Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?

I am a techno-commercial professional with around 14 years of experience in the Aluminum, Power, port, and logistics sectors, specializing in the procurement-to-pay process for spares, Contracts, MRO, raw materials, and capital expenditures. Also have experience in the operation and maintenance of Thermal Power Plants with Capacities of 2400 MW (4 x 600 MW) & 900 MW (6 x 150 MW). Knowing supply chain management, which encompasses the planning & management of all activities involved in sourcing, procurement, conversion, and inventory management.

Q2. How is ESG compliance influencing supplier selection, particularly for raw materials or high-emission commodities?

ESG compliance has a significant impact on supplier selection, particularly for raw materials and goods with high emissions. This is driven by pressure from investors and regulators to reduce a company's environmental footprint, primarily its Scope 3 emissions, which largely originate from the supply chain.
Key ESG factors in supplier selection-
Environmental: Businesses assess a supplier's carbon footprint, energy usage, and waste management practices. For high-emission commodities, this means prioritizing suppliers who utilize renewable energy and efficient production methods to minimize Scope 3 emissions.
Social: Companies evaluate a supplier's labor practices, human rights policies, and workplace safety. This includes examining conditions for raw material extraction and production.
Governance: The focus is on a supplier's ethics, transparency, and regulatory compliance. Strong governance helps prevent corruption and ensures accountability.
Impact on sourcing and procurement-
Risk Mitigation: Companies mitigate reputational, legal, and operational risks by selecting suppliers with strong ESG credentials, particularly when dealing with controversial commodities.
Performance Measurement: Businesses use ESG performance data, often collected through supplier audits or third-party ratings, to inform their sourcing decisions.
Collaboration: Many companies partner with suppliers to enhance their sustainability, often providing training or incentives to help them achieve ESG goals.

Q3. How is AI being used in procurement functions across the steel and manufacturing sectors—for example, in spend analytics, supplier risk assessment, or demand forecasting?

AI is being used in the steel and manufacturing sectors to automate tasks and provide deeper insights for better decision-making. In procurement, this applies to key functions like spend analytics, supplier risk assessment, and demand forecasting.
Key AI applications in procurement
Spend analytics: AI processes and categorizes large volumes of spend data, identifying patterns and saving opportunities that manual methods might miss. This improves visibility into spending and can flag potential fraud.
Supplier risk assessment: AI proactively monitors suppliers by analyzing real-time data from financial reports, news, and market trends to identify potential issues, such as economic instability or geopolitical risks. It can even assess lower-tier suppliers, identifying hidden single points of failure.
Demand forecasting: AI-powered predictive analytics analyze historical sales, market trends, and economic indicators to more accurately forecast future demand. This helps optimize production schedules and inventory levels, reducing excess stock and waste.

Q4. Which downstream sectors (e.g., infrastructure, auto, renewables, real estate) are driving the largest share of steel demand currently?

The infrastructure and construction industries drive the most significant portion of the world's steel demand. This covers the building industry as well as large-scale infrastructure projects like roads, railroads, and bridges, which contribute significantly to steel consumption, particularly in areas like Europe and India.
While other sectors, such as automotive, renewables, and real estate, are important consumers, their demand is generally smaller and can vary more significantly based on regional economic factors.

Q5. Are domestic supply chains becoming more resilient, or does dependency on imports for certain materials still pose challenges across the industry?

Government programs like "Make in India" and growing technological use are strengthening India's domestic supply chains. The reliance on imports for essential raw materials, which exposes industry to supply disruptions and price volatility, still poses serious problems.
Increased resilience
•    Government push: Initiatives such as the Production-Linked Incentive (PLI) programs provide incentives for domestic manufacture, especially in the pharmaceutical and electronics industries.
•    Diversification: To lower risk, companies are shifting away from relying solely on one source and realigning supply networks.
•    Adoption of technology: Investing in digital platforms, automation, and Artificial intelligence enhances efficiency and logistics.
Continued challenges
•    Raw materials: Industries like steel are still highly dependent on imported coking coal, which makes them vulnerable to changes in the price of the commodity globally. 
•    Important minerals: For essential minerals like lithium, cobalt, and nickel that are needed for renewable energy technology, 
India is mainly dependent on imports.
•    Infrastructure gaps: Persistent issues with logistics, poor road quality, and fragmented systems hinder efficiency and increase costs.

Q6. How intense is the competition between domestic and imported materials—especially in high-volume or specialty categories?

Competition between domestic and imported materials in India is intense, with different dynamics for high-volume and specialty categories.
High-volume materials
Domestic producers of materials, such as steel, face fierce competition from often cheaper imports, especially from countries like China and South Korea. This price pressure can hurt smaller local mills.
Specialty materials
India imports many specialty materials that aren't made in the country. Nonetheless, to lessen reliance on imports and improve competitiveness, government initiatives seek to increase domestic production of these specialized goods.
Drivers of competition
•    Government policy: Tariffs and quality standards can protect domestic industries from cheap imports.
•    Global market: Fluctuations in international prices and oversupply can significantly affect domestic profit margins.

Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management?

If I am an investor looking at companies in the steel and manufacturing sector, a critical question to pose to senior management would be:
"What is your strategy to build long-term supply chain resilience and reduce dependency on imported critical raw materials, while maintaining cost competitiveness and ESG compliance?"
This question combines several key investor concerns:
Supply Chain Resilience: How prepared is the company for disruptions, considering global market volatility and geopolitical risks?
Import Dependency: Specifically, what are the plans to mitigate reliance on materials like coking coal for steel or critical minerals for renewable energy technologies?
Cost Competitiveness: How will this strategy impact the company's ability to compete with cheaper imports and manage production costs?
ESG Compliance: How will efforts to enhance resilience and diversify sourcing align with environmental, social, and governance objectives and evolving regulations?