One India, One Power Tariff Is Need Of The Hour

The installed capacity of the bulk ferro alloys industry in India is 5.15 million tons but the capacity utilisation level is only at 50-55 percent. This is because the domestic ferro alloy industry (manganese alloys) is reeling under high power tariffs and cheaper imports from Malaysia. The need of the hour is thus a relook at the country’s energy pricing policies. India should also look to build further on its existing presence in overseas locations like South Africa, Zambia, Mozambique etc and seek opportunities to own ferro alloy assets there, J K Chatterjee, Secretary General, The Indian Ferro Alloys Producers' Association (IFAPA), tells Madhumita Mookerji. He also feels the industry should look at value-added ferro alloy products big time and explore ways to market the same. Excerpts from a freewheeling interview:

What is the installed capacity of the ferro alloy industry in India?

The installed capacity of the bulk ferro alloy industry in India is 5.15 million tons (mt). The bulk ferro alloys comprise ferro silicon, ferro manganese and silico manganese, medium carbon ferro manganese and ferro chrome and the capacity utilisation is 50-55 percent.

Incidentally, India produces 3.5 mt of ferro alloys and consumes around 2.3 mt. The country exported 1.3 mt of ferro alloys, earning a foreign exchange of around ₹8,900 crore.

India's production of around 3.5 million tons of ferro alloys consists of 1 mt of ferro chrome (FeCr) and 2.5 mt of manganese alloys.

It may be noted that around 365,000 tons of extra capacity came into the market in 2016, and an additional 180,000 tons was expected to come in during 2017. The higher supplies are likely to bring down profitability.

Actually, this capacity utilisation level keeps changing. As we say, it is a caravan industry. As power supply and incentives becomes available, units are set up but consequently power tariffs go up and incentives eventually lapse, as happened in West Bengal. At one time, Bishnupur was cited as a very good location and 5-6 ferro alloy plants came up here too. At that time, power was available at a discount of 40 percent. Now, the industry is practically closed in this area because of high power tariffs. The plants are still there but these are illusory. I feel clustering can help in this area.

Power tariffs are too high for the manganese alloys industry in India. What do you feel about this drawback?