Ferrosilicon industries caught off-guard

Rajesh Rai  | Phuentsholing

Ferrosilicon industries in Pasakha Industrial Estate have been caught off-guard as India’s Ministry of Steel made it mandatory for the steel manufacturers to produce Bureau of Indian Standards (BIS) certification.

The last date to upgrade the certification is April 22, 2020.

Ferrosilicon is the primary raw material for steel production. India imports ferrosilicon from Bhutan. China and Norway are the other countries from where India imports ferrosilicon.

There are a total of nine ferrosilicon industries in the country, eight in Pasakha and one in Samdrupjongkhar.

Ferrosilicon is one of Bhutan’s top 10 export commodities. The provisional Bhutan Trade Statistics (BTS) from July 1 to September 2019 features ferrosilicon as the country’s top export commodity worth Nu 2.16 billion (B). BTS 2018 also shows ferrosilicon as the top export commodity with export worth Nu 13B.

The industries had nine months’ time to produce certification as the announcement came on July 22, 2019. However, the industrial estates in Pasakha came to know about the notification only last month.

As the certification procedure takes time, the Association of Bhutanese Industries (ABI) yesterday submitted a letter to the Bhutan Chamber of Commerce and Industry (BCCI).

The association’s general secretary, Jochu Thinley, said the association had asked for a year’s time extension, until April 2021. ABI’s letter was routed from the chamber and directed to the Bhutan Standard Bureau (BSB) and the Department of Trade (DoT).

Jochu Thinley said the issue was also raised during the recent Bhutan-India startup summit in Thimphu. The Indian Minister of Railways, and Commerce and Industry, Piyush Goyal, was also present during the summit.

The industries in Pasakha have started working on the certification processes. An industrial establishment has to first collaborate with a consultant to link with the BIS.

One of the eight ferrosilicon companies in Pasakha, however, had applied for certification in November 2019. The application is at an advanced stage.

Ferrosilicon price

The current market price of ferrosilicon has increased—about Nu 89,000 per metric tonne (MT). This is an increase from Nu 66,000 per MT last year.

The drop in the price last year was also largely attributed to India’s requirement for ferrosilicon that was generated domestically.

Annually, India imports around 300,000MT of ferrosilicon from countries like Bhutan, China, and Norway. Today, Bhutanese ferrosilicon industries produce about 10,000MT to 12,000MT of ferrosilicon in a month.

Considering the time taken to get the BIS certification for the ferrosilicon industries in these countries, India could see a sharp shortage of the steel raw material. And it could trigger the price to further rise.

Bhutanese ferrosilicon companies also export their product to the European countries.

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