Like most business scions, Puneet Arya always had the urge to create his own mark as an entrepreneur, even as he worked to expand his inheritance. Keen to start something different from the family’s ship breaking business, Arya founded the group’s manufacturing arm—the Arya Iron and Steel Company—in 2004. Within 10 years, this iron ore pellet maker has grown from one to 250 people with a production capacity of 1.5 million tonnes of pellets per year. This rapid growth propelled them to become one of the Top 10 companies in the Inc. India 500 ranking. 

We don’t export iron ore pellets at all. That has always been our underlying philosophy at Arya. When the domestic steel industry is suffering for want of cheap and good quality iron ore pellets, why should we focus on exports?" - Puneet Arya

After completing my bachelors in business management from Rochester Institute of Technology, USA in 2002, I joined my family business of ship breaking. While it was an exciting business I couldn’t see myself doing it all my life. I was more inclined towards manufacturing and after working with my father for two years, I was constantly on the lookout for related industries to start a manufacturing business in.

India had huge reserves of iron ore at the time, as it does today. But there weren’t many companies producing iron ore pellets in the country. There were three major players—JSW, Essar and Kudremukh— who either produced the pellets for consumption in their own steel plants or exported it to China, Japan or Korea. I realised that iron pellets would be the future of the steel industry and decided to bridge this gap in the market.

It was the first time our group was gettinginto manufacturing so it felt like a big risk. I was ready to prove myself by taking up a project that was different from our traditional family business. That is how Arya Iron and Steel was incorporated in 2004. 

The region around Barbil in Orissa, has the fifth largest deposit of iron ore in the world. We wanted to be the closest possible to our raw material. I was just 24 years old when I went to Barbil to scout out the best location for our plant. During that time, our family business employed only 25-30 people because ship breaking is a contract based industry and nobody in our team was experienced in manufacturing. So I had to take the help of some Jindal Steel officials working in Orissa to guide me. 

It was the early 2000s but this area was very remote almost as if it was another country. In fact, there was no railway platform at Barbil, and we had to jump off the train at the station! Also, there was no cell phone network in that region then, and I had no way to communicate with either office or home for days. We spent three days driving around for hours on roads that were almost non-existent to identify the land. It was backbreaking work.

But, that was just the beginning. Once we had identified the land, it took us another year to get the approval from the government, and build buy-in with the area’s tribal population. Arya wasn’t a wellknow business group then. Plus, the grate kiln technology we were planning to install hadn’t been used in India before. We had our task with the government cut out—to convince them that the technology risk would be completely borne by the company and we only needed support for land, power and water. Things became a little easier when we made the government officials realise that India was exporting more than 40 million tonnes of iron ore fine when we could have used that for our domestic economy. In contrast, Arya’s aim was to produce iron ore pellets only for domestic producers. 

 I have always focused on the work environment first and then the production.

The government finally allotted us the land in 2005 but our next challenge was to work with local villagers to convince them to vacate the land. We would sit down with the villagers telling them that the plant would also benefit their families through employment. We hired a lot of local people to work on the plant. But in my whole journey of setting up Arya, land acquisition in Orissa was definitely the hardest thing I had to do.

Unless I had the land, nothing would have moved forward. At last in 2006, we got the site cleared and the production work started. Physically standing at the site and seeing the pellets roll out was probably one of the most exciting days of my life. But soon after, I had the task of educating the domestic market to use iron ore pellets. As I mentioned earlier, pellets were not being sold in the domestic market until we came onto the scene. Indian DRI (direct reduced iron) manufacturers had read about them and theoretically studied its benefits but they had never used them. Thankfully, I didn’t have to do much of the convincing because I didn’t have the right technical expertise in that area. My father always says—let the experts handle the situation. So I found the best talent in the industry to do the convincing. I just sold the pellets at a cheaper rate than we should have to get people to use it in the beginning. And once they saw its benefits, they would come back for more. Commissioning and stabilising the plant in those first few years of business took us longer than we had expected but things at Arya have become rather smooth since then. Till 2010, I used to travel to Barbil every alternate week but now I need to be there only once a month. The processes have been streamlined and professional management has been running the show. I am mostly involved in sales and purchases now. 

Arya still sells pellets to the domestic market only, even after nine years of starting the company. We don’t export iron ore pellets at all. That has always been our underlying philosophy at Arya. When the domestic steel industry is suffering for want of cheap and good quality iron ore pellets, why should we focus on exports? The government is contemplating to reduce the export duty on iron ore. But that will only encourage domestic iron ore pellet makers to export instead of sell in the domestic market, even as Indian manufacturers bear the brunt. The government should seriously look into this. 

I believe the reason why Arya has grown so fast in under 10 years is the precedence given to quality over quantity. Not just in manufacturing pellets but also in real life. Before I ask how much production has taken place in a day, I ask my people about the housekeeping and hygiene conditions at the plant. I have always focused on the work environment first and then the production. I started this company with only one employee and today I have 250- plus employees and more than 500 contract workers. I see my company taking shape every single day and I strive to only make it better in the coming years.