Interviews



  • Name: Mr. Yatinder Suri

    Designation: Managing Director

    Company: Outokumpu India Pvt,Ltd

    1. Outokumpu is as old as stainless steel; that is more than a century. But when was Outokumpu India private limited came in to being?

     

    Yes, if you trace the origins of stainless steel, you will find them in Outokumpu. We came to India in 2006 with something that didn’t exist in terms of product forms, grades and applications. At that point of time, the domestic mills had plenty of capability to manufacture low-end vanilla grade products only. The initial challenge was to create awareness about corrosion mitigation by using the new age higher metallurgy products.

     

     

     

    We had to break the myth about stainless steel being expensive by enlightening the end user and educating the consultants and the decision makers on the competitive advantages they could derive from choosing the right grade of stainless steel for a given application and operating environment. First few years were spent educating stakeholders, doing workshops, sharing new successful ideas and knowledge through presentations, brochures and technical specification handbooks. We continue doing this even today since our advanced R&D set up keeps inventing new products and creating new applications every year. Our focus was very clear to help Indian end users get updated with new grades and applications to participate and compete globally.

     

    With the first baby steps in New Delhi, we have grown in size and expanded to four locations i.e. Mumbai, Baroda, Delhi and Chennai - all stainless steel intensive regions. The stainless steel intensity in the eastern parts of the country is nascent so we are not present there yet. Western India uses close to 52 per cent of the total stainless requirement, 32 per cent demand comes from the Delhi area and around 15 per cent comes from the South which is growing fast now.

     

    From day one, we declared a war against corrosion in India. After a decade long presence in the Indian Stainless Steel Industry, there is a sense of pride to realize that that we have played a vital role in strengthening qualitative aspirations of the end users in their quest to achieve the Zero Defect. Thus contributing to their commitment on Make in India for the world as well as building corrosion-free India.

     

    1. Steel industry, we are given to understand, is facing global recession for quite a long time. Is that so? If yes, how has it affected the Outokumpu India private limited business?

     

    Indian Stainless steel industry comprises of four big players and nearly 50 small EAF/IF –AOD route mills with a combined melting capacity over 6 million tons stainless steel. The capacity utilization in the organized sector is around 60%. Furthermore for some strange reasons more than 60% of Indian stainless production and usage in India is for non-standard grades not conforming to any international or Indian standards. This is quite contrary to the government theme of promoting ZERO DEFECT. This must change. Sooner the better.

    Cheap Imports from Asian mills (predominantly China) as well as use of seconds and defectives together with >60% non-standard domestic production has lowered the qualitative and price benchmarks in India leading to the poor health of Indian mills. Indian government needs to introduce stern policy measures to correct this low quality stainless steel regime prevalent in India. The domestic mills must follow global standards and responsible pricing mechanism to become profitable and competitive globally.

     

    With a host of protectionist measures together with rupee devaluation of over 40% in past few years, surprisingly the domestic mills have not improved prices to become profitable.

     

    The production share for stainless steel rests at approximately 4 per cent of the total steel production in India. But the per capita use of stainless steel in India is <3 kg as opposed to that of >12 kg in China. The “Make in India” campaign will improve our manufacturing share in GDP thus increasing the need for stainless steel for industrial equipment. The current over-capacity in long as well as flat products are likely to get used up in the next five years. The future for stainless steel is bright as the material is quickly gaining popularity in terms of preference on account of its properties like corrosion resistance, strength, aesthetics, low life cycle cost and most importantly human health and safety aspects.

     

    For Outokumpu, the outlook is bright. With its ever widening product portfolio, we keep offering new innovative products and applications to provide competitive advantages to the customers in India. We take pride and feel happy to see the competition emulate us in India. Despite the slow GDP growth, we are looking at incremental growth due to our efforts to mitigate corrosion in industrial applications with high end metallurgy products. It is an ongoing activity since 2006 and we now have steady and successful milestone achievements.

     

    1. Stainless steel as material is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. But at various levels of products it faces competition from materials ranging from lighter alloys to plastics. Your take?

     

    Competition will always be there from new materials and innovations. As long as we are also proactively launching new products with higher competitive advantage, we are secure in this competitive world. Educating stakeholders through workshops, sharing knowledge with Corrosion and welding handbooks, technical specification brochures on our superior high end products like Duplex y as well as high performance stainless steel will be the winning edge.

     

    Corrosion ails the Oil and Gas , Chemical & Petrochemical tanks, Distribution pipelines, Metro coaches, Railway coaches , Railway wagons , Road and Rail bridges , Skywalks , Chemical tankers , Food processingandDesalination to name a few. Here our high end grades are most relevant. Stainless steel rebar usage is another idea whose time has come in India for use in concrete and steel structures in coastal and hilly regions.

     

    India definitely needs Outokumpu innovations and these acts as catalysts and inspiration to the local producers, as this will equip them to participate actively in the discerning global markets.

     

    1. How in your view stainless steel materials can be financially viable product options for customers for tools of modern life, and solutions for critical problems such as clean energy, clean water and efficient infrastructure?

     

    Corrosion is a natural hazard and causes unwanted and expensive damage to most consumer and infrastructure sectors - from automobiles, home appliances, drinking water systems, storage and distribution of liquids to oil and gas pipelines, rail and road bridges, as well as steel structures and buildings. According to the last corrosion study done in USA, the direct cost of metallic corrosion represented 3.1% of the Gross Domestic Product (GDP). The good news is that corrosion can be controlled /mitigated with higher metallurgy products and low life cycle cost.

     

    It is a myth that stainless steel is more expensive. Stainless steel, itself a product with excellent corrosion resistance attributes and green credential, will always be preferred in all forms of power generation, nuclear reactors, desulphurization scrubbers and heat exchangers due to lowest life cycle cost.

     

    Citizens in India do not have access to clean drinking water from the taps at home or in public areas. It is basically because our storage and distribution systems experiences corrosion of coated steel used which make the water unhygienic filthy. We can eliminate these contamination possibilities by making use of corrosion free stainless steel tanks and pipelines. Government needs to make stainless steel mandatory for drinking water storage and distribution to maintain the purity of water in home, public places as well as rail and bus stations.

     

    Desalination process is another extremely corrosive process which needs equipment made from duplex stainless steel or super duplex stainless steel. These plants are handling seawater with high levels of chlorides and at ambient temperatures close to 50 degrees during summer in coastal areas. Going forward, due to scarcity of fresh water, power projects will need to draw water from the sea for heat exchangers and other utilities which can corrode coated steels easily.

     

    Stainless steel will definitely be used where long life, low maintenance, and aesthetic appeal are critical. The new smart cities and rural townships will have to opt for stainless steel to have a long maintenance free life with lowest life cycle cost. As cash starved nation, we cannot afford to spend money on maintenance frequently which also leads to inconvenience to the citizens due to disruption during repairs.

     

     

     

    1. Outokumpu is a global entity having presence in five continents. What kind of stockholding arrangement it has with its Indian subsidiary?

     

    Outokumpu India is a 100% owned Indian subsidiary of Outokumpu Group. We are located in four stainless steel intensive cities across India namely New Delhi, Mumbai, Chennai, and Vadodara. We have a warehouse in Mumbai to offer just in time delivery of stainless steel products in small quantities to SMEs who are also vendors for big corporates. We offer them with traceability of the products and its manufacturing process parameters from chrome ore stage to finished goods which the trade route does not.

     

    1. Have you experienced “ease of doing business” in the last two years of the Modi government in India?

     

    The domestic stainless steel manufacturing industry is facing problems due to high level of competition from imports coming from China at low prices, high level of seconds and defectives in circulation as well as overcapacity which is fairly high. In their zeal to fill capacity, there is a downward spiral in prices which hurts every domestic mill and pushes them to the NPA status.

    In desperation they start to seek protectionist measures from the government who willingly goes along due to high level of NPAs in steel sector. While initiating Anti-dumping investigations on Chinese imports seems fair but putting barriers to imports from Europe is adhoc and unfair. Indian mills wish a slice of profitable markets in Europe through exports and hence generating hostility with European players is not advisable.

    The recent quality control order is yet another technical protectionist measure but the same is not drafted well to eliminate imports and domestic sale of non-standard grades, seconds and defectives in all grades. It is strange that there are barriers to imports of products conforming to international standards but there is no action by government to ban sale and use of defective and non-standard stainless steel materials in India. If the QC order is drafted well, it will lead to quality regime which will improve demand and also improve profitability of local mills through responsible pricing.

    The import duty structure is fairly high creating inverted structure wherein raw materials have higher duty and finished goods have lower import duty. Such a protection to domestic steel mills will hurt the domestic stainless steel downstream end users and make them uncompetitive.

     

    1. Do you see Outokumpu playing a greater role than before in critical areas of clean energy and efficient infrastructure initiatives of the Modi government?

     

    Clean Energy, sustainable infrastructure need sustainable solutions.

    There is no R&D capability in domestic stainless industry. Government should encourage co-operation between the global majors and local mills to upgrade domestic capabilities in the long run which will upgrade our qualitative standards to global levels. This will support the Make in India for the world as well as Zero Defect policy of Modi government.

    India must align BIS standards with international standards to ensure that Indian markets are a level playing field for all quality products and create an enabling qualitative environment to ensure that Make in India for the World vision becomes a success.

     

     

    1. Innovation is critical in stainless steel industry to create advanced materials that are efficient, long lasting and recyclable. What is level of the company’s focus on R & D?

    Outokumpu is synonymous with the innovation in stainless steel products and applications. We are supported by the biggest R&D centers we have in Europe. There is one for process improvements to offer price advantage to customers and another one for product and application innovations for sustainable competitive advantage.

    Our sales company comprises of trained technical experts duly backed up by product specialists for each of our main customer segments to help material selection for any application.

    Our R&D team helps the customers and project owners in choosing the right grade of material which depends on a number of factors depending on indoor or outdoor application, exposed to a coastal or inland climate, the hostile process emissions from heavy industry, Low life cycle cost ambition and so on. We help the customers in all these aspects. With our century of stainless experience we are always ready to share our knowledge.

     

    1. Any expansion plan in India in future?

     

    We do believe in localization which means that we are here to support and partner with downstream manufacturing and processing companies to make world class downstream products available locally for accelerated industrial and infrastructure growth in India. We are here for the long term and look forward to proactive government support as well.

    There is excess manufacturing capacity in India but unfortunately, the new capacity creation has been done with little thought on demand for wider and thicker products. This means India will continue to be dependent on imports for many grades and sizes.

    For the emerging sectors like Energy, Oil & Gas, Desalination, Ports, Transport and Roads and Coastal bridges, there is a definite gap on supply side for high end grades, in view of non-availability of these products from the local producers.

    We are a responsible player in the stainless steel arena and our brand represents product innovation, quality and reliability and therefore customer willingly offers us premium.

    Being the oldest and largest stainless steel player in the world, we have positioned ourselves as the wise stainless men in India who are constantly educating the domestic end users on new grades and applications and also giving new opportunities to the domestic mills to learn from us and upgrade their capabilities.

    We are here to grow by actively supporting and serving the ZERO DEFECT and MAKE IN INDIA for the world vision of Modi government.