, measuring 146 feet long, 240 feet wide and 90 feet high.
Aluminum extrusions provide the mechanical properties and surface finish needed for
this mission-critical application.
- See more at: http://www.aluminum.org/industries/processing/extrusions#sthash.NOGk4B5i.dpuf

Overview of the global aluminum extrusion market

Technavios market research analyst predicts the global aluminum extrusion market to grow at
a CAGR of more than 6% by 2020. Owing to the rise in pollution levels, the governments of many
countries are encouraging the use of aluminum. Aluminum is light weight and increases the fuel
efficiency of the vehicles. This has compelled several automotive companies to manufacture
vehicles made of aluminum instead of heavy vehicles made of steel. Japans green car incentive
policy provides incentives to promote the purchase of eco-friendly vehicles to
reduce greenhouse gas emissions. Also, aluminum is one of the most
environmentally sustainable and energy efficient recyclable construction materials which
help buildings achieve the green status. With growing adoption of green buildings, the use of
aluminum extrusions will surge in the coming years.

Aluminum extrusions are increasingly being used for manufacturing building profile systems as
fine value-added solutions. These products are used in the form of windows, doors, facades, and
sliding doors in modern high-rise buildings, commercial buildings, and hotels. Aluminum
profiles are gaining market shares due to their slim structure, durability, and negligible
maintenance cost. Also, these aluminum extrusions do not have insulation limitations. The use of
aluminum extrusions ensures safety and faster construction as they have design flexibility, fast
installation, easy fabrication, and superior performance. The anticipated growth of the building profile
systems market is expected to increase the consumption of aluminum extrusions during the forecast
period.
 Segmentation by product and analysis of the aluminum extrusion market

Mill finished
Anodized
Power-coated

During 2015, the mill-finished aluminum segment dominated the market and accounted for around
57% of the overall market share. These products are predominantly used in applications that do not
require aesthetic or additional corrosive resistivity such as ladders and hollowware. Several end-
users, especially in the building and construction sectors, prefer mill-finished products over value-
added products due to its relatively fewer premium properties.

Geographical segmentation and analysis of the aluminum extrusion market

China
Central and South America
Europe
North America
Rest of Asia

China is the largest region in the market and is expected to occupy more than 59% of the overall
market share in 2020. Rise in demand from the industrial sector because of increased production of
automobiles, emission control equipment, power generation and distribution equipment, and air
conditioning units are driving the market growth. With the increase in the export of semi-fabricated
products, the country is expected to witness tremendous growth in the coming years.

Competitive landscape and key vendors

The competition in this market is high and is exclusively dominated by the leading players who use
expansion strategies to increase their market share. Technavio expects the market competition will
intensify during the forecast period with an increase in product extensions and innovative solutions.
The strong position of the major vendors will restrict the entry of new players in the market.

Key vendors in the market are -

Alcoa
Constellium
Gulf Extrusions
Hindalco
Sapa
Other prominent vendors in the aluminum extrusion market include Aluminium Products (ALUPCO),
Al-Taiseer Aluminium Factory, Balexco, Hulamin Extrusions, Tajik Aluminum (TALCO), YKK
Corporation of America, and Zahit Aluminium.

Aluminium Extrusions: How are they Re-shaping the

Global Aluminium Market?
March 15, 2016Contributed by: Dipanwita Gupta
inShare1

Aluminium extrusions are all over. They are used in buildings, in automobiles, in
equipment and appliances and where not! Industries are just waking up to the
enormous benefits of these versatile metal products, and it is only a matter of time
before they become the mainstay of modern day architecture.

There was a time when ferrous metals used to be at the core of any engineering
and technological innovation or project. With the turn of the century, lightweight
metal wave has swept across economies, and the use of aluminium and aluminium
extrusions has picked up over the years.

In the last two decades, the use of aluminium alloy has increased drastically, now
forming more than 50 per cent of the total market share of all extruded metal
products. The reason why it has succeeded in outpacing other metal extrusions lies
in the multitude of benefits aluminium provides as a metal. It is light, strong, and
non-corrosive; blends with other metals to form aluminium alloys without
compromising on strength and durability. Malleability of aluminium allows for more
options in design and cost-effective production. And it can be recycled endlessly!
What is aluminium extrusion? process or product ?
Aluminium extrusion is basically a manufacturing process, but the end product too
is known by the same name in generic use. Making the most of aluminiums
excellent formability, the process creates shapes by heating billets of aluminium
alloy to soften them and then forcing them with a hydraulic press or ram under
high pressure through special steel dies. What results are pieces of aluminium that
maintain the specific shape of the die. These end products are known as extruded
aluminium products or simply, aluminium extrusions.

Aluminium extrusion applications:

According to the leading extrusion manufacturer, Sapa Extrusion, The scope of use
of extruded aluminium is limited only by imagination. True that! There exists in
the market today an assortment of aluminium extrusion products which are
fabricated and customised according to the specific requirements of the customers.
Worldwide, Building and Construction industry is the major consumer of aluminium
extrusions followed by the industrial and the transportation segments. High
conductivity of heat and electricity makes this downstream product apt for use in
nuclear reactors as well!

Aluminium extrusion in construction:

Construction sector uses aluminium extrusions in prefabricated forms- windows
and door frames systems, curtain walling, roofing and exterior cladding, space
frame systems, geodesic domes, canopies, bridge decks, atriums, and arches etc.

Other popular aluminium extruded products that are gradually replacing traditional
wooden, concrete, or iron fixtures are portable/modular aluminium stairs,
aluminium railings, aluminium panels, and aluminium framing components. And
this is not all! Aluminium extrusions are being used for making components of the
international space station as well! So, if we talk about advantages of using the
metal products in installations, they are endless.

Using aluminium extrusion in construction offers benefits other than weight

savings. The components can be designed to incorporate additional features in
fixings, channels, and interlocking systems that preclude the need for additional
parts. Hence, the construct appears much more uncluttered leaving enough room
for further improvisation. Think about contemporary aluminium window frames
they allow for easy placing of large glass panels which increase the amount of
daylight intake in a room. The structural strength of the assembly is in no way
compromised through this simplistic design.

Use of aluminium formwork is also gaining in popularity these days. A

comparatively new technology, it saves time, cost, and improves quality of the
construction. Moreover, aluminium structural components are receptive to top-
grade architectural coatings which help in further value-addition.
All things aside, aluminium extrusion products fit perfectly into the green building
concept, which centres around the use of resources while reducing impact on
peoples health and environment.

Aluminium extrusion in transportation:

Demand for aluminium extrusions in the automotive sector has literally zoomed in
the last five years or so. Previously, the use of aluminium extruded products was
mainly restricted to engine mounts, radiator frames, brake components, seat
frames and a few other minor applications. Now, original equipment
manufacturers (OEMs) are creating fresh demands for aluminium tubes, bars and
profiles, and sheets for high-end equipment parts, crash management systems and
other safety components, cockpit carriers, body-in-white structures, and elaborate
decorative parts.
Extrusions are being used increasingly for manufacturing dashboard
reinforcements, pedal mountings, wipers, door trimmings, chassis and suspension
parts, electronic applications, electrical base carriers, brackets, and tanks.

Automobile equipment parts made from aluminium extrusions stand out by virtue
of their lightness, design, forming optimization, and safety standards. Earlier most
OEM suppliers would use aluminium scrap or cast aluminium to make aluminium
extrusions which used to fall short of the international safety standards. But now,
with safety norms being made stricter all over the world, automotive OEM suppliers
have largely shifted to molten primary aluminium as their main raw material. So,
the extruded aluminium automotive components manufactured nowadays have
better finish and improved quality.

Demand driver:
Rising demand for lightweight vehicles is boosting the use of aluminium and
aluminium extruded products in transport.

Light weighting is needed to make an automobile efficient, so that it consumes less

fuel and emits less carbon dioxide while yielding better performance in terms of
sturdiness and speed. Aluminium being low-density helps OEMs to balance the
need for reducing weight with the need to cut cost. Moreover, the CAF standards
are being made stringent all over the world; this will further drive the demand for
aluminium in automobiles in the long run.

Other areas of growing application:

Telecom: Extruded aluminium is superior as heat dissipater. It outperforms cast
aluminium with thermal conductivity that is twice as effective, and has lesser
density than copper. So it is mostly used in heatsink solutions. Cooling fins made
from extruded aluminium can be spaced closely and with high degree of precision
in a heatsink solution.
Solar power infrastructure: Aluminium is the metal of choice for Solar Panels
manufacturers. About 40-50 tonnes of extrusions are used for mounting solar
panel systems per MW of installation.
Consumer durable: Today, starting from furniture and appliances to gadgets,
every article of daily use with long-term customer value has some aluminium
component built in it. The underlying reason is same- aluminium serves as a
versatile base for any kind of packaging value-addition; hence, it fits into
contemporary consumers changing tastes and sensibilities. Moreover, it is light,
strong, and green.
Global aluminium extrusions market:
According to the analysts, global aluminium extrusion market is set to witness a
tremendous growth at a rate of around 7 per cent during 2015-2020. Of the three
main product categories- Mill finished, Anodized, and Powder Coated, the Mill
Finished segment alone is expected to reach around 13 million metric tons by the
end of 2019.

China presently accounts for more 62 per cent of the global market share. During
the forecast period it is expected to grow at a rate of 7 per cent. The increase in
industrial consumption of extruded aluminium will drive the market in China.

Aluminium extrusion market worldwide is highly fragmented with only a handful of

big players dominating the spectrum. Among the top aluminium extruders are the
brands like Alcoa, Hindalco-Novelis, Hydro-Sapa, Gulf Extrusion, EGA, Constellium,
and Kaiser Aluminum. With demand for aluminium extrusion products growing
stronger, more manufacturers and suppliers are expected to join the league. For
that to happen a more conducive international trade environment is needed where
there will be fair competition and faster adoption of technology across the borders.

Indian aluminium extrusion market:

India is a fledgling market for aluminium extrusions. Current per capita
consumption of aluminium extrusion here is amongst the lowest in the world. But
the country holds immense potential. Indias infrastructure is undergoing a major
overhaul. Smart cities are coming up; metro railway networks are being built across
Tier 1 cities. And with the recent onslaughts of e-commerce, preferences of
contemporary urban Indians are changing day in and day out. To keep pace with
these changing socio-economic trends, core and ancillary industries such as
aluminium extrusions are bringing out solutions that are global in their concepts,
yet perfectly fitted for the local usage.

Indian aluminium extrusion market is fragmented and comprised mostly of SMEs

barring a few companies like Century Extrusions, GAL Aluminium Extrusion Pvt. Ltd,
Bhoruka Extrusions Pvt Ltd, Jindal Aluminium, Galco Group and Sapa Extrusion
India (subsidiary of global Sapa Group). Till now, they have been relying heavily on
aluminium imported from China, Middle East and South East Asian countries.
However, after the recent 2.5 per cent import duty hike, they will now have to
procure their raw materials from the domestic producers. It remains to be seen
how they are benefited or affected by this change in duty structure.

Domestic primary aluminium producers too are now focusing on the downstream
sector. Nalco, for example, has announced an investment commitment of INR
20,550 crore for setting up an aluminium park at Angul. Vedanta has also proposed
to invest INR 1,000 crore on an aluminium downstream park, close to the site of its
existing smelting facility at Jharsuguda.

It seems Indian aluminium makers are finally repositioning themselves in the global
value chain. This was much needed given the cyclicality of aluminium business,
capacity built-up from time to time, and price volatility. With the Central
government betting big on Make in India, more aluminium extrusion
manufacturers and suppliers are expected come on stream with the vision to grow
through planned investment and strategic expansion.

Global demand for flat rolled and extruded aluminium products is expected to rise by 5-
6% CAGR between 2016 and 2020, mostly due to increased demand from the
transportation sector. This is the general expectation held by the major aluminium
fabricators based on latest research and forecasts. During the same period, demand
from construction will remain weak as major economies struggle to stabilise financial
sectors, with GDP growth stagnating.
The major increase in demand, both for extrusions and flat rolled products (FRP-s),will
come from China, followed by India, Brazil and other developing countries. Demand for
automotive sheet alone will be the highest in North America (up to 25-30 % CAGR),
Europe, and East Asia ( 10-12 % CAGR), increasing from around 1.2 million tonnes in
2015 to around 2.4 million tonnes in 2020, marking an average global growth of ~ 15%
CAGR.

Similarly to the primary aluminium segment, China holds a major role in the global
market when it comes to downstream aluminium semi-finished products, both in
production and consumption.

Global demand for semi-finished products is currently around 80 million tonnes per year,
out of which Chinese demand is approximately 36 million tonnes, and 44 million tonnes
for the rest of the world. Global demand for FRP-s is around 24 million tonnes (out of
which ~50% belongs to East Asia (incl. China)) and around 26 million tonnes for
extruded products (~72% East Asia and China). Little more than quarter of the total
demand for semi-finished products comes from transportation while about a quarter
goes to construction, both being the largest segments of semi-finished product
aluminium demand. Geographically the highest demand is in China (about 45 % of total
demand), Asia (excl. China) with 18%, and Europe and North America with around 15%
each. These figures are approximate (though quite realistic) taking into account there is
no reliable statistical data, just estimates done by some of the leading market research
companies, all of which have come up with varying results. Major demand growth for
FRP-s came from transportation (especially light vehicles) and packaging sectors in
most regions, as well as from the production of pipe and tube.

It is estimated that the U.S. market for aluminium auto body sheet is expected to grow
from <100kt in 2012 to ~ 450kt by 2015 and ~ 1000kt by 2020. According to a study
done by research firm Frost & Sullivan, the global market in automotive applications for
aluminium is expected to more than double by 2017, from US$ 13 billion in 2010 to US$
28 billion in 2017. This would be the result of demanding new fuel-efficiency standards
in the European Union, the United States and Japan.

It is also expected that demand for castings in automobiles to decrease proportionally

while demand for flat rolled products will keep increasing during the same period. Based
on recent CRU research for North American automobile production, demand for castings
could increase by 50% between 2012 and 2025. However, the percentage of castings in
automobiles will decrease in the future, while the percentage of flat rolled products will
increase.

Chinese exports of semi-finished aluminium products have surged in recent years,

reaching ~4.2 million tonnes in 2015, almost three times higher compared to the 1.5
million tonnes exported in 2012. There are currently no indices that these exports will
vary much in 2016 compared to the previous year. Chinese rolling mills, around 160 and
growing, are increasing technological standards in recent years to be able to compete
with the most advanced Western rolling mills. However, the majority still lack the
technology to produce the kind of value-added products made by Novelis, Alcoa, Aleris
and other leading producers. Moreover, technology is not the only issue, as the
exchange of best practises and integrated work with other plants of our company, also
plays an important role, according to Michael Peter Steffen, spokesman for Hydro
Aluminium in Germany, when commenting on Hydros Malaysian premium foil mill.

All these major producers of FRP-s have invested significant capital in recent years
(several billion US dollars in total) in upgrading and building new production facilities,
preparing for increased demand, especially from automobile industry and the
transportation sector. Recent research analysis of future additions to capacity indicate
that China will continue to attract the largest share of investment, though the type of
investment is likely to change moving into the future. It is realistic to expect China to
make a qualitative and quantitative shift in new capacity towards the production of
higher value added FRPs such as canstock, auto body sheet and heat treat sheet and
plate.

Demand trends
The European market for flat rolled products increased by around 2 % in 2015,
according to Norsk Hydro. The automotive segment continued to be the dominant
market driver due to the growing substitution of steel with aluminium, together with an
increase in European car production of around 6 % in 2015. The beverage can market
segment was solid and improved after a weak start at the beginning of the year.
Demand in the foil market showed a slightly more positive development. Overall,
increasing imports from China and Turkey resulted in increased margin pressure.

Demand for general extruded products was strong in North America compared to 2014,
with an increase of more than 5 %, Norsk Hydro stated. European extrusion markets
were stable while market conditions for building systems continued to weaken in 2015,
in Europe in general and in the key markets of France and Italy in particular. However,
the weak European building and construction market was offset by growth in most other
segments. The building and construction market represents almost 50 % of the
extrusion market in Europe and demand in the first quarter this year increased over Q4
2015 by 10% both in Europe and North America, according to Norsk Hydro.

Production shift
In recent years the trend has been to shift production by Japanese and German
automakers to the US in order to reduce costs, which is largely related to a weaker US
dollar and stronger Japanese Yen and Euro. Big Japanese and German automobile
producers found that it is cheaper to produce autos in the US, rather than producing
locally and exporting to the US. This trend represents a fundamental shift in the
philosophy of we build where we sell. As a result, the production shift of automobiles
in the US has increased local demand for aluminium products used in automobiles and
also increased domestic sourcing of auto parts (including spare parts) made of
aluminium alloys.

The other trend is automobile productions shift to China and to a lesser extent
surrounding Asian countries, where the relatively cheap workforce and huge market
potential are the main motivation for international companies. This trend is also
followed by opening plants for production of other input products used in automobile
industry, including flat rolled and extruded aluminium products

Porters five functions aluminium

1. PORTERS FIVE FUNCTIONS-ALUMINIUM By Aarushi Nargas

2. Supplier Power PORTERS FIVE FORCES Degree of Rivalry Buyer Power Barriers to
Threat of substitutes Entry

3. INDUSTRIAL RIVALRY As a new entrant into the market it is difficult to compete

with rivals as- 1. The top 5 Cos have covered a significant portion of market share with
top Producer Hindalco itself covering 39% 2. Slow rate of growth 3. Economies of scale
4. High Investment in fixed assets

4. Competition is primarily on quality and price, as being a commodity, differentiation

is difficult. However, the recent spate of consolidation has reduced the competitive
pressure in the industry. Further, increasing value addition to aluminium products has
helped some companies protect themselves from the high volatilities witnessed in this
industry.

5. THREAT OF SUBSTITUTES Aluminium is comparatively more cheaper, lighter and

durable as compared to other metals. Demand for aluminium is estimated to grow at
6%-8%, per annum in view of the low per capita income consumption in India. Also the
demand for the metal is expected to pick up as the scenario improves for user
industries, like power, infrastructure and transportation.

6. However, copper can replace aluminium in electrical applications; magnesium,

titanium and steel can substitute for aluminium in structural and ground transportation
uses. Composite wood and steel can substitute for aluminium in construction. Glass,
plastics, papers and steel can substitute for aluminium in packaging.
7. BARRIERS TO ENTRY There are high barriers to entry in this industry as- Large
economies of scale. High capital costs Extended time to set up Scarcity of Power
Government factors Land problems Labour Law issues

8. The most cost efficient level of production is termed Minimum Efficient Scale
(MES). This is the point at which unit costs for production are at minimum - i.e., the
most cost efficient level of production. If MES for firms in an industry is known, then we
can determine the amount of market share necessary for low cost entry or cost parity
with rivals. The greater the difference between industry MES and entry unit costs, the
greater the barrier to entry. As the difference is towards the higher side in the
aluminium Industry it can be said that there are high barriers to entry.

9. BARGAINING POWER OF CONSUMER Being a commodity, customers enjoy

relatively high bargaining power as prices are determined on demand and supply. This is
aided by the long gestation period and the high storage costs that incur which makes
companies want to push out their product into the market.

10. BARGAINING POWER OF SUPPLIER Suppliers are Powerful if: Credible forward
integration threat by suppliers Significant cost to switch suppliers Suppliers are Weak
if: Many competitive suppliers Credible backward integration threat by purchasers
Concentrated purchasers

11. The bargaining power of suppliers is low for fully integrated aluminium smelters
(upstream) as they have their own mines for key raw material like bauxite. Examples
here could be Nalco and Hindalco. However, those who are non-integrated or semi
integrated, (downstream) have to depend upon the upstream producers for alumina or
primary metal. While the bargaining power is limited in case of power purchase as it is
highly regulated sector and government is the sole supplier most of the times,
increasing usage of captive power plants are helping the companies to rationalize their
costs to certain extent.

12. SWOT ANALYSIS Strengths: Abundant resources of aluminium ore Low cost and
efficient labour force Strong Managerial capability Strongly globalised industry and
emerging global competitiveness Modern new plants & modernized old plants.
Weaknesses High cost of energy Higher duties and taxes Labour laws
Dependence on imports for aluminium manufacturing equipments & technology.

13. Opportunity Rapid Urbanization Increasing demand for consumer durables

Untapped rural demand Increasing interest of foreign aluminium producers in India
Globalization Threats Market fluctuations and Chinas export possibilities Global
economic slowdown Governance issues. Environmental concerns.

14. CONCLUSION Indian aluminium producers have emerged among the lowest cost
aluminium producer in the world. Aluminium Industry in India registered a phenomenal
growth during the past few years on the back of robust growth in the economy. With the
growing demand of aluminium in India, the Indian aluminium industry is also growing at
an enviable pace.

15. In the past, the growth of alumina and aluminium industries was in the range of 2
to 3% per annum. However, the growth rate may remain minimal in developed
countries. But its growth is bound to be reasonably high in developing economies such
as BRIC countries (Brazil, Russia, India and China) and Middle East.
Vimetco Extrusion managed also to increase its production by 8% YoY in H1 2016.

Vimetco Extrusion managed also to increase its production by 13.7% YoY in 2015