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The refractories division of the ₹10,000-crore Dalmia Bharat Group has entered into a joint venture with Europe-based Seven Refractories to develop and supply a range of advanced monolithic refractory material.
The joint venture entity – Dalmia Seven – will upgrade and modernise Dalmia’s existing factory at Katni in Madhya Pradesh at an estimated investment of close to ₹32 crore ($5 million). Dalmia has a 51 per cent stake in the joint venture company.
According to Sameer Nagpal, CEO-Refractories, a new line will be put up at the plant at Katni to manufacture value added and premium range of monolithic refractory products. The new line will be operational by the end of the calendar year 2018.
“The plant at Katni is currently minimalistic. We plan to upgrade the existing facility at an estimated investment of close to $5 million,” Nagpal told BusinessLine .
Growing demand
Refractory products, such as castables and bricks, are vital in all high-temperature processes in the making of metals (like steel), cement, glass and ceramics. The advanced monolithic refractory material will be used by consumers in iron, steel and cement industries.
According to Nagpal, the domestic steel industry, which had been going through turbulent times, is likely to grow backed by a steady demand from infrastructure and housing sectors.
“Steel companies are looking to benchmark themselves to international standards, thereby necessitating the demand for advanced refractory material,” he pointed out.
The refractory business of Dalmia Bharat Group comprise Dalmia Refractories and OCL Refractories.
Dalmia-OCL has four manufacturing plants in India and one in China.
Product diversification
Meanwhile, the refractory division of Dalmia group has been working on readjusting its product portfolio for the domestic market by focusing on production of high performance bricks for cement kilns and special quality bricks for high purity steel. The company is also looking for alternatives for magnesia bricks to hedge against uncertainties in raw material availability.
It has earmarked close to ₹80-100 crore towards product diversification and plant modernisation initiatives to be undertaken in the next couple of years.
This apart, the group is also looking for acquisitions overseas, specifically Europe, as a part of growing its refractory business.
Exports currently account for nearly 15 per cent (or over ₹80 crore) of its ₹550 crore refractory business. The plan is to double it over the next one to two years.
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