Looking Back On The 1990s

Management consultancy firm McKinsey, in a presentation before steel secretary Ashok Basu and the chief executives of big steel companies, has said that recovery in the sector requires active government intervention to force a rigorous, rational business plan before any concessions.

McKinsey also called upon the government to enable closures and divestments in the sector, sources present at the meeting told Business Standard.

The sources say the presentation, made by McKinsey & Co partner Ashok Alexander, said the government should provide needed financial support upfront, move towards phased dismantling of tariffs and take measures to stimulate direct and indirect demand.

 

There was also a seven-point prescription for corporates: restructure the organisation; refocus on the viable and the core units; restore financial foundation; reprioritise capital expenditure (Capex); realise value; reduce operating costs; and rejuvenate and refocus marketing.

Organised under the aegis of Confederation of Indian Industry, the presentation was attended by Tisco managing director J J Irani, Steel Authority of India Ltd chairman Arvind Pande, Usha Ispat managing director K C Agarwal, Malvika Steel managing director S K Mittal, Lloyds Steel managing director Rajesh Gupta, Ispat Industries joint managing director V K Mittal, Jindal Vijaynagar Steel vice-chairman S K Gupta, Mukand director Sukumar V Shah, Mecon chairman L K Singhal and Essar Steel advisor J M Bhasin. Making out a case for active intervention by the government, McKinsey cited how British Steel was turned around in the 1980s with the United Kingdom government writing off loans worth