Q - How big is the stainless steel market in India and what are the emerging opportunities you see in India?
A - Currently the overall demand level for cold rolled stainless steel products is over 1.3 million tonnes. While utensils and kitchen wares add up to nearly 0.9 million tonnes, the balance demand is from the industrial segment around 400,000 tonnes. The demand for Industrial grades is set to grow 4 times in the next 8 to 10 years.
In the absence of domestic capability to manufacture high end products for hostile Industrial applications, imports will continue to play a big role.
Therefore enhancing domestic capabilities to offer high end products for the high end application segments in domestic markets is the biggest challenge.
Domestic demand for the low end applications currently generates a demand for nearly 1 million tonnes which will double in next 8 years.
Domestic players have a limited range of product grades available in smaller width only as compared to the wide coils and a big range of grades being offered by global mills which helps the domestic end users to gain big competitive edge in export markets.
THEREFORE INDIA NEEDS TO IMPORT STAINLESS STEEL FLAT PRODUCTS WHICH CANNOT BE MADE IN INDIA.
Q - How Outokumpu has positioned itself in Indian market and how is your company planning to contribute to the growth in steel sector?
A - In contrast to developed world, Indian stainless steel industry is extremely fragmented. Over hundreds of small units using Induction furnaces account for a production volume exceeding the production volume of the largest stainless steel player in the country. These small units cannot compare with the global standards in areas of environment protection, social security issues as well as product quality.
Indian producers can supply commodity vanilla grades for low end applications mostly.
Therefore, the capital goods manufacturing segment has heavy dependence on imports of value added stainless steels. Even the SMEs who export wares to the discerning buyers in global markets have no option but to buy products from globally reputed mills.
Outokumpu, being the oldest and one of the largest with global leadership in product innovation and application, Outokumpu brings immense value to the end users in the Indian markets.
Q - What are various challenges and opportunities Outokumpu visualizes in Indian market?
A - One of the big challenges for the Indian Stainless Steel industry is to be seen as professionally ethical and true to what it stands for ie to work towards satisfying the customer at all times and not be seen to be self centric with profits being the ONLY motive.
The customer in India are mostly in SME and MSME segments employing millions of employees as compared to a few producers in the organized sector employing a few thousand employees. The customers get agitated to observe that during boom time the producers maximize their exports and dump the domestic customers. When there is a downturn big producers lobby with the government successfully to restrict imports.
Q - Is it not unethical and unfair to observe that it is so easy to take away the end user's right to choose the vendor?
A - Government must protect the interest of customers who are actually the back bone of the economy. Industry must emerge as ethical and fair in all conditions.
Outokumpu has always positioned itself as a service oriented company.
Q - What are they various activities you have adopted to serve your client in more effective manner?
A - India is the second fastest growing economy in the world with a very strong growth in demand for special grades and sizes of stainless steel products for infrastructure development, Oil & Gas, Nuclear energy, chemical processing industries, the transport sector, building and construction.
Through our sales offices network, we provide a complete stainless steel package from one contact point in our Indian Team to the big corporate.
India's biggest end user segment of stainless steel is the fragmented Small & Medium Enterprises. We wish to offer service with reliability to deliver the right product at a competitive price and right on time to the small end users. One immediate major step in this direction is to start a custom bonded warehousing facility in Mumbai for fulfilling small quantity orders specific to customers' needs.
The end user understands that buying their small quantities of stainless steel products from company owned distribution channels is the most reliable way to do their business.
We also help the customers gain competitive advantage by proper selection of the appropriate grade of stainless steel for each application and offer traceability of the Outokumpu product up to the manufacturing stages.
Unfortunately due to the anti dumping investigations initiated by Commerce Ministry at the behest of ONLY one family owned stainless steel manufacturing company in India, the first FDI in stainless steel in India has been scuttled. Outokumpu planned to invest over EUR 30 million to build a modern Coil Service Centre as well as Plate Service Centre near Mumbai with combined annual processing capacity exceeding 50000 tons per annum.
This project would have meant direct employment to over hundred skilled and semi skilled people in Maharashtra together with indirect employment to hundreds of people engaged in transportation, handling etc. Our proposed investment would have brought hundreds of crores of additional INR revenue for the country by way of customs duty, excise duty, VAT and additional CVD and Education Cess etc.
Q - What is the USP of Outokumpu products?
A - Outokumpu is one of the largest and the oldest stainless steel company in the world - the most experienced with leadership in product innovations and new applications.
Outokumpu has always been respected globally for its ethical behavior in all situations with the customer, the stake holders and the employees. We continue to honor our commitments at all levels and reorganize the way we work to offer the competitive advantage to our customers at all times.
Outokumpu is doing everything that needs to be done to bring Indian end users at par with global practices. We are bringing at the door steps of the end users in India those world class products and applications which are not being manufactured by Indian producers.
Q - Can you talk of your clients and projects Outokumpu is associated with?
A - With the world's consumption of water doubling rapidly, desalination in increasingly becoming the answer. Desalination process is the emerging segment in India and it is the most challenging application from corrosion point of view.
We are global leaders in providing guidance and supply of Duplex and Super Duplex range of stainless steel grades to get a long life of plant & equipment.
Similarly whether offshore or onshore, the oil and gas industry not only encounters the toughest external corrosive atmosphere but also confronts the harshest process conditions. We offer guidance to choose the right grade of premium grade for flowlines, umbilicals, firewalls, piping and storage tanks.
Q - What is your goal for 2009?
A - On a global level, our Group vision to be the number one and our strategy to get closer to the end users continues to be followed very aggressively and our efforts to expand the product basket with higher share of special grades globally is also paying dividends.
In the Indian context, the biggest goal and challenge for us is to explain to the government that imposing anti dumping duty on products which can not be produced by Indian producers will harm the emerging infrastructure development of the nation. Such a step will kill the ambitions of thousands of SMEs who export their products and also damage the competitiveness of our capital goods manufacturing companies in the global markets.
