Commercial notes

Inputs from Mr. Sonal- Raw material for Plastics SBU

Raw materials for Plastics: Lime Kali, Carbon material- Pet coke, Anthracite, Breeze coke, Met coke

Lime:

Totally 16 to 17 suppliers of Lime kali, located within 300 Km radius. Lime also used in Steel
industries
Freight charge is a major component: INR 750-850 per MT
Freight depends on demand of trucks. Transfer of agricultural produce yields better margins
than transferring lime. Also when there is a disruption in the movement of goods such as in
North East India or walnut in Kashmir, trucks were normally shifted there.
Also, movement of Ores to Orissa. Ores are transferred from Jodhpur areas to Kota through
trucks as they dont have railway siding.
Quantum of movement is also a deciding factor.
Supervisory staffs at lime fields to whom the day to day requirement is communicated & they
ensure the trucks are available for transportation.
2.2 CaCO3 + 0.2 Pet coke 1 CaO
Good relation with lime suppliers is paramount.
Current lime storage capacity is 350 MT. If we add 150 MT of storage space, can we avoid the
uncertainties of freight?
Lime stone is available in Gotan borunda; Illegal mining is done at Manakpur.
Lime quality is low in summer, high in winter
Limestone prices have increased to INR 450 per tonne but we are restricting the increase in
price.
Contracts change as and when pet coke prices change.

Penalty Clauses:

If CaO is less & fines, UB, RA, MgO are beyond certain values. No compromise on MgO.

Payment terms:

15 days credit and bills are paid for net weight.

Areas of Concern:-

Availability of good quality lime

Freight at economical rates- varies heavily as per demand from other sector
DCM employs JIT: - Susceptible to disruption during External factors such as Festivals,
rains, etc.

Pet Coke:-
 Current consumption is around 350Kg for per ton of carbide produced.

Suppliers: Reliance, IOC, Essar, Imports

BPCL (Sulfur content 7-8%), transit time is 7-8 hrs

MRPL, HMEL (Batinda) - Freight is an issue

Transportation is via railways.

Centralized purchase of Pet coke for Kota complex combining Cement, PP & Carbide.
~15000 MT
Pet coke going for cement & PP attracts 3% entry tax as per norms
Cost structure of Pet coke is dependent on Crude. Price is mainly governed by demand &
supply.
Pet coke is also consumed in Cement industries, Coal based Power plant Boilers & Carbide
Imports are from USA, Gulf, Al Jubail, Saudi Aramco (Poor quality)
o Quality is a problem. Cant ascertain the quality of PC
o Sellers market

Areas of Concern:-

Prices have risen in last one year owing to increased demand in cement industries & also
demand from China
Availability at economical rates
Availability at granular size
Upcoming Pet coke gasification project in Reliance
Sellers market when imported

Low Ash Coking Coal (Metallurgical coke):-

Mainly imported from Aus, SA Batteries/Cake Oven Coke Cooling Sized

Powdered form of Met coke is Breeze coke.
Unorganized market:-
o Maithan alloys get raw material from IISCO Burnpur
o Carbon edge
o BLA Coke
o Vimala (Trader)
Transported via trucks
Low Ash coking coal:-Better in quality, low impurities
Met Coke:- Used in boilers of power plant, foundries & Steel plants, Steel, Foundry, Ferro-
alloys, Blast Furnaces, Zinc and Cement Industry
One ton of steel roughly requires 0.6 tons of coke, which in turn, requires one ton of metallurgical
coal.
Breeze coke:- Sintering operation where Breeze coke is used along with Iron Ore fines, Power
Plant
 Transport is separate as it changes whenever there is upswing/downswing in market- Kota based
transporters
Taxation:- 6% E.D , 2% CST

Areas of Concern:-

Currency fluctuations as Met coke is imported

Availability at economical rates
Price sensitivity based on seasonality

Anthracite:-

Imported from SA, Vietnam

One lot at price of our expectations came from SA

Areas of Concern:-

Currency fluctuations as Anthracite is not available in India

Availability at economical rates

Suggestions:-

Lime is sourced by Sugar plant of DCM Shriram separately. Also pet coke is sourced by Bharuch plant
for their power plant operations separately. If we could centralize the sourcing, we can get these raw
materials at cheaper rates- More bargaining power.