Shyam Metalics, an integrated metal-producing company headquartered in Kolkata, West Bengal, is amongst the largest producers of ferroalloys in terms of installed capacity in India. The company has the ability to sell intermediate and final products across the steel value chain. Shyam Metalics is one of the leading players in terms of pellet capacity and the fourth largest player in the sponge iron industry in terms of sponge iron capacity in India.
In conversation with Brij Bhushan Agarwal, Vice Chairman and Managing Director, Shyam Metalics where he shares his insights on emerging trends in the sector.
Please share with us the journey of Shyam Metalics
Shyam Metalics is a leading and fastest-growing integrated metal-producing company based in India, primarily in the steel Industry in West Bengal and Odisha, with a focus on Long Steel Products and Ferro Alloys. The company listed itself on the exchanges in 2021 and possesses a market capitalization of Rs 7,684 CR. Our journey spreads across four decades of experience in the iron and steel industry. We have, across the last four decades, demonstrated our ability to grow, and in doing so, we remained EBITDA positive since the commencement of our operations in 2005.
Spearheaded by Brij Bhushan Agarwal, Vice Chairman and Managing Director, the company strives to deliver unparalleled quality through their customized value-added solutions to meet business requirements. In 2020, Shyam Metalics reached a milestone of 5.71 MTPA of combined capacity of intermediatery and final products of all manufacturing units.
Shyam Metalics is not just one of India’s largest iron and steel manufacturers but has expanded to an iron & steel manufacturer of repute. In the domestic market, they have strengthened our foothold in Eastern India, followed by the Central, Northern, and Western parts of India.
What are the most significant challenges facing the industry today?
India is one of the world’s largest iron and steel manufacturers, but it cannot realize its full potential due to low labour productivity and high coking coal costs. India largely fulfills its coking coal requirements through imports from Australia. Due to the vagaries of weather, there have been huge fluctuations in coking coal supply and coking coal prices. The inconsistent electricity supply in the country adds up to the complications of the overall operations for most of the manufacturing companies. Furthermore, poor infrastructure is also a hindrance in many aspects as it creates roadblocks for various developments and logistical movements. While regular training is useful, rewarding staff for meeting long-term safety goals is frequently more beneficial. Adopt the most recent technological advancements to maintain plant safety and efficiency. Ensure that personnel have the proper equipment, tools, and machinery – and that everything is in functioning order
Industry 4.0 is expected to create a revolution in the Steel industry with tremendous benefits, opportunities, and challenges. What motivations drive the deployment of Industry 4.0 in the Steel industry?
Industry 4.0 is transforming how businesses make, improve, and distribute their products. Manufacturers are incorporating new technologies such as the Internet of Things (IoT), cloud computing and analytics, and AI and machine learning into their industrial facilities and processes. Through substantial customization and personalization, the steel industry will become more dynamic, adaptable, efficient, environmentally sustainable, and inclusive. Also, material resources and energy consumption will be reduced, and new product designs will be launched that optimize the use of new advanced materials and nanomaterials with beneficial qualities, shorten transport routes, and reduce transaction costs. Shyam Metalics recognizes the opportunity of the latest industrial revolution and is investing resources, time, and attention to fully leverage Industry 4.0.
Sustainability and a circular economy are essential in today’s manufacturing environment. As the one who puts principles into practice, how should an industry/manufacturing unit go about it? What could be a practical roadmap with a plan of action?
Shyam Metalics is committed to minimizing its environmental impact. We are dedicated to environmental preservation, protection, and promotion. Our target has always been to reduce specific direct net CO2 emissions.
Further, we have augmented our capacities to meet our energy requirements through captive power, reducing wastage by using alternate sources of raw materials without compromising on the quality of finished products. We strive to increase water efficiency, minimize wastewater, recharge groundwater sources, maintain zero-effluent discharge, and significantly reduce noise and dust pollution. Our Company’s vision is to empower communities with sustainable livelihoods.
We also remain committed to elevating the lives of communities around our plant locations. An approach towards inclusive growth is embedded in our corporate philosophy to nurture local communities and engage with every stakeholder group. We are actively involved in Rural Healthcare and Education, Social Infrastructure Development, and Awareness and Skill Development, to name some of our initiatives toward social sustainability.
What are the emerging trends in the sector?
The mining and metals sector is responding with more fundamental shifts to business and operating models. New business models offer opportunities for miners to reposition for a changing future, with many companies considering the benefits of strategies to rationalize, grow and transform. Miners are considering more innovative, sophisticated approaches to mitigating supply chain risk, including stronger relationships with suppliers and collaborative contracting. With the pandemic exposing weaknesses in the “just-in-time” model, we expect to see a mix of “just-in-case” and “just-in-time” supply strategies as miners find a way to balance supply chain resilience with costs.
Make in India and Atmanirbhar Bharat – how have these initiatives helped the sector?
Through ‘Atmanirbhar Bharat’ and ‘Make in India,’ the central government aims to unlock the potential of the metal and mining sector and attract more investment. India has significant reserves of iron ore, bauxite, chromium, manganese ore, baryte, rare earth elements, and mineral salts. The metals and mining sector in India is expected to boom in the coming years as a result of reforms such as Make in India, Atmanirbhar Bharat, Smart Cities, Rural Electrification, and a focus on building renewable energy projects under the National Electricity Policy, as well as an increase in infrastructure development. These two initiatives by the GoI has helped not just the metal and mining industry but other foreign companies at large to set up their manufacturing base in India for production in the field of technology, textile, automobile, pharmaceuticals, etc.
What challenges affected the sector in FY 2021-2022? How do you anticipate the next financial year to be for the sector?
The mining industry is facing a number of challenges and disruptions that are impeding its growth. Many environmental aspects related to mining activities create challenges in the expansion of mining. The issues of land use and conversion, waste generation, groundwater depletion, and air and water pollution are some of the major factors that create concerns on the national level.
As previously stated, the industry cannot reach its full potential due to low labour productivity and high coking coal costs. In addition, the country’s poor infrastructure and inconsistent electricity supply complicate matters for the sector.
As we enter 2023, we remain optimistic that the mining and metals industry will respond with more fundamental changes to business and operating structures. New business models will allow miners to reposition themselves for a changing future. Companies that will examine and adapt their business strategies will have a competitive advantage as demand and expectations change.
What are your expectations from the union budget 2023-24?
We hope for an increased allocation of products from the steel sector to be covered under the PLI Scheme giving the industry a much-needed boost. We also hope there is an increased focus by the govt. to scale up the infrastructure sector in the country, which will have a positive domino effect on the steel sector. A good budget for National Highways will also translate into a positive for us, further propelling the sector’s growth. The industry is already reeling under a lot of pressure due to the raw material price hike, measures stated above will only help the industry look forward to a healthy growth trajectory for both the industry and the economy. We expect the government to increase import duties on major metals to keep the imports in check.