Dalmia OCL plans to hold at least a 25% market share in India over next 2-3 years

2020-10-14

Oct. 10, 2020 - Mr. Sameer Nagpal, CEO, Dalmia OCL, thereinafter, talks on the company's targets in an Interview.

1) Can you talk in detail about the recently launched refractory line for production of Magnesia Carbon (MgO-C bricks)? What will be the capacity of this line?

Magnesia Carbon Brick is the largest volume product consumed by the steel industry. The demand for MgO-C brick in FY20 was approx. 300k MT out of which almost 75% i.e. 225k MT was imported. To substitute these imports and make India Atmanirbhar, Dalmia OCL has embarked upon an initiative of ‘Bharat ki Factory mein Bharat ki Refractory’. Under this program, the company is localizing production of most refractories which are currently being imported.
In this direction, Dalmia OCL has recently launched a new capacity of 108k MT of MgO-C brick at the Rajgangpur Plant. Launching in 3 phases of 36K MT each, the first phase of the MgO-C brick line will substitute 17% imports immediately ramping up to 50% over next 1-2 years. This is India’s first refractory line after the announcement of Atmanirbhar Bharat initiative by Hon’ble PM Shri Narendra Modi.

2) What is the market share that you are targeting with the launch of this new line?

Through the launch of this line, we plan to hold at-least a 25% market share in India over the next 2-3 years. We will continue to invest in India as we aim to make it an export hub for refractory products in the coming future.

3) Do you think India will be able to do away with import dependence from countries such as China?

We live in an interdependent world. I think the idea is to reduce overdependence on China for manufacturing, something which has evolved over last two decades. To that extent I think India is fully capable of ramping up its production capacities but we need to improve our labour laws and simplify our compliances system.

At Dalmia OCL, we can manufacture 100% refractory products in India. We have plans to expand capacities in our five plants, for which we have already started putting additional lines. As these lines become operational, it will definitely reduce the dependency on imports and make India not only self-reliant but also a net exporter in coming years. It is time we make India a supply center and we are hopeful to get the government’s support to make this successful.

4) What are the challenges faced by the Indian Refractory industry?

India has the manufacturing capability and technology to make the best refractory in the world, however availability of raw material at a cost effective price is a major challenge for the sector. Manufacturing in China is much cheaper since the industry there has access to a wide range of subsidies and raw materials. Government needs to help the sector by simplifying mining of refractory raw materials and till then supporting with lower import duties on the same.

5) The government has been emphasizing on creating an Atmanirbhar Bharat and on being Vocal for Local. How does Dalmia-OCL aim to contribute to this vision?

A dynamic Indian company with decades of expertise in manufacturing, Dalmia OCL has always taken pride in its Indian roots. The company has been vocal for local way before PM’s clarion call for Atmanirbhar Bharat. We intend to expand our production capacity in order to attain self-reliance in refractory. Therefore, in the last two years, we have put up two new manufacturing lines, a world-class monolithic plant in Katni with 48,000-tonne per annum capacity and a new 250-sets per annum snorkel line in Rajgangpur. This line will allow Indian steel producers to source high-quality indigenously manufactured Snorkels for producing high-grade steel, thereby eliminating the need to import. Our recently launched Magnesia Carbon Brick Production line is the latest capacity development in Rajgangpur that will cater to the Steel Industry and further support the government’s mission and vision.

6) What kind of support do you expect from the government to achieve this mission? Any specific incentives you’re looking for government to bring down cost of production?

We need the government’s support to be cost competitive compared to China made refractories. The government can provide production related incentives to the local industry. Some states already offer this but a policy applicable specifically to refractory industry irrespective of state will give a major push to the sector. The government can also extend support by simplifying mining and exploration related to refractory minerals. We must not forget that even for refractory made in India there is large dependency on China for raw materials.  By simplifying these activities, organisations can easily procure refractory raw materials as we have huge resources in India which needs to be explored and utilized.

I also believe that apart from seeking policy level changes from the government, organizations should focus on intensifying their scale of production.  This will make our manufacturing more competitive with faster turnaround, thereby creating opportunities for Indian companies via FTAs.