We feel that strong GDP growth will drive the demand for steel. Steel consumption is expected to go up considering governments thrust on spending around 500 billion infra structure sector. Apart from that foreign investment of nearly $40 billion committed in steel sector. Biggest investment will be in public private partnership projects. In such a scenario. MPIL being a play in India’s growth story will hugely benefit in such a scenario.

Ashwani Gupta, Founder & Managing Director, MPIL shares his views with Sandeep Sharma about his company, products and offerings in the steel sector, geographical presence, production enhancement plans, role of steel sector in the overall infrastructure development of India. Edited Excerpts…

Could you provide us a glimpse of your achievements during MPIL's decade long journey as part of steel sector?

Some of MPIL’s significant achievements over the last decade have been 1) 400% growth in sales and turnover. 2) Team growth from 20 people to 850 people. 3) Expansion in scope of work from iron-ore mining, raw material handling to steel value addition to structural steelwork. 4) Second unit in Tarapur. 5) New unit in Karnataka. 6) Multi-location offices throughout India. 7) Dealer network of 110 MPIL nodes. 8) Entry into international markets. 9) Highest SME rating by CRISIL. 10) Awards and media recognition for safety practices and efforts towards women’s empowerment

Could you brief us about your products and offerings?

MPIL is a first grade turnkey solution provider for metal building products and integrated structural steel fabrication. Our products and technology span over five major sectors:

• Heavy structures (used for airports, high-rise buildings, power plants)
• Light structures (used for warehouses, factory sheds)
• Turnkey roofing (used for metal roofing solutions for facades and roofs)
• Structure components (such as steel decks and panels used for flooring, walls, roofs)
• Solar mounting structures (used for mounting solar panels)

We have successfully designed, manufactured and executed India's most prestigious and challenging infrastructure projects pertaining to airports, high-rise buildings, solar farms as well as heavy industrial plants.

What kind of production capacity are you targeting in the short/long run?

Presently, MPIL has capacity to manufacture 50,000 tons of structural steel per year. With the inauguration of its second production unit in Karnataka this December, the production capacity will increase to 75,000 tons per year. At MPIL, our target is to achieve 100,000 tons per year in the next 18 months.

Could you tell us about your presence in various geographies and the ones targeted for future growth?

We have presence in South and the West Region of India i.e. Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Orissa. Internationally we have presence in Ethiopia, Indonesia and Uganda. In the near future we hope to set up offices in East Africa and South-East Asia.

How do you ensure smooth flow of raw material for your steel products?

One of MPILs biggest advantage is its geographical proximity to its raw material suppliers:

• JSW Steel Ltd (1 km away from our Tarapur Plant)
• JSW Ispat Ltd (3 hours away from our Tarapur Plant)
• Essar Steel Ltd (4 hours away from our Tarapur Plant)
• JSW Steel Ltd – Bellary Works (11 kms away from our Karnataka Plant)

We have a continuous feeding of hot-rolled steel plates and coils from India’s largest steel manufacturers. We value our relationships with our vendors as much as our relationships with our clients. We are proud of our decade long relationships with the steel magnates of India.

What’s your commitment to your buyers assigning steel construction works to you? Please mention any of your project which was highly challenging.

At MPIL our strength is our flexibility and humility. We strive to service the clients in every possible way – we make realistic commitments and offer clients the chance to be involved in their project’s execution directly. We welcome inspection of materials, late delivery penalties and other systems of checks and balances so that we can prove our efficiency to clients. We have undertaken many challenging projects of live furnaces, boiler rooms, toxic chemicals with utmost care and safety. We are proud that we have a large collection of completion certificates of projects executed from India’s finest industrial houses.

Which are the verticals driving growth for Pre-Engineered buildings in India?

India’s penchant for infrastructural growth feeds growth of the PEB section in India. Many government initiatives, public-private partnerships, and entrepreneurial waves drive the demand for PEBs. Moreover, PEBs are the natural choice for nations entering the phase of extreme development. India is following the trajectory of growth that countries in the West experienced a decade ago.

How is the current year so far in terms of output and revenue generated?

2011 financial year began cautiously with gradual slumps owing to rising interest rates, skepticism towards RBI policies, and unrest in developed US and European markets. Moreover, monsoon slow down the execution of projects. However in the PEB industry, growth has been steady with tremendous promise out of the second half of the financial year.

What’s your take on the Indian Steel Industry at large and the challenges being faced?

We feel that strong GDP growth will drive the demand for steel. Steel consumption is expected to go up considering governments thrust on spending around 500 billion infra structure sector. Apart from that foreign investment of nearly $40 billion committed in steel sector. Biggest investment will be in public private partnership projects. In such a scenario. MPIL being a play in India’s growth story will hugely benefit in such a scenario.

Challenges:-

Price Fluctuation: Steel prices are subjected to daily fluctuation make it a volatile business especially for small manufacturers in value added products.

Logistics: Logistics is an issue due to bad road problem and heavy transportation costs. Vast distance of mining plants and steel companies

Tax problems: There was lot of hype on introduction of GST however there is lack of clarity on enforcement of the same.

Lack of protection to Small Manufacturers: Big Steel companies have entered into Value add industry creating a non level playing field for small players.

Time delay: Time delays are quite common with lead time anywhere between 15-30 days

Could you provide us glimpse of your upcoming/expansion projects?

MPIL is setting up a brand-new production unit in Karnataka over 26 acres. We will inaugurate production in this unit in December 2011. MPIL is proud to announce that it is undertaking the structural steelwork of the largest airplane hangar in the Mumbai International Airport complex, the multi-storey business convention center of the Four Seasons Hotels in Worli and 20MW wind energy production unit in Rajasthan.

Where do you see the role of Steel in the overall of our Infrastructure development country?

We believe that The Steel Industry in India will play a dominant role in Infrastructure development. Just to give you some facts and figures: • The domestic consumption of steel has grown by 12.5% in the past three years • Production of Indian steel has grown from 17 Million Tons (MT) to an expected target of 66 MT over a period of two decades in the year 2011 • The construction projects all over India are major consumer of steel • the per capita consumption of steel is lower than other countries, so the steel industry has huge opportunities in the future Acknowledging this opportunity MPIL armed with an Expertise of more than 15 years in executing complex structural steel projects, skilled engineering team of 850 members, and over 300 satisfied clients is well poised to serve the requirements of ‘India’s growth story’.

What's your expectation from the new National Mining Policy as proposed by the Centre?

The two main issues that we strongly urge the government to take proactive steps are in areas of illegal mining and exports and give more impetus to value-addition industries in the steel sector. We also feel that the government should take a holistic approach towards the industry and make strong steps in areas of improving infrastructure, introducing GST, and providing a level playing field to small manufacturers.

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