Editorial – July 2024
It is a well-known fact that the steel demand is somewhat depressed during the monsoon. This is because the construction activity is almost halted during this period and thus the steel requirement is also reduced but once the monsoon is over I am sure it will bounce back. This has been a regular pattern for the last so many years but I am not saying this only because of that. This is not only a wishful thinking. This year, the rain did not disappoint the farmers and there seems to be sufficient water for the farms as well as in the lakes. One may think why I am discussing water in a steel magazine ? What is the connection ? My friends, there is a very strong connection between the rainfall and the steel industry. Let me explain.
Firstly if the rainfall is good more soil is irrigated and thus the usage of tractors increases which ultimately translates in to higher steel demand. Secondly, when the rains are good, we get good harvest and the farmers and the middlemen get some extra money. We must understand that even today, majority of India’s population is dependent on agriculture. They utilise this extra money to buy things like refrigerator, AC, vehicle etc. They will eat more in the restaurants, travel more. All this will ensure that the country’s economy wheel starts rotating faster and a growing economy will always have a bigger appetite for steel. This is not a small thing. These farmers can make or break the country’s economy. We can also observe that the districts and the regions having less rainfall will have a less economic growth and the steel demand there will also be less. Now that the country is having good rains this year, can we predict a good steel demand till next march / April ? I think we can. Thus we have enough reasoning to believe that the water and steel have very thick co-relation.
We all know that the only permanent thing in this world is ‘Change’. So the good days after a satisfactory monsoon will not last forever. Apart from making the most out of this period, one also has to think and make provisions for a probable slack period in the future. I am not talking only about monetary provision. There are so many other things which can add to the sustainability of the enterprise. Identifying the risk areas, working on them and finally reducing the risk is the key consideration in achieving sustainability. There are other things too and the experts can surely provide guidance in this regard.
So friends, maximize the business in the favorable period but do address the issues like longevity and sustainability !