P. K. Mukherjee, MD, sesa Goa talks to Virat Bahri on The Company’s outlook post The Lifting of The Export ban and The Sfio Report
B&E: Indian steel companies often complain that we should be looking at value adding our iron ore within the country rather than exporting it. What is your stand on this issue?
PKM: Theoretically, yes. (But) where is the capacity to consume? How much capacity have we added since independence? Value addition, as stated above, is a big subject and we can discuss over it for hours. I can only say that nowhere in the world does steel producers depend only on captive ore. Instead, players buy ore from merchant miners at international prices, be it Australian Blue Scope or even US Steel mills, leave aside the Japanese and Europeans who have largely depended on imported ore for decades and still compete year after year in the international market with competitive technology – they invest in sinter plants and consume all grades of ore instead of high grade lumpy ore as a major portion. There are so many sponge iron plants in this country that only consume high grade lumpy ore of specific size, leading to crushing of limited natural resources and generating more fines; leave aside the question of their environmental footprints.
B&E: What is your outlook for the current fiscal? How do you see the break up of your Indian and global businesses altering?
PKM: Domestic sale as a percentage of total sales is going up. But a significant quantity coming out of Goa mines, which is having low grade reserves and is not touched by domestic steel producers will necessarily have to be exported continuously. The Karnataka scenario and transport bottlenecks in Goa would determine our outlook this fiscal. We’ll continue to maximize the volume within all regulatory parameters. Subject to the above, we look forward to volume growth of about 20% from our Goa and Karnataka mines put together.
B&E: What is your stand on raising of export duties by the government? How is the new manufacturing policy expected to affect your business?
PKM: We believe in free market economy and more regulations have various fall outs, which, in the long run, may not be helpful for the country as a whole.
B&E: What is the status of the SFIO investigation that questions your overinvoicing of imports and what is your stand on the same? How important is transparency to you as an company?
PKM: We’ve received the SFIO report and are in the process of compiling our comments & are confident that the ministry will consider the report objectively after evaluating our comments.
PKM: Theoretically, yes. (But) where is the capacity to consume? How much capacity have we added since independence? Value addition, as stated above, is a big subject and we can discuss over it for hours. I can only say that nowhere in the world does steel producers depend only on captive ore. Instead, players buy ore from merchant miners at international prices, be it Australian Blue Scope or even US Steel mills, leave aside the Japanese and Europeans who have largely depended on imported ore for decades and still compete year after year in the international market with competitive technology – they invest in sinter plants and consume all grades of ore instead of high grade lumpy ore as a major portion. There are so many sponge iron plants in this country that only consume high grade lumpy ore of specific size, leading to crushing of limited natural resources and generating more fines; leave aside the question of their environmental footprints.
B&E: What is your outlook for the current fiscal? How do you see the break up of your Indian and global businesses altering?
PKM: Domestic sale as a percentage of total sales is going up. But a significant quantity coming out of Goa mines, which is having low grade reserves and is not touched by domestic steel producers will necessarily have to be exported continuously. The Karnataka scenario and transport bottlenecks in Goa would determine our outlook this fiscal. We’ll continue to maximize the volume within all regulatory parameters. Subject to the above, we look forward to volume growth of about 20% from our Goa and Karnataka mines put together.
B&E: What is your stand on raising of export duties by the government? How is the new manufacturing policy expected to affect your business?
PKM: We believe in free market economy and more regulations have various fall outs, which, in the long run, may not be helpful for the country as a whole.
B&E: What is the status of the SFIO investigation that questions your overinvoicing of imports and what is your stand on the same? How important is transparency to you as an company?
PKM: We’ve received the SFIO report and are in the process of compiling our comments & are confident that the ministry will consider the report objectively after evaluating our comments.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
