Synergy Capital's Saurashtra acquisition signals shift in west Indian met coke industry

The recent buyout of Saurashtra Fuels' Mundra plant in Gujarat by private equity firm Synergy Capital is likely to pave the way for a change in the western Indian coke industry, which has been struggling against import competition.

Saurashtra Fuels, once the leading producer and de facto leader of the west Indian coke industry, has been dealing with financial stress due to the influx of cheaper imports in recent years, which led the cokery to stop operations around a year ago, according to market participants.

The cokery was unable to revive itself even after the Indian government imposed a quantitative restriction on imported low-ash metallurgical coke at the beginning of 2025, which was intended to provide some relief to merchant cokeries across the country.

Synergy Capital announced its acquisition of Saurashtra's Mundra plant earlier in October and plans to invest between Rupees 12,000 million-20,000 million [$136.4-$227.3 million] over the next three to five years. This includes the acquisition cost and the phased restart of the met coke plant, among other investments in the project, it said.

The plant, now called Synergy Saurashtra, consists of eight coke oven batteries of non-recovery type with a total capacity of 600,000 mt/year and will be revived and restarted in pairs from November, Synergy Capital said.

"We will bring about 350,000 mt of capacity online over the next three months, targeting a minimum 67 CSR [coke strength after reaction] grade, well above the 62-64 CSR typically produced by other merchant coke ovens in the region," Davinder Chugh, Senior Partner and Chief Operating Officer at Synergy Capital, told Platts, part of S&P Global Energy.

The company is also in the process of procuring coking coal and plans its blend to comprise 65%-70% premium low-vol type coals and 30%-35% for other grades that would provide cost flexibility.

Existing west India-based cokeries currently produce lower grades of met coke and cater to regional industries like chemicals and ductile iron pipe makers, among others.

West Indian market

West India's met coke industry came into prominence after a major earthquake in Kutch, Gujarat, in 2001 had prompted the central and state governments to announce a five-year exemption from excise duty and sales tax for new industrial investments in the district, paving the way for the establishment of several cokeries in the area.

But the west Indian region's steelmaking hub being dominated by re-rollers and induction furnaces, unlike the blast furnaces and stand-alone pig iron manufacturers in the east, impeded the industry's growth.

The west's domestic merchant coke market faced a double whammy as integrated steelmakers in the region came up with their own coke ovens, while the deluge of cheaper imported coke from Indonesia since 2022 pressured domestic cokeries to see closures and production cuts.

India's imports of Indonesian coke jumped by over 1,000% from 2022 to 2024 at 2.08 million mt, accounting for around 40% of India's total coke imports during the year, according to the latest data from S&P Global Market Intelligence's Global Trade Analytics Suite.

"Surviving in the west coast, or in the southern parts, of India is very difficult," a major east India-based coke producer said, adding that west coast-based cokeries have suffered more due to cheap imports, as in east India, coke producers operate their own steel plants, so a portion of their coke is used captively.

Large integrated steelmakers in east India that are coming up with new blast furnace capacity expansions are in the domestic coke market from time to time, and that helps with demand as well, the major coke producer added.

"There is no market for high CSR coke in the west, and even if demand is there, those prices are not attractive ... Some coke plants have tried to sell high CSR coke, but mills ask for import parity prices, which are not workable for sellers," a Gujarat-based merchant coke producer said.

Since 2022, when high volumes of Indonesian coke imports started flowing into the Indian market, domestic coke prices have been higher by $100/mt or more compared to Indonesian coke on a CFR India basis, according to market participants.

"While the west coast is not the east coast in terms of steelmaker demand, there is robust demand from zinc producers, chemical players, and foundries that require stronger coke -- a product only our company can supply -- and, of course then, JSW Steel, AMNS India and a few others [who] are structurally short of coke," Synergy's Chugh said.

State-owned steelmaker Rashtriya Ispat Nigam Limited, or RINL, located in Visakhapatnam, Andhra Pradesh, was also a potential customer due to its coastal location, Synergy Capital said.

Various Indian coke market participants additionally anticipated that these added merchant coke supplies would eventually flow to the western-India buyer, AMNS India, given its natural geographical proximity. "AMNS is a very important part of the equation on the west coast for a large capacity coke plant to run viably," the Gujarat-based merchant coke producer said.

"At this moment, there are no discussions [with AMNS]. We are focused on bringing the batteries into operable condition, and in due course, we will hold commercial discussions with JSW, AMNS, and others. They are potential customers, and we would be keen to have them in our order book, but that will be subject to further discussions," Synergy's Chugh said.

AMNS India did not respond to requests for a comment.

Merchant coke industry evolves

Synergy Capital also aims to commission a waste-heat recovery power plant in early 2027 and subject to feasibility, an integrated steel plant and/or ferroalloys plant and other downstream facilities, it said.

"[Synergy's acquisition] is good for the coke industry," the major east India-based coke producer said, adding that eventually all merchant cokeries will have to come up with steel-making capacities or they will have to shut their operations.

"Indonesia has come up with big volumes... Indian logistics cost is higher, and we don't have the coke-making technology that Indonesia-based cokeries are using," the major coke producer said. "Small coke plants here don't have the capex to improve their technology, so it is very difficult or impossible to survive in this context."

Despite an ongoing quantitative restriction (QR) on imported coke, India imported 854,594 mt of Indonesian coke between January and July, according to S&P Global Market Intelligence's Global Trade Analytics Suite.

"Without adding any upstream or downstream facility or any help from policies like QR or antidumping duty, this industry does not have much future, because Indonesia is breathing down our neck," a Gujarat-based coke market participant said.