Face-to-Face

The demandsupply scenario of steel should be balanced

How do you find market outlook in India and across the world for sponge iron and steel products?
- Steel demand in China seems to be coming near to saturation and is expected to plateau with only moderate growth in the next decade. Across the developed world, growth in steel demand is expected to be flat. India is the only large market where the growth is expected to be very high for the coming few years with our per capita annual consumption of steel being just 45kg.

V. R. Sharma
CEO & Dy. MD (Steel Business) Jindal Steel & Power Ltd.

indal Steel & Power Limited, with an annual turnover of over $2.3 billion (Rs 11,000 crore), is a part of about US $12 billion diversified O P Jindal Group. It is a leading player in Steel, Power, Mining, Coal to Liquid, Oil & Gas and Infrastructure, consistently tapping new opportunities by increasing production capacity, diversifying investments, and leveraging its core capabilities to venture into new businesses. JSPL's investment commitments in steel, power, oil & gas and mining have touched more than US $30 billion today. JSPL has expanded its steel, power and mining businesses to various parts of the world particularly in Asia, Africa, South America and Australia. V R Sharma is CEO & Dy. MD (Steel Business) of Jindal Steel & Power Ltd. A BE (Mechanical) and MBA (Marketing) from UK, Sharma has around three decades experience in the steel industry with various organizations. Some of his major stints include Bhushan Steel and Ispat Industries. Prior to joining JSPL, he was working with Bhushan Power & Steel Limited as Joint Managing Director. At JSPL, Sharma has played a key role in managing large Greenfield projects and expansions and driving the growth of the organizations through mergers and acquisitions, creating large business opportunities leading to exponential growth in marketing and operations in global scenario. In an exclusive interview to Balakrishnan Nair, V. R. Sharma lays threadbare his plans for the company. Excerpts:

For the quarter ended June 30, 2010, the company's net profit after tax was up by 45 percent while net sales up by 34 percent. What are the financial targets the company has set for itself for the next two years?
- In the next two years we target our PAT to grow by around 15 percent year-on-year. We do not expect much growth in sales at the end of this financial year but our new facilities would come up in FY 2011-12 and we would achieve a high growth in net sales at the end of FY 2011-12.

How does JSPL plan to increase its retail distribution network/retail chain across India and overseas so that the product is made available to end-users close to the user point? Any plans to set up retail outlets on the lines of Essar Hypermart or ISPAT Chowk?
- JSPL is foraying in a big way into Wire Rod and Rebar production. Wire Rod production started at the start of this financial year and Rebar production in Patratu will start at the end of this financial year. These products require the seller to cater to the requirement of a large number of customers and JSPL is geared with the necessary distribution network for the same. At the beginning of this financial year, we had 6 stockyards throughout the country. As of now, we have 8 stockyards and we plan to expand to 12 stockyards by the end of this financial year. Further, we also felt a need to set-up channel partners who will sell on behalf of JSPL. In this regard, we are appointing dealers and distributors who will be responsible for the sale of light and medium section beams, angle irons, TMTs and Wire Rods.

What are the prospects of Iron and Steel industry in Asia and India in particular?
- The growth momentum of China in the last decade, with special emphasis on infrastructure, led to large scale expansion in steel supply. As a consequence, China's production capacity reached to 700 MTPA. However China's demand for steel has saturated and we will be in a scenario of over-supply in China. This is a cause of concern for Indian

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Face-to-Face

We will commission a 6 MTPA integrated steel-making facility in Angul, Orissa and a 3 MTPA integrated Greenfield steel facility in Patratu, Jharkhand. Our Raigarh facility will be expanded from 3 to 5 MTPA.

steel industry with respect to cheap Chinese exports. Government of India will have to take pre-emptive measures in this matter to maintain the growth of Steel industry and other allied Engineering industry. Demand in the developed world is expected to be flat for the coming few years. In India too, a significant amount of steel capacity is expected in the next 2-3 years. However, we will also have a strong growth in demand. All-in-all the supply-demand scenario should be balanced. The major cause of worry is governmental policy with respect to allotment of mines and sharing of mining profits with the local stakeholders. This will increase the cost of steel production and may decrease the profitability of the entire industry.

l Adopting 4 Industrial Training Institutes under the PPP scheme of the Govt. of India. l ablishing O.P. Jindal Est Community College of Technology and Skills to develop skilled workforce l Opening English medium CBSE affiliated Schools at our various plant and project Locations like Raigarh, Tamnar, Nalwa, Angul and Patratu, wherein quality education is being imparted to over 9000 students. l Establishing multiple charitable Clinics and Hospitals, and providing World-class health facilities to its employees and community. l Planting of large number of trees, using environment friendly technologies, setting up of an environmental laboratory, etc. l Assessing the needs of the community through a socio-economic survey conducted regularly by independent agencies. Door to door surveys, questionnaire sessions, focus group discussions and in-depth interactions, etc. are utilized and social initiatives are introduced based on the findings of the survey. l Initiating livelihood programs for Women Self Empowerment.

What are the initiatives taken by JSPL to promote environmental sustainability?

- JSPL has been working on multiple fronts to promote environmental sustainability. JSPL has been promoting new environmental friendly technologies and are setting up coal gasification plant for production of sponge iron which is a much cleaner technology compared to coal-based sponge iron.

What are the various capacity expansions planned by JSPL in the coming years? What is your vision for the company for the next five years?
- JSPL has aggressive expansion plans for the next five to ten years. In the next five years, we have the following plans: We will commission a 6 MTPA integrated steel-making facility in Angul, Orissa and a 3 MTPA integrated Greenfield steel facility in Patratu, Jharkhand. Our Raigarh facility will be expanded from 3 to 5 MTPA. In Bolivia we will set-up a Pellet plant, a sponge iron plant and an integrated steel plant. We have acquired Shadeed Iron & Steel in Oman and have set-up and commissioned a sponge iron plant there. We plan to set-up a full-fledged integrated steel plant with downstream facilities.

JSPL has been receiving awards for CSR excellence. Can you brief about company's activities in this area?
- JSPL has been very active in CSR activities and our activities extend well beyond our business objectives. Some of the major CSR activities which JSPL has undertaken are:

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