Indian Metals and Ferro Alloys (IMFA), a leading producer of ferrochrome in the country, plans to increase production capacity by around 30 per cent to 375,000 tonne a year in three years betting on new power plants that are crucial for alloy-making.
"After addition of new power plants, we will have 40-50 Mw surplus power, which can sustain production of 75,000 to 100,000 tonne. We are exploring capacity addition, but it is currently in drawing board. The capacity upgradation may take three years," said Subhrakant Panda, managing director and CEO of IMFA.
The company currently has production capacity of 275,000 tonne per year out of its two production units situated at Rayagada and Choudwar in Cuttack district.
In July this year, it upgraded its captive power generation capacity to 258 Mw, by commissioning 120 Mw plant at Choudwar. The company is supplying the surplus power to state-run power trader Gridco Ltd.
Conversion of chrome ore into ferrochrome consumes huge power and therefore, nearly all ferroalloys industries rely upon own power source rather than buying costly power from state grid to minimise cost of production. IMFA said, though the new power capacities allow it to raise ferrochrome production, the upgradation would take place not before three years due to unavailability of funds.
"I cannot comment about cost of capacity addition at present because we are not looking at that right now. As we have just commissioned the power plants, we need some time to arrange the capital (for enhancing capacity)," said Panda.
Ferrochrome is used in the making of stainless steel because of anti-corrosion property of chromium. India exports more than 80 per cent of its one million tonne ferrochrome output to China. However, China recently surpassed South Africa in ferrochrome production capacity. IMFA said, the new capacity addition has been planned eyeing growth of domestic stainless steel industry.
Indian stainless steel industry, though has a capacity of nearly five million tonnes, produces less than 2.5 million tonne a year due to limited demand. Local ferrochrome makers expect rise in demand of the metal alloy in future coinciding with growth of the economy.
