“Beijing LY Metals and ISPAT-China enjoy a win–win partnership in the
ferrochrome and mining sector. My priority is to gain people’s trust and
build a strong integrated team to pursue our common goal of creating a
global company.” – Lucy Wang, President, Beijing LY Metals and MiningOne way ISPAT-China has sorted through the
multitude of businesses in China is by carrying out
vendor assessments. This includes visiting a company
to assess its capabilities and production abilities and
examining its business record. “If they have an office
in China, we can easily find out a lot of information
because if you do your research on the internet, you
will always be misguided. There are too many things
that are not mentioned on the internet,” Vijay says.
“We also see what facilities they have and, if we’re
buying for an international market, we see what kind
of services they provide.”
As a result of this process, ISPAT-China has been
able to sign long-term contracts with both big and
small companies. And Vijay says once you develop
a good reputation, companies are very supportive,
even if market conditions change.
“With a few customers, we have experienced that
when the market goes down, companies back out of
contracts,” he explains. “But, slowly, we have found
good customers who have a good reputation, and we
enjoy working with them. In China, there are many
manufacturers and a lot of competition, so you have
to be selective about who you work with.”
Vijay, who has a chemical engineering degree and
a master’s in global management, has lived in China
since 2002 when ISPAT opened its office there. This
was a time when the country’s steelmaking capacity
was rapidly increasing, with China producing 222
million metric tonnes of steel in 2003. However, like
many markets, it hasn’t been a straight, upward rise.
“When we started our business in 2002, we were
very new in the market,” Vijay says. “Then, in 2005,
market prices of flat steel product dropped from
US$800 to US$400-500. Some companies backed out
of their contracts.”
But China has shown that its steel industry is
resilient – in 2009, while other steel-producing
countries were reducing their output due to the
global recession, China’s output rose by 13.5 per cent,
prompted by domestic demand and strong economic
growth. Events such as the Beijing 2008 Olympic and
Paralympic Games also helped to keep the industry
pushing forward. “Up until 2008, we exported a lot