Refwin: A brief introduction of your company, including its development history, strategic objectives, market positioning, products application, etc.

Mr Matthias Normann: Founded in 1979, INTOCAST took over the business activities of Eugen Schwarz GmbH, who had already been supplying the German and European steel industry since 1922 with consumables for iron and steelmaking.

Through mergers and acquisitions, the INTOCAST group has grown over the decades into an enterprise that is now active world-wide. INTOCAST has a strategically selected network of eight German and five foreign operating sites, employing 1350 staff members worldwide with a consolidated Group turnover of approx. EUR 330 million per annum.

The INTOCAST group is one of the few companies to manufacture and market shaped and unshaped refractory products, casting auxiliaries as well as metallurgical slag additives.

As one of the industry leaders, INTOCAST is committed to developing and manufacturing high quality products for its customers, with the goal of ensuring the best possible cost-benefit ratio for our customers worldwide when using our products.

Please refer to www.intocast.de to find more discription of our history, who we are, our objectives and product applications.

Refwin: Do you have new acquisition plans in next 3 years, after taking over the RHIM’s detached dolomite and magnesia-carbon bricks business in Europe?

Mr Matthias Normann: We are currently active with an acquisition in India. The targeted company is Hi-Tech Refractories in Jamshedpur. Apart from substantial existing product range where we could assist with technology, Hi-Tech has a state-of-the-art production facility for isostatically pressed products. Isostatically pressed products were the only missing product type to complete our global product portfolio. Therefore, this acquisition was not only a financial decision but also a strategic one.

The other area where we want to improve our presence is Latin America and we are in the process of identifying a suitable target.

Both above mentioned geographical locations are seen as important markets in order secure the continuous growth of our group. Refwin: What is your global foot print, layout, esp. for China, India, Southeast Asia and other emerging markets? Mr Matthias Normann: For India and Latin America please refer to the above.

The Southeast Asia markets will be managed by INTOCAST Hi-Tech in India. Over the next 5 years we intend to be in a position to produce, manage and source the entire product portfolio from the INTOCAST Group from our Indian unit.

South Africa is traditionally a very important market for us where we have a very strong presence, which we will utilize to promote shaped refractories in order to grow our market share further in the region.

In Russia we decided many years back to enter into a partnership with Magnezit, which works very well for us as they are the strongest player in the market and we complete their existing product portfolio with our product range. On the casting auxiliaries‘side we have established OOO INTOCAST RUS in Voronezh to manufacture casting fluxes locally and give the customers technical support together with our material supplies.

Refwin: In your opinion, what is the core competitiveness for INTOCAST to standing out among global refractories industry?

Mr Matthias Normann: It is the balance between our product lines. All segments, MgO-C shaped, dolomite shaped, unshaped (MgO/Al2O3/Dolo) and casting auxiliaries are very similar in turnover and gross profit. This puts us in a position to recommend to our customers what we believe is the best technical solution instead of seeking solutions to fill our production plants. That, combined with tailor made refractories and fast product development, gives us the cutting edge in market. Refwin: For the future of refractories industry, what development changes do you think are worth looking forward to? Mr Matthias Normann: In my view the price pressure refractory companies have been put under has led to a development into the wrong direction. The focus is on reducing costs rather than developing products to significantly improve the performance of a product in use with the clear target to give the customer a real competitive advantage. In my view «to be competitive» will not be good enough in the near future. Refractories will not be seen as a commodity by the leading companies in the steel sector, but as a tool to improve productivity and quality of steel manufacturing. To reach extraordinary results a complete refractory system is required, which is developed in conjunction with R&D and lining experts, supervised or managed by highly competent site technologists at the customer. I am looking forward to contributing whatever is needed to put our customers ahead of their competitors.

Mar. 15, 2019 – At present, the four refractory companies listed on the main board have released the 2018 performance report. All four companies achieved double growth in operating income and net profit. Ruitai Technology, Puyang Refractories and Beijing Lirr’s annual revenue in 2018 exceeded RMB 3 billion, with an annual growth rate of more than 20%.

Net profit attributable to shareholders of the listed company achieved year-on-year growth, net profit of Puyang Refractories increased by 919.55% YoY, and Beijing Lirr net profit increased by more than 102.47%. This shows that compared with 2017, the operation of refractory enterprises has improved.

The main reasons for the increase in revenue and net profit of refractory enterprises are analyzed as follows:

Firstly, under the macro conditions of the country’s continuous promotion of supply-side reform and environmental protection in 2018, the operation of downstream steel and other industries continues to improve, especially steel prices remain at a high level, and steel companies are generally in good profitability.

The operating environment faced by refractory companies has improved and double growth in revenue and net profit achieved. Secondly, due to the continuous increase of national environmental protection, some small refractory enterprises that fail to meet environmental protection standards have been shut down, and vicious competition pressure of refractory industry has been alleviated to a certain extent, which has made the environmentally advanced large-scale refractory enterprises have advantages, and prices of refractory products have increased, sales revenue has increased, leading to increased profits.

Finally, due to the devaluation of the RMB this year, income from overseas market was benefited from positive exchange rate. However, the current increase in the management of mineral resources and environmental protection in China has led to tight supply of refractory raw materials and prices are still at a high level, which has brought certain difficulties to the production of refractory enterprises. Refractory industry still has problems such as rising raw materials prices, overcapacity, and accounts receivable etc.

Henan province in central China has launched a new round or ouput cuts for the refreactories and steel industries to run fron November, 15, 2018, to March 15, 2019.

Dalmia-OCL hails an increase in its clean refractory capacity after buying German GSB group.

Indian refractory producer Dalmia-OCL has expanded into Europe with the purchase of Germany specialty refractory manufacturer GSB Group GmbH, increasing its stake in the clean refractories market.

The transaction was valued at €15 million ($17 million), Fastmarkets IM has learned.

According to Dalmia-OCL the investment will be funded partially by internal accruals and debt.

«This acquisition will […] make us one of the specialized manufacturers of refractories for cleaner steel production, a focus area for Indian steel makers,» Dalmia-OCL chief executive officer Sameer Nagpal.

GSB Group operates two production sites at Bochum in Germany and Bhilai in India. Dalmia- OCL refused to share the installed capacity of these two acquired plants.

In 2018, Dalmia-OCL signed a joint venture with Slovenian refractory company Seven to produce advanced monolithics in India. Dalmia-OCL has a 51% stake in this joint venture.

Dalmia-OCL is India’s second-largest refractory company with a production capacity of 250,000 tonnes per year.
Currently, Dalmia-OCL operates five refractory production plants (four in India and one in China) with an installed capacity of 250,000 tpy of refractory products.

The company expects to close the current financial year (April 2018- March 2019) with a revenue of 8 billion rupees ($111 million).

In its domestic market, Dalmia-OCL has been working on readjusting its product portfolio by focusing on the production of high performance bricks for cement kilns and special quality bricks for high purity steel.
The company is also looking for alternatives for magnesia bricks to hedge against uncertainties in raw material availability.

Chinese magnesia prices have tightened over the long term, although prices are down from the their 2018 peak.
Fastmarkets’ February 5 price assessment for fused magnesia,basis 97% MgO, Ca:Si 2:1, lump, fob China, was $1,250-1,350 per tonne. This was up from $440-445 per tonne in July 2017, but down from $1,600-1,800 per tonne at the start of 2018.

Magnesia prices out of China have surged in 2018 following severe environmental restrictions. Carrie Shi, Fastmarkets IM market reporter, looks over the year of shutdowns and the effect on prices.