Continuing ore exports could pose trouble for steel cos

After the exit of Malay Mukherjee,new MD and CEO of Ruias-promoted Essar Steel Dilip Oommen is keen to further the gains made by the company so far

After the exit of Malay Mukherjee,new MD and CEO of Ruias-promoted Essar Steel Dilip Oommen is keen to further the gains made by the company so far. In an interview to Priyadarshi Siddhanta,he spells out his strategy on the same. Excerpts:

How do you plan to consolidate the strategic gains made by the company till now?

Essar Steel today will double up its capacity to 10 million tonnes per annum MTPA,which would make the companys Hazira plant the largest single location flat steel producer in India and the fourth largest in the world. We have invested over Rs 37,500 crore in the business,including executing recent expansions and we are seeking to consolidate the gains made so far.

What are your views on export of iron ore?

No government allows iron ore exports to earn 100 a tonne and lose nearly 700 on exports of steel. Continuing ore exports could pose a major trouble for the steel producers as the mineral is a non-replenishable resource. So exports will have to be curbed. Even in case of generating employment,the ratio of ore exports vis-a-vis steel production is 1:18. The normal alibi to export ore is that there are few takers for low grade ores. In Essar we are beneficiating and pelletising inferior quality ores. Steel firms should try and utilise the mineral idling in dumps in places like Orissa and ensure value addition.

Steel makers usually say that dumping of cheaper steel is happening in India. Do you agree?

Yes dumping is happening mainly from Japan and South Korea as their consumption of steel has come down drastically. We are told that in November 2011,the dumping was to the extent of 500 per cent,but in December it lessened to 100 per cent. We need to safeguard our industry.

Essar also has a paucity of gas supply?

Gas curtailment is an issue for us as steel sector has been classified as a non-core sector. Based on requirement of gas we had established an entire setup at Hazira in Gujarat and now we are told that there is short supply of gas. Considering that steel consumption is only 50 kgs in Indian against 500 kgs in China,steel usage needs to be promoted. So the sector should be given similar treatment as fertiliser and power.