Interview with ORIND Chairman:“WE ARE AIMING AT 30% ANNUAL GROWTH”

2005-12-08

Excerpts from the interview with MR. Ravin Jhunjhunwala, Chairman ORIND...

How long had ORIND been based out of China and where? 

ORIND’s association with China dates back to the year 1988 when we first visited China. ORIND was already a leader and one of the largest refractory manufacturers in India at that time. 

During the visit it was learned that China had plenty of mineral resources at numerous locations and a larger than expected market existed which propelled the idea of setting up a plant in China.

Orind Refractory Limited (ORIND China) got the business license on 18th 1994 and went into brick production in December 1995. It is situated at Bayuquan in the Yingkou Economic & Technological Development Zone in Liaoning Province in Northern China. 

You had indicated that ORIND factory in China is role model and unique in many ways, please elaborate. 

When ORIND China thought about the formation of a wholly owned foreign company in the refractories field to set up base in China, rules and regulations related to 100% foreign owned enterprises were not in existence and in way we helped the government in thinking about the necessity to formulate such rules. 

I admit here, that the local and provincial government was forthcoming and helpful in making our dream of setting up the first Wholly Owned Foreign Enterprise (WOFE) in the refractories field in China a reality. Hence ORIND China has the distinction of being the prime exporter of refractories since 1997. 

The company continues to enjoy unequivocal support from the local and provincial government as well as the society. 

ORIND China has a 616 strong work force including 21 expatriates and has created another 500 jobs in the care of logistics. We are keenly involved in education and sports along with our Chinese co-workers and contribute to the well being and fast growth of the locality. ORIND believes in continuous training and development of its people. 

What are ORIND’s revenues from China? Kindly split trading and manufacturing revenues? 

In 2004, ORIND China’s turnover touched USD 52.1million –equivalent to RMB 430 million and 95% of the production value is derived from export. This does not include trading activities. To make it explicit we limit ourselves to only industrial products trading. 

How do you see the manufacturing revenues growing for ORIND China and why? 

ORIND China has been witnessing growth rate of 30% for the last three consecutive years. Our goal is to become the No.1 Refractory company in Asia Pacific region by the 2008 Beijing Olympics and for achieving this, we are helped by our R&D wing which always comes up with better quality products. Having completed a decade of our operation, we are now well entrenched in China. Our focus so far has been on export, but we are now putting a lot of effort on penetrating into the huge local market, which will supplement our revenue growth. 

You also mentioned about how you are planning to increase capacity at your China plant. Could you give us details about the investment required to beef up capacity, what will be your production capacity after expansion and which markets do you plan to service with the enhanced production? 

With increase in the capacity, we should be able to achieve economy of scale which should help us serve our customers better. We have acquired three times more than what we were having. We are planning to have special products and monolithic plants besides reorganizing the existing brick plant. We have already become the largest Magnesia Carbon bricks manufacturing unit from single location i.e. China and addition special products and special monolithic will add to our revenue by almost 50% of that of the bricks. 

Could you tell us where do you see ORIND’s revenues being in the next one year, two years and five years period? 

We are expectingour turnover to reach USD 75 million in 2005 and with the new facilities in place, the growth will be substantial in the year 2006 and beyond. As already mentioned we are aiming at a 30% yearly growth for the next 10years in China. We are contemplating to strengthen our ORIND USA plant, which was established in the 1998 for the production of monolithics by adding a non-basic monolithic plant, which will further give an added impetus to our revenue growth in the coming years.