The Joda Ferro Alloy Plant (FAP) in Odisha, India recently celebrated its 60th anniversary, making it India's oldest continuously operating ferroalloy plant. Some key reasons for its longevity compared to other volatile ferroalloy sectors are its access to reliable power and raw materials, operational innovations, focus on efficiency and environmental standards, and strong community support. Being a wholly-owned subsidiary of Tata Steel also provided strategic advantages of dedicated customers and flexible power sourcing. Its single product focus on ferromanganese further aided efficiency. Strong management and workforce commitment have kept the plant profitable through market cycles for 60 years.

1. 60 not out - Sixty Successful Years of
Continuous Ferro Alloy Making at Joda
Prabhash Gokarn
What could be the reasons for its longevity in a sector that is notoriously volatile?
All thoughts and opinions in this article are my own and do not necessarily represent company policy. Nothing in this article is
either endorsed by Tata Steel nor does this represent any official view of Tata Steel.
Background
On 20th April 2018, Tata Steel’s Ferro Alloy Plant at Joda turned sixty. It is India’s oldest
continuously operating ferroalloy plant, and one of the oldest continuously operating ferroalloy
plants in the world.

2. Tata Steel (called “TISCO” at that time) set up one of India’s earliest ferroalloy plants at the Joda
Valley in the Keonjhar District. The plant was set up as a wholly owned subsidiary(Joda Ferro Alloy
Pvt Ltd). It was the first assignment of M/s M N Dastur and completed eight months ahead of
schedule.
Inaugurated on 20th April 1958, the plant used power from the newly constructed hydroelectric
power plant at the Hirakud dam on the river Mahanadi and was connected to the railway network
via a freshly laid, 18-kilometre-long, railway line.
Then called Ferro Manganese Plant, it is designed to produce high carbon ferromanganese for
the steel plant at Jamshedpur (hitherto produced in Blast Furnaces) via two 9 MVA Elkem Furnaces.
One furnace was later converted in 1990 to a 15 MVA furnace for Silico Manganese production. For
operational efficiency, from the year 1998, based on recommendations of the Booze Allen team,
production of Silico Manganese was stopped and only HC Ferro Manganese is now produced.
Sectorial Volatility
The Ferro Alloy sector globally, and especially in India, is notoriously short-lived, some of the
reasons being :
Market Side
a) Ferro Alloy prices are extremely volatile – the wild swings in pricing that have short spikes
and long periods where prices fall below cost and most “swing” players stop production. Also,
since there are hardly any trade barriers, the exchange rate has an overwhelming influence.
b) One factor of market volatility and the standardization of specifications is that ferroalloys
have become commoditized with almost no Customer Loyalty; compounded by the fact that
most ferroalloy players have themselves to blame - limited market innovation and their
behaviour during price spikes! No company can survive without strong customer loyalty –
through the good, and more importantly, the bad times.

3. Supply Side – Power, Ores, Reductant
c) Ferro Alloy manufacturing needs a large amount of electricity. While the power situation in
India has improved drastically in the recent years, India faced a crisis of power in the eighties-
nineties, killing off many reputed names in the Industry. About 30%-40% of the cost is of
electric power – rising power costs, especially power from thermal sources – due to a shortage
of coal – has made ferroalloy making in many areas (western & southern India)
uneconomical.
d) While Chinese Ferro Alloy plants survive on almost 100% imported ore; in India, it is very
difficult for the ferroalloy industry to survive without backward integration. Some ferroalloy
manufactures have resorted to wet leasing their plants (becoming External Processing Agents
or Conversion Agents) to companies with access to ores to survive, however, these
relationships, which are between two companies with different aspirations and mindsets,
have not stood the test of time. Even Chinese companies have backward integrated and
invested heavily in Zimbabwe and South Africa to ensure raw material security.
e) Rising cost of coking coal and its impact on cost and availability of Low Ash Metallurgical
Coke has led to ferroalloy producers look at alternate reductants. However, the limited
availability of charcoal in India – unlike in South Africa or China – makes these options also
uneconomical, pushing up manufacturing cost.
Others
f) In the late 1990s till mid-2000s’ easy availability of loans and a rising market, fuelled by
seemingly insatiable demand for steel raw materials (due to the exponential growth in steel
manufacturing in China), many ill-conceived ferroalloy plants were set up. Most of them are
now shut and form a significant proportion of NPAs of Indian Banks.
Secrets of the Longevity of FAP Joda

4. Ferro Alloy Plant Joda has many “unfair” advantages that have helped it survive for six decades
without any interruptions in production. Innovations both on the market side and in production,
the quality of the management; and that fact that it is a wholly owned subsidiary of a very successful
steel major(and later incorporated into the same company), Tata Steel have been very important
factors :
Market Side
a) While ferroalloy prices have been volatile, a large proportion of the production is earmarked
for the steel plants of its parent company, i.e. Tata Steel’s plant at Jamshedpur and now
Kalinganagar; buffering it from the market volatility.
b) Building a customer connect through initiatives like Customer Value Management,
improving packaging, branding etc., to become the most preferred ferroalloy player in India
for the portion of ferroalloy sold to the market (see www.linkedin.com/pulse/market-
development-brand-building-b2b-marketplace-prabhash-gokarn/)
Operational
c) Operational Efficiency due to an experienced, loyal and committed workforce and a single
in-house source for most of its raw materials (reducing variability). A constant focus on
process improvement (awards won for small group activities year on year has fuelled a
passion for improvement in the workforce) and focus on keeping cost in control (e.g. a flexible
power sourcing strategy, use of alternate reductants, use of FeMn slag etc.) helps it remain
very profitable even in downturns.
The fact that it makes a single product, high carbon ferromanganese, is also a very important
factor that has helped it become a world benchmark in operational efficiency.
{The two attempts at diversification, the first, making Silico Manganese lasted only a few
years(~1991-1998) before being dropped for operational efficiency, and the second, an
attempt make Ferro Chrome in the mid-2000 (due to a transformer breakdown at FAP
Bamnipal); did not take off}.
d) Operational Innovations – e.g. installation of the first and only Solid-Liquid Separation Unit
to handle GCP Slurry (see https://www.linkedin.com/pulse/safety-challenges-construction-
large-water-recovery-plant-gokarn-1/) with the option of recirculating high Mn/Fe dried
sludge through agglomeration and recirculation of water has helped improving sustainability;
and will help reduce cost.

5. Another noteworthy innovation is the briquetting of ferromanganese fines (a by-product of
ferroalloy sizing) which helps convert lower value fines into higher value briquettes which
fetches better realization (www.slideshare.net/prabhashgokarn/winner-novel-
agglomeration-process-for-ferroalloy-fines )
Supply Side – Power, Ores, Reductant
e) FAP Joda was set up taking advantage of the recently opened hydro-electric power plant at
the Hirakud dam on the river Mahanadi; giving it access to an eco-friendly source of power,
inured to the availability of thermal coal (that has plagued thermal power plants). In addition,
as mentioned before, taking advantage of power wheeling, this has been supplemented by
cheaper sources of power as & when available.
f) Access to a large captive Manganese Ore mine has given FAP Joda advantages of a reliable
supply as well as uniform quality. The captive ore has been enriched with high grade imported
ores as and when such ores become economically viable.
g) Constant innovation has made it possible for FAP Joda to accept a wide variety of reductants.
Access to nut coke from the steel plant which is available at transfer prices and ability to
accept other reductants (Char, Jhama Coal etc.) has kept costs under some control in the face
of periodic sharp increases in coal & coke prices.
Strong Environment Focus : staying ahead of legislation
h) Many plants, especially in China and some in India, have had to be shut for environmental
reasons. Tata Steel believes in staying ahead of the regulations and that has helped FAP Joda
become a benchmark amongst Ferro Alloy Producers in India. Apart from the above

6. mentioned Solid-Liquid Separation Unit, FAP Joda is the amongst the first ferroalloy
producers to install online stack monitoring facilities with direct uploading of stack data to
the Central Pollution Control Board/Odisha Pollution Control Board. Apart from this, FAP
Joda is one of the few industries that have achieved zero liquid discharge.
Taking the community along
i) A strong sense of Corporate Social Responsibility is inevitable, given that Tata Steel is the
global benchmark for CSR. Some of the recent initiatives include participation in the “100
schools project” and the adoption of local schools. The enduring support from the local
communities has been a key factor in Sixty Successful Years of Continuous Ferro
Alloy Making at Joda – 60 not out!!
Chairman & Managing Director of M/s M N Dastur, Mr Rustam Minu Dastur, along with senior officials
celebrating the Diamond Anniversary of FAP Joda with Mr GP Sahu, Head FAP Joda, Mr Prabhash Gokarn,
Head Engineering Projects & Town and other officials.

7. Some Photos from the Archives….
(courtesy Mr R M Dastur, MD M/s MN Dastur & Company)
Figure 1 : The Plant Site before start of construction in January 1956
Figure 2 : Work Starts on Excavation for the Furnace Building

8. Figure 3 : Reinforcement and Shuttering of the Plant Foundation
Figure 4 : Furnace Building and Ore Bridge under construction (April 1957)

9. Figure 6 : Furnace Building Under Construction : May 1957
Figure 7 : Grinding of the Circular Rail for Furnace Rotation

10. Figure 8 : Furnace Shell being Assembled : July 1957
Figure 9 : Pump House and Main Water Pipelines being installed

11. Figure 10 : Stores Shed and Maintenance Shop erected : August 1957
Figure 11 : Furnace Building takes shape : September 1957

12. Figure 12 : Ore Bridge in Place : January 1958
Figure 13 : Trial Production Started on 8th
January 1958 – Plant was inaugurated in April 1958.

13. Figure 14 : Raw Material Charging into the Furnace
Figure 15 : Opening of the Tap Hole to Tap molten metal and slag
Figure 16 : Tapping of molten metal and slag

14. Figure 17 : One of the first Pan Casting of the tapped molten metal