The Hindu Business Line : Refractory industry hard pressed for inputs

Kolkata, May 6 The Indian refractory industry is faced with a raw materials crisis, thanks to constraints on exports from China coupled with spiralling costs of key inputs.

According to informed sources, in the last 10-12 years, the Indian refractory industry has been “considerably dependent” on imports from China for critical raw materials, such as brown fused alumina and fused magnesia.

The Indian refractory industry requires about 50,000 tonnes a year of brown fused alumina and 30,000 tonnes a year of fused magnesia. Most of this is imported from China, as India does not produce sufficient quantities of equivalent quality.

Sources said that over the last three-four years China has progressively introduced measures that discourage refractory exports.

These include licensing, quantitative restrictions, export duties and withdrawal of export benefits.

Price rise

The landed prices of imported raw materials, too, have gone up substantially between end-March 2007 and end-March 2008.

For example, the landed cost of brown fused alumina imported from China has gone up from Rs 16,446/ tonne as on March 31, 2007 to Rs 35,034/tonne on March 31, 2008 — a rise of 113 per cent.

Similarly, the landed price of fused magnesia has gone up from Rs 17,746/tonne on March 31, 2007 to Rs 25,097 on March 31, 2008.

The price of imported calcined bauxite has also gone up by 120 per cent — from Rs 9,397/tonne to Rs 20,670 — during the same period.

In his address delivered in absentia at the India International Refractory Congress 2008 held in February this year, Dr J.J. Irani, Director of Tata Sons, also urged Indian refractory manufacturers to focus on their raw materials security for the long term.

The Rs 3,100-crore turnover Indian refractory industry comprises nearly 100 established units, including 10 large plants, 24 medium-scale units and the rest being in the small-scale sector.

The industry has an aggregate production capacity of 20 lakh tonnes a year.

The capacity utilisation, however, presently stands at around 60 per cent, or 11.5-12 lakh tonnes a year.

About 75 per cent of the refractories that are manufactured find application in the steel industry, 12 per cent in the cement industry, 5-6 per cent in non-ferrous industries, 3 per cent in the glass industry and the balance in other industries.

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