sanjeev garg, md, indicaa group - containerized steel · pdf filercb coal price which was at...

Sanjeev Garg, MD, Indicaa Group

| STEEL 360 INDIA | JUNE 201514

Trade is an essential

indicator for evaluating a

country’s economy. Trade

facilitates the engineering

wheels. The surplus and deficit in

trade determines the economic and

manufacturing capabilities of a

nation. In our country, the current

account deficit, narrowing of GDP to

1.6% in the quarter ending Dec’14,

gives us an indication of our trade

strengthening capabilities. At the

same time, it also throws at us few

figures, which as industry insiders,

we feel are a point of concern – we

are talking about ‘the essence of

curbing coal import’.

India’s Coal Resource Vs Import

Energy Security will never be a

concern for India if it can effectively

harness the 302 bnt of coal reserve.

From historical data, it can be seen

that the import of coal has increased

steadily. Thermal coal import was

150 mnt in 2013-14 and is 190 mnt

in 2014-15. With cheaper availability

of thermal coal and global prices

falling, it is expected that import may

cross 200 mnt in 2015-16.

Curbing Coal Import

COLUMN

BN PHULORIA, AVP – Coal Mining &

TANMOY CHAKRABORTY, Deputy Manager - Coal Mining, TA to Head BU Coal, JSPL

Global Coal Index HBA, which was

USD 82 in Jan’14 has come down to

USD 61 in May’15. RCB coal price

which was at USD 75 last year is

hovering at USD 62.8 as of May’15.

In the past four years, coal prices around

the world have fallen sharply and

declined by 41% since 2011. During this

period, major coal consumers such as the

US and China have seen domestic coal

prices fall by a similar amount. Though

specific causes vary by market;

generally, coal prices are under pressure

due to lower-than-expected growth in

demand, higher energy efficiency and

competition from other electricity

sources. In addition, regulations to limit

air pollution from coal & robust supply

growth in export markets and China's

domestic market, as projects undertaken

a few years ago became operational.

From Aug 2011 to 2014, the Bloomberg

Global Coal Index of 32 major, publicly-

traded coal companies declined by 56%.

Reports also say that in the US, over

two dozen coal producers have filed for

bankruptcy since 2012 (including two

companies with over USD 1 billion in

assets).

Thermal coal is going into structural

decline and

therefore

diversified

companies will

best serve

shareholder

interests by

reducing

exposure to

thermal coal.

Investors in

such companies

ought to

prioritize

engaging with

the management to understand company

plans regarding capex and M&A related

to thermal coal.

Also, with China trying to reduce coal

import drastically, analysts predict that

India will be the largest coal importing

nation.

But, government’s ambitious target of

Coal India Limited (CIL) producing 1

bnt of coal by 2019 might bring relief.

In FY15, CIL produced 494.23 mnt and

is targeting 550 mnt in FY16. Also,

captive mines have a target of 55-60

mnt. For achieving production targets,

the greater challenge lies in evacuation

of the coal produced from coal mines.

With insufficient road width near mine

zone, congestions at ports and

unavailability of sufficient number of

railway rakes, the logistics measures

need to improve at a rapid pace and its

ground work should be proven.

Coal Block Auction & its Future Implications

To add to the above point, the optimism

about reduction of coal import and

increased domestic coal supply in the

near future seems to be a time

consuming process. The presently

auctioned Schedule-II coal blocks can

fetch around 33 mnt of coal this FY.

Schedule-III coal blocks will take few

more years to reach their peak rated

capacities. Further, the remaining coal

blocks falling in Schedule-I are planned

to be auctioned by Mar’16 and will take

3-5 years to start production. Hence,

curbing coal import will definitely take

a few years and it is imperative for

India and the industry to keep its import

plan of coal on for the next 2-3 years.

(The views expressed are authors’ own and does not

necessarily represent the views of the company.)

Coal Import Quantity (million tonne)

Total Coal Import Thermal Coal Import

50 48.56 70.4

105 171

242.4200

2000-01 2009-10 2011-12Year

2013-14

Big Things Start with Small StepsIn 1993 there was this conversation between two Indian businessmen in Dubai.

| STEEL 360 INDIA | JUNE 201524 JUNE 2015 | STEEL 360 INDIA | 25

Back in the 1990s,

steel scrap trading

was not a

‘mainstream’

business and

mundane as it was,

scrap was mostly traded in bulk

vessels with volumes ranging from

20-30 thousand metric tonnes per

vessel. In bulk shipments, inland

customers (like in Mandi Gobindgarh)

had to go all the way to the port

Why don’t

you look

into some Scrap Metal

What! What are

you talking about?

(Kandla in those

times) to take delivery of their orders.

Bulk meant only heavy melting steel scrap

(HMS) or shredded steel scrap. Bulk

meant - no categorization or grading into

multifarious grades.

This, one entrepreneur from India was not

thinking of just another business, but of

an idea that could revolutionize the way

scrap metal was then traded. Firstly, he

chose to trade scrap in containers.

You can send us some Steel scrap in containers and that way, I think we can do some

business.

Secondly, of categorizing and grading scrap

into various types (which over the years has

now grown to as many as 60+ different

grades) and by learning the best application

of each grade, he thought he could build a

whole new world of containerized scrap

metal business. He had the gut feeling that

this business was promising; also, being a

Chartered Accountant by qualification, he

knew how to make the systems work. True

to his vision, over the years there has been a

sea change at the global level that has

revolutionized the way scrap is traded i.e. in

small parcels and in containers, alongside the

traditional bulk trade, which still continues.

This is May 2015 and we at Steel 360 got up-

close with Mr Sanjeev

Garg, MD, Indicaa Group, a trading

behemoth that commands almost a

sixth of the global business in

containerized metal scrap. We

identified Sanjeev Garg (to be

referred as SG hereon) for an

excellent logistics control and an

innovative containerized trading

concept.

Starting from Dubai and Why DubaiSG landed in Dubai on Christmas

Eve in 1993. Of that time he said,

“Dubai was a small town then, with

a desert landscape. However, it had

all the ingredients that made it a

potential candidate to rise and

challenge the then global finance

and trade hubs of Singapore and

Hong Kong. All it needed was a

visionary leader with the iron will

to dream, think, plan, implement and

grow.”

Lo and behold; (HRH) Sheikh

Mohammed bin Rashid Al Maktoum

(MBR, as he is often referred to)

was appointed the Crown Prince of

Dubai in 1995. Two decades hence, what

Dubai is, the world knows. Two decades

hence, what Indicaa is, we will soon find

out below. HRH MBR changed the face

of Dubai and its perception held by the

rest of the world. He has proven to be a

charismatic leader and there are no

words enough, in any dictionary of this

world, to describe his personality and

leadership.

Having started his career in Finance &

Accounts, SG was working with the

esteemed Kewalram Chanrai Group in

Singapore and Hong Kong. Dubai to

become a Hong Kong or a Singapore of

the Middle East, was probably already in

his vision. He moved to Dubai to trade

in steel products for an Indian group.

Under the then stewardship of PM PV

Narsimha Rao and FM Dr Manmohan

Singh, India was opening up, coming out

of its shackles. Two decades hence,

where India has reached, the world

knows and this has benefited Dubai to a

large extent.

Sometime mid-1994, while visiting a

customer to sell steel pipes, SG met

Sandeep Jain who had a furnace and a

rolling mill in Ludhiana. SG recalls, “He

COVER STORY

Containerized Scrap Metal Business…

In containers? I need to think. Let me see

what I can do?

BY G SWAPNIL

Big Things Start with Small StepsIn 1993 there was this conversation between two Indian businessmen in Dubai.

Back in the 1990s,

steel scrap trading

was not a

‘mainstream’

business and

mundane as it was,

scrap was mostly traded in bulk

vessels with volumes ranging from

20-30 thousand metric tonnes per

vessel. In bulk shipments, inland

customers (like in Mandi Gobindgarh)

had to go all the way to the port

Why don’t

you look

into some Scrap Metal

What! What are

you talking about?

(Kandla in those

times) to take delivery of their orders.

Bulk meant only heavy melting steel scrap

(HMS) or shredded steel scrap. Bulk

meant - no categorization or grading into

multifarious grades.

This, one entrepreneur from India was not

thinking of just another business, but of

an idea that could revolutionize the way

scrap metal was then traded. Firstly, he

chose to trade scrap in containers.

You can send us some Steel scrap in containers and that way, I think we can do some

business.

Secondly, of categorizing and grading scrap

into various types (which over the years has

now grown to as many as 60+ different

grades) and by learning the best application

of each grade, he thought he could build a

whole new world of containerized scrap

metal business. He had the gut feeling that

this business was promising; also, being a

Chartered Accountant by qualification, he

knew how to make the systems work. True

to his vision, over the years there has been a

sea change at the global level that has

revolutionized the way scrap is traded i.e. in

small parcels and in containers, alongside the

traditional bulk trade, which still continues.

This is May 2015 and we at Steel 360 got up-

close with Mr Sanjeev

Garg, MD, Indicaa Group, a trading

behemoth that commands almost a

sixth of the global business in

containerized metal scrap. We

identified Sanjeev Garg (to be

referred as SG hereon) for an

excellent logistics control and an

innovative containerized trading

concept.

Starting from Dubai and Why DubaiSG landed in Dubai on Christmas

Eve in 1993. Of that time he said,

“Dubai was a small town then, with

a desert landscape. However, it had

all the ingredients that made it a

potential candidate to rise and

challenge the then global finance

and trade hubs of Singapore and

Hong Kong. All it needed was a

visionary leader with the iron will

to dream, think, plan, implement and

grow.”

Lo and behold; (HRH) Sheikh

Mohammed bin Rashid Al Maktoum

(MBR, as he is often referred to)

was appointed the Crown Prince of

Dubai in 1995. Two decades hence, what

Dubai is, the world knows. Two decades

hence, what Indicaa is, we will soon find

out below. HRH MBR changed the face

of Dubai and its perception held by the

rest of the world. He has proven to be a

charismatic leader and there are no

words enough, in any dictionary of this

world, to describe his personality and

leadership.

Having started his career in Finance &

Accounts, SG was working with the

esteemed Kewalram Chanrai Group in

Singapore and Hong Kong. Dubai to

become a Hong Kong or a Singapore of

the Middle East, was probably already in

his vision. He moved to Dubai to trade

in steel products for an Indian group.

Under the then stewardship of PM PV

Narsimha Rao and FM Dr Manmohan

Singh, India was opening up, coming out

of its shackles. Two decades hence,

where India has reached, the world

knows and this has benefited Dubai to a

large extent.

Sometime mid-1994, while visiting a

customer to sell steel pipes, SG met

Sandeep Jain who had a furnace and a

rolling mill in Ludhiana. SG recalls, “He

COVER STORY

Containerized Scrap Metal Business…

In containers? I need to think. Let me see

what I can do?

BY G SWAPNIL

asked me why don’t you look into some

scrap metal trade? The idea was puzzling,

though intriguing and interesting and I

responded, ‘What! What are you talking

about?’ Sandeep elaborated that there’s

scope for scrap metal exports in

containers to Ludhiana & Mandi and this

way, we could do some business.

Reluctantly, I replied to him that I’ll look

into the possibility of it. Well, this is how

it all started.”

20 years have gone by, SG and Sandeep

Jain still do business together and are

good friends. Mr Jain is now the

President of All India Induction Furnace

Association.

Even though scrap metal was traded in

bulk, SG observed that trading in

containers would yield a higher customer

satisfaction, provide a deeper market

penetration and open up a broader market

comprising of many consumers, who

would be small in size but large in

number. This has proved to be quite true.

If we look at the geography of the Indian

subcontinent, then the places where scrap

consumption is very high say for example

Ludhiana, Dadri, Mandi and UP, are all

landlocked. A bulk vessel cannot reach

these regions but a container can and it

can even be transported right to the

client’s door. With theft and malpractices

increasing during transportation of loose

scrap, a sealed container arriving at your

doorstep would obviously render the

customer to choose the latter.

Back in Dubai, the neighboring Emirate

of Sharjah was the main hub for scrap

metal business and therefore, Indicaa

Group made its beginning from there in

1994, loading a container a day. Today,

globally, Indicaa loads over 100

containers every day - shall we say a 100

times growth in 20 years…Wow!!!

SG explained, “We are the pioneers of

containerized ferrous scrap trade. When

we started, we had to educate our buyers

about advantages of buying in containers.

Unlike a bulk shipment order, the size of

a containerized shipment order is small;

owing to which, shipments are faster,

Way to Grow!With success in Sharjah, the company

eyed the rest of United Arab Emirates and

the Arabian Gulf countries; and within 6

years, they had presence in Abu Dhabi,

Kuwait, Oman, Bahrain, Yemen and Saudi

Arabia. Then in early 1999, the company

moved outside the Middle East for the

first time. Indicaa reached Sudan and

Lebanon. Soon they were in South Africa;

then they slowly moved towards East

Africa, followed by the western coast

covering the whole of West Africa,

Angola, Cameroon and Ghana and then

Morocco in North Africa.

With time, the business found acceptance

among scrap buyers and Indicaa expanded

its consumer base to Malaysia, Thailand,

COVER STORY

there’s more control on inventory and it

saves working capital. Since the seal of

the container is opened in the presence

of the buyer or his representative,

pilferage or theft is ruled out. In

addition, scrap prices are volatile so, to

buy in small parcels can be a smarter

thing to do.

We went to Vietnam in 1998 for a

conference. When we told buyers about

containerized shipments, they looked at

us as if we were from some other planet.

But we persisted and became the first

shippers of containerized ferrous scrap

to Vietnam. Soon this concept flew and

grew engulfing the entire ASEAN region.

Now, almost the entire world, including

the fussy world of developed nations

(USA, UK, EU etc) is completely

involved and immersed in the

containerized scrap metal trade,

especially for ferrous, besides trading in

their traditional bulk vessels too.

It was hard to convince buyers as well

as suppliers. Buyers would fuss on how

to unload the container and supplier

would fuss on how to fill it. We have

invested a lot in educating people on

how to go about it and the advantages

of containerized business. We are happy

that now it’s a cult.”

Indonesia, Philippines, Korea,

Taiwan, Pakistan and Bangladesh.

Procurements further expanded to

Europe, from UK to Poland. Recent

market that Indicaa Group has

entered is Brazil. SG said, “We

started business in Brazil in 2012,

trading scrap with a client in large

quantity. At the moment, the

economy is not doing very well and

there’s pressure from China. The

country produces about 10 MnT of

scrap and exports less than 10% of

it. But, in days to come, availability

will rise in this part of the world.”

The concept was innovative, the

success was viral and soon the bulk

players in Europe started trading

containerized ferrous scrap. Big

groups like EMR & SIMS too

learnt the relevance of containerized

scrap business and also found doing

it essential to stay in the market.

We have to agree that the quantum

of bulk scrap trade still dominates

the industry, but, it’ll be safe to nod

to the fact that containerized

business has gained good

momentum and has carved out a

niche world for itself where the

bulk trade can’t interfere anymore.

This is a great achievement.

How to Pitch Scrap in Containers?Traditionally, bulk traders own

dockside facilities for loading

vessels. They have their own

procurement network and all others

must deliver to them at their

dockside facilities. So, the suppliers

in the country have two choices –

supply to the local mill, if there is

one, or travel to the docks and

deliver. The possibility of a

container being able to reach a yard

located inland and the yard owner

being able to load it and getting

paid immediately, changed the way

scrap was traded in many countries.

Now the yard owners, even the small

ones, had an option and a new market.

Besides, this led to more scrap

generation– how?, explains SG “If you

can have a market for your product

near where you are actually producing,

who would travel miles to sell to

someone else. Besides, the price we

pay to the small scrap yards is so

remunerative that we actually led to

more scrap generation rather than

disturbing anybody’s market share. We

buy baled light scrap. Now, light scrap

is light and it costs money, more

money, to transport it. We added value

by providing baling machines to the

scrap yards and then we bought bales.

It was a win-win situation for all.

Generally, the operating radius of a

small scrap yard is 10 km, but a large

yard could even group to a 100 km

radius. However, not all scrap can

travel 100 km since it’s a low value

commodity, but it can surely travel

<10 km; you see my point here.”

This was the model used to enhance

procurement in containers. In some

countries in Africa, where there was no

local steel mill, suppliers were ever

ready to load in containers. All they

needed was a system in place, in

which they load today and get paid

today. Indicaa provided this and

they’re all smiles now.

Invest in Relations - A Quality Control MethodIt is not possible/practical to inspect

100% of every container. A

workaround to crack this situation is to

invest in relationship with yards. Here’s

how SG describes it, “Each yard has

some specific grades of scrap and a

management cum operations team. All

we need to do is understand what the

yard buys, the ethics of the yard owner

and the strength of his ground staff.

Then, we’ll invest in relationship

building and to tell you some facts, I’ve

some yards working with us for more

than 18 years. Now, if the yard has

light scrap, then we won’t hesitate to

invest in a baling machine for them and

we’ll have these bales sold. It’s a value

adding proposition and a win-win

situation. We help the yards to diversify

into multifarious grades we trade. We

make them grow with us. Besides

buying whatever they can source, we

also teach them as to what we can sell

and if they can source that too, even if

they have never done it before. It’s

Loading scrap in a container at a scrap yard in Dubai

asked me why don’t you look into some

scrap metal trade? The idea was puzzling,

though intriguing and interesting and I

responded, ‘What! What are you talking

about?’ Sandeep elaborated that there’s

scope for scrap metal exports in

containers to Ludhiana & Mandi and this

way, we could do some business.

Reluctantly, I replied to him that I’ll look

into the possibility of it. Well, this is how

it all started.”

20 years have gone by, SG and Sandeep

Jain still do business together and are

good friends. Mr Jain is now the

President of All India Induction Furnace

Association.

Even though scrap metal was traded in

bulk, SG observed that trading in

containers would yield a higher customer

satisfaction, provide a deeper market

penetration and open up a broader market

comprising of many consumers, who

would be small in size but large in

number. This has proved to be quite true.

If we look at the geography of the Indian

subcontinent, then the places where scrap

consumption is very high say for example

Ludhiana, Dadri, Mandi and UP, are all

landlocked. A bulk vessel cannot reach

these regions but a container can and it

can even be transported right to the

client’s door. With theft and malpractices

increasing during transportation of loose

scrap, a sealed container arriving at your

doorstep would obviously render the

customer to choose the latter.

Back in Dubai, the neighboring Emirate

of Sharjah was the main hub for scrap

metal business and therefore, Indicaa

Group made its beginning from there in

1994, loading a container a day. Today,

globally, Indicaa loads over 100

containers every day - shall we say a 100

times growth in 20 years…Wow!!!

SG explained, “We are the pioneers of

containerized ferrous scrap trade. When

we started, we had to educate our buyers

about advantages of buying in containers.

Unlike a bulk shipment order, the size of

a containerized shipment order is small;

owing to which, shipments are faster,

Way to Grow!With success in Sharjah, the company

eyed the rest of United Arab Emirates and

the Arabian Gulf countries; and within 6

years, they had presence in Abu Dhabi,

Kuwait, Oman, Bahrain, Yemen and Saudi

Arabia. Then in early 1999, the company

moved outside the Middle East for the

first time. Indicaa reached Sudan and

Lebanon. Soon they were in South Africa;

then they slowly moved towards East

Africa, followed by the western coast

covering the whole of West Africa,

Angola, Cameroon and Ghana and then

Morocco in North Africa.

With time, the business found acceptance

among scrap buyers and Indicaa expanded

its consumer base to Malaysia, Thailand,

COVER STORY

there’s more control on inventory and it

saves working capital. Since the seal of

the container is opened in the presence

of the buyer or his representative,

pilferage or theft is ruled out. In

addition, scrap prices are volatile so, to

buy in small parcels can be a smarter

thing to do.

We went to Vietnam in 1998 for a

conference. When we told buyers about

containerized shipments, they looked at

us as if we were from some other planet.

But we persisted and became the first

shippers of containerized ferrous scrap

to Vietnam. Soon this concept flew and

grew engulfing the entire ASEAN region.

Now, almost the entire world, including

the fussy world of developed nations

(USA, UK, EU etc) is completely

involved and immersed in the

containerized scrap metal trade,

especially for ferrous, besides trading in

their traditional bulk vessels too.

It was hard to convince buyers as well

as suppliers. Buyers would fuss on how

to unload the container and supplier

would fuss on how to fill it. We have

invested a lot in educating people on

how to go about it and the advantages

of containerized business. We are happy

that now it’s a cult.”

Indonesia, Philippines, Korea,

Taiwan, Pakistan and Bangladesh.

Procurements further expanded to

Europe, from UK to Poland. Recent

market that Indicaa Group has

entered is Brazil. SG said, “We

started business in Brazil in 2012,

trading scrap with a client in large

quantity. At the moment, the

economy is not doing very well and

there’s pressure from China. The

country produces about 10 MnT of

scrap and exports less than 10% of

it. But, in days to come, availability

will rise in this part of the world.”

The concept was innovative, the

success was viral and soon the bulk

players in Europe started trading

containerized ferrous scrap. Big

groups like EMR & SIMS too

learnt the relevance of containerized

scrap business and also found doing

it essential to stay in the market.

We have to agree that the quantum

of bulk scrap trade still dominates

the industry, but, it’ll be safe to nod

to the fact that containerized

business has gained good

momentum and has carved out a

niche world for itself where the

bulk trade can’t interfere anymore.

This is a great achievement.

How to Pitch Scrap in Containers?Traditionally, bulk traders own

dockside facilities for loading

vessels. They have their own

procurement network and all others

must deliver to them at their

dockside facilities. So, the suppliers

in the country have two choices –

supply to the local mill, if there is

one, or travel to the docks and

deliver. The possibility of a

container being able to reach a yard

located inland and the yard owner

being able to load it and getting

paid immediately, changed the way

scrap was traded in many countries.

Now the yard owners, even the small

ones, had an option and a new market.

Besides, this led to more scrap

generation– how?, explains SG “If you

can have a market for your product

near where you are actually producing,

who would travel miles to sell to

someone else. Besides, the price we

pay to the small scrap yards is so

remunerative that we actually led to

more scrap generation rather than

disturbing anybody’s market share. We

buy baled light scrap. Now, light scrap

is light and it costs money, more

money, to transport it. We added value

by providing baling machines to the

scrap yards and then we bought bales.

It was a win-win situation for all.

Generally, the operating radius of a

small scrap yard is 10 km, but a large

yard could even group to a 100 km

radius. However, not all scrap can

travel 100 km since it’s a low value

commodity, but it can surely travel

<10 km; you see my point here.”

This was the model used to enhance

procurement in containers. In some

countries in Africa, where there was no

local steel mill, suppliers were ever

ready to load in containers. All they

needed was a system in place, in

which they load today and get paid

today. Indicaa provided this and

they’re all smiles now.

Invest in Relations - A Quality Control MethodIt is not possible/practical to inspect

100% of every container. A

workaround to crack this situation is to

invest in relationship with yards. Here’s

how SG describes it, “Each yard has

some specific grades of scrap and a

management cum operations team. All

we need to do is understand what the

yard buys, the ethics of the yard owner

and the strength of his ground staff.

Then, we’ll invest in relationship

building and to tell you some facts, I’ve

some yards working with us for more

than 18 years. Now, if the yard has

light scrap, then we won’t hesitate to

invest in a baling machine for them and

we’ll have these bales sold. It’s a value

adding proposition and a win-win

situation. We help the yards to diversify

into multifarious grades we trade. We

make them grow with us. Besides

buying whatever they can source, we

also teach them as to what we can sell

and if they can source that too, even if

they have never done it before. It’s

Loading scrap in a container at a scrap yard in Dubai

COVER STORY

pursuit of excellence in relationship

building. Money will surely be made

by all as no one works to lose

money, but a relationship is

something that is more long lasting

than the profits we earn from our

partners in trade.”

Trading with Consumer Behavior ApproachAs we know, Indicaa Group’s

operations are spread across various

geographies, we asked SG to tell us

about challenges connected to law &

order, people’s behavior and business

methods.

SG explains, “In Sudan, we recruited

people who speak Arabic, in

Morocco our staff spoke French, in

Brazil our people speak Portuguese;

in Poland, they speak Polish. What I

want to say is that we need to mould

our business according to the local

culture, rules and regulations.”

Flexibility has got to be the virtue of

a global enterprise. On one hand, the

native employees help SG to know if

the business is in accordance to the

laws of the country, on the other

hand, he educates scrap yards and

makes sure they export only what is

excess as they don’t want to starve

their domestic mills. This creates a

platform for mutual understanding.

Understanding consumer behavior is

central to the theme of this business.

Taking a practical example; buyers

in Chennai (India) are fond of

‘turning scrap’. In Brazil, turnings

are in surplus as local mills don’t

really want them and hence a lot is

left over. The effort of the company

is to identify the consumption pattern

and then, just connect the dots. In

SG’s words, “We need to understand

the local economy, the buying

pattern of the local steel mills, what

they want and what they’d kill for. Also,

what is it that they wouldn’t want and

let go of. So we will develop our

business model around what the local

mills don’t want”.

Sustainability in Global Scrap BusinessWill South Africa ban scrap

exports?

SG: South African government has a

policy in place whereby you require

export permits to export scrap metal,

but first such metal should be offered to

domestic user industry at a discounted

price. This policy came into effect in

September 2013. It has had its effect as

exports have definitely reduced from

South Africa. However, the government

is also committed not to ban export of

scrap metal as visibly, there is a surplus

in the country. The local economy has

been meandering at a low level of

growth fraught with high energy costs

and low industrial production. This does

render a continued surplus of scrap

metal, but this surplus has been

diminishing over the years and may

balance out over the next decade or so.

The resource of scrap metal in any

country is comprised of three channels

– Firstly, a reservoir of old scrap;

secondly, the new industrial and

construction scrap generated daily and

thirdly the new household and

demolition/refurbishment scrap so

generated. Unless the scrap pool keeps

getting replenished as it gets used up,

the total resource available would start

diminishing just like any other resource,

be it gold, oil, water or even iron ore.

In case of scrap metal, it is the general

economic and industrial activity that

replenishes the pool. If the economy is

chugging along at a low stream, then

we have problems ahead. South Africa

is somewhat a similar story. We hope

the economy will bounce back to high

growth levels.

Which are the other potential

countries, if not Africa? What will be

their suggestive business model?

SG: I think there will be a reversal of

flows in the times to come. So far, scrap

has flown from the West to the East.

Perhaps in future, Korea, Taiwan, China

and Japan may become potential scrap

suppliers to India. As far as the business

model is concerned, just like money

chases the highest returns, material

chases the highest price. Already, offers

are flowing in from the far Eastern

nations for shipping scrap in containers.

Indian subcontinent will continue to pay

a good price for scrap. Consumers will

also be choosy on what grades they buy

due to an ever evolving business

environment. Bulk business model does

not carry this flexibility as I have

explained earlier. For example, Korea

(similar to Brazil) does not have a huge

domestic user industry for turning scrap.

Now, if one has to export the surplus

turnings, it really can’t be done as a bulk

shipment but in containers. I see this

growing. It will happen in China too. The

two decades of steaming growth in China

will now lead to availability of scrap

metal, as it generally takes (in the steel

industry) two decades from the date of

capital formation before the recycling

happens. Researchers and industry

watchers are forecasting China to have a

huge resource base of scrap metal very

There’s zero duty on imports from

South East Asia. Will this impact

scrap imports to India?

SG: No, I don’t think so at all. Free

Trade Agreements are in place with many

ASEAN nations, but with a small import

duty of 2.5%, it doesn’t really make a

difference given the huge demand for

scrap in India and rather miniscule

volumes of scrap exports from ASEAN

nations. Most of these nations to our East

are actually net importers of scrap. It’s

only certain specific items that get

exported at a tonnage that is not large

enough to cause any impact in the

markets. Besides, there’s still some policy

confusion on whether the preferential

duty rates under FTAs apply to

manufactured products or include

recyclables too.

For how long will Turkey be an

epicenter for scrap import around

the world? We’ve news that there

are plans of blast furnace set ups

in the country.

SG: If Turkey sets up blast furnaces,

then it would have to import iron ore

& coal which will not be an easy task

for them. The global steel industry is

rapidly changing. So far, Turkey has

been importing scrap and exporting

steel products to regional markets in

MENA. Now, there are new capacities

for iron & steel manufacturing in most

of the MENA countries and more are

coming up. This has reduced the

market for Turkey over the last two to

three years and it is a downward slope

going ahead. Investments in BOF will

have to be carefully thought of by

Turkish producers as it will cost over

USD 2 billion and a minimum of five

years to set up a One mnt BOF plant.

So far only one has been announced.

Hence, I don’t think the Turkish lead

position as the largest importer of scrap

in this world will change anytime soon,

but the quantum of scrap imported

might keep going down year on year.

Besides, a lot of Black Sea, North Sea

and Mediterranean Sea scrap is very

short transit scrap with extremely

competitive freight rates for Turkey.

Such scrap will always need Turkey as

a market, come what may. In fact, I

haven’t heard of any deep sea vessel of

scrap metal originating from Europe

cross the Suez Canal in the last five

years or so. EMR used to ship a lot to

Chennai, almost a vessel a month.

Now, I think it’s hardly a vessel in a

year or may be two years.

The Indian Scrap MarketIs the Indian Scrap market

sustainable?

SG: Sustainability is the last thing on

my mind. My worry is how to feed the

insatiable appetite (as I foresee it) for

scrap metal in the Indian subcontinent.

Two decades of government led growth

in China changed the economy of our

world. As the West sagged, China

lifted the world. Now, mark my words,

the next decade starting from 2015

belongs to India and the subcontinent.

All we need is political mud-slinging

to stop and hopefully, the Modi

Government in India, the Sharif

Government in Pakistan and the new

leadership in Bangladesh, will show us

a new path. There’s no way out.

Economic prosperity in an all-inclusive

manner is the only way to uplift the

general living standards of the 1.7

billion in the subcontinent. Remember,

the Indian subcontinent is the largest

population bloc in the world which is

almost interconnected, but for political

boundaries.

If we look at the per capita steel

consumption of USA, it’s close to 800-

1,000 kg; for China it is 600 kg.

However, Indian steel consumption is

just a meager 60 kg and it would take

us about 10 years to reach utilization

levels close to those of developed

nations. No doubt, steel consumption

in India is set to grow and explode.

No economic growth in this world can

come about without investment in

infrastructure and housing. Steel is

needed for all. We saw this happen in

China. I foresee Indian steel demand

growing at close to 10% annually. This

would mean we will need close to 10

mnt new steel every year. Now, owing

to various policies and economic

reasons, there are many challenges for

new capacities to come. We are aware

of what has happened with all big

ticket announcements made in India

for setting up new steel capacities like

POSCO, ArcelorMittal etc. It’ll take

about a minimum of seven years for

commissioning of new projects in

India even if they had all clearances in

place. However, the Indian GDP is

expected to grow at over 8% per annum

for the next decade, led by nothing else

but domestic investment and

consumption. We need to bridge this gap

of 10 mnt of additional annual

requirement. Imports are the only

answer, though long term sustainability

will come from domestic substitution.

Where does scrap fit in? – India is the

only country in the world where more

than 1/3rd steel is produced in the

secondary sector, mostly through the

induction furnace route. This sector is

present in every nook and corner of the

country. Unlike China, where the growth

was mostly in coastal region, India is

blessed with possibilities of a

nationwide growth due to a large

peninsular coast line and a river fed

North/North-East. Demand for

construction steel, especially long

products, will lead over flat/engineering

steel. This will keep providing a

growing market for the secondary sector

as most of the producers in this sector

are making long steel products. Scrap

and DRI will remain the main source of

raw material for this sector and with

DRI in trouble most of the times due to

some regulation or the other, I don’t see

any let down in the demand for scrap in

India. Taking a cue from PM Modi – We

need to make in India, but first for India

and then the world.

So it goes for Pakistan and Bangladesh.

All these countries need to do is to

spend in infrastructure for their own

citizens. We see a growing demand in

these two nations. The population is

large and so are the needs for basic

housing, power, roads, sanitation,

bridges, dams etc. If these needs are

catered to, you will need steel and lots

of it. In Pakistan and Bangladesh,

almost 100% of their steel is produced

in the secondary sector.

Any plans to set up a shredding

unit in India?

SG: No. We maintain our position in

this trade as that of a ’valuable conduit’

COVER STORY

pursuit of excellence in relationship

building. Money will surely be made

by all as no one works to lose

money, but a relationship is

something that is more long lasting

than the profits we earn from our

partners in trade.”

Trading with Consumer Behavior ApproachAs we know, Indicaa Group’s

operations are spread across various

geographies, we asked SG to tell us

about challenges connected to law &

order, people’s behavior and business

methods.

SG explains, “In Sudan, we recruited

people who speak Arabic, in

Morocco our staff spoke French, in

Brazil our people speak Portuguese;

in Poland, they speak Polish. What I

want to say is that we need to mould

our business according to the local

culture, rules and regulations.”

Flexibility has got to be the virtue of

a global enterprise. On one hand, the

native employees help SG to know if

the business is in accordance to the

laws of the country, on the other

hand, he educates scrap yards and

makes sure they export only what is

excess as they don’t want to starve

their domestic mills. This creates a

platform for mutual understanding.

Understanding consumer behavior is

central to the theme of this business.

Taking a practical example; buyers

in Chennai (India) are fond of

‘turning scrap’. In Brazil, turnings

are in surplus as local mills don’t

really want them and hence a lot is

left over. The effort of the company

is to identify the consumption pattern

and then, just connect the dots. In

SG’s words, “We need to understand

the local economy, the buying

pattern of the local steel mills, what

they want and what they’d kill for. Also,

what is it that they wouldn’t want and

let go of. So we will develop our

business model around what the local

mills don’t want”.

Sustainability in Global Scrap BusinessWill South Africa ban scrap

exports?

SG: South African government has a

policy in place whereby you require

export permits to export scrap metal,

but first such metal should be offered to

domestic user industry at a discounted

price. This policy came into effect in

September 2013. It has had its effect as

exports have definitely reduced from

South Africa. However, the government

is also committed not to ban export of

scrap metal as visibly, there is a surplus

in the country. The local economy has

been meandering at a low level of

growth fraught with high energy costs

and low industrial production. This does

render a continued surplus of scrap

metal, but this surplus has been

diminishing over the years and may

balance out over the next decade or so.

The resource of scrap metal in any

country is comprised of three channels

– Firstly, a reservoir of old scrap;

secondly, the new industrial and

construction scrap generated daily and

thirdly the new household and

demolition/refurbishment scrap so

generated. Unless the scrap pool keeps

getting replenished as it gets used up,

the total resource available would start

diminishing just like any other resource,

be it gold, oil, water or even iron ore.

In case of scrap metal, it is the general

economic and industrial activity that

replenishes the pool. If the economy is

chugging along at a low stream, then

we have problems ahead. South Africa

is somewhat a similar story. We hope

the economy will bounce back to high

growth levels.

Which are the other potential

countries, if not Africa? What will be

their suggestive business model?

SG: I think there will be a reversal of

flows in the times to come. So far, scrap

has flown from the West to the East.

Perhaps in future, Korea, Taiwan, China

and Japan may become potential scrap

suppliers to India. As far as the business

model is concerned, just like money

chases the highest returns, material

chases the highest price. Already, offers

are flowing in from the far Eastern

nations for shipping scrap in containers.

Indian subcontinent will continue to pay

a good price for scrap. Consumers will

also be choosy on what grades they buy

due to an ever evolving business

environment. Bulk business model does

not carry this flexibility as I have

explained earlier. For example, Korea

(similar to Brazil) does not have a huge

domestic user industry for turning scrap.

Now, if one has to export the surplus

turnings, it really can’t be done as a bulk

shipment but in containers. I see this

growing. It will happen in China too. The

two decades of steaming growth in China

will now lead to availability of scrap

metal, as it generally takes (in the steel

industry) two decades from the date of

capital formation before the recycling

happens. Researchers and industry

watchers are forecasting China to have a

huge resource base of scrap metal very

There’s zero duty on imports from

South East Asia. Will this impact

scrap imports to India?

SG: No, I don’t think so at all. Free

Trade Agreements are in place with many

ASEAN nations, but with a small import

duty of 2.5%, it doesn’t really make a

difference given the huge demand for

scrap in India and rather miniscule

volumes of scrap exports from ASEAN

nations. Most of these nations to our East

are actually net importers of scrap. It’s

only certain specific items that get

exported at a tonnage that is not large

enough to cause any impact in the

markets. Besides, there’s still some policy

confusion on whether the preferential

duty rates under FTAs apply to

manufactured products or include

recyclables too.

For how long will Turkey be an

epicenter for scrap import around

the world? We’ve news that there

are plans of blast furnace set ups

in the country.

SG: If Turkey sets up blast furnaces,

then it would have to import iron ore

& coal which will not be an easy task

for them. The global steel industry is

rapidly changing. So far, Turkey has

been importing scrap and exporting

steel products to regional markets in

MENA. Now, there are new capacities

for iron & steel manufacturing in most

of the MENA countries and more are

coming up. This has reduced the

market for Turkey over the last two to

three years and it is a downward slope

going ahead. Investments in BOF will

have to be carefully thought of by

Turkish producers as it will cost over

USD 2 billion and a minimum of five

years to set up a One mnt BOF plant.

So far only one has been announced.

Hence, I don’t think the Turkish lead

position as the largest importer of scrap

in this world will change anytime soon,

but the quantum of scrap imported

might keep going down year on year.

Besides, a lot of Black Sea, North Sea

and Mediterranean Sea scrap is very

short transit scrap with extremely

competitive freight rates for Turkey.

Such scrap will always need Turkey as

a market, come what may. In fact, I

haven’t heard of any deep sea vessel of

scrap metal originating from Europe

cross the Suez Canal in the last five

years or so. EMR used to ship a lot to

Chennai, almost a vessel a month.

Now, I think it’s hardly a vessel in a

year or may be two years.

The Indian Scrap MarketIs the Indian Scrap market

sustainable?

SG: Sustainability is the last thing on

my mind. My worry is how to feed the

insatiable appetite (as I foresee it) for

scrap metal in the Indian subcontinent.

Two decades of government led growth

in China changed the economy of our

world. As the West sagged, China

lifted the world. Now, mark my words,

the next decade starting from 2015

All we need is political mud-slinging

to stop and hopefully, the Modi

Government in India, the Sharif

Government in Pakistan and the new

leadership in Bangladesh, will show us

a new path. There’s no way out.

Economic prosperity in an all-inclusive

manner is the only way to uplift the

general living standards of the 1.7

billion in the subcontinent. Remember,

the Indian subcontinent is the largest

population bloc in the world which is

almost interconnected, but for political

boundaries.

If we look at the per capita steel

consumption of USA, it’s close to 800-

1,000 kg; for China it is 600 kg.

However, Indian steel consumption is

just a meager 60 kg and it would take

us about 10 years to reach utilization

levels close to those of developed

nations. No doubt, steel consumption

in India is set to grow and explode.

No economic growth in this world can

come about without investment in

infrastructure and housing. Steel is

needed for all. We saw this happen in

China. I foresee Indian steel demand

growing at close to 10% annually. This

would mean we will need close to 10

mnt new steel every year. Now, owing

to various policies and economic

reasons, there are many challenges for

new capacities to come. We are aware

of what has happened with all big

ticket announcements made in India

for setting up new steel capacities like

POSCO, ArcelorMittal etc. It’ll take

about a minimum of seven years for

commissioning of new projects in

India even if they had all clearances in

place. However, the Indian GDP is

expected to grow at over 8% per annum

for the next decade, led by nothing else

but domestic investment and

consumption. We need to bridge this gap

of 10 mnt of additional annual

requirement. Imports are the only

answer, though long term sustainability

will come from domestic substitution.

Where does scrap fit in? – India is the

only country in the world where more

than 1/3rd steel is produced in the

secondary sector, mostly through the

induction furnace route. This sector is

present in every nook and corner of the

country. Unlike China, where the growth

was mostly in coastal region, India is

blessed with possibilities of a

nationwide growth due to a large

peninsular coast line and a river fed

North/North-East. Demand for

construction steel, especially long

products, will lead over flat/engineering

steel. This will keep providing a

growing market for the secondary sector

as most of the producers in this sector

are making long steel products. Scrap

and DRI will remain the main source of

raw material for this sector and with

DRI in trouble most of the times due to

some regulation or the other, I don’t see

any let down in the demand for scrap in

India. Taking a cue from PM Modi – We

need to make in India, but first for India

and then the world.

So it goes for Pakistan and Bangladesh.

All these countries need to do is to

spend in infrastructure for their own

citizens. We see a growing demand in

these two nations. The population is

large and so are the needs for basic

housing, power, roads, sanitation,

bridges, dams etc. If these needs are

catered to, you will need steel and lots

of it. In Pakistan and Bangladesh,

almost 100% of their steel is produced

in the secondary sector.

Any plans to set up a shredding

unit in India?

SG: No. We maintain our position in

this trade as that of a ’valuable conduit’

COVER STORY

between scrap generators/processors

and scrap consumers. We don’t want

to cross our boundaries and trespass

on to the territory of our valuable

partners in this trade. By setting up a

shredding unit, we would be

trespassing.

However, many members of MRAI

(Metal Recyclers Association of

India) would be happy to set up auto

shredding units in India, but they do

need a clear government policy on

supporting this by prescribing rules

for disposal of ELVs (End of Life

Vehicles). Good work is being done

by MRAI on this front and I think,

over the next two to three years, we

might see some fruitful action. In the

Western world, policies are very

clearly laid out on ELVs. Automotive

licenses are not renewed for any ELV

and its disposal to a scrap yard for

shredding/stripping is mandatory.

When we get something similar from

the Government of India, we will get

lots of shredders too.

India imported 4.5 mnt of scrap

last year; do you think this will go

up in the coming years?

SG: I have already answered this

earlier. India’s demand for imported

scrap will grow for the next 10 years

before tapering off.

In India, Nava Sheva seems a

favorite destination for Middle

East scrap exports, but Chennai

is not, why?

SG: Shipping lines operating between

India and the Middle East have a

large concentration of NVOCCs

(Non-Vessel Owning Cargo Carriers).

They are far more flexible on freight

rates from Nhava

Sheva/Kandla/Mundra for the middle

eastern ports. They are not so flexible

for South Indian ports. I think it’s got

to do with trans-shipment costs for

South Indian ports, especially

Chennai. The rotation of containers to

and from western Indian ports is

much faster and cargo is also

abundantly available. This is the main

reason for Middle Eastern scrap not

finding Chennai as a favorite

destination.

Is the Indian growth story on a

right path?

SG: I have expressed earlier in this

interview my rational exuberance on the

Indian growth story. The next decade

India has been victimized by coalition

politics for over two decades. Now, the

current NDA Government under the

leadership of a Prime Minister who is

at least appearing to be doing

something has no reason not to

perform. And if, a majority government

can’t perform, then only God can help

our beloved country.

However, patience is the biggest virtue

and so goes for NDA Government too.

The size of India is such that any

action taken by the present government

will take at least two years to show

results. Hence, with green shoots

surfacing in 2015, from next year we

will see India rock. Global economy

too can’t go worse than where it is

now. China will stagnate at current

levels; Eurozone will recover due to

austerity and ECB led QE. USA is

already on the recovery path, though it

will stagnate at current levels. All said,

Asia will drive the world. With

economies like China, Japan, India,

Korea, Taiwan, Indonesia and the oil

rich Middle East, how can Asia go

wrong?

Indicaa’s One Million Tonnes Milestone Trading about 350,000 scrap metal

containers in 20 years and achieving 1

mnt volume in 2014 in containers, does

indicate that the business model has

gained noticeable acceptance. We were

curious to know how they do it. Here’s

what SG had to say about it.

“The capacity we’ve built is capable of

handling 2 MnT. When I say capacity, I

mean our only asset base, which is our

people or whom we fondly call as

‘Indicans’. We don’t have plant and

machinery. It is our people who are our

only asset and then of course, we have

systems in place for our Indicans to

work smoothly and seamlessly.

So looking from this angle; we’re

running at half of our capacity. I think

the success lies in our hardworking

Indicans and our robust systems of

handling and running this massive

business. I’m a Chartered Accountant by

education; designing and making systems

work has been my forte. We have a

thorough understanding of operating

system in various countries; we’ve our

own software that can track any

transactions or transit at any point of a

time; we’ve a dual layer of monitoring

i.e. any transaction is monitored by two

different people at any given time; we

have back offices in India

involved with data processing and

management.

I’m proud of the systems we have

built. As and when we get an

opportunity to handle 2 mnt,

we’re ready to do it and we are

very confident of coming right.”

Targeting Pursuit of Excellence

Indicaa’s target over the

next five years…

“We don’t keep any such targets.

We just have one ideology i.e.

‘Pursuit of Excellence’ and that’s

all that we target for. Excellence

is not simply numbers. It’s overall

and broad. Take the example of

Sachin Tendulkar. His cricket was

all about excellence, not targeting

records and numbers. He excelled

in his game and the results were

records and numbers.

We believe in best practices and

long lasting relationships with all

the stake holders in this trade,

even with our competitors. We’ve

given a shape to this business, we

just want to shape it better in the

future and for the next generation.

Indicaa is the Infosys of scrap

metal trade. My life’s sun will set

too, but the legacy of Indicaa

must carry on for generations to

come. That’s the dream we all

carry and that’s what we work for.

You’ll be surprised to know that

we’ve done about 40,000

containers in 2014 and we haven’t

lost a single one of it. There was

never a point when we didn’t

know the location of any of these

40,000 containers. We’ve invested

a lot in systems and we’ve got

one robust system management in

our company.

Our operations are spread across over 81

cities in 39 countries – this is where we only

buy from, and we sell to 42 ports and 20

ICDs (in India only) across 16 countries.

Normally we don’t buy and sell in the same

country. This gives us a vast global span of

nearly 55 countries, but there are still as

many number of countries left for us to

explore. Surely, we have a lot more to work

for and a lot more to explore, still.”

For the next two years, Indicaa looks

forward to have a firm grip on the Indian

subcontinent scrap import market. SG

believes that Vietnam, Indonesia,

Thailand and Korea will be among the

top prospecting countries that can

export scrap to India. The company is

strengthening its presence in Brazil.

They’ve also started trading out of

USA and they’re exploring potential in

East and West Europe. SG foresees that

with the momentum that they’ve gained

now, over the next five to seven years,

they would be able to significantly

grow the trade in terms of volume.

Scrap Container loaded on truck, ready to head towards its destination.

The company achieved

a remarkable feat of

trading 1 million

tonnes of containerized

scrap in 2014. About

90% of this was ferrous

scrap metal.

“In 20 years? Let’s see,

our cumulative tonnage

in last 20 years would

be about 7 mnt and

each container must’ve

carried on an average

20 mt. We’re talking

about 350,000

containers

approximately.”

COVER STORY

between scrap generators/processors

and scrap consumers. We don’t want

to cross our boundaries and trespass

on to the territory of our valuable

partners in this trade. By setting up a

shredding unit, we would be

trespassing.

However, many members of MRAI

(Metal Recyclers Association of

India) would be happy to set up auto

shredding units in India, but they do

need a clear government policy on

supporting this by prescribing rules

for disposal of ELVs (End of Life

Vehicles). Good work is being done

by MRAI on this front and I think,

over the next two to three years, we

might see some fruitful action. In the

Western world, policies are very

clearly laid out on ELVs. Automotive

licenses are not renewed for any ELV

and its disposal to a scrap yard for

shredding/stripping is mandatory.

When we get something similar from

the Government of India, we will get

lots of shredders too.

India imported 4.5 mnt of scrap

last year; do you think this will go

up in the coming years?

SG: I have already answered this

earlier. India’s demand for imported

scrap will grow for the next 10 years

before tapering off.

In India, Nava Sheva seems a

favorite destination for Middle

East scrap exports, but Chennai

is not, why?

SG: Shipping lines operating between

India and the Middle East have a

large concentration of NVOCCs

(Non-Vessel Owning Cargo Carriers).

They are far more flexible on freight

rates from Nhava

Sheva/Kandla/Mundra for the middle

eastern ports. They are not so flexible

for South Indian ports. I think it’s got

to do with trans-shipment costs for

South Indian ports, especially

Chennai. The rotation of containers to

and from western Indian ports is

much faster and cargo is also

abundantly available. This is the main

reason for Middle Eastern scrap not

finding Chennai as a favorite

destination.

Is the Indian growth story on a

right path?

SG: I have expressed earlier in this

interview my rational exuberance on the

Indian growth story. The next decade

India has been victimized by coalition

politics for over two decades. Now, the

current NDA Government under the

leadership of a Prime Minister who is

at least appearing to be doing

something has no reason not to

perform. And if, a majority government

can’t perform, then only God can help

our beloved country.

However, patience is the biggest virtue

and so goes for NDA Government too.

The size of India is such that any

action taken by the present government

will take at least two years to show

results. Hence, with green shoots

surfacing in 2015, from next year we

will see India rock. Global economy

too can’t go worse than where it is

now. China will stagnate at current

levels; Eurozone will recover due to

austerity and ECB led QE. USA is

already on the recovery path, though it

will stagnate at current levels. All said,

Asia will drive the world. With

economies like China, Japan, India,

Korea, Taiwan, Indonesia and the oil

rich Middle East, how can Asia go

wrong?

Indicaa’s One Million Tonnes Milestone Trading about 350,000 scrap metal

containers in 20 years and achieving 1

mnt volume in 2014 in containers, does

indicate that the business model has

gained noticeable acceptance. We were

curious to know how they do it. Here’s

what SG had to say about it.

“The capacity we’ve built is capable of

handling 2 MnT. When I say capacity, I

mean our only asset base, which is our

people or whom we fondly call as

‘Indicans’. We don’t have plant and

machinery. It is our people who are our

only asset and then of course, we have

systems in place for our Indicans to

work smoothly and seamlessly.

So looking from this angle; we’re

running at half of our capacity. I think

the success lies in our hardworking

Indicans and our robust systems of

handling and running this massive

business. I’m a Chartered Accountant by

education; designing and making systems

work has been my forte. We have a

thorough understanding of operating

system in various countries; we’ve our

own software that can track any

transactions or transit at any point of a

time; we’ve a dual layer of monitoring

i.e. any transaction is monitored by two

different people at any given time; we

have back offices in India

involved with data processing and

management.

I’m proud of the systems we have

built. As and when we get an

opportunity to handle 2 mnt,

we’re ready to do it and we are

very confident of coming right.”

Targeting Pursuit of Excellence

Indicaa’s target over the

next five years…

“We don’t keep any such targets.

We just have one ideology i.e.

‘Pursuit of Excellence’ and that’s

all that we target for. Excellence

is not simply numbers. It’s overall

and broad. Take the example of

Sachin Tendulkar. His cricket was

all about excellence, not targeting

records and numbers. He excelled

in his game and the results were

records and numbers.

We believe in best practices and

long lasting relationships with all

the stake holders in this trade,

even with our competitors. We’ve

given a shape to this business, we

just want to shape it better in the

future and for the next generation.

Indicaa is the Infosys of scrap

metal trade. My life’s sun will set

too, but the legacy of Indicaa

must carry on for generations to

come. That’s the dream we all

carry and that’s what we work for.

You’ll be surprised to know that

we’ve done about 40,000

containers in 2014 and we haven’t

lost a single one of it. There was

never a point when we didn’t

know the location of any of these

40,000 containers. We’ve invested

a lot in systems and we’ve got

one robust system management in

our company.

Our operations are spread across over 81

cities in 39 countries – this is where we only

buy from, and we sell to 42 ports and 20

ICDs (in India only) across 16 countries.

Normally we don’t buy and sell in the same

country. This gives us a vast global span of

nearly 55 countries, but there are still as

many number of countries left for us to

explore. Surely, we have a lot more to work

for and a lot more to explore, still.”

For the next two years, Indicaa looks

forward to have a firm grip on the Indian

subcontinent scrap import market. SG

believes that Vietnam, Indonesia,

Thailand and Korea will be among the

top prospecting countries that can

export scrap to India. The company is

strengthening its presence in Brazil.

They’ve also started trading out of

USA and they’re exploring potential in

East and West Europe. SG foresees that

with the momentum that they’ve gained

now, over the next five to seven years,

they would be able to significantly

grow the trade in terms of volume.

Scrap Container loaded on truck, ready to head towards its destination.

The company achieved

a remarkable feat of

trading 1 million

tonnes of containerized

scrap in 2014. About

90% of this was ferrous

scrap metal.

“In 20 years? Let’s see,

our cumulative tonnage

in last 20 years would

be about 7 mnt and

each container must’ve

carried on an average

20 mt. We’re talking

about 350,000

containers

approximately.”

sanjeev garg, md, indicaa group - containerized steel · pdf filercb coal price which was at...

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