India's BRPL Eyes 85% Capacity Utilisation in FY'19

Leading pellet maker Brahmani River Pellets Ltd (BRPL) is looking to operate at 80-85 per cent of its rated capacity in this financial year. Buoyed by the recent change in the pellet maker's shareholding structure, it has set itself higher production goals as both domestic and export demand back its case for a ramp-up in output.

Both Thriveni Pellets Ltd and JSW Group firm JSW Techno Projects Ltd have acquired 49 per cent equity each in BRPL. The residual two per cent stake has been taken over by Bengaluru-based mid-scale steel maker Mitsun Steels Pvt Ltd. BRPL has already signed share purchase agreements with the three companies on December 15 last year. The share sale transaction has been okayed by the Competition Commission of India. The Odisha government, too, has approved the change in ownership structure of BRPL.

Last fiscal, BRPL operated at barely 60 per cent of its nameplate capacity of four million tonnes per annum. The new promoters are making frenzied attempts to scale up capacity utilisation to full 100 per cent. Their focus is now on upgrading the quality of products churned by the plant.

BRPL operates a four million tonnes per annum (mtpa) pellet plant at Jajpur in the eastern state of Odisha, 4.7 mtpa iron ore beneficiation unit at Barbil along with a 230-km slurry pipeline connecting the two units, all in the same state.

Most of BRPL's production is shipped to the export markets, predominantly the People's Republic of China. But, BRPL is keen to diversify its export basket and is eyeing potential markets of Malaysia and South Korea. China, however, would continue to dominate pellet sourcing from domestic makers in India as its steel makers are complying with stern emission norms and have demonstrated a propensity for buying pellets. Pellet, an intermediate steel product, is a cleaner feed to blast furnaces and is widely considered to be the more eco-friendly mode of steel manufacturing compared with iron ore fines or lumps. In India, however, steel companies opt for lumpy ore mostly since it gives them a significant cost edge over pellets. In the domestic steel market, BRPL has been supplying to Tata Steel and Bhushan Steel Ltd.

According to data managed by SteelMint, Company produced about 2.6 MnT pellet in FY18 against installed capacity of 4 MnT. It exported 1.6 MnT pellets in FY'18