Maithan Alloys plans expansion, to invest ₹600 cr

Shobha Roy Kolkata | Updated on February 11, 2019

Subodh Agarwalla, Director and CEO, Maithan Alloys

Kolkata-based manganese alloy producer Maithan Alloys Limited is planning to invest around ₹600 crore on both organic and inorganic expansions over the next three years.

According to Subodh Agarwalla, Director and CEO, Maithan Alloys, plans are afoot to set up a 1,20,000 tonne unit at Bankura, approximately 206 km from Kolkata, entailing an investment of close to ₹270 crore.

“We have applied for environmental clearance to set up the unit and are hoping to get the same in the next six months,” Agarwalla told BusinessLine.

The company manufactures Ferro Manganese, Silico Manganese and Ferro Silicon at its plants at Kalyaneshwari (West Bengal), Visakhapatnam (Andhra Pradesh) and Ri-Bhoi (Meghalaya). It has a combined capacity of 2,25,000 tonnes per annum and a capacity utilisation of over 90 per cent.

The plan will be to double capacity in the next three-to-four years. Apart from the 1,20,000 tonne unit at Bankura, it would explore brownfield expansion at its Kalyaneshwari unit or a greenfield project at Vizag. It is also in talks with couple of companies which are in various stages of insolvency proceedings for inorganic expansion.

“We are looking to double capacity by way of greenfield or brownfield projects or acquisition,” he said.

Steady demand

According to Agarwalla, the growing steel demand across the globe continues to be a key driver for ferro alloys, which serves as an intermediary product in steel manufacturing.

The country’s crude steel output rose 4.9 per cent to 106.5 million tonnes in 2018. The development will boost the steel ministry’s initiative to achieve 300 million tonnes of production capacity by 2030.

“Achieving the target of 300 million tonnes of steel production by 2030 is not difficult if the country’s economy continues to grow steadily at around 7 per cent. This will continue to drive the demand for ferro alloys,” he said.

Maithan holds around 8 per cent share of the total ferro alloys market, which is estimated to be close to 2.5 million tonne per annum, said Agarwalla.

Margins to remain firm

The company with a turnover of ₹1,891 crore as on March 31, 2018, has been growing at around six-to-seven per cent on a year-on-year basis.

As on December 31, 2018, its operating profit margin was around 15.08 per cent (19.75 per cent) and net profit margin was at 11.32 per cent (14.26 per cent).

The company expects margins to remain steady at around 15-17 per cent.

“We have been able to maintain our profitability due to a slew of measures which includes focussing on operational efficiency, negotiating better terms with suppliers and ensuring better productivity per employee by creating right environment at workplace,” he pointed out.

Published on February 11, 2019

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