Sailing ahead

PREETI MEHRA | Updated on: May 26, 2011

LF27_-_COVER7 | Photo Credit: Kamal Narang

C.S. Verma, Chairman of Steel Authority of India (SAIL) has literally sailed through his first year on the job. With a background in finance and a long stint at BHEL, he was no novice to the world of public enterprises. And he was clear from the start where he wanted to take the company. With many years of boardroom experience at BHEL, corporate governance came to him easily. So did the strategy for optimum gains from SAIL's Maharatna status.

“In PSUs, corporate strategy is most important. On the first day of joining SAIL, I had set an agenda for myself and identified six areas for action,” says the SAIL chief, who has built a reputation of being a polite and soft-spoken, but also very firm.

Going global

His first priority was to make the country's largest steel-maker a global entity. The youngest chairman of SAIL, his experience at BHEL and honing in finance helped him see the broad picture. “My first communication to the employees was that our ambition was to become a global player,” he recalls.

As Chairman of SAIL, Verma is automatically the Chairman of the five PSU-consortium International Coal Ventures Ltd (ICVL). Along with the consortium members, in one year, he has a string of potential deals to his credit.

An important initiative was signing an MoU with Indonesia for development of mineral deposits, setting up a mineral processing facility, and a three million tonne steel plant. This move is a win-win for both sides. While the province of Central Kalimantan in Indonesia will get a steel plant and mineral processing facility which will optimise its large natural resources of coking and thermal coal and iron ore, it will also meet the requirements of coal of the promoter companies of ICVL.

Other overseas proposals being studied are coal assets in Mozambique, Mongolia, Australia and the US. Verma has other overseas strategies up his sleeve as well. For the first time, SAIL and state-owned RINL will join hands with private steel and mining companies to bid for mines with iron ore deposits in Hajigak in Afghanistan. Hajigak is known for its mineral-rich resources and is estimated to carry 1.8 billion tonnes of high quality magnetite which has 62-63 per cent Fe content. This is also part of the Prime Minister's initiative to help development in Afghanistan.

As the SAIL chief outlines these and more plans for the future so that the steel major can snatch back the 30 per cent market share it enjoyed a decade ago, his involvement and enthusiasm in growing this 1,15,000-strong employee company comes through. “We lost to some of the large private players such as the Jindals and the Tatas, but we are working to get it back. By 2013, our capacity will go up to 24 million tonnes per annum… we are in the midst of augmentation and modernisation schemes, de-bottlenecking and environmental programmes… all the schemes are at an advanced level of implementation and time is running fast, with bulk of the orders worth Rs 42,000 crore already placed,” says Verma.

Verma has a participatory style of leadership. “He doesn't just give orders and expect things to be done. He makes you think that it was your idea and you feel enthusiastic about implementing it,” says a colleague.

How does he build employee motivation? From the first day he rolled out his ‘People Initiatives'. The idea is to make every employee in the company feel that he or she is working for its development. He explains that often in government enterprises, employees feel left out.

His style is to make each one feel involved. “The best way is to sell your ideas, give various options and then zero down on the most suitable option. That way you get full commitment for implementation from everybody,” he explains.

Assets, not baggage

Verma gives an example. When inducting a new technology, he could give a directive and without any discussion impose it on the people. But that would not get him results. The other way is to have a study done by the people themselves, let them decide the best option. People feel involved in the process, he says. “I take my employees as assets, not as baggage”.

He is an accessible boss; employees are encouraged to SMS him their suggestions or problems, and he responds to each one. “Also, every time I visit a plant my must-stop is at the shop floor to talk to the workers and understand their issues,” he explains.

But how will he compete with private companies that are lean and mean when he has a massive employee base?

Every limitation can be turned into an opportunity, is his response. He concedes that SAIL is taking a big hit on manpower costs at 18 per cent of the turnover; against a mere three per cent at Jindal Steel and Power.

“But that is the legacy we have and are trying to see that we utilise our people in the most optimum manner. And that's how we enjoy very good industrial relations,” he says.

You can also feel the pride in his tone when he reiterates a PSU's obligations to society. He also values transparency. “We have to see that every decision taken in the company is transparent. I started my career in a private sector company, and I have seen how they function. Today I can say with 100 per cent confidence that the level of transparency in a State-owned company is much higher than in the private sector in India,” he says.

Looking ahead

Planning for the future is his forte. Since his arrival, SAIL has built a perspective plan 2020. “By 2020 India's steel capacity will be 180 million tonnes and we want to get 30 per cent market share,” he says. In the same breath he concedes that competition in the steel sector has become stiff and to augment revenues, the company has chosen three other streams of growth — power generation, rail transportation and mining for natural resources.

In power, the PSU chief aims to not only generate enough power from its captive plants to feed its own business, but to have surplus which it will then offer as merchant power to the grid or electricity boards. In rail transportation, among the many initiatives, SAIL has a joint venture with Rites. It is on the road to manufacturing high-end wagons and steel wagons at a new plant in Kolti, West Bengal. The third diversification in mineral resources includes being on the verge of signing an MoU with the Rajasthan Government for manganese ore mines. Revenue from the much awaited follow-on public offer that is likely to hit the markets in mid-June will be used for SAIL's modernisation initiatives.

Deeply involved in the company, Verma seems to have forgotten his days of leisure and enjoyment. Known to burn the midnight oil, he is in office till late hours. A father of two, his wife takes the brunt sportingly. Though there is a hint of losing out on good films and great holidays, the chairman's belief in the philosophy of karma takes him along.

“He believes we should not cut corners where work is concerned, should strive for perfection in every endeavour… but in the end, leave the results to God,” says a colleague. And guess who is his role model? One of the best professionals of the country — Delhi Metro's E. Sreedharan.

Published on May 26, 2011
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