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The ₹10,000-crore Dalmia Bharat Group is looking for acquisitions overseas, specifically in Europe, as part of growing its refractory business.
Plans are also afoot to appoint representatives in Bangladesh, West Asia, Africa and Russia to grow exports.
According to Sameer Nagpal, CEO - Refractories, Dalmia Bharat Group, exports currently account for nearly 10 per cent (₹50 crore) of its ₹500-crore refractory business.
The plan is to double it over the next 1-2 years.
“We are actively looking for acquisitions in Europe as it is the hub of refractory business. This will help us tap the European market,” Nagpal told BusinessLine.
Sources say many smaller companies are up for acquisition in Europe, in contrast to larger ones.
The refractory industry has over the past 10 years, gone through consolidation, leading to lesser scope in the segment.
Nagpal however refused to divulge any details on the size of such acquisitions.
“It is only the smaller ones (where acquisition opportunities are available), and where we are in a position to fund them. They are not huge investments. Rather, I would call them critical investments,” he said.
Dalmia Bharat Group is currently present in Europe through a network of agents — primarily, smaller refractory service companies, for addressing local customers’ needs. International acquisition will help the company upgrade its technology.
The group’s refractory business comprises Dalmia Refractories and OCL Refractories.
Dalmia-OCL has four manufacturing plants in India and one in China.
Better capacity utilisationAccording to Nagpal, higher exports will lead to better capacity utilisation.
Capacity utilisation in India has been under pressure due to low demand from the domestic steel industry.
The capacity utilisation for the refractory industry as a whole has been close to 50-55 per cent. Refractory products are used in high-temperature processes that go into the making of metals, cement, glass and ceramics.
The steel industry is one of the biggest consumers, accounting for nearly 60-70 per cent of the segment’s total production.
“In India, the refractory industry is going through a lot of churn. It will take time to recover. So we are focussing on West Asia, Africa and Russia for better capacity utilisation of our products,” he said.
Product diversificationMeanwhile, for its domestic market, the company will work on readjusting its product portfolio.
Focus will be on high-performance bricks for cement kilns, looking for alternatives for magnesia bricks to hedge against uncertainties in raw material availability, and producing special-quality bricks for making high-purity steel.
Product diversification and plant modernisation will entail an investment of ₹80-100 crore in the next couple of years.
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