What is the current market for refractories in India? And what is the share of cement as a segment for refractories?
Refractory is a critical input with high temperature application in the manufacturing of iron and steel, cement, glass and non-ferrous metals. Iron and steel accounts for roughly 70 per cent of the market. The total market size for of refractories in India is estimated to be around 8,000 crore and cement accounts for around 10 per cent of that.
Could you touch upon the growth rate of refractories in the Indian market for the last three years?
Supported by growing steel and cement production, refractories have registered 7-8 per cent YoY growth in India over last few years. However, Dalmia OCL has grown by over double that rate due the investments we have made in new products and services.
For refractories, are we still depend on imports? If so, which are the major countries from which India imports?
Refractories based on magnesia accounts for a lot of imports, as the raw material sources are located outside India. However as India’s growth ramps up, domestic manufacturers like us are putting up infrastructure to make those also in India. Dalmia OCL is the first company to make basic bricks for cement industry in India, which will help our customers address issues of inventory management and lead times.
Could you highlight three significant factors that determine the decision of imports? The two major reasons for imports are unavailability of raw materials in India and undercutting by Chinese manufacturers. Both are detrimental to the health of Indian refractory industry and to our user industries in the long term. We are working closely with our customers to give them enhanced value through investments in local manufacturing to provide just-in-time services. Third reason, in some situations, is unavailability of certain products in India. We are also trying to address that by setting up newer product lines like the world’s most advanced monolithic production line commissioned by us in Katni, Madhya Pradesh or the new basic brick and snorkel line being commissioned in Rajgangpur, Odisha.
Do we have a substitute in the domestic market? If yes, why are the industry players still majorly dependent on imports?
One of the fundamental reasons for imports is lack of availability of quality raw materials. A favourable mining policy and revision in duty structure for refractory raw materials can help reduce dependence on imports and build a robust refractory industry in India which can support aggressive growth targets of the Government.
How do you see the Indian market panning out for refractories in the next five years in India?
With the Prime Minister Modi setting the goal of $5 trillion economy, we expect growth to remain strong in India. The Steel Ministry has taken a target to grow steel production in India three folds to 300 million tonnes by 2030 and the Cement industry is expected to grow to 700 million tons. Since both industries are dependent on refractory, this industry in India is expected to grow multi-fold over the next decade.
– liza V