Refractory maker RHI Magnesita India is planning to invest close to ₹450 crore for brownfield expansion of its existing plants across India over the next two-to-three years. It is also scouting for acquisitions to expand its production capacity in the country.

The company, which is into production and supply of high-grade refractory products, systems and solutions, currently has three manufacturing units at Bhiwadi (Rajasthan), Vizag (Andhra Pradesh) and Cuttack (Odisha).

It has an annual production capacity of around 1.42 lakh tonne across the three units. Plans are afoot to double production capacity to close to close to 2.8 lakh tonne by end of 2023.

‘Important focus region’

According to Stefan Borgas, CEO of RHI Magnesita, the company has recently scaled up the capacity of its Vizag plant by almost 30 per cent at an investment of ₹50 crore.

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“India is the only real growth market in the refractory industry (globally) at present and it is the most important focus region for us. We have recently scaled up the capacity of our Vizag plant and we are further working on starting production of certain high-end products in the Bhiwadi facility, which are currently imported into India from our European and American facilities. This would lead to import substitution of these products,” Borgas told BusinessLine .

Looking at acquisitions

Apart from organic expansion, the company is also looking to acquire one or two companies in the domestic market for expanding capacity.

“We have three-to-four targets (for acquisition) and we are in advanced stages of discussion (with some of them) and we hope something should fructify in the next six-to-twelve months,” Parmod Sagar, MD and CEO, RHI Magnesita India said.

Growing market share

Refractory products are vital in all high-temperature processes in the making of metals, cement, glass and ceramics. The steel industry is one of the biggest consumers of refractory products, accounting for nearly 60-70 per cent of the total production.

The refractory market in India is estimated to be close to ₹10,000 crore.

RHI Magnesita, one of the leading players in the refractories industry globally, holds close to 30-35 per cent market share in most markets it has presence in. However, in India, it currently holds a market share of around 20 per cent. The company is looking to scale up its share in the country over the next two-to-three years.

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“We have to invest in capacities (expansion) in India to benefit more from the growth in the market as compared to some of our competitors,” he said.

The company recently inaugurated the regional R&D centre in India. It is investing in expanding its capability to develop Indian operations as the R&D and manufacturing hub for the greater region of India, the Middle East and Africa, he added.