'Ferro alloys makers should gear up for good times ahead'

Bhilai Steel Plant managing director R P Singh has called upon ferro alloy producers to gear up for doubling production and preparing themselves for future challenges as this was the "right time to get started".

Singh was delivering the inaugural address at a two-day national conference on "Challenges to ferro alloy industry in the present market scenario," organised by a Steel Authority of India (SAIL) subsidiary, Maharashtra Elektrosmelt Ltd (MEL).

Singh, who is also chairman of the Chandrapur-based MEL, said that the Indian steel industry had come out of recession and was now in an expansion mode.

"The present production of 35 million tonne is expected to increase to 63 million tonne by 2012 and 100 million tonne by 2020," he remarked.

Consequently, the demand for ferro alloys, which are critical inputs for steel manufacturing, will also go up. Production of ferro alloys is projected to be 5 lakh tonne in 2004-05. The demand is expected to grow to 9.4 lakh tonne in 2012 and if exports are also included, it would be 11.4 lakh tonne, he said.

Ferro alloy producers, therefore, need to double their production to meet this demand. They would have to decide whether they will take up this challenge or allow foreign producers to eat into their slice of cake, Singh said.

At present, however, steel plants, which are consumers of ferro alloys, are not happy with the price and quality of ferro alloys, he admitted.

The steel industry is reeling under the pressure of high price of ferro alloys because the demand is more than supply. Production is low because of shortage of raw materials.

The high price could also be explained by the high rate of power which contributes 50 per cent to the cost of ferro alloys. But in an era of globalisation, it is necessary to reduce costs, Singh said.

This is possible through technology upgradation and constant R&D efforts aimed at finding cheaper alternatives, he said. Ferro alloy producers also need to improve their quality which, at present, is a matter of concern for steel producers, he said.

Singh said that the industry could be crippled beyond salvage if it didn't rise to the occasion now. "Now is the right time to get started and overcome these problems or else it would be too late," he warned.

Earlier, in his introductory remarks, R K Gupta, executive director of MEL, said that there was pressing need for research and development activity to provide competitive edge to the Indian ferro alloy industry.

Deteriorating quality and scarcity of raw materials, technological obsolescence, finished product casting practices, high power cost are some of the issues which call for critical examination and solution, he said.

The government has to come forward to solve the problems which are not the making of ferro alloy producers, such as raw material shortage and high power tariff, he said.

Deepak Anurag, director, ministry of steel, S K Dubey, director of Power Trading Corporation, and P Roy, chairman of Indian Ferro Alloy Producers Association, also spoke on the occasion.

Umashankar Agrawal, chairman & managing director of Ferro Alloys Corporation Ltd, was conferred with a Lifetime Achievement Award at the conference for his outstanding contribution to the ferro alloys industry.

SAIL seeks merger of Manganese Ore with itself

SAIL has made a proposal to ministry of steel to merge the Nagpur-headquartered Manganese Ore India Ltd (MOIL) with itself.

"The proposal is to the effect that MOIL should either be merged with SAIL or made its subsidiary," R P Singh, managing director of SAIL-subsidiary Bhilai Steel Plant, said at the inaugural session of a national conference on ferro alloy industry here.

Like SAIL, MOIL too comes under the steel ministry. MOIL was proposed to be privatised but the government has now decided against it. The merger of the two organisations would be mutually beneficial to each other.

For SAIL, the merger would give a critical backward linkage as manganese forms the basic raw material for producing ferro alloys which are used in steel production. Around 12 to 15 kg ferro alloys are used for producing a tonne of steel.

SAIL's subsidiary Maharashtra Elektrosmelt Ltd (MEL), Chandrapur, manufactures manganese-based ferro alloys, namely, high carbon ferro manganese, silico manganese and medium carbon ferro manganese.

MEL supplies 90 per cent of its produce to SAIL plants while the rest goes to small steel plants and foundries. MOIL is MEL's biggest supplier of manganese.