Breaking the Steel Barrier

By Shereen Bhan

As a 7-year-old, Sminu Jindal dreamed of a career making submerged welded pipes. Today, she handles various aspects of the family business, be it waste management, infrastructure, fabrications or railways.

Shereen Bhan (SB): You once said that when you joined the business, you had to fight people who felt engineering is not a woman’s area of business. Even being Sminu Jindal couldn’t have made it easy for you?
Sminu Jindal (SJ): Yes, it had its ups and downs. Having the surname Jindal also came with a lot of expectations. Everyone thought our dreams are larger than life because we always wanted to do something bigger and better. We got into the steel sector, now we are the biggest steel player. Then we got into the stainless steel segment, and became the biggest player there. In the power sector we are striving ahead, while when it comes to pipes, we were the first to enter the Indian market.

SB: But did you always want to build a career making submerged welded out pipes?
SJ: That’s just what I wanted to do since I was seven-years-old.

SB: When you started out almost two decades ago, there were few Marwari women in the boardroom. Did you face any difficulties?
SJ: I began work at an early age, at a time when the iron and steel sector was considered a man’s domain. I had to break the stereotype image that women cannot be good engineers.

SB: So how long did it actually take you to get people to respect your knowledge?
SJ: I handled my first unit when I was just 23-years-old. It was a loss making unit and I had to turn it around, which I managed in one year’s time. My father said that he was closing down that unit, so if I could run it, I would be allowed to enter the business. I took up the challenge, though the first six months were very tough. People didn’t realize that a young girl on a wheelchair could actually do anything. But luckily we turned it around.

SB: It couldn’t have been a breeze. Did you have to battle many personal demons?
SJ: I am lucky because I am surrounded by selfless people, beginning with my grandfather—a very down-to-earth, loving human being. I wish I could be a little bit like him. My husband is always willing to give me all the credit. My two sons are also very supportive of my career. These selfless people are my backbone, though I am physically bound to the wheelchair.

SB: Your company is a 100 percent wholly-owned subsidiary foraying into areas like waste management, infrastructure, fabrications and railways. What is the outlook and vision for the business?
SJ: We are looking at sectors which address climate change issues. We invested in water—from salt water processing into sweet water, to sewage water processing to delivery of fresh water. We forayed into inland as well as costal shipping areas because we felt that these are places where we are not really utilizing our rivers for cargo movement. The rail wagon is one of the projects we have just started in Gujarat. However, the project we are most proud of is the waste to power project. This not only delivers power to everybody but also clears up landfills. And with urbanization, the demand for better water resources and infrastructure is increasing. So, not losing focus on infrastructure, we have made ourselves stronger by entering such territories.

SB: You had mentioned in 2008 that you were planning to pump in Rs.10,000 crore in these sectors. Where do things stand now?
SJ: Actually, it could be much bigger but I cannot really say whether it will be done just within this one year periowd. It could be divided over a period of five years. But in terms of investment we would definitely like to strengthen our position in our core businesses. We will stick to infrastructure.

SB: There’s a lot of talk about your expansion in the Middle East, Iraq specifically.
SJ: We are looking at the Middle East very strongly but I wouldn’t really like to pin-point just one area. We are looking at an investment of around Rs.300-Rs.400 crore and should be ready to roll out operations in 2011.

SB: Almost 50 percent of your revenues actually come from the export market. At this point, what is your outlook for 2010?
SJ: I see myself concentrating on the domestic market with a lot of projects coming up. But internationally too there are lots of projects coming up, now that we are out of last year’s recession.

SB: Your EBITDA target is likely to come down to about 10,000-10,500, per ton?
SJ: I see that my margins are comfortable and hope that the steel prices will actually let up a bit.

SB: I am sure your uncles are not going to be very happy about that scenario?
SJ: Yes, that’s where the problem is with the synergy sometimes. One needs to look at the bigger picture and say it is okay.

SB: There has been a lot of talk about how the Jindal family is looking at simplifying the cross holding structure. I believe 51 percent of your market capitalization at current market value is on account of your investments in other group companies—where do things actually stand now?
SJ: Correct. We are working on it, though it is too soon for me to really talk about it now.

SB: Is the Jindal family council working on this?
SJ: The best thing my grandfather gave us all was a sensible head on our shoulders. So we believe in sitting and talking with each other. We are a close-knit family. Though my uncle and father handle separate areas, it is pretty intermingled with each other.

SB: But you also have outside advisors who are working on putting this plan in place. How is this being structured?
SJ: My parents and uncles are capable of handling it themselves. But to bring in a certain amount of objectivity, they may have asked a few people internally for some advice. We don’t see a timeline but I think confusion is not good over a long period.

SB: What does that mean exactly for people like us?
SJ: Though there would be a sort of clearing out in terms of cross holding—who holds what and what percentage—we will still be considered as one company under the O.P. Jindal Group.

SB: Is it an ownership issue or is it more than that?
SJ: What happened is that we all worked together and grew manifold in certain areas. As a result we have cross holdings among ourselves. Earlier it was only Jindal SAW, which was a cash-rich company. So it stood up a lot of other companies. Then they took off under their own steam and their own endeavors came into the picture. So there is some confusion that has to be taken care of. This just means strengthening bonds with the company.

SB: You and your husband are steering this company forward, how have you managed to split responsibilities?
SJ: Initially we were both apprehensive but my father is our guiding light and he keeps both of us sane. My husband takes care of the infrastructure aspects, the newer businesses which are really his ideas though he is too shy to come out and openly tell that. I take care of further investments, de-bottlenecking as well as technological side of Jindal SAW.

SB: Are people today more accepting of differently-abled people in the work place?
SJ: Acceptance is a little bit away because the transport system is not yet well-equipped for such people. Companies are chary of hiring someone who has difficulty with basic transportation. But that is mainly because these workplaces are not accessible to a differently-abled person. That is where Svayam—as an institution—is trying to work with the government to make it mandatory for all public housing as well as public buildings to provide facilities for such people.

SHEREEN BHAN is the Executive Editor, CNBC-TV18.

Tags:
family business, Jindal, Sminu Jindal