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Guest of the month

Mr. Bagrodia has a very wide experience of about 45 yeras in the industry. He has been working in Birla Group since 1958. He has held top positions in many professional bodies like cement manufacturers Association, lkali Manufacturers Association, Indian Refiend Copper Producers Association and National Council for Cement & Building Materials. He also held position of Honoray Counsul of Republic of Tunisia in Mumbai

He has wide experience of setting up mega projects of Birla Group.

He was decoreted as outstanding business executive of the Decade by Unity International. He was appointed by government of India as director on GAIL. He is also appointed as a member Task Force (TF) MOU, by government of India, Ministry of Heavy Industries & Public Enterprises. He was conferred the Honoary Doctorate by International Institute of advanced Economic & Social Studies (IIAESS), Rome. Here are the excerpts of his exclusive interview with our Editor D.A.Chandekar.

Q. What are your association’s current activities to help sponge iron manufacturers?

A.Sponge iron manufacturers association (SIMA) was established in 1992 with clear objective to promote and protect the interest of Indian sponge iron manufacturers. In Its multi-dimential role SIMA provides common platform for regular interface with Government and other regulatory authorities and provide the right feedback for formation of necessary policies for long term development of the industry to support the growing metalliks requirements of steel industry.

Association also concentrates on compilation and dissemination of industrial data, technical and commercial information essentially required for correct decision making and realistic future projection, investments and monitoring market trends.

SIMA has established itself as the official data bank of the industry. Indian DRI industries presence has well recorded in the international arena with all time high production of 69.08 lac tons in the year 2002-03 showing an overall growth of 22.1% this has made India as the largest producer of sponge iron in the world.

Over a period of time SIMA has established contacts with Midrex technologies, USA, HYL Mexico and sponge iron manufactures association in New Zealand for exchange of Industrial experiences, ideas, and knowledge. SIMA is actively involved in all matters pertaining to the industry and keeps its members fully informed.

Q. Do you see a bigger growth potential for sponge iron sector in view of boom in steel sector at present?

A. The outlook appears very bright and encouraging for sponge iron industry. There are limitation in the supply of Natural Gas and as such no expansion in the capacities or further investments are likely for gas based units. Huge investments are taking place in coal based sector. I expect that in the next 5 years there will be addition of 45 to 50 lac tons in installed capacity from the existing level of 87.5 lac as on 31.3.2003.

The buoyancy with higher price realization in steel sector both in flat and long products coupled with a spurt in steel exports has also had a positive impact on sponge iron industry. I am confident that the demand of sponge iron will continue to grow specially in view of diminishing availability of steel melting scrap and limited reserves and rising prices of coking coal for making steel through blast furnace route.

Q. What are the export growth potentials for the sponge iron sector?

A. There is definitely a good potential export market for sponge iron. India exported 8.50 lac tons in 1993-94 which started dropping gradually and became nil in 2000-01 thereafter we have no exports. Present situation of inputs with rising domestic demand for DRI I do not see much scope for exports. Export demand is mostly for gas based sponge iron and due to limitations in the supply of Natural Gas, industry is not in position to tap these potential areas in near future. Coal based sponge iron has limited export market due to low % of carbon content. Here we need lot of government help as all inputs for sponge iron industry namely NG, Iron ore and non coking coal are in government hands and are comparatively more expensive then international prices These areas will have to be examined for building up a strong, regular and rewarding export market..

Q. Do you see improvement in gas availability for the sponge iron manufacturers in near future? What steps you are taking in this regard?

A. In India the use of NG is 8% of total energy used against in USA 45 – 50 %. India needs to give priority in exploration, production and increase in use of NG to achieve various advantages. There is a very good news for our country that there are substantial reserves in KG basin areas, north eastern, Rajasthan and other areas. I expect NG availability would increase substantially after 3 to 4 years. A lot will depend on prices at which NG will be made available to the industry. Government will have to draw clear long term policies to encourage the use of this indigenously produced, clean and environment friendly energy source at affordable prices.

Q. Are there any plans to help grow the domestic consumption?

A. The long term demand availability projections of finessed steel as compiled by Ministry of steel, India should be producing 52.01 million tons of finished steel by 2011-12 against current years projected production of 34 million tons. With this kind of growth in the domestic steel sector the demand of metallik will necessarily be met by sponge iron industry both gas and coal based units. I have my reservations about availability of steel melting scrap and also coking coal for steel making through blast furnace route. Keeping these factors in mind I am confident and optimistic that demand for sponge iron will continue to be good and the industry seems to be heading for good times provided vital inputs are properly managed and made available to the industry at respectable prices.

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