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Major Project Report

Comparative Analysis of Public


and
Private Sector Steel Industries in India

By

Gaurav Tripathi
409

In Partial Fulfillment for the award of the degree


Post Graduate Diploma In Management
Batch – 2016-18

Specialization: Finance and Business Analytics

New Delhi Institute of Management

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New Delhi Institute of Management
50 (B&C), 60, Tughlakabad Institutional Area, New Delhi-110062
Website : www.ndimdelhi.org

Major Project Report

Comparative Analysis of Public


and
Private Sector Steel Industries in India

Under the supervision

of

Prof. S.S. Khullar

Submitted By

Gaurav Tripathi
409

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DECLARATION

I ………..Gaurav Tripathi………….. student of New Delhi Institute of


Management ……..Batch(2016-18) declare that every part of the Project Report
………”Comparative Analysis of Public and Private Sector Steel Industries
in India with special reference to Tata Steel and Sail”………… submitted by
me is original.

I was in regular contact with my faculty guide and contacted many times for
discussing the project through phone, email or visits.

Date of project submission: ______________

Signature of the Student

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CERTIFICATE OF AUTHENTICITY

Faculty Mentor’s Comments:


___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
______________________________

<<Signature of Faculty guide>>


<<Name>>

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CONTENTS

1) TITLE

2) INTRODUCTION

a) World Steel Industry : An Overview


b) Indian steel Industry
c) What is Private limited and Public limited
d) Private sector companies in India
e) Public sector companies in India

3) REVIEW OF LITERATURE

4) OBJECTIVES

5) RESEARCH METHODOLOGY

a) Research design
b) Data collection method

6) DATA ANALYSIS

Measures taken by Indian government to improve the industry.

National Steel Policy, 2017.

7) FINDINGS

8) CONCLUSION

9) BIBLIOGRAPHY

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INTRODUCTION

World Steel industry: An overview

Steel, the recycled material is one of the top products in the manufacturing
sector of the world.

The Asian countries have their respective dominance in the production of


the steel all over the world. India being one among the fastest growing
economies of the world has been considered as one of the potential global steel
hub internationally. Over the years, particularly after the adoption of the
liberalization policies all over the world, the World steel industry is growing
very fast.

Steel Industry is a booming industry in the whole world. The increasing


demand for it was mainly generated by the development projects that have been
going on along the world, especially the infrastructural works and real estate
projects that has been on the boom around the developing countries. Steel
Industry was dominated by the United Sates of America but this scenario is
changing with a rapid pace with the Indian steel companies on an acquisition
spree.

It has been observed that Steel Industry has grown tremendously in the last
one and a half decade with a strong financial condition. The increasing needs of
steel by the developing countries for its infrastructural projects have pushed the
companies in this industry near their operative capacity.

The most significant growth that can be seen in the Steel Industry has been
observed during the period 1960 to 1974 when the consumption of steel around
the whole world doubled. Between these years, the rate at which the Steel
Industry grew has been recorded to be 5.5 %. This roaring market saw a phase
of deceleration from the year 1975 which continued till 1982. After this period,
the continuous fall slowed down and again started its upward movement from
the early 1990s.

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Steel Industry is becoming more and more competitive with every passing
day. During the period 1960s to late 1980s, the steel market used to be
dominated by OECD (Organization for Economic Cooperation and
Development) countries. But with the fast emergence of developing countries
like China, India and South Korea in this sector has led to slipping market share
of OECD countries. The balance of trade line is also tilting towards these
countries.

The main demand creators for Steel Industry are Automobile industry,
Construction Industry, Infrastructure Industry, Oil and Gas Industry, and
Container Industry.
New innovations are also taking place in Steel Industry for cost
minimization and at the same time production maximization. Some of the
cutting edge technologies that are being implemented in this industry are thin-
slab casting, making of steel through the use of electric furnace, vacuum
degassing, etc.

In the year 2004, the global steel production has made a record level by
crossing the 1000 million tones. Among the top producers in the steel
production, China ranked 1 in the world.

Indian Steel Industry

Steel has played a vital role in the development of modern human civilization.
Steel plays a significant role especially in the development of developing
economy. Per capita consumption of steel is used as an indicator of socio-
economic development of the country as well as an indicator of standard of
living of its people. Economic growth of India depends upon the growth of the
Indian steel industry. Steel continues to be used in traditional sectors such as
construction, housing and ground transportation, special steels has been
increasingly used in engineering industries such as power generation,
petrochemicals and fertilisers. India occupies a central position on the global
steel map, with the establishment of new state-of-the-art steel mills, acquisition
of global scale capacities by players, continuous modernization and up
gradation of older plants, improving energy efficiency and backward integration
into global raw material sources.

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India is the second largest crude steel producer in the world. In FY17 crude steel
production in India was 97.4 metric tonnes (MT), with the total crude steel
production growing at a CAGR of 5.5% over the last 6 years. India’s steel
production is expected to increase from 97.42 MT in FY17 to 128.6 MT by
2021. The Government of India has allowed 100 per cent foreign direct
investment (FDI) in the steel sector under the automatic route. The steel sector
contributes over 2% to the GDP of the nation and provides 20 lakh jobs in the
country. During April-December 2017, crude steel and finished steel production
in India stood at 84.4 MT and 88.5 MT respectively.

India was the only major steel consuming market globally, which saw a demand
escalation. However, the country suffered from an unprecedented inflow of steel
imports from China, Japan, South Korea, and Russia. South Korea and Japan
benefitted due to the free trade agreement with India. Steel industry derives its
demand from other important sectors like infrastructure, aviation, engineering,
construction, automobile, pipes and tubes etc. With the Indian economy poised
for its next wave of growth under the reforms being unleashed in the last one
year, there lies tremendous opportunity for the Indian steel industry to prosper
and grow exponentially.

HISTORY OF STEEL
Steel was discovered by the Chinese under the reign of Han dynasty in 202 BC
till 220 AD. Prior to steel, iron was a very popular metal and it was used all over
the globe. Even the time period of around 2 to 3 thousand years before Christ is
termed as Iron Age as iron was vastly used in that period in each and every part
of life. But, with the change in time and technology, people were able to find an
even stronger and harder material than iron that was steel. Using iron had some
disadvantages but this alloy of iron and carbon fulfilled all that iron couldn’t do.
The Chinese people invented steel as it was harder than iron and it could serve
better if it is used in making weapons. One legend says that the sword of the
first Han emperor was made of steel only. From China, the process of making
steel from iron spread to its south and reached India. High quality steel was
being produced in southern India in as early as 300 BC. Most of the steel then
was exported from Asia only. Around 9th century AD, the smiths in the Middle
East developed techniques to produce sharp and flexible steel blades. In the
17th century, smiths in Europe came to know about a new process of

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cementation to produce steel. Also, other new and improved technologies were
gradually developed and steel soon became the key factor on which most of the
economies of the world started depending.

Evolution of the Indian Steel Sector

 1907-18
Production of steel started in India (TISCO was setup in 1907)
IISC was setup in 1918 to compete with TISCO.

 1923-48
Mysore Iron and Steel Company was setup in 1923.
According to the new Industrial Policy Statement (1948), new ventures were
only undertaken by the central government.

 1954-64
Hindustan Steel Limited and Bokaro Steel Limited were setup in 1954 and 1964
respectively.
In the early 90s, the public sector dominated steel production.
Private players were in downstream production mainly producing finished steel
using crude steel products.

 1973-1992
SAIL was created in 1973 as a holding company to oversee most of India's iron
and steel production.
In 1989, SAIL acquired Vivesvata Iron and Steel Ltd.
In 1993, the government set plans in motion to partially privatise SAIL.

 1993-2014
Foreign players began entering the Indian steel market.
No license requirement for capacity creation.
Imposition of export duty on iron ore, to focus more on catering growing
domestic demand.
Decontrol of domestic steel prices.
Launch of Scheme for promotion of Research and Development in Iron and
Steel sector.

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 2015-2017
In 2017, India ranked as the 3nd largest crude steel producer in the world,
leaving behind United States.
During FY17, 8.24 MT of steel was exported from India.

Characteristics of Indian Steel Industry

 The industry is dominated by large integrated players like SAIL and Tata
Steel, RINL, Jindal Steel, JSW in steel.

 The industry’s fortunes depend on general global economic conditions


but it is particularly sensitive to the performance of the automotive,
construction, durable equipment, and other industrial products industries.
The trend in the last few years in steel prices shows that the steel industry
is cyclical.

 The global (and Indian) steel industry also suffers from cycles of over
capacity and shortages. This too leads to cyclically falling/rising prices
and industry losses/profits.

 Integrated steel producers (ISPs)—Tata Steel and SAIL—face high fixed


costs, and thus in a downturn, the percentage profit margins come down
significantly. The downturn phases have witnessed depressed prices at the
firm level and widespread operating losses.

 Economic logic differs for mini mills that can vary output more quickly
when prices fall.

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CONTRIBUTION OF COUNTRIES TO GLOBAL STEEL INDUSTRY

World crude steel production stood at 1691.2 million tonnes during January -
December 2017, an increase of 5.29% over same period of 2016 as per data
released by the World Steel Association.

Chinese crude steel production reached 831.7 million tonnes during this period,
a growth of 5.69% over same period of 2016. China remained the largest crude
steel producer in the world, accounting for 72% of Asian and 49% of world
crude steel production during January - December 2017.

India was the 3rd largest crude steel producer during 2017 and recorded a
production of 101.4 million tonnes with growth of 6.18% over 2016, accounting
for 9% of Asian and 6% of world crude steel production during January -
December 2017.

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MARKET VALUE OF INDIAN STEEL SECTOR

Over 2007-17(E), the sector’s market value is estimated to have posted a strong
CAGR of 12.76 percent.

MARKET SHARE

 As of FY17, SAIL dominated India’s steel sector, with the company


accounting for 11.40 percent of country’s finished goods production and
14.59 percent of country’s crude steel production. During FY17, Tata Steel
accounted for 11.46 percent of finished steel production and 12.46 percent of
country’s crude steel production.

 In January 2017, Indian government inaugurated Universal Rail Mill (URM)


worth US$ 178.49 million at SAIL’s Bhilai steel plant. The production of the
world’s longest single rail of 130 meters from the new URM also
commenced in the new mill.

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India’s crude steel market share by production

India’s finished steel market share by production

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What is Private Limited and Public limited?

Now let’s first understand the meaning and difference between Public
Sector Company and Private Sector Company. The term “Private Company”
refers to ownership of a business company in two different ways— First, referring
to ownership by non-governmental organizations; and second, referring to
ownership of the company's stock by a relatively small number of holders who
do not trade the stock publicly on the stock market.

In countries with public trading markets, a privately held business company


is generally taken to mean one whose ownership shares or interests are not publicly
traded. Often, privately held companies are owned by the company founders

and/or their families and heirs or by a small group of investors. Sometimes


employees also hold shares of private companies. Most small businesses are
privately held.

Private companies may be called corporations, limited liability companies, partnerships,


sole proprietorships, business trusts, or other names, depending on where and how

they are organized.

The term "Public Company" thus refers to a government-owned corporations. and


the ownership of assets and interest is shared by people. Normally, the shares of
a public company are owned by many investors. However, a company with many
shareholders is not necessarily a public company. The shares of a public
company are often traded on a stock exchange. The value or "size" of a public
company is called its market capitalization

It is able to raise funds and capital through the sale of its securities. This is
the reason why public corporations are so important: prior to their existence, it
was very difficult to obtain large amounts of capital for private enterprises. In
addition to being able to easily raise capital, public companies may issue their
securities as compensation for those that provide services to the company, such
as their directors, officers, and employees.

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Private Sector companies in India

The private sector of the Steel Industry is currently playing an important


and dominant role in production and growth of steel industry in the country. The
private sector units consist of major steel producers in one hand and relatively
smaller & medium units such as Sponge iron plants, Re-rolling mills, Electric
Arc Furnaces and Induction Furnaces on the other. They not only play an
important role in production of primary and secondary steel, but also contribute
substantial value addition in terms of quality, innovation and cost effectiveness.

TATA Steel:

Tata Steel is India's largest integrated private sector steel company.


Established in 1907, The Company is backward integrated with owned iron ore
mines and collieries. Tata Steel has an integrated steel plant, with an annual
crude steel making capacity of 5 million tonne, located at Jamshedpur,
Jharkhand.

The steel works is situated at Jamshedpur in the state of Jharkhand, India.


The factory covers 800 hectares of land. West Bokaro sub division in
Hazaribagh district overs 2000 hectares of land in which mining and coal
beneficiation activities are performed. Jharia Division occupies 2500 hectares of
land for its industrial, mining and domestic activities in the district of Dhanbad
both in the state of Jharkhand. The iron ore and dolomite mines are located at
Noamundi in the state of Jharkhand and at Joda, Kalamati, Khondbond and
Gomardih in the state of Orissa.

Tata Steel Group is the 11th Largest Global Steel Producer with an annual
crude steel delivery of 23.88 Million tonnes globally in FY17; having
manufacturing operations in 26 countries and services in over 150 countries.
Tata Steel's annual crude steel capacity across Indian operations is nearly 13.00
MTPA and a turnover of US $ 7889 Mn in FY 2017. The Company also set up
second Greenfield steel plant in the eastern state of Odisha; commissioning the
first phase of 3 MTPA capacity in 2016. Tata Steel Kalinganagar plant has

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started its commercial production in June 2016. Tata Steel was awarded the
PM's Trophy for best integrated steel plant for the year 2014-15 and 2015-16.
Tata Steel has also been awarded "World's Most Ethical Companies" for the
year 2017, under the category Metals, Minerals and Mining by Ethisphere
Institute, USA.

Areas of business

The company produces crude steel and basic steel products, and makes steel for
building and construction applications through Tata BlueScope Steel, its joint
venture with Australia's BlueScope Steel.

Tata Steel has also set up joint ventures for the development of limestone mines
in Thailand, the procurement of low-ash coal from Australia and coking coal
from Mozambique, and the setting up of a deep-sea port in Orissa in India. The
company is exploring opportunities in the titanium dioxide business in Tamil
Nadu, India, and will soon be producing high carbon ferrochrome from its plant
in South Africa.

Joint ventures, associates and subsidiaries

Tata Steel has numerous joint ventures and subsidiaries. Among them are:

 Tata Steel Europe


 NatSteel Holdings

 Tata Steel Thailand

 Tinplate Company of India

 Tayo Rolls

 Tata Ryerson

 Tata Refractories

 Tata Sponge Iron

 Tata Metaliks

 Tata Pigments

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 TM International Logistics

 Mjunction services

 Jamshedpur Utility and Service Company.

 Indian Steel and Wire Products

 Tata BlueScope Steel

 Dharma Port Company

 Hooghly Met Coke and Power Company

 Lanka Special Steel

 Sila Eastern Company

 Tata NYK

ESSAR STEEL LTD.

Essar Steel India is one of India's leading integrated steel producers with an
annual production capacity of 10 MTPA supported by a 20 MTPA pellet facility.
The state-of-the-art facilities comprise iron making, steel making and
downstream facilities, including a cold rolling mill, a galvanizing and pre-
coated facility, a steel-processing facility, an extra-wide plate mill and 3 pipe
mills with coating facilities. Essar is the largest pellet producer in India with a
capacity of 14 million tons and another six million tons pellet capacity under
completion.

Essar Steel has wide range of flat steel products that include Hot Rolled, Cold
Rolled, Galvanized, Colour-Coated products, extra wide plates and pipes. It
caters to a wide section of industrial segments that include auto, ship building,
white and yellow goods, general engineering, power plants, hydrocarbon
industry, pipe making, defence among others. Essar Steel is the leading supplier
of steel to the Indian Defence sector with grades like DMR 249A, ARMAPRO
500, DMR 1700, CDA99, SPADE, Jackal etc.

JSW STEEL LTD.

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JSW Steel is one of India's leading integrated steel manufacturers with a
capacity of 18 MTPA. It is one of the fastest growing companies in India with a
footprint in over 100 countries. With state-of-the-art manufacturing facilities
located in Karnataka, Tamil Nadu and Maharashtra, it is recognized for its
innovation and quality.
JSW offers a wide gamut of steel products that includes Hot Rolled, Cold
Rolled, Bare & Pre-painted Galvanized & Galvalume®, TMT Rebars, Wire
Rods and Special Steel. JSW Steel continues to enhance its capabilities to meet
the rapidly changing global market needs. JSW has entered into technological
collaboration with JFE Steel Corp, Japan to manufacture high strength and
advanced high strength steel for the automobile sector. JSW Steel has also
entered into a joint venture with Marubeni-Itochu Steel Inc. Tokyo, to set up a
state-of-the-art steel processing centres. To strengthen its global network, the
Company has also acquired a Pipe and Plate making steel mill in Baytown,
Texas in USA. By end of next decade, JSW Steel aims to produce 40 million
tons of steel annually.

JINDAL STEEL AND POWER LTD. (JSPL)

Jindal Steel and Power Limited is one of India's Primary & Integrated Steel
producers and largest business conglomerates with significant presence in core
infrastructure sectors including steel, power and mining.

Under the 'Make in India' Vision, Jindal Steel and Power Ltd. (JSPL) has
successfully completed Angul Greenfield project with installation of a 4 Million
Tonne Per Annum (MTPA) Blast Furnace, the largest ever built in India. The 2
Million Tonne DRI Plant is fuelled by World's largest Coal Gasification Plant to
produce Syngas from swadeshi high ash coal. With a 5 MTPA Steel Melting
Shop, Angul Steel Complex also comprises of a 1.2 MTPA Plate Mill
manufacturing India's widest plates of up to 5 metre width and 1.4 MTPA Bar
Mill produces a wide range of Jindal Panther TMT Rebar’s.

JSPL's Product Range: From the widest flat products to a whole range of long
products, JSPL's offer a product portfolio that caters to markets across the steel
value chain.

JINDAL STAINLESS STEEL (JSL)

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Jindal Stainless Limited (JSL), is one of the largest integrated manufacturers of
stainless steel in India with a capacity of 1.00 MTPA. The Jajpur plant is
capable of producing unique and wide range of products both in terms of grades
and dimensions. Hot Rolled Plates and Coils of 1650mm width and minimum
thickness of 2mm in all grades of stainless steel can be produced as per the
customers demand. Also, Cold Rolled Coils of minimum thickness of 0.3mm
with maximum width of 1650mm can be achieved based on customers' need.

JINDAL STAINLESS (HISAR) LTD.

Jindal Stainless (Hisar) Limited (JSHL) has a fully integrated stainless steel
plant with a capacity of 0.78 MTPA. It is also the world's largest producer of
stainless steel strips for razor blades and India's largest producer of coin blanks,
serving the needs of India and international mints. JSHL's specialty product
division caters to the high-end precision and specialty stainless steel
requirements of reputed Indian and International customers. The product range
includes Slabs & Blooms, Hot Rolled Coils, Strips, Plates, Coin Blanks,
Precision Strips and Cold Rolled Coils.

The other major Private steel companies are

 JISCO.
 Saw Pipes.
 Uttam Steels Ltd.
 Mukand Ltd.
 Mahindra Ugine Steel Company Ltd.
 Usha Ispat Ltd.
 Kalyani Steel Ltd
 Electro Steel Castings Ltd.
 Sesa Goa Ltd.
 NMDC.
 Lloyds SteeI Industries Ltd.
 Electrosteel Limited.

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Public Sector companies in India

STEEL AUTHORITY OF INDIA LIMITED (SAIL)

Steel Authority of India Limited (SAIL) is the leading steel-making


company in India. It is a fully integrated iron and steel maker, producing both
basic and special steels for domestic construction, engineering, power, railway,
automotive and defence industries and for sale in export markets.

The Government of India owns about 86% of SAIL's equity and retains
voting control of the Company. However, SAIL, by virtue of its ‘Navratna’
status, enjoys significant operational and financial autonomy

Ranked amongst the top ten public sector companies in India in terms of
turnover, SAIL manufactures and sells a broad range of steel products, including
hot and cold rolled sheets and coils, galvanised sheets, electrical sheets,
structural, railway products, plates, bars and rods, stainless steel and other alloy
steels. SAIL produces iron and steel at five integrated plants and three special
steel plants, located principally in the eastern and central regions of India and
situated close to domestic sources of raw materials, including the Company's
iron ore, limestone and dolomite mines. The company has the distinction of
being India’s largest producer of iron ore and of having the country’s second
largest mines network. This gives SAIL a competitive edge in terms of captive
availability of iron ore, limestone, and dolomite which are inputs for steel
making.

SAIL's wide range of long and flat steel products is much in demand in the
domestic as well as the international market. This vital responsibility is carried
out by SAIL's own Central Marketing Organisation (CMO) and the
International Trade Division. CMO encompasses a wide network of 34 branch
offices and 54 stockyards located in major cities and towns throughout India.

SAIL has also several units viz. Research and Development Centre for Iron and
Steel (RDCIS), Centre for Engineering and Technology (CET), Management
Training Institute (MTI) and SAIL Safety Organisation (SSO) all located at

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Ranchi, Central Coal Supply Organisation (CCSO) located at Dhanbad, Raw
Materials Division (RMD), Environment Management Division (EMD) and
Growth Division (GD) all located at Kolkata, and SAIL Refractory Unit at
Bokaro. The Central Marketing Organisation (CMO), with its headquarters at
Kolkata, coordinates the countrywide marketing and distribution network of the
Company. The SAIL Consultancy Division (SAILCON) functions from New
Delhi

Integrated Steel Plants

 Bhilai Steel Plant (BSP) in Chhattisgarh


 Durgapur Steel Plant (DSP) in West Bengal

 Rourkela Steel Plant (RSP) in Orissa

 Bokaro Steel Plant (BSL) in Jharkhand

 IISCO Steel Plant (ISP) in West Bengal

 Salem Steel Plant at Salem, Tamil Nadu

 Visvesvaraya Iron and Steel Plant at Bhadravati, Karnataka

Joint Ventures

 NTPC SAIL Power Company Pvt. Ltd


 Bokaro Power Supply Company Pvt. Limited
 Mjunction Services Limited
 SAIL-Bansal Service Centre Ltd.
 International Coal Ventures Private Limited
 SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set
up a joint venture company to produce Ferro-manganese and silico-
manganese at Bhilai.

Financial Performance

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The Company recorded turnover of Rs.26, 297crore in the first Six Months of
the Financial Year 201718. The post-tax net loss was Rs.1, 340crore for the first
Six Months of the Financial Year 2017-18. The Company has not paid any
dividend for the Financial Year 2016-17.

Production Performance

(in million tonne)


2017-18
Items 2016-17
(April-Nov’17 )
Hot Metal 15.7 10.4
Crude Steel 14.5 9.8
Saleable Steel 13.9 9.3

Raw Materials

During 2017-18(April-December, 2017), likely production of iron ore, fluxes


and raw coal from SAIL captive mines and collieries is about 19.56 million
tonnes, 1.46 million tonnes and 0.52 million tonnes respectively.

SAIL has fulfilled the requirement of iron ore for its Steel Plants from its
captive mines by producing 26.44 million tonnes during 2016-17. The
production of fluxes from captive mines during 2016-17 was 2.083 million
tonnes. During 2016-17, raw production in captive collieries of SAIL was 0.74
million tonnes.

RASHTRIYA ISPAT NIGAM LTD. (RINL)

Visakhapatnam Steel Plant (VSP) is the first shore based integrated steel plant
located at Visakhapatnam in Andhra Pradesh. The plant has been built to
matching international standards in design and engineering with the state-of-
the-art technology, incorporating extensive energy saving and pollution control
measures. RINL completed Expansion to 6.3 Mtpa capacity. Modernization and
up gradation to 7.3 Mtpa has also been completed with the commissioning of
additional caster in SMS-2 in Dec'17. Stabilization of the units is in progress for
ramping up the production progressively. RINL employed 17458 regular
employees as on 31.12.2017.

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The Company is having one subsidiary, viz. Eastern Investment Limited (EIL)
with 51% shareholding, which in turn is having two subsidiaries, viz. M/s
Orissa Mineral Development Company Ltd (OMDC) and M/s Bisra Stone Lime
Company Ltd (BSLC).

RINL, with an exclusive product mix of longs is one of the largest producer of
"Bars and Rods" in the country. The products of RINL include Rebars, Wire
Rods, Rounds, Structurals, Blooms & Billets and Pig Iron and the company also
markets the resultant by-products like coal chemicals (Ammonium Sulphate,
Benzol products etc.) and Slag. RINL products are known for its quality.

Financial Performance

The company has recorded turnover of Rs.11395 crore (provisional) up to


December, 2017 in the current financial year. The company has reported Loss
after tax of Rs.979 crore (provisional) upto Dec.17 in 2017-18. The company
has not paid dividend in 2016-17.

Production Performance

2017-18
Actual(April- Forecast(Jan- Annual
Items 2016-17
Dec) Mar) Growth

Crude Steel 3962 3371 1378 20%


Saleable Steel 3847 3187 1313 22%

NATIONAL MINERAL DEVELOPMENT CORPORATION LTD.


(NMDC)

Incorporated on November 15, 1958, the National Mineral Development


Corporation Ltd (NMDC) a Government of India Enterprize, is engaged in the
business of developing and exploiting mineral resources of the country (other
than coal, oil, natural gas and atomic minerals). NMDC is also doing
exploration and prospecting works for high value minerals like diamond in
Andhra Pradesh and gold in Tanzania.

NMDC operates the large mechanized iron ore mines in the Country at Bailadila
(Chhattisgarh) and Donimalai (Karnataka). The Diamond Mine of NMDC is

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situated at Panna (Madhya Pradesh). Sponge Iron Unit of NMDC is situated at
Paloncha, Andhra Pradesh. Mining activities at DMP, Panna were stopped with
effect from 22.08.2005 on receipt of notice from Madhya Pradesh Pollution
Control Board. The case is pending with Hon’ble Supreme Court of India.
NMDC is following up the case for early hearing.

NMDC is setting up a 3.0 MTPA Greenfield Integrated Steel Plant at Nagarnar,


Bastar District in Chhattisgarh. Construction work for the project is in progress
and as on date around 90.59% of civil work, 79.01% structural erection, 60.36%
equipment erection have been completed as on 31st Dec'17. The progress has
picked up momentum since then in the last Quarter.

Capital Structure

The Authorized share capital of the company is Rs.400 crores. The paid up
equity share capital is Rs.316.39 crores as on 31.12.2017, out of which 74.9% is
held by the Government of India and the balance 25.1% by the financial
institutions/banks/individuals/employees etc.

Financial Performance

The Company recorded turnover of Rs.5263 crore in the financial year 2017-18
upto Sep'17. The post-tax net profit for the year was Rs 1814 crore. The
Company has paid final dividend @ 100% of paid up equity capital for the year
2016-17 during 2017-18.

MSTC LTD.

MSTC Ltd. (formerly Metal Scrap Trade Corporation Ltd.), a Government of


India Enterprise, was set up on September 9, 1964 for regulating export of
ferrous scrap from India. The status of the Company underwent a change in
February 1974 when it was made a subsidiary of Steel Authority of India
(SAIL). In the year 1982-83, the Corporation was converted into an independent
PSU under the Ministry of Steel. It was the canalizing agency for import of
carbon steel melting scrap, sponge iron, hot briquetted iron and re-rollable scrap
till February 1992. It was also the canalizing agency for import of old ships for

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breaking, Import of such items were decanalized and put under OGL with effect
from August 1991.

Capital Structure

As on 31.03.2017, the Authorized Capital of the company is Rs. 50.00 crore and
paid up Capital is Rs.17.60 crore. Bonus share was issued at 1:1 in 2016-17.
Further, as approved in the AGM during 2016-17, Bonus Share has been issued
at 1:1 in 2017-18, thereby, rising paid up capital to Rs.35.20 crore.
The shareholding pattern of the company is as below.

SI. No. Name of Share holder % of Holding


1. Government of India 89.85
2. Others 10.15
Total 100.00

Financial Performance

2017-18
Items 2016-17
(Estimated)
Turnover 1428.69 1300.00
Operating Profit 98.03 103.17
Profit before tax 96.61 100.17
Profit after tax 65.43 65.47

FERRO SCRAP NIGAM LTD. (FSNL)

Ferro Scrap Nigam Ltd. (FSNL) is a wholly owned subsidiary of MSTC Ltd.
with a paid up capital of Rs. 3200 lakh. The company undertakes the recovery
and processing of scrap from slag and refuse dumps in the nine steel plants at
Rourkela, Burnpur, Bhilai, Bokaro, Visakhapatnam, Durgapur, Dolvi, Duburi
and Raigarh. The scrap recovered is returned to the steel plants for
recycling/disposal and the company is paid processing charges on the quantity
recovered at varying rates depending on the category of scrap. Scrap is
generated during iron and steel making and also in the rolling mills. In addition,

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the company is also providing steel mill services such as scarfing of slabs,
handling of BOF slag, etc.
Financial Performance

Items 2016-17 2017-18

Total Turnover i.e. , Service charges 32829.77 22868.98


realised including miscellaneous Income
etc.

Gross Margin before Interest & 4766.07 3035.47


Depreciation

Interest & Depreciation 1144.38 905.70

Profit before Tax 3621.69 2129.77

MANGANESE ORE (INDIA) LTD. (MOIL)

Manganese Ore (India) Ltd. (MOIL) was established in 1962. It is the largest
producer of manganese ore in India. Subsequently, name of the Company was
changed from Manganese Ore (India) Limited to MOIL Limited during the
Financial year 2010-11. During the year, the Company completed Buyback of
shares after which the current shareholding of Govt. of India, Govt. of
Maharashtra and Govt. of Madhya Pradesh is 56.21%, 4.56% and 4.81%
respectively. Rest 34.42% shares are held by the public.

MOIL Produces and Sells following Grades of Manganese Ore. They are: -

 High grade ores for production of Ferro manganese.

 Medium grade ore for production of Silico manganese.

 Blast furnace grade ore required for production of hot metal and

 Dioxide for dry battery cells and chemical industries.

Capital Structure

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The Authorized and Paid-up Capital of the Company are Rs. 300, 00, 00, 000
and Rs. 266, 37, 56, 080 respectively, as on 31st Dec., 2017.

Financial Performance

The physical and financial performance of the Company during 2004-05, 2005-
06 and 2006-07 (April-Dec. 2006) are given below in the table:

2017-
Items 2016-17 18(up to
Dec’17)

Production

a) Manganese Ore (thousand tonne) 1004845 829491

b) Electrolytic Manganese
731 634
Dioxide(tonne)

c) Ferro Manganese (tonne) 9950 7959

KUDREMUKH IRON ORE COMPANY LTD. (KIOCL)

KIOCL Limited, a flagship Company under Ministry of Steel, Government of


India was established on 02.04.1976 with an objective to mine & beneficiate
low grade magnetite iron ore at Kudremukh Iron Ore mine in Chickmagaluru
District of Karnataka State.KIOCL Limited is presently engaged in Pelletization
and conferred with the "Mini-Ratna-category-I" status in 1999 under schedule-A
& accredited with ISO-9001:2008, ISO-14001:2004 and compliant with
OHSAS: 18001:2007.

Government of India holds 98.99% of its equity. The Company has a capacity to
produce 3.50 million tonnes of Iron Oxide Pellets and 2.16 Lakhs tonnes of Pig
Iron annually. The Company has its captive berth and ship-loading facilities at
Mangalore. Company depends mainly on NMDC & other private source for
raw materials viz. iron ore to feed to its Pellet Plant.

Production Performance

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For the year 2017-18, a production target of 17.50 Lakh tonnes of Pellets has
been fixed. Target set for despatch up to December, 2017 is 12.00 Lakh tonnes.
Actual production up to December, 2017 is 17.00 Lakh tonnes of Pellets
representing 142% achievement of the target.

Financial Performance

An overview of the performance of KIOCL during the year 2017-18 up to


December, 2017 together with estimate thereof and actuals for the previous year
is as follows:

2016-17 2017-18
Particulars
April- January-
Total
December’17 March,2018
Revenue from
Operations 929.36 1206.68 353.09 1540.30

Profit Before Tax 31.22 28.18 6.49 34.67

Profit After Tax 47.93 18.43 4.24 22.67

REVIEW OF LITERATURE

It was found that the Steel Industry is one of the oldest and most important
industries in Indian Economy. It can safely be called the backbone of the Indian
Economy for various reasons. For centuries iron had been produced in India,
while as late as 1810 Indian steel was superior in quality to British Steel. When
India became independent in 1947 as the biggest, but not the only, successor
state to the British raj, the three major iron and steel companies had a total
capacity of only 2.5 million tons. Government of India took the control and
reserved the capacity creation only for public sector. Four integrated steel plants
were established namely Durgapur, Bhilai, Rourkella and Bokaro by

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government during 1950s and 1960s. Tata was to dominate the Indian steel
industry until the 1950s. The Indian Iron and Steel Company were set up in
West Bengal in 1918 by the British firm Bum & Co., with plans to become a
rival steelmaker.
During that time Indian steel industry collaborated with former USSR, Federal
Republic of Germany and United Kingdom for technological support. In early
1970s Government of India issued licenses to more than 200 steel mills but in
the second half of the decade many of those steel mills were forced to stop their
operation due to shortage of key inputs and acute power problem. In 1980s
Government of India adopted three-pronged strategy (i. expansion of existing
steel plants, ii. setting up new capacities, iii. modernization and upgradation of
technologies in existing plants to achieve higher productivity) to revitalize the
industry

During this period the industry suffered from negative productivity growth
because of technological obsolescence and wasteful use of resources. But in
1990s Government of India introduced a liberalized industrial policy. The policy
facilitated the withdrawal of public sector reservation on capacity creation,
elimination of export and import restrictions, reduction of import tariff,
decontrol of domestic steel price, and introduction of freight ceiling system in
place of freight equalization scheme. With the introduction of liberalized policy
a large number of private corporate units entered into the competition.
But Indian steel industry went through a rough phase during 1997-2001 because
of low demand and declining steel price all over the world. Many steel firms
were forced to exit from the competition. However, steel industry recovered
from such difficult situation owing to resurgence of demand in United States
and turnaround of Asian economies. Industrial recovery in India really began to
be noted in 2002-03, consolidated during 2003-04, gathered momentum during
2004-05 and scaled a new height during 2005 to 2007.

In this research we have tried to present the overall structure of the industry and
its performance with an emphasis on the effects of liberalization on this
industry. The performance of this sector (industry) is also assessed both
independently and within the whole sector. With the aid of graphs and pie-charts
various aspects of this industry are studied. This research also explains the
performance of major companies in this industry.
We have also taken help of some reports and studies and they will be
appropriately mentioned. Currently India is the third largest producer of crude

29 | P a g e
steel in the world and is expected to become the 2nd largest producer of crude steel in
the world.

The growth of this industry is intertwined with that of the economy at large, and in
particular the steel consuming industries such as manufacturing, housing and
infrastructure. Steel demand shows a significant integration with a country’s
GDP growth. So if one can predict how far a country is faring in its
macroeconomic characteristics, one can predict the demand for steel.
The main industries providing forward linkage to the Steel Industry, i.e.,
Automobiles, Capital Goods, Construction, Consumer Durables have
all optimistic growth projections for near future.

The market is dominated by the top six producers who account for almost half
the market share. SAIL has forever been a market leader, although its share has
declined steadily over a period of time.
We found that most of the private companies share has remained almost
stagnant. This is due to mushrooming of many small units, which account for SAIL
falling market share.

OBJECTIVES

 To compare private and public steel sector.

 To analyse potential of the Steel Industries.

 To analyse measures taken by Indian government to improve the industry


and study the National Steel Policy 2005.

 To analyse the future of Indian steel industry.

30 | P a g e
 To measure the performance of steel industry of India in terms of production,
consumption and foreign trade.

 To study the prospect of the Indian steel industry in terms of production and
consumption.

RESEARCH METHODOLOGY

This section deals with the research design used and data collection method
used.

a). Research design:-

In case of my research “Comparative Analysis of Public and Private Sector


Steel Industries in India” The descriptive research is found to be more
appropriate.

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Descriptive research studies are those studies, which are concerned with
describing the characteristics of a particular individual, or a group. This study is
concerned with specific prediction, narration of facts and characteristics
concerning individual, group of situation are all examples of descriptive
research studies.

b). Data collection method:-

According to my topic of research I found that the use of secondary data is


the only right choice. For that I mainly used Internet and collective various data
from government and private websites.

I visited to the library and went through various books and journals for
collection of the relevant data for the research.

DATA ANALYSIS

After economic liberalization in India production and consumption of finished


steel were spectacularly increased. However, Indian steel industry has entered
into the new steel age during 2005-06. The main reason for such growth are
boom in automobile industry, railway, real estate and construction and increased
government expenditure in infrastructural segment.

In case of total finished steel (non-alloy + alloy/stainless):

32 | P a g e
Production for sale stood at 79.049 million tonnes, a growth of 5.3%
compared to last year.

Exports stood at 7.606 million tonnes, a growth of 52.9% compared to last year.

Imports stood at 6.097 million tonnes, a growth of 10.9% compared to last year.
India was a net exporter of total finished steel.

Consumption stood at 64.867 million tonnes, a growth of 5.2% compared to last


year.
Data on production for sale, consumption, import and export of total finished
steel (alloy + non-alloy) and production of crude steel for the last five years
and April-December 2017-18 (provisional) are shown in the table below:

Production of Finished Steel (alloy/stainless +non-alloy) and Crude Steel


Item 2012-13 2013-14 2014-15 2015-16 2016-17 April-
December
2017-18*
Finished Steel
Production 89.621 95.577 100.681 102.904 115.91 86.699 (1.4)
Imports 7.925 5.45 9.32 11.712 7.227 6.097 (11.0)
Export 5.368 5.985 5.596 4.079 8.243 7.606 (52.9)
Consumption 73.483 74.096 76.992 81.525 84.042 64.868(5.2)

33 | P a g e
Growth in the production of eight core industries (percent) is as given below
in the table. It may be seen that during the current financial year, for the
period, April-November, 2017-18, the index has registered a growth of 3.9
percent, with the production of steel registering growth of 7.2 percent
Growth in the Production of Eight Core Industries (per cent)
Sector Weight 2015-16 2016-17 April-November
Coal 10.3 4.8 3.2 1.5
Crude Oil 9.0 -1.4 -2.5 -0.2
Natural Gas 6.9 -4.7 -1.0 4.4
Refinery products 28.0 4.9 4.9 3.6
Fertilizers 2.6 7.0 0.2 -1.1
Steel 17.9 -1.3 10.7 7.2
Cement 5.4 4.6 -1.2 0.6
Electricity 19.9 5.7 5.8 4.9
Overall Index 100 3.0 4.8 3.9

34 | P a g e
Balance sheet of available of alloy & Non-alloy steel during last 5 yrs
Description 2012-13 2013-14 2014-15 2015-16 2016-17 April-
Dec 2017-
18

(A) Production
Non-Alloy Steel 83.732 87.888 92.112 94.618 107.41 79.353
Alloy Steel 5.889 7.689 8.569 8.285 8.496 7.346
Total 89.621 95.577 100.682 102.90 115.91 86.699
Share of Alloy Steel 6.57% 8.04% 8.51% 8.05% 7.33% 8.47%
(B) Import
Non-Alloy Steel 6.253 4.299 6.754 8.718 5.366 4.553
Alloy Steel 1.672 1.151 2.567 2.994 1.860 1.544
Total 7.925 5.450 9.320 11.712 7.226 6.097
Share of Alloy Steel 21.09% 21.12 27.54% 25.56% 25.74 25.32%
(C) Export
Non-Alloy Steel 4.756 5.508 4.906 3.475 7.584 6.873
Alloy Steel 0.612 0.477 0.689 0.604 0.658 0.733
Total 5.368 5.985 5.596 4.079 8.242 7.606
Share of Alloy Steel 11.40% 7.97% 12.32% 14.81% 7.98% 9.64%
(D) Balance of
Non-Alloy Steel -1.497 1.210 -1.847 -5.243 2.218 2.320
Alloy Steel -1.060 -0.674 -1.877 -2.390 -1.202 -0.811
Total -2.557 0.536 -3.725 -7.633 1.016 1.509
(E) Consumption
Non-Alloy Steel 67.621 67.994 70.236 73.469 76.969 59.115
Alloy Steel 5.861 6.102 6.758 8.055 7.073 5.753
Total 73.482 74.096 76.994 81.524 84.042 64.868
Share of Alloy Steel 7.98% 8.24% 8.78% 9.88% 8.42% 8.87%

35 | P a g e
Production for sale of total finished steel stood at 115.910 million tonnes
during 2016-17, as against 81.681 million tonnes in 2012-13, an average
annual (CAGR) growth of 7%.

Export of total finished steel during 2016-17 stood at 8.242 million tonnes
against 5.368 million tonnes in 2012-13.

Import of total finished steel during 2016-17 stood at 7.226 million tonnes
against 7.925 million tonnes in 2012-13.

Domestic actual consumption of total finished steel stood at 84.042 million


tonnes in 2016-17 as against 73.483 million tonnes in 2012-13, growing
at a CAGR of 4% during the last five years.

India became a net Exporter of total finished steel in 2016-17 as well as


during April-December 2017-18.

Production of both alloy and non-alloy steel has an increasing trend during
last 5 years while contribution of alloy steel in total finished steel
production increased from 6.57% in 2012-13 to 7.33% in 2016-17.

36 | P a g e
Trend of Crude Steel Production in last five years
Year Working Production % Utilisation
2012-13 97.024 78.415 81%
2013-14 102.26 81.694 80%
2014-15 109.851 88.98 81%
2015-16 121.971 89.791 74%
2016-17 128.277 97.936 76%
April-Dec 2017-18* 130.08 75.64 78%

Crude steel production grew at 5.71% annually (CAGR) from 78.415 million
tonnes in 2012-13 to 97.936 million tonnes in 2016-17.

Such growth in production was driven by capacity expansion, from 97.024


million tonnes in 2012-13 to 128.277 million tonnes in 2016-17, a CAGR
growth of 7% during this five year period.

The above crude steel performance has been contributed largely by the strong
trends in growth of the Electric Arc Furnace of steel making which accounted
for 30% of total crude steel production in the country during both 2016-17 and
April-December 2017-18 and has emerged as a key driver of crude steel
production.

37 | P a g e
Performance of Public & private sector in Crude Steel Production
Sector 2012-13 2013-14 2014-15 2015-16 2016-17 April-
Dec
2017-18
Public Sector 16.482 16.777 17.205 17.92 18.456
14.387
Private Sector 61.933 64.917 71.775 71.871 79.48 61.255
Total 78.415 81.694 88.98 89.791 97.936 75.642
% Share of Public 21% 21% 19% 20% 19% 19%
Sector
Expansion of private sector in steel making industry increases the
contribution of private sector gradually in crude steel making.
Public sector is contributing 19% both in 2016-17 and April-December 2017-
18.

38 | P a g e
Performance of Public & private sector in Finished Steel Production
Sector 2012-13 2013-14 2014-15 2015-16 2016-17 April-
Dec
2017-18
Public Sector 12.819 13.439 12.832 12.977 14.866 11.81
Private Sector 76.802 82.138 87.849 89.927 101.044 74.889
Total 89.621 95.577 100.681 102.904 115.91 86.699
% Share of Public 14% 14% 13% 13% 13% 14%
Sector
Public sector is contributing 13-14% in finished steel production during last
five years and 14% in April-December 2017-18.

39 | P a g e
MEASURES TAKEN BY INDIAN GOVERN. TO IMPROVE THE
INDUSTRY

Now let’s have a look over what government has done to make the industry
competitive in world market. Government has taken several initiatives in last
decade to improve the steel industry. The main steps taken for this are as
follows-
 To ensure that only quality steel is produced and imported, Government has
notified Steel and Steel Products (Quality Control) Orders dated 12.03.12
and 04.12.15
 Government has notified MMDR, Amendment Act, 2015 to streamline grant
of Mining Leases in order to maintain sufficient availability of raw materials
for various sectors including steel sector.
 To provide level playing field to the domestic steel producers, Govt. has
imposed Minimum Import Price (MIP) on 66 steel products.
 Government has imposed in June 2015, an Anti-Dumping Duty on imports
of certain variety of hot-rolled flat products of stainless steel from China,
Korea and Malaysia.
 Hiked import duty on ingots and billets, alloy steel, stainless steel and non-
alloy long products from 5% to 7.5% and non-alloy and other alloy flat
products from 7.5% to 10%. This was further revised in August, 2015 on flat
steel from 10% to 12.5%, long steel from 7.5% to 10% and semi-finished
steel from 7.5% to 10%.
 The Government had notified anti-dumping duty vide Notification No.
61/2015-Customs on import of Cold Rolled Stainless Steel Flat products.
The duty rates vary from 4.58% to 57.39% depending on the country and the
producer.
 Increased the peak rate of basics custom duty on both flat and non-flat steel
to 15% from 10%.
 Increased the import duty on flat rolled steel @ 10% on long and semi-
finished products.
 Levied the Anti-Dumping Duty for five years on imports of cold rolled Flat
products of stainless steel.
 Imposed the Safeguard Duty of 20% on hot-rolled flat products of non-alloy
and other alloy steel, in coils.

40 | P a g e
NATIONAL STEEL POLICY, 2017

NSP 2017 aims to increase focus on expansion of MSME sector, improve raw
material security, enhance R&D activities, reduce import dependency and cost
of production, and thus develop a "technologically advanced and globally
competitive steel industry that promotes economic growth" eyeing self-
sufficiency in production, developing globally economical steel manufacturing
capabilities by facilitating investments and cost efficient productions with
adequate availability of raw materials.
With focus on R&D through establishment like Steel Research Technology
Mission of India (SRTMI), the technology would be of utmost focus over the
next decade and MSME steel plants would be the key drivers to achieve the
additional capacity required for the India's consumption led growth and
improvement in the overall productivity and quality.

Expected impact / outcome of NSP 2017

a) India to be world leader in energy efficiency and sustainability


Ministry of Steel, in association with suitable agency, will constantly monitor
techno-economic performance of all the steel plants within the country vis-à-vis
the global best practices. Transfer of technology for production of automotive
steel and other special steels will be facilitated by helping set up JV's with
global leaders.

b) Cost-effective and quality steel destination


Thirty Seven (37) steel products have already been notified under the
mandatory quality certification mark scheme of BIS. Efforts will be made to
bring in additional steel products, which are used in critical end-use
applications, under the mandatory scheme to ensure protection of human health,
environment and safety

c) Attain global standards in Industrial Safety & Health


The Ministry is coordinating with steel companies to ensure that on the job
trainings on maintaining a safe workplace are provided to employees of the steel
companies.

41 | P a g e
d) Substantially reduce the Carbon foot-print of the industry
In order to address the environment related issues, the Ministry is facilitating
the formation of a forum to chalk out best practices and is also focusing on
development of a Waste Management Plan for the industry.

e) Domestically meet the entire demand of high grade automotive steel,


electrical steel, special steels and alloys.

Policy on Preference to Domestically Manufactured Iron & Steel Products


(DMI&SP)
The Government has introduced the Policy on preference to DMI&SP in
Government tenders. The policy mandates for domestic value addition of 15%
on the imported input steel to be eligible for big ticket public procurement in
steel. The policy encourages the downstream companies to set up capacities for
steel products which were otherwise getting directly imported in the past,
leading to substantial outflow of valuable Forex.

Objective of this policy is to provide a level playing field for the domestic
manufacturers and not to encourage inefficient practices.

 The policy mandates to provide preference to DMI&SP in government


procurement for its own use and not with a view to commercial resale.

 The policy is applicable to all such projects and procurements, where the
aggregated estimated value of the "iron & steel products" is either INR 50
crores or more.

 DMI&SP has been defined as those iron and steel products, in which a
minimum value addition of 15% has taken place domestically.

The policy is envisaged to promote growth and development of domestic steel


Industry under ‘Make in India’.

42 | P a g e
FUTURE OF INDIAN STEEL INDUSTRY

India is expected to become the second largest steel producer in the world by
2018, based on increased capacity addition in anticipation of upcoming demand,
and the new steel policy, is expected to boost India’s steel production. Huge
scope for growth is offered by India’s comparatively low per capita steel
consumption and expected rise in consumption.

AUTOMOTIVES
The automotive industry is forecasted to grow in size by US$ 74 billion in 2015
to US$ 260-300 billion by 2026. With increasing capacity addition in the
automotive industry, demand for steel from the sector is expected to be robust.

CAPITAL GOODS
The capital goods sector accounts for 11 percent of steel consumption and
expected to increase 14/15 percent by 2025-26 and has the potential to increase
in tonnage and market share. Corporate India’s capex is expected to grow and
generate greater demand for steel.

INFRASTRUCTURE
The infrastructure sector accounts for 9 percent of steel consumption and
expected to increase 11 percent by 2025-26. Due to such a huge investment in
infrastructure the demand for long steel products would increase in the years
ahead.

AIRPORTS
More and more modern and private airports are expected to be set up. In 2016,
passenger traffic at Indian airport stood at 223.61 million and number of
operational airports stood at 95 in FY 16. Development of Tier-II city airports
would sustain consumption growth. Estimated steel consumption in airport
building is likely to grow more than more than 20 percent over next few years.

RAILWAYS
The Dedicated Rail Freight Corridor (DRFC) network expansion would be
enhanced in future. Gauge conversion, setting up of new lines and
electrification would drive steel demand. Indian Railways started the PPP mode
of funding and has already awarded projects worth around US$ 1.73 billion

43 | P a g e
during the 1st 7 months (April-October) of FY 16. In January 2017, Crisil
estimated that the railways sector would create business opportunities worth
US$ 99.65 billion.

OIL AND GAS


Oil and Gas amongst major end-user segment accounted for -34.4 percent of
primary energy consumption in FY16. This would lead to an increase in demand
of steel tubes and pipes, providing a lucrative opportunity to the steel industry.

POWER
The government targets capacity addition of 100 GW under the 13 th Five-Year
Plan (2017-22). Both generation and transmission capacities would be
enhanced, thereby raising steel demand from the sector. Conventional power
capacity addition of 23.98 GW has registered to be the highest in FY16.

RURAL INDIA
Rural India is expected to reach per capita consumption of 12.11 kg to 14 kg for
finished steel by 2020. Policies like Food for Work Programme (FWP) and
Indira Awaas Yojana, Pradhan Mantri Gram Sadak Yojana are driving growing
demand for construction steel in rural India. In FY16, per capita consumption of
steel in rural India is estimated at 60 kg, which is lower in comparison with the
global average of 216 kg.

FINDINGS

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The Indian steel industry responded enthusiastically to the liberalization and
large capacities were created in the private sector. The plants which came up
post 1991, like Vizag Steel (RINL) in the public sector and Essar Steels, Ispat
Steels, Jindal Vijayanagar etc. in the private sector used the modern state-of-the-
art technologies. However, because of decontrol, removal of duty protection,
free import, dumping from China and CIS, and, above all, a global economic
melt-down in the latter half of 90s, the industry went through a major crisis. The
period from 1997-2001 marked the worst for the industry with price decline,
poor capacity utilization, inventory pile up, dumping through unofficial
channels and high interest burden.

Meanwhile, the industry is already into an expansion mode with all steel
majors like SAIL, Tata Steels, RINL, Ispat, Jindals and Essar hiking their
capacities. States like Orissa and Jharkhand, rich in iron ore, are attracting
major investment interest both from domestic and international majors. There is,
however, some concern regarding the differential treatment meted out to
overseas players to attract investment, mainly in respect of export of iron ore. In
the final analysis, the industry scenario is expected to radically alter in the
coming years.

 However, the public sector is expanding its capacities but, it has more
potential lies within to perform more than that.
 Utilization of capacities in public sector is more than that of private sector
but the performance still has to be improved.

 Public sector has undergone retrenchment for the employees and


improved has its labor productivity but it is still lacking behind as
compared to private sector.

 Most of the plans to achieve the significant position in world market will
remain on paper unless adequate attention is given to augmentation of
infrastructure i.e. roads, ports, railways, power, etc.

These areas are of prime concern and the policy envisages a High Level
Monitoring Group which will not only prepare action plans in consultation
with the concerned Ministries but also coordinate development of the
required facilities. There are tremendous challenges ahead of us but these

45 | P a g e
have to be met comprehensively if we are to take our legitimate place in the
world as a developed nation by 2020.

CONCLUSIONS

In recent time steel industry is one of the fastest growing industry in India and
as well as in the world. The purpose of the study is to evaluate the actual
condition and trend of steel industry in India. Result of the study found that
India has all potential to become top producer of steel in near future. The steady
growth of production and consumption indicates that India has set a higher
growth path by the end of the decade. The CAGR of production, consumption
and foreign trade shows an impressive picture of the development of the
industry for the study period. All the major steel producers in world like Arcelor
and Mittal, POSCO come to India to establish the steel plants which facilitate
the growth of Indian steel industry. According to Ministry of Steel, India is
expected to become second largest producer of steel in world by 2015-16.

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BIBLIOGRAPHY

 Annual report (2017-18) published by ministry of steel.


 Annual report (2016-17) published by TATA Steel.
 Article published in magazine ‘FRONTLINE’ in December 2006 edition.
 www.steel.nic.in (Official website of Ministry of Steel)
 www.tatasteel.com (Official website of Tata Steel)
 www.sail.co.in (Official website of Steel Authority of India)
 www.worldsteel.org (Official website of International Iron and Steel
Institute)
 www.jbcindiasteel.nic.in (Website of Joint Planning Committee)
 www.scribd.com
 www.slideshare.com

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