Presented By-

PGDM Sec. 5 Abhijeet Agarwal

2017-19 Mayank Mundra
Mainak Saha
INTRODUCTION
 The Indian iron and steel industry is nearly a century old, with Tata Iron &
Steel Co. as the first integrated steel plant to be set up in 1907.
 According to the data released by Department of Industrial Policy and
Promotion (DIPP), the Indian metallurgical industries attracted Foreign
Direct Investments (FDI) to the tune of US $10.33 billion in the period
April 2000–March 2017.
 Indian was the world’s third-largest steel producer in 2016.
 Real consumption of steel during FY16 was estimated at 81.25 million
tonnes.
 Consumption of real steel has grew at CAGR of 5.76% during FY08-FY16.
 The total finished steel production in FY17 stood at 83.10 MT while 6.10
million tonnes of finished steel was imported into India.
 As of March 2017, the capacity utilization of steel producers is set to
increase with strong export demand and signs of revival in domestic sales.
Companies like JSW and Essar Steel have experienced a sharp increase in
steel manufacturing in the last 2 months
PRODUCT OF THE SECTOR

Steel

Form Composition End use

Liquid Crude Finished Silicon Structral Construction

steel steel Steel Alloy Stainless High speed Rail Steel
electrical steel Steel

Ingots Semis Flat Non-flat

 India's crude steel market
MARKET SHARE share by Production- FY 17
14.80%
COMPANYS MARKET
CAP. (IN Cr SAIL
11.72%
Tata steel 61526.53 TATA
JSW steel 56442.10 69.45% 4.04% RINIL
SAIL 23440.73 OTHERS
Jindal (Hissar) 4047.46
India's finished steel market
Share by production- FY17
11.47%
SAIL
10.84%
TATA
53.96% 3.05% RINIL
OTHERS
GROWTH OF THE INDUSTRY
 The steel sector contributes over 2 per cent to the GDP. With high GDP
growth rate in India and government focusing more on infrastructure
the requirement of steel is expected to rise to 104MT. The National
Steel Policy 2017 has also aim to increase demand for steel in the future.

Market value of the Indian steel sector

(US$ billion)
CAGR 18.7%
100
80
60
40 87.9 95.3
81
46.8 57.8
20 30.1 43 36.5
0
FY07 FY08 FY09 FY10 FY11 FY14 FY15 FY16
PEST ANALYSIS-
 POLITICAL FACTOR-
 The government investments in infrastructure such as rail, highways, dams,
power plants and ports are critical prime movers for steel demand.
 Environmental norms imposed by the government from time to time have a
significant impact, estimated to be around 15% of the project cost.
 Government of India has approved the National Steel Policy (NSP) 2017,
NSP 2017 targets 300 million tonnes (MT) steel-making capacity and 160 kg
per capita steel consumption by 2030.
 The Ministry of Steel is facilitating setting up of an industry driven Steel
Research and Technology Mission of India (SRTMI) in association with the
public and private sector at an initial corpus of Rs 200 crore (US$ 30
million).
ECONOMIC FACTOR
 The steel sector contributes over 2 per cent to the GDP of the nation and
provides 20 lakh jobs in the country.
 During April-January 2017, crude steel production in India grew by 7 per cent
YoY and stood at 39.98 MT.
 The Government of India has allowed 100 per cent foreign direct investment
(FDI) in the steel sector.

SOCIAL FACTOR-
 Steel Industry (company) shall constantly strive to improve the quality of life of
the communities it serves through excellence in all facets of its activities.
 In the company like Tata Steel, Importance will be given to continuous training
for promoting safety consciousness among all employees
 Companies like SAIL & Tata Steel believe that the loyalty and commitment of its
employees depends upon the quality of life they are offered at work and at
home.
TECHNOLOGY FACTOR-
 Steel companies will be encouraged to have strategic joint ventures for
production and development of technologically more advanced products.
 Ministry will encourage the research institutes within the country to develop
less resource intensive and less energy intensive steelmaking technologies as
well as new products.

ENVIRONMENTAL FACTOR-
 Set sound environmental objectives and targets, and integrate a process of
review, as essential elements of corporate management.
 Install, maintain and operate facilities to comply with applicable
Environmental Laws, statutes and other regulations.
 Conserve natural resources and energy by constantly seeking to reduce
consumption and wastage.
 Minimize process waste, and promote the recovery and recycling of materials
in order to control pollution.
LEGAL FACTOR-
 Government is introducing the various rules and regulations of this
particular industry.
 The government is about to pay more attention in the health policies of the
employees working in the steel industry.
 Special health incentives and rules are introduced in the steel industry.
PORTER’S FIVE FORCES
THREAT OF NEW
ENTRY-
-HIGH CAPITAL
REQUIREMENT
-HIGH ECONOMIES OF
SCALE
-FAVORABLE GOVT
POLICY
-LOW PRODUCT
DIFFERENTIATION

SUPPLIER’S
POWER- COMPETITVE
RIVALRY-
-LOW BUYER’S POWER-
DIFFERENTIATION OF -SLOW INDUSTRY
INPUTS GROWTH -LOW BARGAINING
-HIGH BRAND LEVERAGE
-HIGH VOLUME
REQUIRED IDENTITY -HIGH BUYER
-High exit barrier CONCENTRATION
-HIGH COST OF RAW
MATERIAL

THREAT OF
SUBSTITUTES-
-HIGH SWITCHING
COST AND HIGH
PERFORMANCE MEDIUM
TRADEOFF OF
SUBSTITUTES
-LOW BUYER
HIGH
INCLINATION TO
SUBSTITUTE. LOW
FUTURE TREND OF THE INDUSTRY

Automotives Capital good Infrastructure

• The automotives • The capital goods • The infrastructure
industry is forecasted sector accounts for 11% sector accounts for 9
to grow in size by US$ of steel consumption per cent of steel
74 billion in 2015 to and expected to consumption and
US$ 260-300 billion by increase 14/15 per cent expected to increase
2020. by 2025-26 and market 11 per cent by 2025-26.
• In 2017, Indian share
• Due to such a huge
automotives sector is • Corporate India’s capex
estimated to be 3rd is expected to grow and
investment in
largest automotives generate greater infrastructure the
market, by volume demand for steel demand for long steel
products would
increase in the years
ahead.
 Airports Railways Rural India
• In 2016, passenger • Gauge conversion, • Rural India is expected
traffic at Indian airport setting up of new lines to reach per capita
stood at 223.61 million and electrification consumption of 12.11 kg
and number of would drive steel to 14 kg for finished
operational airport demand steel by 2020.
stood at 95 in FY 16. • In January 2017, Crisil • Policies like Food for
• Estimated steel estimated that the Work Programme
consumption in airport railways sector could (FWP) and Indira Awaas
building is likely to create business Yojana, Pradhan Mantri
grow more than 20 per opportunities worth Gram Sadak Yojana are
cent over next few years US$ 99.65 billion driving growing
demand for
construction steel in
rural India.
 NATIONAL STEEL POLICY 2017
a) Vision: To create a technologically advanced and globally
competitive steel industry that promotes economic growth.
b) Mission: Provide environment for attaining –
 Self-sufficiency in steel production by providing policy
support & guidance to private manufacturers, MSME steel
producers, CPSEs & encourage adequate capacity additions.
 Development of globally competitive steel manufacturing
capabilities
 Cost-efficient production and domestic availability of iron
ore, coking coal and natural gas.
 Facilitate investment in overseas asset acquisitions of raw
materials.
 Enhance domestic steel demand.
c) Objectives: The National Steel Policy aims at achieving the
following objectives –
 Build a globally competitive industry
 Increase per Capita Steel Consumption to 160 kgs by 2030-31
 To domestically meet entire demand of high grade automotive
steel, electrical steel, special steels and alloys for strategic
applications by 2030-31
 Increase domestic availability of washed coking coal so as to reduce
import dependence on coking coal from ~85% to ~65% by 2030-31
 To have a wider presence globally in value added/ high grade steel
 Encourage industry to be a world leader in energy efficient steel
production in an environmentally sustainable manner.
 Establish domestic industry as a cost-effective and quality steel
producer
 Attain global standards in Industrial Safety and Health
 To substantially reduce the carbon foot-print of the steel industry
THANK YOU