Impex Ferro Tech Ltd Management Discussions

Ferroalloys are one of the important inputs in the manufacture of alloys and special steel. They are used as deoxidisers and alloy additives in the steel manufacturing process. They impart special properties to steel. The alloys provide increased resistance to corrosion, improve hardness & tensile strength at high temperature, impart wear and abrasion resistance and increases creep strength etc. The growth of Ferroalloys Industry is, thus, linked with the development of the Iron and Steel Industry, Foundry Industry and to some extent Electrode Industry.

The principal ferroalloys are chromium, manganese and silicon. The product series consists mainly of ferromanganese, silicomanganese, ferrosilicon and ferrochrome. Ferroalloys Industry spends 40 to 70% production cost on power consumption. Most of the ferroalloys units have been set up in Andhra Pradesh, Chhattisgarh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha and West Bengal because of availability of the raw material as well as uninterrupted electricity supply.

Ferroalloys are classified into two main categories, viz, bulk ferroalloys and noble ferroalloys. Bulk ferroalloy is majorly used in stainless steel & carbon steel. Most of the noble ferroalloys are made from rare-earth minerals and are expensive to produce as compared to bulk ferroalloys.

Ferromanganese/Silicomanganese: Ferromanganese is produced as high carbon ferromanganese with 72-82% Mn, 6-8% C and 1.5% Si; medium-carbon ferromanganese with 74-82% Mn, 1-3% C and 1.5% Si; and low-carbon ferromanganese with 80-85% Mn, 0.1-0.7% C and 1- 2% Si. Silicomanganese on the other hand is a combination of 60-70% Mn, 10-20% silica and about 20% carbon. Manganese in the form of ferromanganese is added for hardening and desulphurisation of steel. Silicomanganese, is an alloy that contains 60- 70% manganese, 16-28% silicon and 1.5 to 2.5% carbon. It is more preferred as an effective deoxidising agent than high-carbon ferromanganese in the production of various types of steels. It is also used as feedstock to produce refined alloys like medium and low-carbon ferromanganese. Around 4,750 to 5,250 kWh power is consumed to produce one tonne of silicomanganese. Silicomanganese has emerged as a more important alloy than ferromanganese.

Ferrrochrome/Charge-chrome: Ferrochrome when added to steel imparts hardness, strength and augments its stainless characteristics. For every tonnes of stainless steel (depending on the grade), there is 17-23% of chrome content is required. Hence, if the stainless-steel Industry grows, the Ferrochrome Industry also grows. Carbon content classifies the ferrochrome alloy into high- carbon (6-8%), medium-carbon (3-4%) and low-carbon (1.5-3%), although chromium content in all the three grades is around 60-70%. Around 2.5 tonnes chrome ore with an estimated power consumption of 4,500 kWh is required to produce one tonne of ferrochrome. Ferrochrome is produced by electric carbothermic reduction of chromite.

Ferrosilicon: Ferrosilicon contains about 75-90% silicon and minor amounts of iron, carbon, etc. It is produced by using quartzite, iron ore, coke and electrode paste. Around 1.75 to 2 tonnes quartzite is required to produce one tonne of ferrosilicon. A very high consumption of power, i.e., 9,000 to 10,000 kWh is required to produce one tonne of ferrosilicon. It is a powerful deoxidising agent and its major applications are in electrical steel used for transformers and dynamos, alloy steel for tools & automobile valves and in iron casting and mineral dressing. Ferrosilicon is used by the military to quickly produce hydrogen for balloons. For this, chemical reaction of sodium hydroxide, ferrosilicon and water is utilised.

NOBLE FERROALLOYS : Noble ferroalloys are one of the vital additive inputs required especially in production of alloy and special steel. Noble ferroalloys also refer to alloys used in small quantities and are relatively expensive compared to bulk ferroalloys. These are used in the

production of steel as deoxidant and alloying agents. These high temperature alloys impart strength, resistance and stability within a temperature range from 260 to 1,200⁰ C. These alloys are used generally in turbine engines, power plants, furnaces and all pollution control equipment. Noble ferroalloys include ferrovanadium, ferrotitanium, ferronickel, ferromolybdenum, ferrotungsten and ferroniobium. In India, noble ferro alloys are mostly manufactured through alumino-thermic process.

ENVIRONMENT FACTORS: Studies reveal that depending on the ferroalloy manufactured, waste generation per day in 35 tpd and 50 tpd ferrosilicon and ferrochrome plants may be in the following range: Silica fines: 7 to 8 tonnes/day Fe-Cr slag (fined boulder): 40 tonnes/day Charcoal & coke fines: 7 to 8 tonnes/day Waste from ferroalloys industries could be effectively utilised, a typical Fe-Si or Fe-Cr manufacturing unit can provide material for 10 small scale units for manufacturing bricks and each unit can produce 2,400 bricks per day. Other units which can be set up are board-and-briquette-making units. The utilisation of waste materials for converting them into building materials will result in bringing down the building material cost, and therefore, lead to conservation of natural resources like clay and sand

WORLD REVIEW The major ferroalloys producing countries were China, South Africa, India, Russia and Kazakhstan. The markets for the bulk alloys like high-carb on ferromanganese, silicomanganese, ferrosilicon and high-carbon ferrochrome showed varied responses to the fluctuations in steel and stainless steel production which seem to have influence as per the different circumstances that prevailed in different markets.

FUTURE OUTLOOK Depending on the process of steel making and the type of steel being manufactured, the requirement of different ferroalloys varies widely. Indian Ferroalloys Industry has immense potential and capability to compete in the international market. On the positive side, India produces some of the finest ferroalloys in the world. Indian ferroalloys are extensively preferred in Europe. India exports potential is indeed bright with very high growth prospects. As per the National Steel Policy, 2017, Ferroalloy industry is a power intensive industry. Hence, captive power generation in the ferroalloys plants will be extensively supportive. Since the demand for ferro-alloys is likely to grow along with steel production in the country, the Industry would have to be encouraged to set up larger units to achieve adequate economies of scale. Efforts in the direction of providing necessary raw materials linkages and stable supply of power to the Ferroalloy units must be rendered priority

Ferro alloys are critical additives in the production of Iron & Steel and the fortune of Ferro Alloys Industry is directly linked with the growth of Iron & Steel Industry. The Company produces Ferro alloys.

The Indian ferro alloys production has been gradually on increasing track in the year 2023-24 as compared to the year 2022-23. The Countrys export of annual ferro alloys is also showing a gradual increase. The socio-political relations with neighbouring countries is also expected to play an important part in the future for ferro alloys industry.

The industry is expected to see substantial consolidations which will drive market discipline and cut down inefficiencies in the production capacity. India holds a lot of promise with government initiatives easing mining operations for consolidated Ferro Alloys producers.

The steel sector has been a major contributor to Indias manufacturing output which in turn depends on increase in automotive production and the development of construction sector.

The proportion of use of ferro alloys depends upon the grade of stainless steel being produced which can be upto 30% of the total input of production. The demand for ferro alloys is expected to increase gradually in future. Rising investment in the infrastructure and real estate sectors and increase in number of construction activities are promising a slow but gradually demand for stainless steel products.

Impex Ferro is the one of the significant manufactures of ferro alloy in eastern India. The Company currently operates a manufacturing complex at Kalyaneshwari plant in West Bengal.

The Honble National Company Law Tribunal (“NCLT”), Kolkata Bench, admitted the Corporate Insolvency Resolution Process (“CIRP”) application filed by a Financial Creditor of Impex Ferro Tech Limited (the Company) and appointed Mr. Rajiv Kumar Agarwala as Interim Resolution Professional (RP), in terms of the Insolvency and Bankruptcy Code, 2016 (The code) vide order dated 2nd May, 2024. Subsequently Mr. Ashok Kumar Sarawagi was appointed as Resolution Professional (RP) by the Committee of Creditors (CoC) in its 2nd CoC meeting held on 14th June, 2024 as approved vide order dated 12th July, 2024 by the Honble court of NCLT, Kolkata. In view of pendency of CIRP, the management of the affairs of the company and power of the Board of Directors are now vested with RP. The future of the company depends upon the outcome of ongoing CIRP.

This has been dealt within the Boards Report.

Statements made in the Report describing the Companys objective and predictions may be “forward-looking statements” within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of outcome of undergoing CIRP process, economic and political conditions in India, volatility in interest rates new regulations and government policies that may impact the Companys business as well as its ability to implement the strategy. The Company doesnt undertake to update the statements.