MSTC, a mini ratna under the ministry of steel, started off as ‘Metal Scrap Trade Corporation Limited’ but has transformed to become an e-commerce player providing specialised solutions for e-auctions to state and central governments.
It has reversed the 80:20 proportion it had between trading and e-commerce, expanding its e-commerce business after auctions in the electronic mode were introduced in 2002. We spoke to chairman BB Singh during the company’s IPO roadshow to get an understanding of the company’s strategy. Excerpts:
With e-commerce becoming a mainstay will you cut the focus on trading business?
I cannot say we are not focussing on trading business. We are definitely going for 110 per cent BG (business guarantee) backed procurement. We are going aggressive on it as it is a risk free business. Then, associated business models like supplying gas pipelines to GAIL etc....that kind of business model we will continue. To overcome the problems we had faced earlier, we have gone for a safer business of e-commerce-enabled trading where all the risks will be overcome. The traditional cash and carry model, we want to exit.
Tell us more about your e-commerce business model...
In e-commerce, we are only providing portal service. This is done in-house. We are a standalone service provider, we are not outsourcing any of the e-commerce solutions to outsiders. We have engineers, IT professionals who have come from Cognizant, Accenture etc... that is why we have been able to develop customised services.
What is your thrust area?
We want to grow exponentially in e-commerce. We have the expertise in developing ERP solutions. We can provide the services for HR solutions, pay package solutions... We are able to do that. These skills of our people have been honed after developing a trading portal for oil marketing companies. ERP solutions. We can adapt the potential.
So, you cannot be compared to other trading peers like MMTC or STC?
We are more an e-commerce and IT company... you can say IT company. We have developed very complex portals for e-trans and Udaan, where so many parameters had to be controlled. We have been successful in Udaan, two phases are over and third phase for international routes is going on now. So, they have all been success.
You mentioned about a trading platform for oil marketing companies, can you elaborate?
Exim portal for oil maketing companies. We developed it for Indian Oil Corporation and now all the petroleum sector companies are making a beeline for it. All petroleum companies sooner or later have to avail of this. For export of by-products and import of by-products. They look at products that are beneficial to import and export. All the overseas traders, buyers are bidding for them through the platform we developed.
For LNG too we have developed a product for IOC and that is operational. They are very excited about this. Now, we are planning to take these to Essar Oil and Reliance. It was a collaborative effort with IOC, not a product we had developed all alone for them. We worked on it for more than a year.
You also have a joint venture with Mahindra for shredding vehicles...
Yes, recycling sector. It is in the initial stages. Vehicles shredding and recycling... growth opportunities are there. We are very well positioned to take this on.