In an interview with PTI, Parmod Sagar, MD & CEO of RHI Magnesita India, said, “the steel sector is in a bullish phase, and steel majors expect India to add at least another 120 million tonnes of capacity over the next seven years.
“We remain the most reliable refractory partners for steel makers due to our backward integration support from our global parent. We have alternate raw material sources in case the China supply chain gets disrupted.”
The company already commands a 30 per cent market share in the Indian refractory market, which is estimated to be worth Rs 13,500 crore per annum, the official said.
“We are well-positioned to ramp up our market share to 40 per cent in the next four years, given the growing demand and the synergies we are deriving from the two acquisitions carried out in the last 12 months,” Sagar said.
RHI Magnesita India acquired the Indian refractory business of Dalmia Bharat Refractories Ltd in a share swap deal in January and Hi-Tech Chemicals in October 2022 for Rs 621 crore in an all-cash deal. “We are now in the process of consolidating the acquisition and modernizing Dalmia assets. We remain open for more inorganic growth,” Sagar said. “We are looking at infusing Rs 200-300 crore in the five Dalmia plants over the next three years to optimize them to world-class standards,” he added.
The modernization will help the company for domestic and export markets. Exports, which are currently at 12-13 per cent, will be doubled in 3-4 years.
RHI Magnesita, which had a total refractory capacity of 1.8 lakh tonnes, post-acquisition jumped to 5.3 lakh tonnes. The Dalmia acquisition added some three lakh tonnes, while Hi-Tech, which produces top-grade products in the refractories value chain, added some 35,000 tonnes to the manufacturing footprint in India.
The company now has nine manufacturing plants in the country and an average capacity utilization of 60 per cent.
Sagar said that though the existing capacity is sufficient for the next three to four years, the company will continue to explore acquisition opportunities.
RHI Magnesita India is also innovating in decarbonizing the steel industry with green refractory products with recycling and technology interventions.
He also informed that the industry association is also working with the government on decarbonisation and raw material security, eyeing 300 million steel capacity target by 2030.
Meanwhile, Sagar said his company is looking at around Rs 4,000 crore in revenue in the current fiscal from Rs 2,005 crore achieved in FY23. The top-line jump comes due to the two recent acquisitions.
“We will maintain a 8-10 per cent growth amid a high base post acquisitions,” Sagar asserted.