IMFA plans shift in production site to save Rs 100 crore in costs: Company aims for output of 400,000 tonnes in current fiscal year

Indian Metals and Ferro Alloys (IMFA) is eyeing cost savings of up to ₹100 crore as it gradually moves production of ferrochrome from its flagship plant in Odisha to a more cost-efficient location within the state, while increasing output by nearly 90% in two years. The largest producer of ferrochrome in India has three key manufacturing locations in Odisha-Therubali in the south which is its flagship plant, Choudwar closer to the eastern coast, and Kalinganagar, where it is setting up a greenfield plant and has also acquired Tata Steel's ferrochrome operations.

"Between Therubali and Choudwar, Therubali has a ₹5,000-6,000 per tonne disadvantage because of the inbound and outbound logistics and electricity transmission charges," managing director Subhrakant Panda said. "Kalinganagar, meanwhile, is even more cost competitive than Choudwar because it is closer to the mines," he said in an exclusive interaction with ET.

The company will be moving output from Therubali to Kalinganagar. After adjusting for costs, including those related to transitioning the production, the overall output of the company will see a cost savings of ₹1,500-2,000 a tonne. With the acquired operations in Kalinganagar, its greenfield capacity and existing capacities, the company is aiming for an output of 400,000 tonnes in the current fiscal, and 475,000-500,000 tonnes in FY28; this compares to its output of 267,300 tonnes in FY26.

Apart from the additional capacity that will come on board, the company has also improved the efficiency at its existing plants, increasing output by around 30% in the last few years. While gradually "deemphasising" production of ferrochrome at Therubali, Indian Metals is setting up a 120 kilo litres per day ethanol plant at the facility, for which it has invested over ₹150 crore. "For the past several years, we had been looking at what could be a viable business model to utilise the land and other infrastructure which is available (at Therubali)," Panda said.

Given that the ethanol plant will be grain based, Therubali's geography works in its favour, he said.

"Ethanol is also something we understand in the sense that it is a B2B industrial commodity, and it has certain adjacencies to our skill sets," he said. After the plant starts operations and is fully ramped up over the next few months, Indian Metals will take a call on whether it wants to invest further in the business. "We have dipped our toe in the ocean by committing to a small unit. If it makes sense to us, we will scale up that capacity." India is blending 20% ethanol with 80% petrol. Ethanol is manufactured by using sugarcane and grains.