Interview With Satish Agarwal, CMD, Kamdhenu Ispat

Satish Agarwal, 
CMD,
Kamdhenu Ispat

Many companies are coming up with capacity expansion plans. How do you see the demand-supply scenario evolving after these capacities come into being? 

The demand for steel in India is expected to rise by seven per cent in this financial year as compared to 5.5 per cent as of last year. The overall outlook for the steel sector is positive and the demand was likely to pick up. It’s true that many companies are coming up with capacity expansion plans due to the growing commercial and housing sector, infrastructure projects and various initiatives by the central and state governments. 

The demand-supply scenario will certainly change if such capacity expansion takes place, but the current status of the market is not set to absorb any substantial increase in supply. 

How is the depreciating rupee impacting the sector in general and your company in particular? 

The depreciating rupee value will provide some respite to domestic steel companies, which are facing tough times in these times of limited margins and low demand. It might make the Indian steel industry more competitive abroad, causing a boost in export revenues. At the same time, it will make imports relatively costlier. 

There has been a lot of talk about the environmental hurdles that the sector is facing. What is your take on this, and how can the problem be addressed? 

This is really a challenging situation, as every industry related to mining or extraction is facing environmental issues. But since the issue is extremely relevant for sustainable development, any kind of generalised principle, about the approach will be inappropriate. It can only de discussed and decided on a case-to-case basis. 

What is your take on the key raw material prices for steel in FY14 and FY15? 

With the depreciating rupee, the imports of raw material has certainly became expensive. Further, iron ore and coal are the basic raw materials. The companies which own the captive mines are better placed, but the units which are procuring raw materials from the market are definitely facing the heat even in the past. The prices of raw material will go up in the future.