Friday, April 1, 2016

Despoiling a Steel Maker

Steel making has got nothing to with Child Sexual Abuse, right? Wrong. In India, after much public pressure, the government passed a law in 2012 to address the issue of exploitation of vulnerable children. The law was called the 'Prevention of Children from Child Sexual Offences'. So far, so good.

The trouble began when the government circulated an acronym to popularise the act. The POSCO Act seemed easy on the mouth. But the bureaucrats who came up with moniker clearly didn't know about the existence of POSCO, the world's fourth largest steel maker by measure. POSCO is a South Korean giant with a significant Indian footprint. In 2005, the company had grabbed the headlines by announcing a $12 billion steel plant in Odisha. Given Modi's pet theme of Make in India, it's important not to piss off brands like POSCO.

By equating POSCO with Child Sexual Abuse, the government has unwittingly caused enormous embarrassment to the brand equity of the South Korean conglomerate. Fortunately, POSCO isn't a B2C brand. Being more of a B2B brand, this unhappy coincidence will not hurt the company as much. But imagine the damage had the 60 billion dollar company been an FMCG company! Perhaps next time, the government selects a name, it might help to do a name-check before unleashing it to the world.