Steel is crucial to the development of any modern economy and is considered to be one of the backbones of human civilisation. The level of per capita consumption of steel is treated as an important index of the level of socioeconomic development in a country.
From only three steel plants, a few electric arc furnace-based plants and a mere one million tonne (MT) capacity status at the time of Independence, India is now the fourth largest crude steel producer in the world and the largest producer of sponge iron.
Presently, steel contributes to nearly 2 per cent of the gross domestic product (GDP) and employs over 500,000 people. The total market value of the Indian steel sector stood at $ 57.8 billion in 2011 and is expected to touch $95.3 billion by 2016. Indias per capita steel consumption stood at 57.8 kilograms in 2013, according to a World Steel Association report and is expected to rise with increased industrialisation throughout the country.
India is slated to become the second-largest steel producer in the world by 2015. Steel production in the country has increased at a compound annual growth rate (CAGR) of 6.9 per cent over 2008-2012.
Indias real consumption of total finished steel grew by 0.6 per cent year-on-year in April-March 2013-14 to 73.93 MT, according to the Joint Plant Committee (JPC), Ministry of Steel.
Increasing demand by sectors such as infrastructure, real estate and automobiles at home and abroad has put India on the world map. The construction sector accounts for around 60 per cent of the countrys total steel demand while the automobile industry accounts for 15 per cent.
The steel industry and its related metallurgy and mining industries have witnessed quite a few investments and developments in the recent past. Some of the notable investments are as follows:
- L&T Special Steels and Heavy Forgings has entered into a five-year technology transfer agreement with Japan Steel Works. This agreement covers transfer of critical technology for steel-melting and heavy forgings made from ingots weighing up to 200 tonnes and for the hydrocarbon and thermal power sectors.
- JSPL Group has commissioned a greenfield 2 MT steel plant in Sohar, Oman at an investment of $800 million. The greenfield unit will be one of the largest steel plants in the Gulf region.
- Steel Authority of India Ltd (SAIL) has secured contracts for supplying over 117,000 tonnes of rails after successful bids for two global tenders floated by Rail Vikas Nigam Ltd (RVNL), for major upcoming passenger rail line projects in India.
- JSW Steel plans to commission a Rs 4,500 crore ($748.55 million) cold rolling mill (CRM) at its integrated steel plant in Torangal, Karnataka. The unit, which will produce high-strength auto-grade steel, has an installed capacity of 2.3 million tonnes per annum (MTPA).
- JSW Steel is also set to acquire WelspunMaxsteel for about Rs 1,100 crore ($182.98 million) in a move aimed at sourcing cheaper raw material, bringing down production cost and enhancing its presence in the northern and western markets.
- Canada has invited Coal India Ltd (CIL) to explore mining opportunities in British Columbia, as per the Canadian High Commissioner in India.
Ministry of Steel, Government of India, is considering setting up a strong research and development (R&D) mission/centre, virtual or otherwise, to step up innovative research and technology development in the countrys steel industry.
The Centres Steel Development Fund (SDF) and Plan Scheme presently provide financial assistance for R&D in the sector. Under the SDF scheme, 82 R&D projects have been approved with total project cost of Rs 677 crore ($112.61 million) where in SDF assistance is Rs 370 crore ($61.54 million). Under the Plan Scheme, eight projects have been approved with a total cost of Rs 123.27 crore ($20.51 million) wherein government assistance is Rs 87.28 crore ($14.51 million).
In order to increase industrial activity, the Government of India, through the Ministry of Steel, has signed Memorandums of Understanding (MoUs) with all the major steel producing Public Sector Undertaking (PSU) companies such as SAIL and Rashtriya Ispat Nigam Ltd (RINL). These will help to direct the companies to achieve targets and benefit the sector as a whole.
As regards the public sector, modernisation and expansion plans have already been launched in Steel Authority of India Limited (SAIL) for increasing the steel making capacity from 12.8 mtpa to 21.4 mtpa and Rashtriya Ispat Nigam Limited (RINL) has recently completed its expansion from 3.0 mtpa to 6.3 mtpa. RINL is further implementing modernisation schemes which would further add 1.0 million tonne capacity by 2016-17. These plans envisage several new facilities involving latest technology resulting in demand of additional technical and skilled manpower.
Details of direct employment generated (recruitment) in SAIL and RINL during each of the last two years are as under:-
- SAIL has modernised and expanded its integrated steel plants in Bhilai, Bokaro, Rourkela, Durgapur, Burnpur and Salem.
- The company has expanded its crude steel production capacity to 21.4 mtpa in 2013.
- Completed mega expansion of Rashtriya Ispat Nigam Limited (RINL) to more than double capacity of plant (from 2.9 MT to 6.3 MT) from 2013-14.
- International Coal Ventures Pvt Ltd, comprising SAIL, RINL, CIL, NTPC and NMDC, has been set up for acquisition of coal mines overseas.
- The consortium of SAIL and National Fertiliser Limited (NFL) has been nominated for revival of Sindri Unit of the Fertiliser Corporation of India Limited.
- RINL, Vishakhapatnam Steel Plant and the Power Grid Corporation of India Ltd (POWERGRID) signed an MoU to set up a joint venture company to manufacture transmission line towers and tower parts including R&D of new high-end products.
- Attracted by the growth potential of the Indian steel industry, several global steel players have been planning to enter the market.
- National Mineral Development Corporation (NMDC) has signed an MoU with Russia´s third-largest steelmaker, Severstal, for a greenfield steel plant in Karnataka.
- Posco Steel to invest $12 billion in setting up a 12 MT project in India.
- Indian steel companies have now started benchmarking their facilities and processes against global standards, to enhance productivity.
- These steps are expected to help Indian companies improve raw material and energy consumption as well as improve compliance with environmental and pollution yardsticks.
- Companies are attempting coal gasification and gas-based direct-reduced iron (DRI) production. Other alternative technologies such as Hlsmelt, Finex and ITmk3 being adopted to produce hot metal.
- Ministry of Steel has issued necessary direction to the steel companies to frame a strategy for taking up more R&D projects by spending at least 1 per cent of their sales turnover on R&D to facilitate technological innovations in the steel sector.
The liberalisation of the industrial policy and other initiatives taken by the government have spurred the growth of the private sector in the steel industry. While the existing units are being modernised or expanded, a large number of new steel plants have also come up in different parts of the country based on cost-effective and state of-the-art technologies. In the last few years, the rapid and stable growth of the demand side has also prompted domestic entrepreneurs to set up fresh greenfield projects in different States of India. With the increase in global population, there is a greater need for steel to build public-transport infrastructure. Emerging economies will continue to drive demand as these countries require a significant amount of steel for urbanisation and industrialisation purposes. Indias steel sector is anticipated to witness investment of about Rs 2 trillion ($33.26 billion) in the coming years, as per Tata Steel.