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Orient Refractories’merger may boost shareholder value

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Post-merger, the combined entity will have operating revenue of Rs 1236 crore on proforma basis, two production facilities and over 700 employees.

The BSE-listed Orient Refractories has announced merger of its two unlisted subsidiaries – RHI India and RHI Clasil – with itself for better operational efficiency and simplify holding structure. The merger through the proposed scheme is expected to be completed over the next 9-12 months. Orient Refractories is the leading manufacturer and supplier of special refractory products, systems and services. Post the merger, the shareholding of RHI Magnesita, through Dutch US Holding BV and other group companies, in the combined company is likely to be 70 per cent, said Orient Refractories early in August 2018. Furthermore, about 5 per cent of the shareholding will be held by certain individual shareholders of RHI Clasil who are not part of the RHI Magnesita group, the world’s largest refractory player. All three companies are part of the London Stock Exchange listed RHI Magnesita, a leading global supplier of high-grade refractory products, systems and services.

Parmod Sagar, Managing Director, Orient Refractories, said the merger will strengthen operations, significantly expand product offerings and sales platform to access a much larger client base and allow for a pooling of resources and know-how. ”We believe that this will act as a strong platform from which we can embark on the next phase of our growth and unlock significant value for the shareholders.’

As part of the merger, Orient Refractories will issue 7,044 equity shares (with face value of Rs 1 each) for every 100 equity shares of RHI India (Rs 10 face value each) and 908 equity shares for every 1,000 equity shares of RHI Clasil (Rs 10 face value each). Pursuant to the scheme, share base of Orient Refractories will increase from 120.1 million to about 161 million.

Orient Refractories is 69.6 per cent owned by RHI Magnesita. RHI India, takes care of sales and offers full range of refractories and related services while RHI Clasil, which is 53.7 per cent owned by RHI Magnesita, manufacturer and supplier of mainly Alumina-based refractories for the steel and cement industries.

RHI Magnesita is a global refractory supplier, with revenue of 2.7 billion euros in 2017. It has more than 14,000 employees in 35 main production sites and more than 70 sales offices. Refractory products are used in high-temperature industrial processes like production of steel, cement, glass, etc.

In India, the combined company is estimated to have operating revenue of Rs 1,235.6 crore as against the Rs 626.8 crore posted by Orient Refractories in fiscal 2018 ended in March 2018. It will have two production facilities with over 700 employees. After the completion of the merger, Orient Refractories is proposed to be renamed RHI Magnesita India.

In order to strengthen its position in India, RHI Magnesita had acquired 43.6 per cent of Orient Refractories in 2013. After a mandatory open offer that followed the deal, it currently holds a 69.6 per cent stake. RHI India, a wholly owned subsidiary of the parent, is the Indian sales company of the RHI Magnesita group. RHI Clasil is a manufacturer and supplier of mainly alumina-based refractories for the steel and cement industries and is 53.7 per cent-owned by RHI Magnesita.

"The merger marks an important milestone towards expanding RHI Magnesitas market leadership in the refractory market of India. We are convinced that one strong entity, organisation and management in India will increase long term value for all stakeholders," said Stefan Borgas, CEO, RHI Magnesita. This merger significantly enhances the profile of RHI Magnesita in India and creates a stable umbrella under which the immense growth potential we see in the Indian market can be tapped more effectively and efficiently.

”We believe, the proposed merger will create significant value for shareholders. The combined entity will have operating revenue of Rs 12,356 million, EBITDA of Rs 2,322 million, PAT of Rs 1,406 million (on FY18 proforma basis) and outstanding shares of 161 million (versus approximately 120 million in ORL). This implies FY18 proforma EPS of about Rs 8.7, indicating approximately 22 per cent accretion over ORL’s FY18 EPS of Rs 7.1. RHI Magnesita will hold about 70 per cent of the combined entity and ORL’s minority shareholders will hold about 23 per cent," said Shradha Sheth, Edelweiss Research in a note after the merger announcement. Orient Refractories’Q1FY19 revenue grew a strong 23 per cent year-on-year (YoY) and PAT jumped approximately 34 per cent YoY.

”This merger is part of RHI Magnesita’s strategic pillar "markets" which focuses on building a global presence with strong local organisations and solid market positions. India’s growth prospects in the refractory market derive primarily from the steel sector, which is by far RHI Magnesita’s largest customer industry (74% of 2017 pro-forma revenues)… With one strong and integrated local organisation, the industry’s most comprehensive product portfolio and proven supply and sales capabilities RHI Magnesita India will be optimally positioned to leverage the positive local market developments in India," RHI Magnesita said in its global announcement.

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Economy & Market

TSR Will Define Which Cement Companies Win India’s Net-Zero Race

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Jignesh Kundaria, Director and CEO, Fornnax Technology

India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.

According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.

Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.

The Regulatory Push Is Real

The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.

Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.

Why Indian Waste Is a Different Engineering Problem

Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.

The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.

Engineering a Made-in-India Answer

At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.

Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.

Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.

The Investment Case Is Now

The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.

The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.

The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.

The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.

About The Author

Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.

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Concrete

WCA Welcomes SiloConnect as associate corporate member

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The World Cement Association (WCA) has announced SiloConnect as its newest associate corporate member, expanding its network of technology providers supporting digitalisation in the cement industry. SiloConnect offers smart sensor technology that provides real-time visibility of cement inventory levels at customer silos, enabling producers to monitor stock remotely and plan deliveries more efficiently. The solution helps companies move from reactive to proactive logistics, improving delivery planning, operational efficiency and safety by reducing manual inspections. The technology is already used by major cement producers such as Holcim, Cemex and Heidelberg Materials and is deployed across more than 30 countries worldwide.

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Concrete

TotalEnergies and Holcim Launch Floating Solar Plant in Belgium

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TotalEnergies and Holcim have commissioned a floating solar power plant in Obourg, Belgium, built on a rehabilitated former chalk quarry that has been converted into a lake. The project has a generation capacity of 31 MW and produces around 30 GWh of renewable electricity annually, which will be used to power Holcim’s nearby industrial operations. The project is currently the largest floating solar installation in Europe dedicated entirely to industrial self-consumption. To ensure minimal impact on the surrounding landscape, more than 700 metres of horizontal directional drilling were used to connect the solar installation to the electrical substation. The project reflects ongoing collaboration between the two companies to support industrial decarbonisation through renewable energy solutions and innovative infrastructure development.

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