After completing 27 years, Ispat Industries is in the process of undergoing a change in management with the country’s largest private sector company in the steel space, JSW Steel, entering into a strategic alliance with it. In an interview with Ishita Ayan Dutt, Ispat Executive Vice-Chairman Vinod Mittal talks about the road ahead. Edited excerpts:
With the problems of Ispat Industries behind you now, what are the focus areas?
Our involvement with the company spans 30 years. Though officially, the company is 28 years old, our association, factoring in the conceptualisation and implementation, will take it to 30 years. But the important thing is that together Ispat and JSW will be one big entity. And Ispat will be back on the dividend list. We have about a million shareholders and that is our priority.
What are your priorities now?
Our focus has not shifted. We have to complete the transaction. There is a lot of unfinished agenda. We have to see that the project work starts and complete the integration. There is a transition time of 18 months.
What is the status of Bhadrawati Power Project?
We are working on the project. Power will be a focus area.
There was some talk on inducting a strategic partner for the project. Is that plan still on?
No, we have decided to drop that plan. We will go alone. In the first phase, we will have a capacity of 660 Mw.
When will you start work on the power project?
We hope to begin work in a year. We will look at power and infrastructure projects.
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How difficult was the decision to go for a strategic alliance?
Decision of inducting a strategic partner is always difficult. But, we realised that it was the need of the hour and had to be done.
ArcelorMittal was said to be one of the suitors, was it tough choosing JSW over ArcelorMittal?
No, it was a dispassionate choice.
Did you have a discussion with L N Mittal on the deal after it was struck?
We never discussed this issue.
What will be focus areas at Ispat during the transition time?
For the next 18 months, we will focus on backward integration projects. We will support the new management. The new board will be in place in the next three to four months.
What are the captive raw material sources that Ispat has?
We have a prospecting licence in Maharashtra. The mine has a capacity of 150 million tonnes, which will cover Dolvi’s requirements. We have a prospecting licence for a 60-million tonne coking coal mine in Madhya Pradesh. But it will take five years to make it operational. These captive mines will ease Ispat’s raw material supply. We now source 90 per cent of our iron ore needs from NMDC.
Ispat had a Jharkhand project as well. What is the status?
We have a prospecting licence, but the mine is not very good. We will surrender the mine and seek a new one. The memorandum of understanding was for a 3 MT plant, but we don’t see anything happening in the near future in Jharkhand. Our raw material needs in Jharkhand will have to be aligned with metal capacities. And currently our focus is very different.
Have you chalked out plans for the next generation?
Nothing has firmed up as yet. It’s still early days. They will chalk out their own plans. It’s difficult to forecast. After all, three months back, the roadmap that we had in mind for Ispat was quite different.