This was admitted by K.A.P. Singh, a director of the LNM Group and the concurrent vice chairman of the Managing Board and chief operating officer of Ispat Nova Hut, the Czech steel firm acquired by the LNM Group early this year.
Singh warned that "China is driving the bus" in the region, providing the growth engine with a production of 200,000 tons of steel.
The LNM Group, Singh said, has observed that most of the manufacturing has moved to the developing countries.
"That is why the LNM group likes to grow in that part of Asia where growth is," Singh said.
According to Singh, the LNM Group is not giving up yet on its bid to acquire NSC even though Philippine creditor banks of NSC are currently locked in an "exclusive" negotiation with competing bidder Global Infrastructure Holding Ltd. (GIHL).
The Philippine creditor banks of NSC agreed to grant a 90-day "exclusivity" to GIHL in exchange for a P250-million "good faith" money which would go toward the immediate rehabilitation of NSC should a deal be reached between the banks and GIHL.
The "exclusivity" negotiation was started in November and will end by January.
If no deal is reached with GIHL by the end of the 90-day period, the creditor banks will be free to start negotiations with the LNM Group which had earlier expressed willingness to improve their original offer for the mothballed Philippine steel firm.
The LNM Group had made an initial offer of P7 billion for NSC, but failed to explain a profit sharing feature which would offer more money to the banks.
The LNM Group is clearly unfazed by the current shut out as they are confident that they are more capable of turning NSC around and eventually running it profitably.
"If NSC can be run by anybody it is LNM," Singh boasted.
The LNM Group, Singh revealed, has already proven its ability to acquire and eventually turn around several faltering steel firms all over the world, the latest of which was the Czech Ispat Nova Hut.
Aside from the Czech steel firm, the LNM Group’s notable rehabilitations include P.T. Ispat Indo and Ispat Mexicana.
The LNM Group’s steel firm holdings, however, covers the world with plants in Algeria, France, Canada, the Caribbean, Germany, Kazakhstan, the Netherlands, Romania, South Africa, Trinidad, the United Kingdom and in the USA.
The LNM Group is currently the world’s second biggest steel group, next only to the Arcelor Group which has a total capacity of 44 million tons compared to the LNM Group’s capacity of just 34 million tons.
The LNM Group, Singh reveals, owes its management success to the "mini-mill" policy of LNM’s chairman Lakshmi N. Mittal which calls for a flat organization and achieves cost competitiveness.
The mini-mill concept, Singh briefly explains, allow for flexibility in operating a steel mill, shutting down unnecessary operations, trimming down manpower to more efficient operating levels and complementing the groups various global.