Page 37 - Banking Finance June 2020

ARTICLE

(IMF), the world economy is already suffering its worst its might to get the economy back on track. The Rs 1.7 lakh
recession since the Great Depression of 1930. With crore package announced by the Finance Minister Nirmala
emerging markets and low-income nations in Asia, Africa Sitharaman, followed by tax moratorium and moratorium
and Latin America in particular at high risk, the present on the payment of interest, is the proof of the government's
gigantic crisis has jeopardised the world economy. firm determination to pull back every section of the country
from the jaws of corona crisis.
In India, retail, transport, hospitality, travel and tourism
industries have been the worst hit along with small and A lot more is expected to be unfolded soon. With focus on
medium-sized industries, and self-employed persons. Steel, reviving demand, resumption of stalled infrastructure and
though falls within the category of essential commodities, construction projects should top the chart, as any
the states imposed various restrictions on the operation of investment on infrastructure projects has positive effects
steel plants, besides entry-exit of the workers and on other industries, thus helping in the revival of economy.
movement of various raw materials. Thankfully, the Steel
Secretary Binoy Kumar immediately intervened and wrote In such a scenario, APL Apollo stands to gain the most. We
to the states to allow operations of integrated steel plants are the leading structural steel company in the country.
as well as induction furnace or electric arc furnace based Structural steel is durable, sustainable, fire-resistant, and
steel units. He also requested the states to allow the easy-to-repair. India has started using the material, of late,
movement of raw materials and finished products through vigorously; but the quantity is far less than what it should
rail, road as well as through waterways or sea routes. have been. However, it is only a matter of time for the usage
to grow rapidly as structural steel saves time and money.
Even then, integrated produces of steel had to resort to Structural products' aesthetic property and complete
curtailing production and run their units with bare minimum recyclability also allow for an improved environmental
workforce. Even the PSU SAIL also pruned production by half
performance across the life-cycle of the structure.
to prevent piling up of the inventory further. On the global
level as well, the world's largest steelmaker Arcelor Mittal,
Globally, residential sector accounts for around 40% of the
which operates in 60 countries with capacity of 90 million total structural steel consumption, followed by
tonnes per annum, also reduced its production
infrastructure, commercial sectors and others including
simultaneously with temporarily idling steel making and
public utility. Of the various types of steel used in the
finishing assets.
infrastructure and construction sectors, growth potential is
the highest for structural steel in India.
We, at APL Apollo, had also temporarily closed all our
operations and manufacturing units across locations after
It is true that steel's usage is at its nascent stage in the
the lockdown was announced. As a responsible corporate,
we abided by all the instructions given to us to save our country - just 4.4% of the total consumption, compared with
employees, stakeholders and the society at large from the global average of 9% and 11% in Europe and 8% in Japan
getting infected with the deadly virus. Even as we lost 8-10 and the Middle East. The share is projected to go up to 10%
days in March, our sales were down by just 4% during of the total consumption in 2023 and even higher in 2030.
January-March quarter and overall, we had a whopping 23% It's cheaper hence its demand will always be there which
rise in sales in 2019-20 over the previous fiscal. will further grow by leaps and bounds.

The question is whether such growth momentum could be Finally, any optimistic projections may not gel with the
maintained in future as well? The answer depends on two widely prevailing sombre mood in the wake of COVID-19
factors - a) the havoc the virus will cause on economy and crisis. But, even in this grim scenario, if anything is true that
public health and b) the government's response towards is the law of the nature: the Sun comes out even after the
bringing back the trajectory of high growth. We have every darkest night. We will overcome this phase and emerge even
reason to believe that government would respond with all stronger than ever. T

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