The annual general meeting of Indal is also scheduled for July 2. After the AGM, Alcan is expected to announce measures to increase its involvement substantially in the management and operations of Indal, including at the board level.

The entire Indal management flew down to Canada to the Alcan headquarters for a "performance and technology meeting" where certain action plans, far more positive and demanding than before, were laid out for the management. The meetings, it is believed, analysed threadbare the challenges before Indal, the lessons from the recent takeover battle with Sterlite Industries, and how substantial shareholder value addition will be possible in the future by the Indal management.

Nothing has, however, been spelt outofficially as yet, because Alcan is keen to go by the book, and wait till the shares accounting for the 20 per cent stake it received in response to its open counter-offer are formally allotted on July 2. Alcan's open offer closed on June 2.

It is believed that major changes in the composition of the Indal board may be announced once the annual general meeting is over, although this could not be confirmed.

Alcan Aluminium fended off successfully a challenge of its single largest shareholder status (it held a 34.6 per cent stake) in Indal with a counter-bid against an open offer from Sterlite Industries. In the process, it has ended up with a majority stake, of 54.6 per cent, which had eluded the Canadian giant in the past. After it had decided not to invest in Indal's global depository receipt issue in 1994, Alcan was not allowed to raise stake in the company by the financial institutions through a proposed preferential allotment.

Alcan is already intricately involved with the production processes atIndal. Through technology and research, Alcan has assisted Indal through the last several decades of its substantial shareholding in the company. In fact, prior to the framing of Foreign Exchange Regulation Act, 1973, Alcan owned a majority stake in the company, and was forced to disinvest by the legislation.

Alcan will find the challenge of propelling Indal forward all the more due to an adverse budget. The government has chosen to go for measures that were heavily in favour of the primary metal producers, whose lobby was extremely strong, and who are the sources of metal for the downstream sector.

In the process, effective duty protection for downstream aluminium production has increased from 25 per cent to 31.75 per cent, which will allow the upstream primary metal companies substantial price cushion.Currently, the international price of aluminium metal is ruling at around Rs 80,000 per tonne, against an Indian price of around Rs 73,000 per tonne. The price is expected to rise after the union budget ispassed, thanks to the substantial duty protection given to the industry at the upstream end.

In fact, since 1996, when the duty on primary metal was only 10 per cent, the tariff has risen to 31 per cent in just three years, which implies that the margin of protection for this sector has increased by more than 300 per cent.

Indal will fight not only the adverse budgetary protection for primary metal, but will also have to deal with the low prices being quoted by south-east Asian manufacturers following the steep devaluation in their currencies.