Metallurgical (met) Coke is in global shortage and India has a low capacity of coke oven and imports the majority of its requirements. The ongoing coronavirus crisis from China has made a lot of companies face supply distortion, as China is the world’s single largest manufacturer and supplier of coke. Vatsal Agarwaal is a young Indian entrepreneur who has identified and seized this opportunity which exists in India where his finished product has a huge demand supply gap.
As per the KPMG report of April 2020, the ‘Potential Impact of Covid-19 on Indian Economy’ there is an impact on on the supply chain of coke, as it is mainly imported and goods which are imported especially that by sea are under danger of supply chain disruption.
The Government of India, under PM Narendra Modi, launched ‘Make in India’ in 2014. Simplex Coke & Refractory Private Ltd. was promoted by Vatsal Agarwaal in 2015, keeping that very same sentiment in mind, he earmarked into manufacturing met coke which is an import substitution product. With a modest initial turnover of Rs.4 crores, and has registered exponential growth and succeeded in achieving a turnover of Rs.100 crores in merely 4 years’time.
Now in 2020, Simplex Coke, is a leading manufacturer and trader of LAM coke, having state of the art stamp charging coke technology manufacturing plants located in Kutch & Porbandar, Gujarat. They are one of the major players in met coke and currently have a market share of approximately 5% in west and north India. With key customers like Tata Chemicals, Nirma, Hindustan Zinc, Hindalco, Jindal Saw Essar Steel, JSPL and many more.
According to Vatsal Agarwaal, the promoter and director of the company, “Coke, being a deficit product in the country is a critical commodity to our clients manufacturing activity, the demand is sustained and continuous. The company, in order to increase its footprint has already tied up with 7 coke manufacturers to cater to the industrial demand of coke on a pan India basis.” The coke industry has also benefited from ADD (anti-dumping duty) of USD 25 on imports from China which increases profit margin of domestic producer. Coking coal being the imported raw material attracts a mere 2.50% of BCD (basic customs duty), which has been constant from past 3 decades.Facing huge shortage of Coke, RINL, Visakhapatnam Steel Plant & IIM, Vizag Chapter organised ‘Global Trends in NR-HR Coke Making Technologies’ on 8 & 9 February, 2020. “As per Steel Policy 2017 India has a target to produce 300 MT of steel by 2030. To achieve this target 30 MT of coke making facilities are required in addition to the existing, envisaged facilities and coke import. Presently India is importing approximately 3 to 4 MT of Coke per year.”
Simplex Coke also ventured into the rental of Piling Rigs, having realised that the high margins in the equipment rental business were relatively untapped. It has become a major player in executing several metro and infrastructure projects as the Government of India has a huge infrastructure investment budget of Rs.111 Lakh crores.