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Steel sector performance
We refer to the editorial ‘Nervous of steel’ (November 1) wherein
certain comments were made about the steel sector. It has given
the example of Tata Iron & Steel Co reporting a whopping
76 per cent dip in its Q2 net profits in the current year. It
is true that the overall performance of the steel sector has
been poor, but we do not fully agree with this editorial when
it says that the Indian Steel Alliance, the newly formed association
under the aegis of CII, should work out an overall strategy
to combat recessionary tendencies by changing its product mix.
When we talk of ‘product mix’, it has been found that the integrated
steel plants and other newly merging main producers are trying
to enter into the steel sector held by secondary steel producers.
This is unfair. They are creating unhealthy competition. The
secondary steel producers are contributing to the national economy
with nearly 30 per cent of crude steel production, and a total
of 60 per cent of hot rolled steel, cold rolled steel, forgings
etc. Thus, this sector has been badly affected due to the integrated
steel plants and main producers trying to enter into the field
of secondary steel producers.
We do agree that overcapacity has been created by government.
The capacity of integrated steel plants and some main producers
is almost 30 per cent more than the actual demand. With the
restrictions now placed on the import of flat rolled products
by the US and European countries, these steel plants are now
producing and may continue to produce more long products.
— R P Varshney, Executive Director, All India Induction
Furnaces Association, Delhi.
Why CEOs fail
It was interesting to read your analysis of corporate failures.
It was very cogent, but some vital factors have been left out.
Quite a few companies fail and go down in their rankings because
their chiefs are self-centred and corrupt. Don’t for a moment
imagine that corruption is confined to politicians and PSUs.
Some CEOs are forced to fail, because of the political pressures
they face. Additionally, like many other senior managers, the
CEOs do not retrain themselves constantly. Most think that they
are beyond education and (are) omniscient! Dynastic inheritance
of the chair is another reason for failure in some cases (although
not all dynastic successions are bad).
It is the bounden duty of the CEOs to create, and where one
exists, to augment the funding for economic and technological
research. Nowadays all decisions have to be knowledge-based,
an arena where most Indian companies are weak.
— B T Dastur, Mumbai
China’s success
This has reference to Mr Sanjaya Baru’s article ‘The secret
of China’s success’ (Nov 2). I feel that it is too early to
talk about the success of the Chinese economy; we still do not
know what is happening in all the provinces of China. Indeed,
it is still a closed country, hidden from independent scrutiny.
Secondly, real productivity gains have to be based on the people’s
welfare and are not sustainable if they are either supported
by cross subsidies or are based on exploitation of labour. Having
said that, India could learn from China in areas of better production
practices and logistics management.
— Narendra M Apte, on e-mail |
