[ferro-alloys.com]Ferro alloy producer Imfa, a major supplier to stainless steel companies in India and overseas, plans to add 60,000 tonne per annum of ferro chrome capacity over the next two years.

This would take the current capacity of 275,000 tonne up by 20%.

While the plan to expand the capacity was on its drawing board for quite some time, the company wants to time the expansion with the availability of increased chrome ore capacity from its new underground mine in Odisha.

The new capacity will have a captive power source, ensuring continued backward integration and cost competitiveness, which Imfa claims it has enjoyed over its Indian peers.

Subhrakant Panda, managing director and chief executive officer of mfa, told dna the company has been able to maintain leadership in the commodities’ space in a tough time with operating profit margins at over 30%.

“This has been achieved due to a strong integrated model of the company and also because of a conservative approach towards expansion,” he said.

Now, the company plans to fast-track its plan to manufacture more ferro chrome so that its chrome ore mine capacity doesn’t go idle.

Ferro chrome is manufactured from chrome ore (or iron chromium oxide) mined from pithead or underground mines and treating them with carbon to extremely high temperature to form ferro chrome. For every one tonne of ferro chrome production, up to 1.3 tonne of chrome ore is required.

It is the chromium content in ferro chrome, the most extensive form of ferro alloy, which imparts anti-corrosion property to steel plates and rods, making them stainless or resistant to corrosion and giving them a shiny surface.

With 80% of the world ferro chrome production consumed by the stainless steel industry, the growth of both is directly proportional.

While the Indian stainless steel industry had slowed down and rupee had also depreciated substantially, Panda said the company has been saved because 80% of its products are exported, especially to countries in the Far East.

However, he is bullish about the domestic stainless steel industry and says the export ratio will change in the next 2-3 years when the additional capacity comes up.

IMFA is also starting its thermal coal mine, which will ensure regular low-cost supply of coal for its 250 megawatt power capacity, out of which up to 200 mw is consumed for captive purposes. This will lead to further cost saving for the company, he said.

Among the developing countries, Indian stainless steel and subsequent ferro chrome production is very less as compared with China.

While India’s stainless steel capacity stands at 2.3 million tonne, its ferro chrome capacity is just over a million tonne.

“With the economy coming back to normal and focus on infrastructure renewing, we expect stainless steel demand to gain momentum as per capita consumption in India is just 2 kg, way below the 8 kg in China,” said Panda.