Considering options on Electrosteel: Vedanta Resources' Anil Agarwal

It cannot be a small capacity plant, says Anil Agarwal

Metals and mining giant Vedanta entered the steel sector in 2018 with the acquisition of Electrosteel Steels, one of the early cases to be resolved under the Insolvency and Bankruptcy Code (IBC). In a conversation, Anil Agarwal, founder and chairman of Vedanta Resources, tells Ishita Ayan Dutt that he wants Electrosteel’s capacity to increase to 15-20 mt from 3 mt at present. Edited excerpts:

You entered the steel sector with the Electrosteel acquisition four years ago. But you are now looking to sell it. What led to this decision?

We have not arrived at a decision. In any business, I tell my CEOs that we have to be in the top three. We have to have a vision. Increase the capacity because we are in a beautiful state, Jharkhand, which is my home state.

But it has to have world-class capacity, and cannot be a small plant. We have a capacity of about 3 million tonnes (mt)... we are contemplating. We have to take it to 15-20 mt. We are either in that business or we are not.

So, you will either take the capacity to 15-20 mt or you will not be in it?
 

I have never sold any business. This is the plan…at the moment we are looking to expand this capacity.

But you are running a process for it?
 

It’s like selling shares. If somebody comes, we will see. There are some environmental issues with the steel plant…

We have to protect our environment. Today, we have to have the world’s best environmental policy and make sure that we do better than anybody else. And all our plants are in the process of doing that.

As part of your proposed investment in Odisha, you mentioned setting up a cluster. Is that part of the forward integration project for semiconductor and display units?
 

We will supply the raw material of glass and semiconductor to be manufactured in Odisha as a smartphone, TV, and laptop. This will be a huge cluster — an ecosystem will be created. And it has to be around Bhubaneswar. We are looking at where we can do this.   

When you talk about a cluster, would it be like an industrial park where you would be creating the infrastructure?
 

It would be like an industrial park — somebody will make TVs or smartphones or laptops. We will supply the raw material and develop an ecosystem where Korean and Japanese firms will come. But the downstream will be most important.

The foundation stone for Vedanta’s aluminium park at Jharsuguda has just been laid. What kind of investment will it attract?
 

This is about giving back. Any entrepreneur that I see, I see myself in him. I want to encourage them. We are inviting entrepreneurs to come and invest, develop products at the aluminium park. Aluminium is the metal of tomorrow – whether it is Railways, infrastructure, automobile or aerospace.

In Odisha, bauxite mines are expected to come up for auction. Do you see a breakthrough in backward linkages?

A. Foreigners don’t want India to open up bauxite. The Odisha government is determined. It will create massive jobs. I am looking forward to the fastest bauxite mine to be auctioned as early as possible. So import of bauxite will reduce and aluminium has a natural place in India.