mishra dhatu nigam: Mishra Dhatu Nigam’s CMD on company’s expansion plans & margin pressure

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“Midhani and Nalco have entered a strategic alliance for setting up a facility to make high-end aluminium alloys which are being used in the defence aerospace and also in the transportation sector. That project was started almost two-three years back. Now, we are coming to the stage where it is going to take off,” SK Jha, CMD, Mishra Dhatu Nigam told ET NOW. Edited excerpts:

We understand that Midhani is planning to increase its capacity. Can you talk to us what are your expansion plans? How will the capacity increase over the next two to three years?
Yes. We are a forward-looking company and we see a lot of opportunities in the defence space. So, certainly, we are expanding our facilities in different areas. In this connection, I would like to mention that we are setting up a facility for enhancing our Titanium alloy production as Titanium requirements in the country have grown. Today, Midhani is the only company that is manufacturing Titanium alloys. The capacity enhancement programme is going on and after six-seven months, we are going to install the latest state-of-the-art facility for melting Titanium alloys. Secondly, we are also working on increasing our capacity in making nickel-based alloys, and super alloys; there also the market potential, domestic as well as export, is good. We are also improving our Titanium casting facility.

What sort of capacity are you looking to increase? How are you managing the rise in raw material costs?
Actually, Midhani deals with niche materials. Here we are not impacted by the fluctuation of the price in the steel sector, especially trading of steel and all. Since these are high-end products, the impact will not be much.

But there will be pressure on the margin if the raw material prices keep increasing. So, this we have seen in the past couple of months as due to the Russia-Ukraine war, the supply of the different types of metals, which we use regularly import, getting impacted. We do not have the resources in the country, especially the nickel molybdenum cohort. There is a lot of fluctuation in the price and that is really affecting our margin. But we have also taken the step where we can see that whatever we have, the reserve, our scraps, we are converting to products by modifying our technology. This way, we can minimise the consumption of the raw material coming from imports.

Are you looking at making some sort of joint venture or strategic alliance?
Yes, already Midhani and Nalco have entered a strategic alliance for setting up a facility to make high-end aluminium alloys which are being used in the defence aerospace and also in the transportation sector. That project was started almost two-three years back. Now, we are coming to the stage where it is going to take off as we are setting up the phase one facility. We have divided this into two phases; we are trying to make the first phase operational in 12 to 18 months. We are working very hard and ensuring second phase initiation as well. So, overall that JV is moving with the support of both Nalco and Midhani. You will find that Utkarsha Aluminium Dhatu Nigam after 17 to 18 months will be operational and giving good output to the country.



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