Posts from — May 2010

Last week, World Steel Dynamics, a market services firm based in New Jersey, ranked Korea’s Posco at the top of its list of world-class steelmakers. Ranked right behind Posco at #2 is India’s SAIL, formerly known as the Steel Authority of India Limited. According to the service, the ranking is based on 23 parameters including size, expansion plans, adaptation of new technology and products.

SAIL's Burnpur Plant

Four other Indian steel companies also feature for the first time among the top 32 world steel companies. These include, Rashtriya Ispat Nigam — rank 30, Essar Steel (20), Tata Corus (10) and JSW Steel (7).

SAIL is also looking to tap overseas market for building raw material security. It is scouting to buy coking coal mines in Australia, Africa, Brazil and Canada. SAIL is currently in the midst of $17 billion expansion of hot metal capacity from 13 million tons to 23.6 million tons by 2012. This would put the company among the top three steel makers globally.

SAIL  is also expected to tap the equity market by September this year with a public offering involving sale of 10% of its equity. The majority stockholder, India’s govebernment has already approved a plans for the company offer 20% of its equity involving the government offloading 10% stake in the company and the steel PSU issuing fresh equity shares in the same proportion (10%). This will happen in two phases, starting in September.

While China’s companies acquire assets in Africa, the companies from Asia’s other growing giant are taking a different path.  Last month, I reported how Essar Steel acquired Trinity Coal for $600 million.

Now there is news about India’s third largest steel company taking control of  over 120 million tons of coking coal assets in a string of mines across West Virgina.  JSW Steel plans to produce 1 million tons of coal in the first year starting from September 2010 which will go up to three million tons in the third year of operation. Much of this coal will be shipped to meet JSW’s Indian demands.

There is much talk of the soft power of the BRIC Countries. While China is the most economically mighty about the BRIC and Russia probably still has the most military technology, there can be hardly any doubt that India is rapidly winning the soft power war among the BRIC countries.

The India Expert rarely comments on Indian Americans since our focus is on India. But when the country’s most venerated business school chooses its first ever foreign born Dean, its newsworthy enough for coverage by the Wall Street Journal, Financial Times and more.

An 1984 alumnus of the Indian Institute of Technology Bombay in India, Dr. Nitin Nohria has been nominated as the next dean of the Harvard Business School. The Richard P. Chapman Professor of Business Administration at Harvard Business School (HBS), will become the School’s 10th dean and will take over on July 1.

His current academic interests include the theory and practice of leadership, the study of human motivation, the analysis of management practices critical to corporate success, and the strategic and organizational challenges of globalization.

Indian-born deans are in key positions at many top American Universities ranging from UCLA, to Carnegie Mellon, to Northwestern.  Most are in engineering and business positions.

IIT Bombay Alumnus Dr. Nitin Nohria

With a brand value of $14.5 billion, the, Indian bank ICICI entered the BrandZ Top 100 this year at Number 45. This is the list of the 100 most valuable brands as estimated by ad measurement firm Millward Brown.

Established in 1955 as  The Industrial Credit and Investment Corporation of India, the company started a bank after India liberalized its economy and is today more highly valued by the stock market than the much bigger State Bank of India. It  pioneered ATMs in India and extended working hours to cover evenings and weekends in order  to provide wide access to banking and to help flatten the society’s hierarchical structure. The bank now operates almost 5,000 ATMs in India and is present in 18 countries, where it mostly serves the Indian diaspora. I interviewed its former CEO, Mr. MV Kamath for my book, Doing Business in 21st Century India. Today ICICI is headed by a dynamic woman, Chanda Kochar.

Outside of the Top 100, in the technology category is a second
Indian brand, also new to the Brand z list this year. Infosys, India’s most valuable technology brand, with a brand value of $6.4 billion, is a
strong contender to enter the Top 100 ranking soon according to Millward Brown.

I think the Millward study is  flawed. The Tata brands,  Tata Motors, Tata Tea, Tata Salt, are likely more highly valued than ICICI, for example. My own former employer Larsen & Toubro, and the software services company Wipro are just as highly valued in my view. I would also rank Airtel, India largest mobile carrier as way up there and ahead of ICICI.

At the annual meeting of legendary Wall Street investor, Warren Buffett this past weekend, he was asked about India. Here is what was reported on the Wall Street Journal blog:

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Currently Berkshire has only invested in a few countries outside the U.S., including China and Israel — Buffett said he is eying the country, adding that he is going to make a trip to India in March next year. One problem, he said, is that Indian laws limit how much Berkshire can invest in companies in the country. Still, he sees potential noting that India has made big improvements in the last 10 years.