HEG Ltd., India’s leading graphite electrode manufacturer and a flagship of the LNJ Bhilwara Group, has officially approved a major expansion plan aimed at scaling its graphite electrode production capacity and reinforcing its global leadership. The move comes at a time when demand for electric arc furnace (EAF) steelmaking is surging, driven by the global shift toward decarbonisation and green manufacturing.
The expansion will further solidify HEG’s position as the world’s largest graphite electrode facility under a single roof, with the company already operating at a capacity of 100,000 metric tonnes annually.
Key Developments and Strategic Highlights:
- HEG Ltd. approves expansion plan to boost graphite electrode production
- Current capacity: 100,000 metric tonnes per annum
- Expansion to support rising global demand for EAF-based steelmaking
- Investment part of broader ₹3,500 crore project roadmap across graphite and green energy segments
- Facility located at Mandideep, Madhya Pradesh—already the largest single-location graphite electrode plant globally
Expansion Blueprint and Capacity Goals:
- The approved plan will enhance HEG’s manufacturing infrastructure, enabling higher throughput and improved energy efficiency.
- The company aims to leverage state-of-the-art, environmentally friendly technologies to meet global sustainability benchmarks.
- The expansion is expected to be executed in phases, with commercial production from new units anticipated by FY27.
- HEG’s strategic location and logistics network will support increased exports, which already account for over 70 percent of its output.
Market Dynamics and Demand Drivers:
- The global steel industry is rapidly transitioning to electric arc furnaces, which require graphite electrodes for operation.
- EAFs emit nearly 75 percent less carbon than traditional blast furnaces, making them central to green steel initiatives.
- HEG’s expanded capacity will cater to rising demand from Europe, North America, and Southeast Asia.
- China’s tightening of graphite exports has created supply gaps, positioning Indian manufacturers like HEG to fill the void.
Financial and Investment Outlook:
- HEG Ltd. has earmarked ₹3,000 to ₹3,500 crore for project implementation across graphite and green energy verticals.
- The company is raising ₹500 crore in tranches to support expansion, with additional funding from internal accruals and strategic investors.
- Promoters will inject equity from Bhilwara Energy, ensuring robust financial backing for the expansion.
- The graphite electrode business remains a high-margin segment, with capacity utilisation currently at 80 percent.
Green Energy Synergy and Future Plans:
- HEG is also investing ₹1,000 crore in a graphite anode facility for lithium-ion batteries through its subsidiary,
The Advanced Carbons Company (TACC).
- The anode plant will support India’s battery manufacturing ambitions under the PLI scheme, with Phase 1 expected to be operational by 2025.
- The company plans to integrate innovation centers for carbon derivatives like graphene and nanotubes, aligning with future energy applications.
- HEG Greentech Ltd., the newly formed green energy arm, will focus on hydropower, energy storage, and recycling initiatives.
Industry Impact and Competitive Positioning:
- With the expansion, HEG becomes the third-largest graphite electrode producer in the western hemisphere.
- The company’s export footprint spans over 30 countries, with long-standing relationships in the steel and energy sectors.
- HEG’s scale and technological edge offer cost advantages over global peers such as GrafTech and Resonac.
- Analysts expect the expansion to enhance HEG’s pricing power and long-term profitability, especially amid global supply constraints.
Conclusion:
HEG Ltd.’s expansion plan marks a pivotal moment in India’s industrial evolution, reinforcing its role in the global graphite electrode supply chain. As the world pivots toward cleaner steel production and energy storage, HEG’s strategic investments and capacity ramp-up position it as a cornerstone of the green transition.
Sources: Moneycontrol, NDTV Profit, EVreporter, MarketScreener, Business News Today
