P. K. Mukherjee, MD, sesa Goa talks to Virat Bahri on The Company’s outlook post The Lifting of The Export ban and The Sfio Report
B&E: FY 2010-11 was an year where you dealt with relatively low iron ore realizations. In the light of that fact, what is your perspective on the results? Also, what are your expectations with respect to when these realizations will improve in the coming time?
PKM: Iron ore realization were good but volume was relatively low. The ban on export of Karnataka ore and even the procedural bottlenecks for moving ore for domestic consumption outside the state, extended monsoon in Goa along with transport time restrictions are the major reasons that came in the way of volume growth. Dispatch of quantities more than EC permissions done by some mine owners (particularly south Goa) that further restricted iron ore movement and the unprecedented increase in road freight in Goa were other challenges. Otherwise, we are quite confident of market being quite buoyant and expect price realizations to be range bound.
B&E: What major transformations have been done post the company’s acquisition by the Vedanta Group? What were the managerial and business related challenges and how did you overcome them?
PKM: Vedanta group acquired SESA in 2007 and then DEMPO acquisition came in 2009. Volume has doubled during this period. Strong Management Information Systems including motivation/push for operational excellence and more empowerment of executives with career growth opportunities for younger generations are few areas of transformation. We also challenge our own benchmarks continuously. The thrust is on continuous growth with sustainability.
B&E: Investors would be waiting for the time when you will be able to finally move towards steel production and export. What is your perspective on the same?
PKM: If the Indian steel industry can consume all the grades of iron ore as exported, miners would be only happy to sell it to them at market determined price. Exports of iron ore from India were never done by design but only because the miners in India were not left with any choice. As far as coming into steel production is concerned, well, it would come at its own time.
B&E: How critical is the lifting of the export ban from iron ore in Karnataka to your business?
PKM: The amount of iron ore produced in our Karnataka iron ore mine hasn’t got enough demand in domestic market; leave alone the issue of market determined price. Hence, growth of our Karnataka volume (as per environmental permissions) is critically dependent on effective lifting of the ban with the seamless issue of all permits required legally.
PKM: Iron ore realization were good but volume was relatively low. The ban on export of Karnataka ore and even the procedural bottlenecks for moving ore for domestic consumption outside the state, extended monsoon in Goa along with transport time restrictions are the major reasons that came in the way of volume growth. Dispatch of quantities more than EC permissions done by some mine owners (particularly south Goa) that further restricted iron ore movement and the unprecedented increase in road freight in Goa were other challenges. Otherwise, we are quite confident of market being quite buoyant and expect price realizations to be range bound.
B&E: What major transformations have been done post the company’s acquisition by the Vedanta Group? What were the managerial and business related challenges and how did you overcome them?
PKM: Vedanta group acquired SESA in 2007 and then DEMPO acquisition came in 2009. Volume has doubled during this period. Strong Management Information Systems including motivation/push for operational excellence and more empowerment of executives with career growth opportunities for younger generations are few areas of transformation. We also challenge our own benchmarks continuously. The thrust is on continuous growth with sustainability.
B&E: Investors would be waiting for the time when you will be able to finally move towards steel production and export. What is your perspective on the same?
PKM: If the Indian steel industry can consume all the grades of iron ore as exported, miners would be only happy to sell it to them at market determined price. Exports of iron ore from India were never done by design but only because the miners in India were not left with any choice. As far as coming into steel production is concerned, well, it would come at its own time.
B&E: How critical is the lifting of the export ban from iron ore in Karnataka to your business?
PKM: The amount of iron ore produced in our Karnataka iron ore mine hasn’t got enough demand in domestic market; leave alone the issue of market determined price. Hence, growth of our Karnataka volume (as per environmental permissions) is critically dependent on effective lifting of the ban with the seamless issue of all permits required legally.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
