I’epaper.timesofindia.com/Repository/ETM/2009/09/02/ETM_2009_9_2_22.pdfopment process of a number...
Transcript of I’epaper.timesofindia.com/Repository/ETM/2009/09/02/ETM_2009_9_2_22.pdfopment process of a number...
Sanjeeb Mitra
One could say the modernage started with the use ofiron in daily life. It was alsothe time when states andcities were born. The Iron
Age continues still and the metal is usedin its various forms.Steel, an alloy of mostly iron and around2 per cent carbon is so widely used thatit is considered to form the very frame-work of civilisation. The modern steelindustry saw its dawn in the late 1850s.Since then, steel has formed the bedrockof the world’s industrial economy.
After India got independent, the gov-ernments put a great stress on develop-ing the country’s steel industry. In 1990-91, six plants — five of which were inthe public sector — had a total output of10 million tonnes. Another 180 smallplants accounted for the rest of thecountry’s steel production — 4.7 milliontonnes. Most were private sector firms.
The Indian steel industry startedspreading its tentacles into Europe after2000. In January 2007, Tata Steel madea successful $11.3-billion bid for CorusGroup PLC. In 2006, Mittal Steelacquired Arcelor for $38.3 billion tobecome the world’s biggest steel maker,ArcelorMittal.
India’s aluminium industry is alsobooming. The industry has one of thehighest growth rates in the world atmore than 7 per cent per year. Most sec-tors that use aluminium are witnessing
tremendous growth, fuelling demandfor the metal. India, which has the fifthlargest bauxite reserve in the world, is allset to tap this opportunity. The industrygrew from 5,000 tonnes per annum at
the time of Independence to 483,000tonnes in 1992, of which 113,000 tonswere exported.
According to PricewaterhouseCoop-ers, “After a period of relatively good
times for the metals industry, September2008 saw the bottom fall out for all ofthe metals players. Major metal produc-ers are struggling to adjust to rapidlydescending demand, and the supplychain is working off significantly overstocked inventory. The marketshave not responded to production curtailments and have not offset thedecline in demand, resulting in rapidprice erosion.”
However, it went on to add that, “Allis not gloom and doom, the last fiveyears of M&A activity have left mostmetal producers in better financial con-dition to weather this downturn andcompete once the global economyrebounds. There will still be issues for allmetals producers to contend with, suchas climate change and the increasingcost of raw materials.”
Since the dawn of civilization, the metal industry has come a long way and now formsthe bedrock of human society
A METALLIC TALE
Mukul Ray
� Comment on thedevelopment of the steelsector.Since 1991, substantial eco-nomic reforms were intro-duced by the Government ofIndia which boosted the devel-opment process of a number ofindustries, particularly the steelindustry. The sector is ex-
pected to grow by10-12%. However,since the economicdownturn, the de-mand for steel hasdefinitely reduced.
However, thedomestic steel in-dustries are under-going various phases of mod-ernization and consolidation.In West Bengal, IISCO, whichis now under the fold of SAIL,has embarked upon a largemodernization programme tothe tune of Rs 10,000 crore ap-proximately.
This is a very good sign forthe demand of steel in the coreindustries and IISCO shall def-initely contribute a good shareof that requirement. More-over, over the last couple of years, the govern-ment of West Bengal has real-ized the potential of the industry and brought in someprivate players in the state.
� Which are the priorityareas of the company?The major contribution ofMETCO in the iron and steelindustries is its design and supply of process equipmentlike Briquetting Plant, LimeSolution Preparation Plant, Mortar Mixing Plant, ShotBlasting Plant, Pig Casting Ma-chine, etc and supply of variousBelt Conveyor and AuxiliaryEquipment are required in the
industry. We have successfullyinstalled over 35 numbers ofcontinuous pig casting ma-chines for different units ofSAIL that is producing millionsof tonnes of cast iron pig annu-ally. Presently, we are executing contracts at IISCOand RSP aggregating morethan 1.2 MTPA production ofpig iron. We have executed
Electro SlagRemelting Plantsup to 10 tonne ca-pacity and havesuccessfully man-ufactured and in-stalled Gas Clean-ing Plants for Fer-ro-Alloy Industry.We have executeda large project in
South Africa for Tata SteelKZN. We are exploring thepossibility of opening a newarea of design, manufacturingand fabrication of specialityequipment for MetallurgicalIndustries under the Renew-able Energy Mission of theGovernment of India.
� What are the futureplans of the company?Our performance during thelast five years was more or lesssatisfactory. We had secured anumber of turnkey contractsfrom the steel industry likeSAIL, TISCO, etc, some ofwhich have already been com-pleted and the rest are nearingcompletion. With the present momentumof work in our Engineering andProject Division, we are veryhopeful that we will contributeour share through engineeringactivities in the expected GDPgrowth of 8%, which the Govtof India is expecting to achieve.
(Ray is Managing Director ofMetal Engineering & TreatmentCompany Private Limited)
Rohit Patni
� What are thelatest trends thatearmark the steelsector? Domestic demand isbetter especiallysince last couple ofmonths, althoughthe extent of recov-ery may be exagger-ated by seasonability
and restocking. We believe markets arelooking up due to better demand and
lower import trends. However, steel funda-mentals are still weak.
� Comment on the high points ofyour company? The high point in our Company is how wefaced the global economic downturn byrestructuring cost cutting and improvedmarket penetration by innovative market-ing. We are looking at the rural sector wherewe have made strong brand presence.
� How important is usage of newtechnology in your sector?The importance of new technology in thesteel sector need not be over emphasized.Adoption of the latest environmentally sus-
tainable technologies can reduce greenhouse emission, reduce operating cost and atthe same time curtail consumption of fossilfuel. We have been successfully running our owncaptive power plants with the use of exitgases which would have otherwise increasedthe emission.
� How do you view competitionfrom the public sector giants?We always welcome healthy competitionwith public sectors or others. Unfortunatelyin our country the public sectors steel plantsare mostly endowed with captive raw mate-rials and various other tax sops. Most impor-tantly, they have the financial support of thegovernment which limits our competitive-ness.
� Are private sector players receivingany form of sops from the govern-ment?No, there are hardly any benefits other thansome rebate in the electric tariff and DEPBbenefits which is also reducing graduallyover the last few years.
(Patni is Managing Director, Rohit Ferro-Tech Ltd& Joint Managing Director, Ankit Metal &
Power Limited)
ET
A CONSUMER CONNECT INITIATIVEF O C U S O N M E T A L S
'Adopt latest environmentallysustainable technologies'
Rohit Patni
MUKUL RAY
Steel sector expected togrow by 10-12%
Sanjay Sureka
� How did thesteel sector fareduring the glob-al economic cri-sis?Steel industryaccounts forapproximately2% of the globaleconomy and3.5% of the global
trade in commodities. The Global SteelIndustry witnessed two sharply divergenttrends in 2008; the first half witnessed asurge in steel demand leading to a recordprices followed by a steep slide in demandand prices in the second half. While the steel demand and realisationsscaled new high in the first half of calen-dar year 2008, they retraced in just twomonths due to global melt down contract-ing the demand by more than 25% andthe prices by 50%.
Even though the impact of this melt-down was deep, the optimism stems fromthe swift policy responses by various cen-tral banks and the national governmentsin a co-ordinated manner to stimulate theglobal economy with large stimulus pack-ages and easing the monetary policy bylowering the interest rates.
� What are the new thrust areas ofyour company?* The company completed all its ongoing proj-ects, added capacities and introduced productsat higher levels of value chain.* The group entered new production space byentering into joint venture with existing units * The group is also foraying into the energysphere led by allocation of coal resources by theGovernment of India. * It is also exploring ferrous and non-ferrousmetal production and mining projects in coun-
tries like Australia, Mozambique, South Africa,Brazil and Indonesia.
� How do you view competitionfrom the public sector giants?The chief advantage available to the PSU's isthe availability of mineral resources like ironore, thermal and coking coal, manganese oreetc of high quality from captive mines at a verylarge discount over the prevailing market priceof the relative resources. However, the presentrounds of allocation of coal and iron ore minesby the government is aimed at creating a morelevel playing field for all producers with a rela-tively significant production base.
� What are the high points of yourcompany? CONCAST entered new production space byentering into joint venture with existingunits. The group is also foraying into theenergy sphere led by allocation of coalresources by the Government of India. The group is also working on strategies forunlocking value blocked in the company'sresources, both passive and active, based ontransparent business practices.
� Comment on your five-year plans.We see ourselves continuously upgrading ourcore technologies, embrace new processes, in-troducing human resources interventions tomotivate employees. With long experience inmanufacturing iron and steel products and lo-gistics management of raw materials and steelproducts (both intermediate and final), thegroup has entered into bulk trade in majorminerals and metals including intermediateproducts required by iron and steel Industry.The company is also pursuing technologies atcommercially viable alternatives for energyfrom non-conventional sources having CDMbenefits.
(Sureka is Managing Director, CONCAST)
A METALLIC TALE
'PSUs enjoy availability ofmineral resources'
SANJAY SUREKA
THE ECONOMIC TIMES MUMBAI WEDNESDAY 2 SEPTEMBER 2009 22
RflK I Ankit Metal & Power Limitedwww.ankitmetal.com
35, CR. Avenue, 4th floor, Kolkata -12, Ph:- +91-33-22119805 //06 //8807
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SRC GROUP OF INDUSTRIES27, NETA3 I SUBHAS ROAD, 6th FLOOR, KOLKATA - 700 001
WEST BENGAL, INDIA
PHONE : (0) 2243-3306, 2243-2194, FAX : +91-33-4005-0785, MOBILE : +91-9230027111/22/33
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Towards A A Steely Tomorrow
Manufacturers of
Structural SIeeIs/BiIIets/PenciI I
es I )oists I U/H-Beams I Plates/Sheets I Chequered Plate I Silico-Manganese I Ferro-ManganeseDealers enquily solicited. Iso 9001:2000 Company Structural Steel products are BIS & CE Cer�if led.
SRC Group
Building
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