Business Standard was covering an opinion poll today and the question was whether Arcelor Mittal combine will help India. He had given a yes/no as his options. Now, this was interesting and I was trying what it could be. Arcelor has no known presence in India. Mittal, atleast has given his word to invest in a 12 mln plant. However, his presence in India, considering he is an Indian, is pretty disappointing as he waited till last year to invest in India.
India currently produces around 1/3rd of the combine capacity of this merger. Around 35 odd million. The entire country! Arcelor produces more money than Mittal but the latter produces more steel. So what am I being an Indian going to get any benefit? The big guns of India with Tata, Sail, Jindal all produce steel and their exports aren't that great, compared to this giant combine. Tata produces one of the lowest cost steel in the world and Sail and Jindal seem to have done some decent work, inspite of being one being a PSU and the other was almost a sick company.
I am just not able to understand how this deal is going to affect India.
- Are we going to get better deal on prices?
- Is he going to manufacture something else that is on the higher end of the value chain in India, post this merger?
- Will he stop his plans in India, now that he is got some incremental capacity in his kitty (close to 10% of the world production) and also considering that we have a government that is unclear on its policies?
None of the above questions gets me a conclusive answer, but yet the results from the other readers was overwhelming 'yes'. I wanted an answer that had the option like - 'I am ignorant and hence inconclusive'. One thing that hit me immediately is that we like Indians to perform well and we back them for no apparent reason. Sania Mirza, Indian cricket, Arun Jain, Bobby Jindal, Vinod Khosla, the many known in US and the even more unknowns who are successful in other countries. W e support them as if they are here to help us move out of this rut with their achievements, but rarely we see that happen. We just sit back and applaud and have an empty happiness. Again, its a feeling that they will come and help us, because they have achieved. We, as Indians, must support, after all, he is an Indian.
Am I missing something that the others seem to have seen and possibly in plain sight?
2 comments:
We are proud of a Sania Mriza because it is not her at WImbledon, but an Indian teenager who is making a statement... maybe I will call it nationalism.
Some positive things that I see-
1.It draws the same reaction from the crowd like the Lenovo takeover of IBM. China has made a point. Though Mittal steel is not based in India, it is more of an Indian making a point.
2. Mittal steel has recruted students from a B school in India. And now , with the company growing in size, maybe they will end up recruiting more students from other B schools.
3. With an increase in the personal wealth of Mr. Mittal, maybe he would become more philanthropic in his home country and dontate money in places other than WB
Someday , he might also make an attempt to takeover Jindal or Tata( though that seems a very distant possibility).. instead of starting wiith greenfield project.
Correction: Its not takeover but buying of IBM thinkpad that I was referring to
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