Minaean International Corporation (MIB-TSXV)
May 28, 2010 Issue
The Most Powerful Name In Corporate News and Information
Specializing In Innovative Light-Gauge-Steel Construction Solutions, Minaean International Corporation Is Focused On Introducing Cost Effective Construction Systems To Boost Its “Artisan Quik Build” Products Line To The Emerging Indian Market In Support Of The Government’s Call Of “Housing for All” To Mitigate The Shortfall Of 26 Million Homes
Capt. Mervyn J. Pinto, MFG
President, CEO and Director
. President & Chief Executive Officer of
Minaean International Corp. from August 2000 to present;
.President of Norpol Pacific Marine Inc. (Norpol), a private shipping group, from September 1990 to August 1997.
Chairman & Managing Director of Mercator
Shipping & Ship Management Ltd., Bombay India from 1985 to 1990
Minaean International Corporation (MIC) is a publicly listed Canadian Company, listed on TSX Venture Exchange, symbol “MIB”, promoted by “Varshney Capital Corporation” a renowned venture capital group from Vancouver. The pioneering efforts and growth potential in India has prompted Mr Hari Varshney to take over as Chairman of the company. The company is focused on the development and promotion of innovative quick-build light-gauge-steel (LGS) technologies for the construction of cost-effective and environmentally friendly structures.
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published - May 28, 2010
Mr. Pinto: Minaean International specializes in innovative light-gauge-steel construction systems, focusing on Quik Build solutions to the emerging markets. The company commenced its global market entry in the burgeoning Indian economy, where there was and still is, a shortfall of 26 million homes. Today, while the Light gauge steel structures are getting perfected for Indian environment, the company has expanded its product lines in to prefabricated Modular Buildings and Modular Bus Shelters.
CEOCFO: Tell me a little about your construction system; what is it and what makes it different?
Mr. Pinto: The company has three product lines. Light Gauge steel wall panel and floor system, Modular Building system and Modular Bus Queue Shelters. The unique product was the company innovated a corrugated steel wall panel system and launched it in India immediately after the major earthquake in Gujarat, which killed 35,000 people. The system was developed to provide a quick build solution coupled with replacing the existing brick and mortar walls with a continuous load bearing steel walls duly clad with insulation and fiber cement boards as used in North America.
CEOCFO: Is this a product that is unique to you?
Mr. Pinto: This product was unique and would have been a great success with its cost effective pricing when we developed it in early 2000 while the steel was less than half of today’s cost. It was the uniqueness of this product that brought the Indian steel giant TATA Steel to sign a strategic alliance partnership with Minaean and invest huge amounts in promoting the product throughout India. However, due to the increase in steel prices in 2004, the product got pushed out of the market and had to be replaced by “ARTISAN QUIK-BUILD” steel framing system. The company conducted the product development and the market entry from 2001 to 2005.
CEOCFO: What is your company structure; do you have different divisions or subsidiaries in different areas?
Mr. Pinto: The company is headed by its publicly listed holding company “Minaean International Corp” headquartered here in Vancouver, British Columbia Canada, and operates through two of its wholly-owned subsidiaries, Minaean Habitat (India) Private Ltd., registered in Bombay India and the 2nd one Minaean Building Structures Inc. for North America. Indian sub has a fully trained infrastructure in place with admin, marketing, accounting and engineering as well as the execution and the installation departments. The company presently operates with a staff of about sixty people and is focusing on the expansion as contracts get awarded. The company had to downsize after the recession from three production plants into one production plant, and from 160 personnel into 50 personnel. The North American subsidiary operates through an outsourced model.
CEOCFO: Who are your customers?
Mr. Pinto: India is a private sector driven economy. The government stays out of the business sectors. However, due to the recession the government had to step forward and has increase its stake in financing and tendering of major infrastructure, power and energy projects. Minaean’s first major contract was with Shell Petroleum for construction of the retail shop modular buildings for their gas stations. The prototype was designed by us along with Australian design consultants SKM, prefabricated and installed at our cost, which was reimbursed by Shell upon satisfactory completion and acceptance. Shell awarded Minaean with the contract to supply and install 65 buildings, recognized the company for its safety and quality and extended the contract on a long-term basis. Our entry and success in this gas station business opened the doors with India’s retail Oil giant Bharat Petroleum, which is a public private partnership and Fortune 500 company, as well as with Indian Oil Corporation, another Fortune 500 company.
CEOCFO: You mentioned housing; how does that play in?
Mr. Pinto: We have had a number of setbacks in convincing the masses in accepting the North American type of houses and the efforts are being pursued as we speak. Number two, when the company entered India, the steel prices were half of what they are today. TATA Steel, India’s steel giant, with a mandate to increase the steel consumption in the construction industry signed a strategic alliance with Minaean in 2003 and took over the marketing program for Minaean. The company constructed number of model homes, staff for quarters, schools, hospitals in the city if Jamshedpur, the headquarters of TATA Steel. The market entry had to be reconsidered when the steel prices increased and by 2004, we had to remodel and revamp our market entry program and move from a low-cost housing to the mid-income housing.
CEOCFO: Are most people looking for your steel panel solutions or do you have to sell them on it?
Mr. Pinto: That is the point we have been trying to make since 2006, barring the period of time that the whole world went into a recession, the Indian economy is practically galloping ahead and is said to be second to China. The governments are realizing the shortfall in homes. The private sector has realized that our Artisan Quik Build solutions can provide them a quick turnaround of money, so obviously there are corporations and governments looking for quick build solutions now and tenders are now being published practically every month.
CEOCFO: So it is looking up!
Mr. Pinto: It is looking up. The country feels it is time to get away from conventional systems and move towards the modern Quik Build solution.
CEOCFO: You have a wide range of products and applications; would you tell us more about what you can use the Quik Build for!
Mr. Pinto: We have three product lines; in fact one is our light-gauge-steel construction system, suited for seven-story buildings where we here in North America are specialized in conducting engineering and providing super structure for those. In India, we go up to four stories. The second product line is modular buildings, which are prefabricated in our plant, shipped to site, and installed within days. I would say practically within 24 hours they are installed, and within another 24 hours the electrical and water connections are made available. By the third day, we are out from the site. These are modular, prefabricated totally in the plant and then transported to site and installed. The third product line is modular Bus Shelters where the company was asked to design Bus Shelters. India needs to revamp more than 9000 Bus Queue Sheelters over the next five years and plans are well underway. The Indian out of home media industry is galloping ahead as well. Every state is coming up with a program to reconstruct their Bus Shelters using stainless or mild steel, to introduce Intermodal Transport Management System, to introduce advertisement space for out-of-home media industry. Some of the private operators approached Minaean to design and install modular Bus Shelters; this was in 2008-2009 where the company produced and installed about 350 bus shelters in the city of Bombay, Bangalor and Punjab.
CEOCFO: Are you strictly working in India these days?
Mr. Pinto: Our primary market is India, where the country has a massive growth needs and cannot be met with for at least for another five decades. But we have a subsidiary operating here in North America registered in Delaware. Our main operating areas in the United States are Oregon and Washington States on the West Coast where light-gauge-steel is very competitive and can provide a much better quality and faster product. It has really captured the market in areas where wood has problems due to warping, shrinkage creating leaky condos and massive insurance claims.
What is the financial picture like for Minaean today?
CEOCFO: Would you tell us about the management team and how you have the insight to go with the times and change quickly as needed?
Mr. Pinto: We have been fortunate. The top management has a great deal of experience in India, starting with myself having 25 years of expedience in the Indian market and have managed to get the right personnel. We have a very strong highly qualified and experienced Managing Director, having worked in one of the giant billion-dollar conglomerates involved in real estate in the past. With a strong leadership to head the set up the company is supported by an experienced team of five middle management managers, starting with the commercial manager, the marketing manager as well as the finance manager and the installation manager. So obviously, we have a strong management team that we have built over the years and good trained personnel. The company was supported by the Canadian International Development Agency in initial days, in the early 2000s doing the feasibility study and training of about 200 personnel in construction of steel buildings. Hence, the company was prepared with trained the crew in 2006 when we had a major contract from Shell for supply and installation of 65 gas/retail shop buildings. The company was well supported by Export development Canada, a crown corporation to support the company with the working capital line, a $ Two million facility which was the back bone for the company’s growth in India.
CEOCFO: Why should potential investors pay attention to Minaean?
Mr. Pinto: Because Minaean has a well set infrastructure with a capable management and trained execution team operating in the burgeoning emerging market like India coupled with a strong North American ethics and culture. In a country like India which needs every detail for improving the quality of living, where no business can fail unless one does not operate with diligence and care, where the opportunities are in plentiful, where the country needs growth in every sector, where setting up takes years, Minaean is already well set up and established. India as we all know is poised to surge from the seventh largest economy to fourth in the next few years. As per World Bank’s reading by 2020, it probably should be the third largest economy in the world. Having said that, with a billion people in India the economy is primarily driven by the consumer markets. So we are positioned in a country with an innovative construction system, as pioneers there to take advantage of opportunities. All these states are looking for growth and have a mandate to provide a sort of improvised environment to the masses.
CEOCFO: Final thoughts, what should people remember most about Minaean International?
Pinto: All I
can say is we are poised for great growth. If we have the right financial
backing from a leading corporate; we are poised within the next three years
to surpass $50 million in revenues and may be able to go into $100 million
over the next five years. This will boost the company to hasten its plans in
going public locally in India and raise additional finance for its growth on
its way to becoming one of the mid to large cap companies in time to come.
The Indian GDP is forecasted to grow at 7.2% this year followed by 8% plus over the next few years creating a huge investment potential. Minaean’s pioneering efforts in the introduction of “Artisan Quik Build System” (AQBS) and “Modular Building Systems” has created a unique brand equity for the company in India. These systems are ideal for Health, Education and Energy sectors and the usage will grow with time. The political parties of the world’s largest democracy depend on the voters of rural India for forming the government and providing homes and better living condition is a critical factor. The public sector has realized that our AQBS can provide quick build solutions while private sector can benefit from a quick turnaround of investment, hence, while AQBS will gain acceptance and contracts, the introduction of “ARTISAN COMPOSITE” system, a system ideally innovated for mass housing solutions will be the ultimate solution for mass housing problems. - Mervyn Pinto
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