No plans to merge with Facor Alloys: Ferro Alloys

Here is a verbatim transcript of an exclusive interview with Ashim Saraf on CNBC-TV18. Also watch the accompanying video.

Q: Are you having any plans to merge two of your companies? Are you looking at any kind of business realignment?

A: We are not looking at any realignment, both the companies are separate. One has got its operations in Orissa, which is Ferro Alloy Corporation, which has captive chrome ore mines, 45 MVA furnace. The second company is Facor Alloys Ltd in Andhra Pradesh.

Q: On iron ore pricing and the way they are currently moving out and the trajectory that you maybe looking at, has there been any impact that you envisage on your products or margins in the near future?

A: We are Ferro chrome producers. So iron ore has no impact on us. It’s chrome ore which is a raw material for us. We have our own chrome ore mines operating in Orissa from 1968. So we have our captive mine. Now we are setting up 100 megawatt power plant, which will be commissioned in the next eight months in a new company called Facor Power Ltd, in which Ferro Alloys and Facro Alloys have taken equity stake.

Q: With that increase in the production, how much will be your capacity? When would this come on stream and how would that increase your capacity?

A: It will not increase my capacity, but it will give me sustained production. Andhra Pradesh government has recently planned a 30% power cut. So we are trying to ensure 100% raw material usage which is chrome ore and have our own power plant. So we will have sustained production. We will be about 150,000 tonne of Ferro chrome annually, which is capable to produce about 700,000 tonne of stainless steel.

Q: Are you sufficiently funded for all these capacity expansions that you just outlined?

A: Absolutely, we have achieved financial closure and the company is under construction. We will have the power plant coming by December 2010.