(This article is to refute claims published in web and social media that Ansteel is a fake company. Whether Ansteel will end up establishing a Steel factory in AP is up for discussion, but it is a legitimate billion dollar company).
Ansteel, a major Chinese steel maker company, evinced interest in setting up a steel plant in Andhra Pradesh. As per the claims of the Andhra Pradesh CMO, Chief minister Naidu on the first day of his tour succeeded in convincing China’s steel major, Ansteel Corporation Limited to invest in the AP state. Ansteel Group is ranked 451 in Fortune 500 Global Ranks in 2015. However , it has been reported in a popular Telugu website and social media that Ansteel is a fake company.That website has carried out an item with the title “Babu Bargaining With Fake Company?“. We want to put forth the facts about Ansteel and let the readers make a decision.
Is Ansteel a fake company ?
Absolutely NOT. Ansteel has revenue upwards of 8 Billion USD. Ansteel had peak revenues of 14 Billion in December 2011 and the revenue took a hit in 2015 due to sluggishness of steel market. This is a cyclical trend in steel market and has nothing to do with Ansteel alone. Even in this market, operating margin of AnSteel was -5% and last year the net operating margin was 4%. Ebb and Flows are common in any business and one cannot term it as a fake company if a company makes a loss in a fiscal year. By that metric, any business in the world can be termed as “fake” as there is no business in the world that churns out profit year after year.
Since this is a publicly traded company, all information is in the public domain.Hope the media outlets do minimum required research before publishing articles. Whether the evinced interest materializes into Investment to AP or not is anyone’s guess. Whether they establish a steel factory in Kadapa district or not is a different discussion altogether. Regardless, AnSteel is a major steel giant.
Below is snapshot of financial results on Ansteel over the last 5 years. All the numbers are in millions of dollars.
