world of steel A Division of Ellias International

Heads I win, Tails I win

22/01/2016 | 02:53:59 | Daanish
If you are a steel producer in India, you have the best of both worlds. You take risks in the global market, you go for greenfield and brownfield projects, mergers and acquisitions across the world and when markets turn sour and business plans go awry, you can retreat and seek protection and how....BIS, anti-dumping duty, safe guard duty, port restriction and everything under the sky.. After all, the banks have financed your mega dreams and leveraged you and their NPAs will drag them down. You are not the man on the street running late on a credit card payment or a car loan.
Of course there is turbulence and market conditions are hostile. But this condition is also for the steel user industry that provides more jobs, pays more taxes and faces fierce global competition and needs to be competitive on raw materials and buy at the prevailing international prices rather than inflated prices brought about by protection and barriers. 
But who cares. The steel user industry does not have the clout or wherewithal or the PR machinery to make its case.
In fact steel is something so 1950`s.  Countries like United States have moved beyond steel as the backbone of their economies. They are into innovation and ideas and disruption.
It is only an open economy in India that can push industry out of its comfort zone for increased efficiency and result in new inventions and business practises and processes. 
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Tausif on 22/01/2016 01:31:25
Tausif on 22/01/2016 14:07:18
Amit on 24/01/2016 10:46:53
An excellent observation Daanish. You have pointed out a very crucial point - we have too little equity in our businesses. The PSU Banks seem to behave like development banks that do a bad job at development.

I also agree that India does need to liberalise and open its markets, that said when some countries do not play by the rules and artificially subsidise their industry then competition becomes unfair. Steel does not require too many people to make it, it is driven by commodity prices or coal and iron ore as well as by the price of power. Some governments are giving free power, capital investment incentives and no local taxes, I would like to get your views on how one should deal with unfair competition promptly?
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