Highlights of the meet:

Domestic refractory industry has been growing faster over the couple of years due to increase in steel production.

ORL is in the business of manufacturing and marketing special refractory products, systems and services for the steel industry with global presence.

ORL is market leader for special refractories in India and has many global partners.

ORL produces more than 40,000 tons of refractory per annum customized products and system solutions.

Refractory is mainly used in iron & steel industry, metal smelters, cement, glass industries, etc.

Demand of refractory is driven by industrial production and infrastructure projects.

Focus on infrastructure by the Indian government is expected to drive steel growth. Government's infrastructure status to housing augurs well for steel industry and therefore the refractory industry as such.

The growth of refractory industry primarily depends on the growth of iron & steel industry.

Steel industry accounts about 75% of consumption of refractory materials, followed by cement (12%), non-ferrous (6%), petrochemicals (4-5%) and glass (3%).

ORL supplies only to steel industries.

Government of India's focus on infrastructure and restarting road projects is aiding the boost in demand for steel.

ORL has continues programs for improving efficiency in manufacturing, raw material cost, energy conservation, working capital. All this is done with the aim to produce special refractories at low cost.

Export in FY 2018 was up 35%.

Recently, ORL parent company, RHI AG reached an agreement with controlling shareholding of another global refractory company, Magnesita, GP & Rohne. The combined company will be able to offer ORL customers comprehensive range of products and services.

The parent company RHI Magnesita N.V. is a global leader in refractories with largest number of locations around the world. RHI Magnesita N.V. has 14,000 employees across 40 countries. It control the shipment of refractory products in more than 180 countries worldwide.

China is one of the biggest suppliers for inputs. It has imposed heavy taxes on mining and export of refractory products and raw materials including magnesium used in production of refractory products. This has forced raw material suppliers there to scale down production, which has affected even the availability of finished goods.

Indian refractory industry sources 50% of its raw material from China.

India is facing obstacles in the import of raw material which has left domestic refractory makers struggling to meet demand. The price of imported raw material has gone up which has increased the refractory material prices. This has increased product prices and the market size and growth.

India's steel industry consumes nearly 70% of the country's refractories output.

The demand for refractories is directly correlated to steel production. By FY 21 India is expected to become top global steel producer.

Prices of raw materials such as magnesia and graphite are firm on continued environmental regulations in China.

To meet global demand of refractory, ORL expanded its existing production capacity of isostatic products from 9,300 tons per year to 11,700 tons per year at Bhiwadi. The first phase has expanded capacity by 2,400 tons/pa, which can be increased to 4,800 tons/p.a in second phase.

The commercial production was started from June 2018 and capex was Rs 17.60 crore.

It is amalgamating RHI India Private Limited and RHI Clasil Private Limited with ORL.

The key objective of the proposed Scheme is to combine the strengths and competencies of all three operating companies in India under one strong listed company that is well positioned to leverage future growth opportunities and enhance shareholder value.

The merger is in line with RHI Magnesita's strategy to consolidate its Indian operations as it considers India to be one of its key markets and strongly believes that the country and the Asia region have significant growth potential for its refractory products and services.

The merger will simplify the corporate structure and consolidate RHI Magnesita's operating entities in India by forming a leading manufacturer and supplier of refractories with operating revenues of Rs 1235.6 crore (on a FY 2018 proforma basis), 2 production facilities and more than 700 employees.

The merger will see the company having the industry's most comprehensive refractory product portfolio with proven supply and sales capabilities.

The merger will strengthen its position, significantly expand product offerings and sales platform to access a much larger client base and allow for a pooling of resources and know-how.

The amalgamation will act as a strong platform from which it can embark on the next phase of growth and unlock significant value for the shareholders.

The merger will significantly enhances the profile of RHI Magnesita in India and creates a stable umbrella under which the immense growth potential in the Indian market can be tapped more effectively and efficiently.