30189911 steel industry in india

8/2/2019 30189911 Steel Industry in India

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Mining and Metallurgy

Jayaram PonnadaLopamudra Panda

MonishaRanjit Pisharody


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Timeline Top Companies Size and Composition Statistics

Growth drivers Globalization SWOT Analysis Government Policies Foreign Direct Investment Technology Privatization Competition Future growth and Recommendations


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Ahmedabad Steel Craft Bengal Industries Bokaro Steel Plant

Central Steel Corporation Essar Steel Devson Steels Buyao Info Jindal Steel & Power Lloyds Steel Steel Authority of India Tata Steel Vizag Steel


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India is ranked 5th among the top steel producers - 53MT.

The steel industry of India has capital investments of more than Rs

100, 000 crores.

The total employment in the industry is more than 2 million

(including direct and indirect employment).

Steel production grew at 1.2 per cent in the

January-March quarter of 2008-09 over the same

period last year.

Out of Indias annual iron ore production of more than

200 MT, about 50 per cent is exported.

Accounts for over 7 per cent of the world's total


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Top Five Consumer Countries of

Steel


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Skilled Human Resources Abundant Iron Ore

Government Policy

Huge Potential for Demand

High GDP growth rate of 8%

1.2 billion population

Low per capita steel consumption of 49kg (World av. 150 kg)

Reserves 10.3 billion tonnes

Stable currency

Easing of regulations

Strong Banking & judicial

system

Growth

factors

Encouraging trade relations with

ASEAN and other countries

Infrastructure building

Exploring new Energy resources

Indian Potential for Steel


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StrengthsIncrease DemandAvailability of labour at lowwage rates

Huge Resources Of RawmaterialEnvironment laws

Weaknesses High cost of capital Lack of infrastructure Slow decision making Low labour productivity Insufficient transport system

OpportunitiesHigh potential to be tapped Unexplored rural market Export market penetration Consolidation

Threats

Cheap Imports Slow Industry GrowthTechnological change Price sensitivity and demandvolatility

Threat from substitutesHuge bottlenecks in foreigninvested projects

S.W.O.T ANALYSIS


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Industrial and Trade Policy Resolutions in 1991 with regard tothe Steel industry:

Licensing requirement for capacity creation has been abolished. Steel industry has been removed from the list of industries reserved for the

state sector. Automatic approval granted for foreign equity investment in steel has

been increased up to 74%. Price and distribution controls were removed from January 1992. Restrictions on external trade, both in import and export, have been

removed. Import tariff reduced from 105% in 1992/93, to 30% in 1996-97. Other policy measures like convertibility of rupee on trade account,

permission to mobilize resources from overseas financial markets, and

rationalization of existing tax structure.


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Big Barons like ArcellorMittal and Posco enterIndia

Investments projected to the tune of US$ 30billion

Bottleneck:

Why Still they are in slippery ground?


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Reduction in economies of scales

Less capital requirement per tone of capacity

Less operating cost

Improved quality.

Increased labour productivity.

Increased export


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The market share of public sector SAIL has now come down to

around 34 per cent. The government of India encouraged Tatas, Mittals, Essar and

Jindals to develop and expand their capacity. There was full

autonomy to take decisions by these companies.

Effects: Increase in profitability.

Improvement in infrastructure. Increase in employment. Indias emergence as a global player.


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Company Production of Steel(in million

tonnes)

Market share(inpercentage terms)

SAIL 13.5 32

TISCO 5.2 11

RNIL 3.5 8

ESSAR, ISPAT,JSWL 8.4 19

OTHERS 14.5 30

TOTAL 45.1 100

Market Share of Leading Players in Iron and Steel

Industry


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Its predicted that the steel production will double to 120 billion

tonnes by 2010 and will become 280 billion tonnes by 2015.

Energy savings potentials.

Environment friendly production- Greenfields


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Further liberalization towards tariff structure, full convertibility of

Indian currency, more equity participation by foreign partners,

rationalization of tax structure etc. will be required.

R&D focus is to be increased substantially.

Firms must do technological forecasting.

Resource utilization must be more effective to improve on theproductivity.

Investment in infrastructure is crucial to step up demand for steel.


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30189911 steel industry in india

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