London-based Stemcor plans to make half of its global investments in India over the next few years, but sees the country contributing 10% of its global revenues annually.
UK co to focus on the eastern region where it is setting up a few projects already
KOLKATA: London-based Stemcor, a $10-billion independent steel trading giant, plans to make half of its global investments in India over the next few years, but sees the country contributing 10% of its global revenues annually.
Ralph Oppenheimer, executive chairman, Stemcor told DNA Money, “There are huge opportunities offered by the iron ore reserves and value that can be added to it because steel production in India has to grow, given the woeful per capita consumption.”
The company’s India plans will revolve around strategic alliances with domestic steel companies to ensure raw material security, providing services to a large number of mid-size non-integrated steel producers and direct investments in adding value to iron ore.
“Of course, China will always be far above India on Stemcor’s pecking order simply because China is such a big importer of raw materials, while India is self-sufficient in raw materials barring coking coal and limestone to some extent. Trading opportunities for Stemcor in China is huge. But, at the same time, in India, the large number of non-integrated steel producers is an extensive market for us to provide steel services leveraging our global presence,” Oppenheimer said.
“We take a long term view of our investments - strategic and direct - in India. We do not invest keeping an eye on share prices. We are not good at that. Our strategic interests are steel companies, which are growing and can leverage our global reach in trading, for inward or outbound businesses,” he said.
Stemcor India is investing Rs1,500 crore on a iron ore pelletisation plant in Orissa, sourcing ore fines from mines at Barbil, which will be linked to the main plant in Kalinganagar, through a 220 km slurry pipeline.
On mega steel projects hitting roadblocks in India, Oppenheimer said Stemcor’s projects did not entail acquisition of vast swathes of land and that the company had the “best managerial talent to grow its Indian business within the Indian environment.”
“It is a good thing that India has the rule of the law, well-defined investment rules and a society that has the right to protest. It is a good thing that voices of protests are raised when a tree is uprooted. Our slurry pipeline in Orissa will be the most environmental friendly system of transporting ore through a slurry pipeline,” Oppenheimer said.
Eastern India will be the prime focus of the group’s investment, said Oppenheimer, just back from a tour of the Barbil iron ore belt in Orissa.
“I have come to India several times before, but this is the first visit to eastern states. I did not even go to Delhi or Mumbai, but landed directly in Calcutta on way to Orissa,” he said, underlining Stemcor’s new interest in the region.
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