Ambarish Mukherjee

Mr Y.P.S. Suri, COO, SteelRX

New Delhi , Jan. 17

THE year 2000 saw a departure in the auctioning of secondary steel in the country. Today, more than 70 per cent of non-prime steel auctioned by manufacturers is transacted through the Net. As the first mover in the field, steel trading portal steelrx.com is credited for building up this virtual market space for steel.

The Chief Operating Officer of SteelRX, Mr Y.P.S. Suri, talks to Business Line about the company's plans and the growth of e-commerce in the metallurgical industry.

Excerpts:

Trading of steel through the Internet has gained substantial momentum over the past four years. Your site was one of the first to enter this segment. How has the current steel boom helped Net-based trading?

As one of the first movers in Internet based e-commerce services, it is indeed satisfying to note that e-commerce as a concept has gained acceptance in the steel domain. Any value-added service that is cost effective and user-friendly gets accepted. For secondary arisings, e-commerce offers immense value to corporates, traders and end-users.

The past two years have seen our buy side membership numbers swell and the success rate in online auctions is far higher.

This is because we are a neutral e-service provider with so many competing steel companies using our services. Our neutrality gives them the confidence that their transactional data is secure and cannot fall into the hands of competitors.

At present, there are six steel trading sites operating in the domestic market, including yours. It appears as if a saturation level is in the offing. Is there place for more players?

What you call saturation level is a natural process of evolution.

Take any sector, when growth takes place or is projected to take place myriad organisations come up. In the second stage, consolidation happens and finally about three or four survive and keep competing on an ever-lasting basis. In the case of steel e-commerce portals, finally some three or four will survive. Such a situation is good in the sense that a monopolistic situation will not arise and the customer will benefit.

As far as new players are concerned, the steel arena is already crowded.

You admit that the steel arena is already crowded, then how do you plan to grow further?

Growth should be both organic and inorganic. Companies should, at some stage, stop dependence on one segment of revenue to minimise risk and spread out. Therefore, we have not just remained confined to steel e-trading but branched out to other aspects of the steel industry such as information dissemination and technology suppliers. We have started providing designing and hosting services as well.

Also, we have started looking beyond steel to the metal industry as a whole and have launched metalrx.com aimed at players in the secondary metals market.

Now, we are also looking at offline trading of commodities seriously and the process of supply side consolidation is going on.

Why aren't you looking beyond the Indian borders?

Although we desired to go beyond the national boundaries, we found that most of the neighbouring countries lack IT infrastructure as well as IT laws that are a pre-requisite to kick-start Internet trading. The growth of online trade will boom with emergence of horizontal portals, adequate IT laws, clean governance thus paving the way for natural migration to online process.

Most steel manufacturers have eventually set up their own trading sites. Do you foresee the same trend in the case of metals also?

Primary metal producers may attempt to set up their own sites to sell their products online.

However, in the fragmented secondary metals segment, the neutral e-commerce platform approach would bring best results.

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