As the Indian economy is looking up, the country’s steel industry is also moving northwards. During the last five years, the growth in the demand for steel has averaged to around 10%. The surge in this demand would continue for the next decade or two. To meet this growing demand, the steel sector has to double its production in the next five years, and around 200 million tonnes (mt) by 2020. This was expressed by Union Minister of State (MoS) for Steel Prathap Annayyagari at a seminar on steel oganised by the Confederation of Indian Industry (CII).
Speaking as the chief guest on the CII Steel Summit on ‘Advantage India – An enabling framework for growth’, the minister said India’s current per capita consumption of steel is 47 kg, against the world average of 190 kg. However, this shortfall could be improved upon if our forward linkages of steel were aimed at tapping the rural demand.
The Ministry of Steel has signed over 220 memoranda of understanding (MoUs) for bringing additional capacity of 276 mt. Though most of these are brownfield , there are some Greenfield projects also on the anvil. There are various problems like land acquisition, availability of water and other raw material, besides forest and environmental clearance, and some of these issues have been mentioned in the New Mineral Policy, the minister pointed out.
Annayyagari also touched upon the fact that out of India’s total steel production of 55 million tonnes, about two-thirds -- over 36 million tonnes -- of crude steel is produced by secondary producers and standalone processors who are unorganised.
Earlier, Mr SK Roongta, chairman of Steel Authority of India Ltd, spoke on the opportunities and key challenges facing the steel sector. He highlighted four areas of challenge such as technology and process, availability of skilled manpower, issues relating to policy support and the resettlement and rehabilitation (R&R) policy. At the same time, he also maintained that aspirations of land holders had to be met. Another key challenge he referred to is increasing the productivity in plants.
“India has to find a way out to manufacture steel, and there has to be a quantum jump in steel production,” he pointed out.
In his special address, a day after assuming charge of the Union steel secretary, Mr Atul Chaturvedi said availability of land, environmental clearances and R&R issues were halting the progress of the steel sector. However, he expressed confidence that the land issues faced by various steel companies could be overcome.
In his concluding remarks, CII Director General Mr Chandrajit Banerjee said the steel industry was of pivotal importance to Indian industry and CII. “CII has been working towards strengthening the global competitiveness of Indian steel industry over the years through its specialized services related to quality, energy efficiency and competitiveness,” he said. He also said CII would also be keen to support the government on its endeavour to develop a mandatory energy efficiency improvement system under the proposed Perform, Achieve and Trade (PAT) scheme for the steel sector. This will help incentivise industry efforts to achieve energy efficiency, he pointed out.
Earlier in his welcome note, Mr B Muthuraman, chairman of the CII National Committee on Steel, and vice-chairman of Tata Steel, said though India is on a growth path, it faces many challenges like achieving the growth simultaneous with social and environmental sustainability. “For the Indian steel industry to grow and prosper, there are major challenges. There will be a strain on infrastructural and natural resources like land, water, power, railways, roads, iron ore and coal. The government needs to step in many of these areas like earmarking large tracts of land as well as formulate policies to allocate iron ore and coal resources to all steel plants,” he added.
India Infoline News Service / 09:04, Jan 22, 2015
The outlook is a flat start. The market will look to scale to new peaks though not much effort is needed for the same. HUL saw a rally and short-covering may have pulled it up further. Speculation is on that its parent will raise stake through an open offer. After the cooling in oil prices, Cairn results will be in focus.