pov steel development online

8/12/2019 POV Steel Development Online

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Indian Steel IndustryAn overview and growth

prospects in north India


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Indian steel industry

The Indian steel industry has entered into a new era of

development since 2007-08, riding high on the resurgent economy

and robust demand for steel. Rapid rise in production has resultedin India becoming the 4th largest producer of crude steel and the

largest producer of sponge iron in the world.

Indian steel industry has just delivered a decade ofexponential revenue and profit growth

The Indian steel industry has

achieved significant milestonesin terms of growth in capacity,

production and exports to

become a major player in the

global steel industry. Between

FY2008 and FY2013, Indias

steel production has grown at

a compound annual growth

rate (CAGR) of about 7 percent

(Exhibit 1).

Exhibit 1. Total finished steel production for India

(in million ton)*

*Source: World Steel Association and Metal Bulletin


Exhibit 2. Revenues and operating profits for top four

Indian steel companies (Rs. Crores)*

Industry revenues (top four

companies) grew close to 4x,

while operating profits grew

by approximately 5x during the

past decade (Exhibit 2).

10

20

30

40

50

60

70

80

2009 2010 2011 2012 2013

02003

Revenues Operating profits

2013

30

60

90

120

150

2008


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Structure of the Indiansteel industry

The Indian steel industry is divided

into primary and secondary sectors.

The primary sector comprises a few

large integrated steel providersproducing billets, slabs and hot

rolled coils, among others. The

secondary sector comprises small

units focused on the production

of value added products such as

cold rolled coils, galvanized coils,

angles, columns, beams and other

re-rollers, and sponge iron units.

Both sectors cater to differentmarket segments.


Exhibit 3. Consolidation in the Indian and global steel industry*

Top 5 players capacity share - India Top 5 players capacity share - Global

Indian steel industry ismore consolidated thanthe global steel industry

The capacity share of the top five

Indian steel players stood at 51

percent of the total capacity (87.3MTPA) in fiscal year (FY) 2011

compared to less than 15 percent

capacity share for the top five

global steel players (Exhibit 3).

This has resulted in the large

integrated producers having

significant pricing power, forcing

the secondary producers to lookat backward integration to

remain competitive.

On the basis of ownership, the

Indian steel industry is broadly

divided into private and public

sector enterprises. The private

sector dominates production

accounting for almost 78 percent

of the finished steel outputwhilethe public sector has higher

capacity utilizations.

Tata Steel9%

SAIL15%JSW

15%

Others49%

Others85%

Arcelor Mittal5%

Hebei Group3%

Baosteel Group3%

POSCO2%

Wuhan group2%

Bhushan5%

ESSAR7%


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India steel industry outlook

Domestic steel demandto remain muted during

FY201217 on account ofa weak macroeconomicenvironment

The demand for longs is expected

to increase by 19 million ton

(MT) at a CAGR of 9 percent and

for flats by 16 MT at a CAGR of

8 percent between FY2012 and

FY2017 (Exhibit 4). This is due torelatively weaker growth prospects

of flats end-user industries (such

as automotive and consumer

durables) than those for longs.

2011

20

40

60

80

100

120

2012 2013 2014 2015 2016 2017

Flats Longs

Exhibit 4. Finished steel demand: longs and flats (in MMT)*



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Increased domesticcompetition

Incumbents and challengers have

announced 71 million ton per

annum (MTPA) of steel capacity

addition between FY2012 and

FY2017 through both brownfield

and greenfield routes. However,

there is considerable uncertainty

on the actual capacity addition as

many projects are yet to achieve

financial closure due to delays or

lack of regulatory clearances.

Based on our bottom-up

assessment of the announcedcapacity additions, projects

aggregating to 35 MTPA of

crude steel capacity have already

achieved financial closure. Hence,

we expect a minimum aggregate

capacity of 122 MTPA to be

commissioned by FY2017

(Exhibit 5).

This capacity addition will lead

to two structural changes. First,the concentration in the longssegment will increase by 57percent in the medium term,deepening the sustainabilitychallenge for secondary producers.

Second, it will shift the currentflats-longs capacity split of50:50 to 60:40 by FY2017, if

all the announced projects arecommissioned. As a result, one canexpect oversupply in flats and acapacity shortfall in longs.

Exhibit 5. Crude steel capacity forecast*

Installed capacity2011-12

Financial closure Projects pendingfinancial closure

Total capacity2016-17



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We have projected capacity for

crude and finished steel between

FY2012 and FY2017 to understand

the supply-demand balance.

In light of the uncertainty in

regulatory approvals and financial

closures, we have built three

scenarios for capacity addition:

Aggressive (all announced

capacity commissioned)

Base (all brownfield and

financially closed; greenfield


Low end (only financially closed


We believe that the supply for flats

could outpace demand between

FY2012 and FY2017, even in the

low-end capacity addition scenario

leading to increased pressure

on utilization and margins. This

coupled with the downturn in

global steel prices will prod primary

producers to substitute imports

and crowd out secondary producers

(Exhibit 6).

In contrast, the longs segment

could see demand outpacing

capacity over the next five years,except in the most aggressive

capacity addition scenario. Longs

steel players are likely to face a

favorable demand environment

with only a transient overcapacity

leading to better utilization and

margins compared to flat steel.

Overcapacity could be prolonged

only if the entire announced

capacity addition21 MTPAis

completed (Exhibit 7).

2011 2012 2013 2014 2015 2016 2017

Demand Base Case Aggressivecase

Low end case

10

20

30

40

50

60

70

80

90

100

in Mn Ton

Exhibit 6. Flats steel demand versus capacity*

Exhibit 7. Longs steel demand versus capacity*

Steel capacity to outpace demand in the medium term

2011 2012 2013 2014 2015 2016 2017

in Mn Ton

10

20

30

40

50

60

70

[email protected]%GDPgrowth

Base Casecapacity

Aggressivecase capacity

Low end casecapacity




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We expect global prices of

iron ore to soften in the near

term, but the same might not

materialize for Indian players

primarily due to the challenging

regulatory environment. The

future landscape of iron ore

supply in domestic markets will

be determined by who wins the

regulatory tussleiron ore miners

or steel players (Exhibit 8).

Scenario 1: If iron ore miners win,

it will lead to:

Firmer iron ore prices in

the local marketimport

parity pricing.

Iron ore shortage for

nonintegrated steel players.

Potential margin compression in

the case of weak realizations.

Scenario 2: If steel players win, it

will lead to:

Softer iron ore prices in t

he local marketexport

parity pricing.

Adequate iron available fornonintegrated players.

Exhibit 8. Iron ore supply versus demand scenarios*

Scenario 2: Steel players win

Scenario 1: Iron players win

2017

2017

2017

2017

2017

2017

2017

2017

2017

2017

2017

2017

10

10

50

50

100

100

150

150

200

200

250

250

300

300

Supplyequals

demand

Supplyshortage

Iron Oredemand

Iron Oredemand

Iron Oreproduction

Iron Oreproduction

Export

Export

in Mn Ton

in Mn Ton

Domestic raw material supply volatility to continue despite improvement inthe global scenario




10/2010

Potential growth constraints

Demand-side constraints

The growth in the steel market is

expected to be muted in the short

term on account of poor growth

in core consumer sectors such as

infrastructure and construction.

The demand is expected to

rebound in the latter half of 2015

with growth in infrastructure

as announced in the Twelfth

Five-year Plan. Growth in the

automobile and consumer durablesectors will also support demand

growth in the long term.

Supply-side constraints

The large steel players and new

entrants have announced capacity

addition of about 71 MTPA till

2017. Regulatory hurdles and land

acquisition challenges remain the

largest supply-side constraint for

the Indian steel market. Mining

bans in Karnataka and Goa

and delays in the execution of

announced capital projects can

further constrain supplies.

22%

Automobiles InfrastructureCapital Projects PipesOthers ConsumerDurables

22%

22%

18%

10%

6%

Exhibit 9. End uses for steel in India*



11/2011

Investment scenario in steel

Land acquisition andregulatory clearances posemajor challenges to new

greenfield investments

Delays in the government

allocating sufficient iron ore

blocks, regulatory approvals and

challenges in land acquisition

have slowed many steel projects.

Moreover, regulatory clearances

and land acquisition challenges

have affected expansion and

modernization projects. Majorinvestments from leading MNCs

and large Indian corporates across

Karnataka, Odisha, Jharkhand and

West Bengal have been affected

due to land acquisition challenges.

Need to secure rawmaterial supply have ledIndian steel companies tolook at global asset base

The raw material security scenario

has slightly improved due to

regulatory support to overseas

acquisitions. The Indian steel

companies are actively seeking

mining leases and assets globally

to secure raw material supplies.

The capability to acquire, develop

and operate these assets hasbecome a key strategic imperative.

These assets provide a natural

hedge at the raw material portfolio

level, and are also important

for overcoming the short-term

domestic challenges.

Incumbents and challengers have announced 71 MTPA of steel capacityaddition between FY2012 and FY2017 through both brownfield andgreenfield routes. However, there is considerable uncertainty on theactual capacity addition as many projects are yet to achieve financialclosure due to delays or lack of regulatory clearances.

Several Indian steel companies

have acquired iron ore and coking

coal assets in countries such as

Canada, Australia and South Africa

through joint ventures. One of the

leading Indian steel companies

acquired a majority stake in a new

iron ore reserve in Canada. It had

acquired a minority stake in an

Australian mine, which was sold

last year to a leading global miner.

Another Indian steel company has

acquired and operates anthracite

mines in South Africa. It has also

acquired a significant minoritystake in an Australian coal miner

with exploration rights for coking

coal in Queensland.


12/2012

Challenging global environment

Steel companies globally have

been operating in a challenging

environment of rising input costs

and limited pricing power (in most

years), leading to steady erosion in

margins. In response, steel makers

have been integrating upstreamfacilities to secure supplies of iron

ore and coking coal.

The global scenario has been

a prologue to the Indian

market where after a decade of

exponential revenue and profit

growth, the steel players are

entering a down-cycle. Historically,high asset utilizations, benign

global pricing, consolidated

industry structure and a local

demand-supply environment have

enabled Indian players to generate

better realizations compared to

their global counterparts.

Recently, however, the Indian steel

industry has started witnessing

the signs of down-cycle leading to

margin compression despite strong

volume growth. This is primarily

due to high input costs and a weak

macroeconomic environment,

both globally and domestically.

Declining margins, coupled with

sluggish demand growth, has made

investors cautious about steelcompanies. As a result, enterprise

value for the Indian steel industry

has declined almost 30 percent

since FY2010.

This situation is further

complicated by key trends in the

global and domestic steel industrythat have far-reaching impact

on Indian steel players and

customer markets

The steel industry in OECD

economies is witnessing

persistent low capacity utilization

compounded by margin squeeze.

This, coupled with three key trends,

is leading to a structural shift in

the global steel industry.

Globally, steel players have been operatingin a challenging environment. These trendsare now extending to India leading to margincompression and weaker growth prospects.

Steel demand growthis expected to flattenin heavy-weight

economies includingOECD economies, evenas major structuralshifts in China andfewer acquisitions ofraw material suppliersin India are expected to

reshape these markets.

Shift toward relativelylower steel demandgrowth in most of the

heavy-weight economiesincluding China

The global macroeconomic crisis

appears to have accelerated the

pre-existing trend toward declining

the steel intensity in the OECD

economies. The steel industry

is staring at a flatter demand

trajectory globally, including inChinawhich is expecting a very

low single-digit growth.

Structural shifts in Chinacould fundamentally

impact Indian players

China is experiencing significant

overcapacity as players havecreated capacity ahead of demand.

This, coupled with weak pricing,

presents a significant threat to

demand in the local and other

Asian markets for Indian players.

Cooling down of iron oreand coking coal prices,

reducing acquisition paceof Chinese and Indian

players

Steel players in China and India

were on an acquisition spree for

iron ore and coking coal assets

around the globe to insulate

themselves from price volatility.

But as raw material prices

cooled in the past few years, the

race for self-sufficiency has taken

a backseat.


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Steel industry in north India:structure and challenges

Industry structureIndias northern steel hub

contributes about 16 percent to

Indias annual steel production. The

hub comprises multiple small and

medium unitsprimarily induction

furnaces and steel re-rolling mills

located in and around Punjab

and Haryana. These units largely

cater to the construction andlight engineering sector including

bicycle and auto-parts.

Uttar PradeshUttar Pradesh is the largest

producer and consumer of steel in

north India. The industry produced

5.6 MTPA of steel in 2011-12. The

industry operates out of several

centers including Sahibabad,Shamli and Gorakhpur. Bhushan

Steel, Gallant Ispat, Jai Bharat

Steel, Rathi Steel are the main

players with production facility in

Uttar Pradesh.

PunjabPunjabs secondary steel

manufacturing capacitiesare concentrated in Mandi

Gobindgarh, Khanna and Ludhiana,

catering to the construction and

light engineering sector.

In the past few years, units in

Himachal Pradesh have developed

an edge over Punjabs steel mills

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Jammu & Kashmir

Annual Production(000 tonnes)

FY2011-12 Data

Annual Sales MMTP(000 tonnes)

Himachal Pradesh

Chandigarh

Punjab

Haryana

Rajasthan

Delhi

Uttar Pradesh

Exhibit 10. Production and sale of finished steel in North India in FY 2012*

*Source: JPC2012 report

owing to tax benefits, and are

catering to Jammu and Kashmir,

and Haryana.

RajasthanRajasthan is the third largest

producer and fourth largest

consumer of steel in north India.

The industry produced 2.5 MTPA

of steel in 2011-12. Rajasthans

secondary steel manufacturingcapacities are concentrated in

Bhiwadi/Alwar, Bhilwara, Jaipur

and Kota. Kamdhenu Steel is

a major steel producer with

production facility in Rajasthan.

HaryanaHaryana is the fourth largest

producer and third largest

consumer of steel in north India.

The industry produced 2.3 MTPA

of steel in 2011-12. Haryanas

steel manufacturing capacities

are concentrated in Bhadurgarh

and Hissar. Jindal Group and

Surya Steel Pipes are two major

steel producers with production

facilities in Haryana.

Himachal Pradesh, Jammu& Kashmir and UttarkhandHimachal Pradesh, Jammu &

Kashmir and Uttarkhand jointly

occupy the fifth position as steel

producing states in north India.

Each of these states produced 0.4

MTPA of steel in 2011-12.

Steel units in Himachal Pradesh

are concentrated around Kala

Amb. These units have in the last


15/20B

few years developed an edge over

Punjabs steel mills owing to tax

benefits. Amba Group, Jai Bharat

Steel and SPS Group are a few of

the steel producers with production

facilities in Himachal Pradesh.

Steel units in J&K are concentratedin Jammu. Cosmic Steel, KC

Group and are a few of the steel

producer with production facilities

in Uttarkhand.

Steel units in Uttarkhand are

located in Haridwar, Kashipur,

Kotdwar and Udham Singh Nagar.

KVS Group and Sidhbali Group area few of the steel producer with

production facilities in Uttarkhand.

Industry challenges

Scarce natural resources butadvantage of proximity toend users

North India has not been naturallyendowed with rich iron ore andcoal deposits like East or SouthIndia. Poor proximity to ports,higher cost and shortages of powerdo not favor setting up primarysteel manufacturing units in theregion. Moreover, the logistics costof transporting raw material fromthe eastern and southern statesmake it unviable to produce crudesteel in the region.

However, north India continuesto be a substantial consumer ofsteel. North India is the industrialhub for automobile and consumerdurable goods factories, which areamong the key consumers of steel.The proximity to these units makes

secondary steel productiona commercially viable option innorth India.

Power shortages and rupeedepreciation impact theindustry in the north

Most steel mills are running atless than 50 percent of theirrespective rated capacities

because of poor power supplyand rising input costs. The poweroutages in northern states areresulting in production losses andforcing many mills to work onlysingle shifts.

Also, the depreciation of theIndian rupee against the USdollar has resulted in a significant

increase in the cost of importedsteel melting scrap, a major inputin secondary steel production.Further, due to the rupeedepreciation, export orders havebeen cancelled or deferred, whichis another set-back for the steelindustry in north India.

Challenges to remaincompetitive in the flatsproducts market

High value flat products such ascold rolled coils and galvanizedcoils have better transport

durability as compared to longproducts. This makes it easier forprimary steel producers to shipthese products from their primarymanufacturing locations to globalconsumers. The long product unitscan benefit from proximity to endusers and provide an opportunityfor secondary steel players innorth India. The demand for

long products for infrastructureand capital projects is met bydownstream units in northIndia. These units focus on theproduction of TMT bars and wirerods, among others.

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16/2016

De-bottlenecking the steel sector innorth India

Opportunities

Infrastructure investmentsin north India to spur the

local steel demand

The government has announced

many mega-investment projects

in north India including the

prestigious US$100-billion Delhi-

Mumbai Industrial Corridor, slew

of export zones and industrial

parks across Rajasthan, Haryana

and western Uttar Pradesh.

These projects will continue to

drive sustained demand for long

steel across the northern states.

Regional steel suppliers need to

remain competitive on cost and

service to play a major role in theimplementation of these projects.

Automobile sector iscentered in north India

About 32 percent of the Indian

major automobile manufacturers

have strong presence in the north

India region including MarutiSuzuki, Hero MotoCorp, Honda

Motorcycle & Scooter, Honda

Cars, Bajaj Auto, Yamaha, TAFE,

Tata Motors, Ashok Leyland, and

Mahindra & Mahindra. Many auto-

component manufacturers too are

based in north India. This provide a

tremendous opportunity for Indian

auto-component manufacturers in

north India.

Challenges

Depreciating rupee andcompetitive import marketwill continue to impactsteel manufacturers innorth India

The Indian governments continued

push toward imposing import

duties on scrap has increased

cost of production for domestic

steel producers. Additionally,

the depreciating rupee will

continue to make imports of scrap

more expensive depressing the

secondary steel margin further.

The north Indian steel producers

will have to work on other aspects

apart from price to remain afloatin the market

Challenges in establishingnorth India as a hubfor production of high-value steel

High-value steel products typically

travel well and are packaged totravel over long distances. The

raw material transportation costs

make nonprimary steel producing

hubs less attractive for the

production of high-value steel. The

automobile and consumer goods

plants in north India continue to

purchase high-value flat products

from around the globe due tocompetitive pricing and excellent

travel characteristics.

Initiatives

Customer-centric sales andmarketing

As Indian steel companies expand,

they are increasingly facing

an overlap in their market and

product footprint. This coupled

with a lower demand growth has

led to increased price competitionand pressure on margins. In this

scenario, increased customer

centricity will differentiate the

high performers. Indian secondary

steel producers will have to

demonstrate higher customer

centricity to maintain business in

highly competitive north Indian

markets. The core customer baseof automobiles, consumer durables

and engineering has become more

demanding in terms of quality

and service levels. Firms will need

to deepen their understanding of

buyer values and create innovative

products and service offerings

targeted at different customer

segments. Capability to analyze

customer buying patterns will

enable the sales force to be more

proactive in the selling cycle.

Additionally, as customers become

more demanding and offering

complexity increases, firms will

need to embrace leading Sales

and Distribution practices from

consumer focused industries

such as FMCG & Pharma todifferentiate themselves from

their peers.


17/2017

Indian steel companies will needto:

1.Deepen their understandingof buyer values and createdifferentiated products and serviceofferingsThe understanding of the endcustomer buyer values would needto go beyond the basic knowledgeof grade and volume and intothe realm of product usage andidentification of critical attributes.Indian steel companies couldleverage this knowledge to createa differentiated value propositiontargeted at the appropriatecustomer segment. In some cases,

they could bundle the productwith a value-added service tocreate a differentiated offering.

2.Embrace leading sales anddistribution practicesTraditionally Indian steelcompanies have been laggardswhen it comes to adaptingleading sales and distribution

practices from consumer-focusedcompanies. As the emphasis onselling their products increases,Indian steel companies willneed to institutionalize leadingpractices and become morecustomer-centric. This wouldinclude adapting aspects such ascustomer account management,effective sales call processes,structured market workingacross the business-to-business,business-to-consumer andbusiness-to customers.

3.Enhance pricing capabilitiesIndian steel companies will needto align their pricing strategy withthe changing market conditionsand customer segments.Organizations need to incorporate

leading practices to maximizepocket margins and reducerevenue leakage including:

Aligning pricing with customervalue: Understand the valuedelivered to customers or theircustomers end customers,and capture a part of thevalue-in-use for customers viapricing. For instance, if a coilwith customized thickness orwidth results in a five percentreduction in manufacturingcosts, steel players price thecustom SKU to share thisbenefit along with additionalcost incurred in rolling thesame. Executing this pricingdecision is challenging as itrequires understanding thecriticality of product attributes

to the end customer andcost elements across thevalue chain.

Improve pricing disciplineto prevent margin leakage:Indian steel companies needto balance price flexibility andmonitoring to control off-invoice leakages. Companies

can enhance pricing disciplineby adhering to standardprice-setting models mappedto the segmented strategiesand streamlining the invoice-to-payment process. This istypically done by using pricewaterfall approach.

Differentiated supply

chains

Firms will also need to develop

nimble supply chains to

minimize working capital and

improve customer service. Firms

will need to reevaluate their

manufacturing strategies and

adopt a differentiated approach

for specific segments. At the

same time, they will need to

build flexibility in their supply

chains, for instance, by pushing

differentiation further down the

supply chain and adopting

Finish-to-Order approaches in

order to balance inventory and

customer responsiveness.

As customers get more

sophisticated and demanding,

Indian steel companies will need tomove away from the one-size-fits-

all approach and customize their

service levels and supply chains by

customer segments.

Historically, when the Indian steel

market was a sellers market,

Indian steel companies would

ration out the production anddeploy a make-to-order (MTO)

strategy across products and

customer segments. Going forward,

companies will need to reevaluate

their manufacturing strategies

and adopt a differentiated

approach for specific segments.

At the same time, they will need

to build flexibility in their supply

chains; for instance, by pushing

differentiation further down the

supply chain and adopting finish-

to-order approaches in order to

balance inventory and customer

responsiveness. Indian steel

companies also would need to:

1. Segment customers and

products by service levels and alignmanufacturing strategy and supply

chain to the customer segments

Indian steel companies need to

do this in three steps. In the first

step, they need to define customer

segments based on size and

profitability, service levels and

product specificity. Post this, they

need to define the manufacturingstrategy and supply chain for each

customer segment.


18/20018

2.Implement integrated order

management

To support order promising

to large, demanding and

sophisticated customers based

on capable-to-promise (CTP)

and available-to-promise (ATP)

capabilities rather than on anad hoc basis. This will enable

the companies to balance

responsiveness and inventory

carrying cost in lower margin,

over-supplied markets.

3. Deploy improved demand

forecasting and sales and

operations planning (S&OP)techniques

Indian steel companies will

need to improve their demand

forecasting techniques as an

over-supplied market will enable

their customers to demand lower

lead times. Further, the companies

will need to develop the ability to

assign the right order to the right

plant as several of the Indian steel

companies have already moved to

a multi-plant and multi-location

environment. As an example, a

leading Indian steel company

implemented an advanced

optimization solution that allows

it to block capacity in an optimal

manner across plants based on

demand forecasts. The solutionthen confirms the same on the

receipt of orders. This process

allows the enterprise to maximize

the overall contribution for a given

demand basket.

Focus on reductionof raw material andmanufacturing costs

Firms with large scale operations

can look at elimination of raw

material risks through backward

integration. Few large north Indiansteel players have built upstream

facilities in iron ore rich states.

Similarly, larger steel players

can also look at investments in

hydro-electric power projects to

ensure stable supply of power for

operations. Smaller players will

have to explore consortium based

approaches for optimizingtheir costs.

Human capitalmanagement

India steel companies ability

to manage and leverage its

human capital will become a

key differentiator and will play

a key role in enabling their growth

aspirations. We believe Indian

steel companies will need

to address the 4 Ds of

managing talent.

1. Define talent required by

identifying and articulating

the organizations critical

talent needs for each areaof the business, in particular

for the mission-critical

workforces. This entails

defining the specific technical

and behavioral competencies

by workforce and level that

will be required to execute

on the organizations chosen

strategy.

2. Discover talent by sourcing

and selecting the best talent

to propel the execution of

an organizations chosenstrategy. Organizations will

need to innovate to find the

best talent for their needs. For

example, as steel marketing

organizations become more

customer centricthey could

benefit from sourcing talent

from more traditionally

consumer focused industrieslike consumer durables,

automotive and durables.

3. Develop talent by continuously

developing individual and

collective skills, knowledge,

and behaviors to expand the

organizations capabilities

and its strategic advantage.

In fact, developing the next

generation of leadership

is one of the foremost

challenges facing Indian steel

companies today.

4. Deploy talent by building the

capability to put the right

talent in the right place at

the right time to allow theorganization to execute its

current strategy and prepare

for future challenges and


19/2019

opportunities. For example,

organizations need an active

program of performance and

career management to rotate

high potential executives

between specific functions to

build a cadre of strong future

business leaders.

In summary, in order to attract

and retain the best talent the steel

companies would require to:

Develop a long-range plan in

line with the growth objectives

Institute programs to attract

talent and retain key talent

Up-skill existing resources in

order to stay relevant in the

changing marketplace

Strengthen the overall

employee value proposition

Build an HR work-force thatfocuses on Strategic and

Performance Enhancement

and less on Transactional and

Administrative activities

About CIIThe Confederation of Indian

Industry (CII) works to create and

sustain an environment conducive

to the development of India,

partnering industry, Government,

and civil society, through advisory

and consultative processes.

CII is a non-government, not-

for-profit, industry-led and

industry-managed organization,

playing a proactive role in Indias

development process. Founded

over 118 years ago, Indiaspremier business association has

over 7100 members, from the

private as well as public sectors,

including SMEs and MNCs, and

an indirect membership of over

90,000 enterprises from around

257 national and regional sectoral

industry bodies.

CII charts change by working

closely with Government on policy

issues, interfacing with thought

leaders, and enhancing efficiency,

competitiveness and business

opportunities for industry through

a range of specialized services and

strategic global linkages. It also

provides a platform for consensus-

building and networking onkey issues.

Extending its agenda beyond

business, CII assists industry to

identify and execute corporate

citizenship programmes.

Partnerships with civil society

organizations carry forward

corporate initiatives for integrated

and inclusive developmentacross diverse domains including

affirmative action, healthcare,

education, livelihood, diversity

management, skill development,

empowerment of women, and

water, to name a few.

The CII Theme for 2013-14

is Accelerating EconomicGrowth through Innovation,

Transformation, Inclusion and

Governance. Towards this, CII

advocacy will accord top priority to

stepping up the growth trajectory

of the nation, while retaining a

strong focus on accountability,

transparency and measurement

in the corporate and social eco-

system, building a knowledge

economy, and broad-basing

development to help deliver the

fruits of progress to all.

With 63 offices, including

10 Centres of Excellence, in

India, and 7 overseas offices in

Australia, China, Egypt, France,

Singapore, UK, and USA, as well asinstitutional partnerships with 224

counterpart organizations in 90

countries, CII serves as a reference

point for Indian industry and the

international business community.


20/20

About Accenture

Accenture is a global management

consulting, technology services and

outsourcing company, with approximately

275,000 people serving clients in

more than 120 countries. Combining

unparalleled experience, comprehensive

capabilities across all industries andbusiness functions, and extensive research

on the worlds most successful companies,

Accenture collaborates with clients to

help them become high-performance

businesses and governments. The company

generated net revenues of US$28.6 billion

for the fiscal year ended Aug. 31, 2013. Its

home page is www.accenture.com.

Legal disclaimer

This Report has been published for information and illustrative purposes only and is

not intended to serve as advice of any nature whatsoever. The information contained

and the references made in this Report are in good faith, neither Accenture nor any its

directors, agents or employees give any warranty of accuracy (whether expressed or

implied), nor accepts any liability as a result of reliance upon the content. This Report

also contains certain information available in public domain, created and maintained

by private and public organizations. Accenture does not control or guarantee the

accuracy, relevance, timelines or completeness of such information.

Confederation of Indian Industry (CII) Disclaimer

Copyright 2013 by Confederation of Indian Industry (CII), All rights reserved. No part

of this publication may be reproduced, stored in, or introduced into a retrieval system,

or transmitted in any form or by any means (electronic, mechanical, photocopying,

recording or otherwise), without the prior written permission of the copyright owner.

CII has made every effort to ensure the accuracy of information presented in thisdocument. However, neither CII nor any of its office bearers or analysts or employees

can be held responsible for any financial consequences arising out of the use of

information provided herein. However, in case of any discrepancy, error, etc., same may

About Accentures Steelpractice

Accenture works with the leading

international steel players as well as

Indian steel companies on business

challenges ranging from Operations

excellence, Capital Projects, Sales &

Marketing to Post Merger Integration,

Strategy, Talent & Organization and

Systems Design and Implementation.

In India, Accentures steel practice has

advised more than 70% of the Top 15

steel companies in India.

Authors

Deepak Malkani

Managing PartnerResources Operating

Group, Accenture India

[email protected]

Rakesh Surana

Managing DirectorCapital ProjectsPractice, Accenture India

[email protected]

Samir Verma

Senior ManagerResources Operating

Group, Accenture India

[email protected]

Copyright 2013 AccentureAll rights reserved.

Accenture, its logo, andHigh Performance Deli ered

pov steel development online

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