An eight-member business delegation that recently went to the South African Province found `untapped potential there for manufacturing stainless steel downstream products' like tubes and pipes, catalytic converters, catering equipment, kitchen sinks, hollow-ware and cutlery. According to leader of the delegation, Uttam C Mehta, both the sides would prepare pre-feasibility report (PFR), including basic infrastructre required for each project and submit them within three months. The Indian side would provide technical know-how and bear the financial cost. The turnover of these companies ranged between Rs 10 crores to Rs 25 crores per annum.

Talking to The Financial Express on the delegation's return here, Mehta said that there could be greater mutual co-operation between South Africa and India as both the countries produced different grades of stainless steel. The global demand for stainless steel was also likely to increase in future with the realisation that although it is 30 per cent costlier than mild steel it lasts 300 times longer.

The visit was held under the aegis of Confederation of Indian Industry (CII) on the invitation of Mpumalanga Investment Initiative (MII), the official investment promotional agency of the provincial government.

Other members of the delegation were Ugamraj M Hundia of Real Strips Ltd, Hemant P Shahanand of Katuri Works, Anil P Shah of Kadambari Works, KP Bhootaka of Mech Engineers, Chirag S Shah of Suchi Fasteners, Ashwin A Kataria of Rolling Mills India, and Raju Krishnaswamy, deputy director of CII-Gujarat.

A Memorandum of Understanding (MoU) was signed by CII-Gujarat and MII in presence of IB Mkhize, chief director of Mpumalanga Provincial government, to explore the possibility of overseas trade and investment and development of industrial co-operation between the two provinces, initially for a period of five years.

The delegation which visited Columbus Steel Plant at Middleburg, the fifth largest stainless steel producer of the world,iddleburg found that the bulk of stainless steel produced at the fully-automated Columbus plant, which recycled even scraps, is exported. There are not many units in South Africa which manufactured stainless steel dowstream products.

While the Columbus plant mainly produced the 300-series Austenitic grade stainless steel (with higher chromium and nickel and low carbon) having excellent corrosion resistance, welding, fabrication and hyginic qualities, India produced more the 400-series Ferritic grade stainless steel (with more manganese) exhibiting basic required properties of stainless steel but for less aggressive environments as indoors.

Mehta pointed out that the speciality of the delegates from Gujarat had in areas which are not that developed in South Africa, such as in coil rolling, sheet rolling, utensils, fasteners and capital goods.

As a follow-up action, he said, prospective entrepreneurs from Mpumalanga would come to Gujarat in October. The initiative was taken when a South African high-power delegation, led by High Commissioner Maite E Mohale, visited Ahmedabad in February and had a prolonged meeting with 65 delegates from stainless steel industry in Gujarat.

Mehta pointed out there were several similarities with India and South Africa. Despite opening up of the economy, vis-a-vis per capita consumption of stainless steel as well as in the use of stainless steel in different sector.

He said the industry in both the countries still needs incentive just as infrastructure has scope for further development, there being identical interest rates and wide disparity between the rich and poor. However, one difference between the two countries is that the size of middle income group is too small there. And the local `emowerment group' gelled well with people of Indian origin there. As such, he said, South Africa is a land of very big players but hardly any middle or small-scale sector - be it diamond, gold, coal, iron, aluminium, copper, chromium or platinum. Nickel is mined as a by-product of platinum. Chromium is the main ingredient, common in all types of stainless steel.

South Africa and particularly Mpumalanga, according to their own agency (MII), also offers investment opportunity for value-addition in petro-chemicals and other chemicals, timber, paper and pulp, furniture, packaging materials, agriculture, agro-processing and tourism.