RHI Magnesita, the leading global supplier of refractory products, has announced the acquisition of the Indian refractory business of Dalmia Bharat Refractories Limited (“DBRL”). DBRL is one of India’s leading refractory players and a long-term trusted partner to customers in the region.
The acquisition will significantly increase RHI Magnesita’s presence in the fast-growing Indian refractory market, with forecast steel production growth in India of 12 percent in 2022 and a 7 to 8 percent compound annual growth rate until 2030. Through the consolidation of DBRL’s production into RHI Magnesita’s existing operations, significant network optimisation synergies will be captured. The company employs approximately 1,200 people in India and has production capacity of more than 300,000 tonnes of refractory annually, from five refractory plants and raw material sites. The acquisition will add production capacities in important industrial regions in the south and west of India where RHI Magnesita currently has no assets.
Commenting on the acquisition, Stefan Borgas, CEO of RHI Magnesita, said, “I am very pleased to announce this highly value creating acquisition which will accelerate our development in the fast-growing Indian refractory market. It is another step in the execution of our Group strategy.
“We see material financial and operational benefits from the addition of the Dalmia Bharat Refractories business to our existing network, which will enable us to increasingly serve our customers with a ‘local for local’ approach in India and offer a broader range of products, in particular in the Industrial segment, in which RHI Magnesita is currently under-represented. This transaction demonstrates our ability to continue to grow our business in India where the outlook for the refractory industry is strong, at a time when demand in other geographies is weakening.”
Parmod Sagar, CEO and Managing Director of RHI Magnesita India, said, “As a trusted and reliable business partner, the integration of the Dalmia Bharat Refractories business into our network will underline our position as the leading player in the Indian refractory market. This transaction represents a strong commitment from the senior management to continue strengthening the company’s operations in India and to further expand our footprint in the region.”
Commenting on the transaction, Sameer Nagpal, Managing Director & CEO of DBRL, said, “We were able to scale up the business over the last few years on the back of product breadth and service capabilities, establishing ourselves as a reliable Indian player. For the next phase of growth of this business it is imperative to have access to technology which RHI Magnesita, being a global leader, brings to the table. We believe our business can be optimally utilised to serve Indian customers by becoming a part of RHI Magnesita’s network.”
The acquisition will take place via a Share Swap Agreement in exchange for 27 million shares in RHI Magnesita India Limited.