theceomagazine.com | 179of steel products into China,” Vijay says. “After
that, there was a big change – China became the
world’s biggest producer of steel and, in five years,
it developed various steel production units.”
This spurred on change at ISPAT, and the
company started turning its attention to ferrochrome
mining. ISPAT had a special grade of chrome ore
mine and charge chrome product that was not
available in China, leading to a spike in Chinese
demand for ferrochrome. The product is mainly used
by stainless steel plants, and China has expanded its
stainless steel production in the past five years to
become the world’s largest producer of stainless steel.
This prompted ISPAT to start exporting into the
market and signing long-term agreements with large
steel companies. “We have had discussions with
various Chinese companies and have found there
is a lot of scope for us to work together,” Vijay says.
Despite the sometimes unpredictable nature of
the industry, he says there are numerous benefits to
working in the Chinese market, which requires
working closely with people to negotiate the right
price, delivery terms and a guarantee. “I feel it is
a good place to source raw material and all kinds of
equipment related to the mining sector. The people
here are very easy to work with.”
Other advantages include being able to receive
products much faster than other countries. For
example, Vijay says mining equipment like
roadheaders, a powerful excavating machine
used in the mining industry, can take three
to four months to be delivered from
European countries including Germany and Sweden.
But in China, it can be as short as two months and
companies will “go out of their way to try and
support you the best that they can”. For example,
the company recently received a machine in around
70 days, after another company had said it would
take more than 130 days.
He says Chinese quotes also often provide
a better pricepoint – sometimes a little higher than
half the price of companies from other countries.
“China is the best place to buy equipment from,
and you get very good after-sales service.”
ISPAT-China now does both imports and
exports in China and is continuing to develop its
open-pit Boundary Pillar mine and underground
mining project – eventually, it wants to be placed
in the top five in the world for chrome ore and
ferrochrome production. “At the same time, we
are having discussions with Chinese companies in
regards to our long-term relationships,” Vijay says.
“We have already signed a long-term agreement
with a Chinese stainless steel company that wants
to buy our products.”
Moving ahead, some of the challenges will
involve dealing with China’s unpredictable market.
But ISPAT-China plans to weather this storm
through its careful selection – and support of –
its suppliers and customers.YOU HAVE TO BE
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