Mining and Metallurgy

Jayaram Ponnada
Lopamudra Panda
Monisha
Ranjit Pisharody
 Timeline
 Top Companies
 Size and Composition
 Statistics
 Growth drivers
 Globalization
 SWOT Analysis
 Government Policies
 Foreign Direct Investment
 Technology
 Privatization
 Competition
 Future growth and Recommendations
 Ahmedabad Steel Craft
 Bengal Industries
 Bokaro Steel Plant
 Central Steel Corporation
 Essar Steel
 Devson Steels
 Buyao Info
 Jindal Steel & Power
 Lloyds Steel
 Steel Authority of India
 Tata Steel
 Vizag Steel
 India is ranked 5th among the top steel producers - 53MT.
 The steel industry of India has capital investments of more than Rs
100, 000 crores.
 The total employment in the industry is more than 2 million
(including direct and indirect employment).
 Steel production grew at 1.2 per cent in the January-March
quarter of 2008-09 over the same period last year.
 Out of India’s annual iron ore production of more than 200 MT,
about 50 per cent is exported.
 Accounts for over 7 per cent of the world's total production.
 Accounts for around 5 per cent of the global steel consumption.
Top Five Consumer Countries of
Steel
 Indian Potential for Steel
• High GDP growth rate of 8%
• 1.2 billion population
• Low per capita steel consumption of 49kg (World av. 150 kg)

Huge Potential for Demand

Growth Abundant Iron Ore

Skilled Human Resources
factors
Reserves 10.3 billion tonnes

Government Policy

• Stable currency • Encouraging trade relations with

• Easing of regulations ASEAN and other countries
• Strong Banking & judicial • Infrastructure building
system • Exploring new Energy resources
 Strengths Weaknesses
Increase Demand • High cost of capital
Availability of labour at low wage • Lack of infrastructure
rates • Slow decision making
Huge Resources Of Raw material • Low labour productivity
Environment laws • Insufficient transport system

S.W.O.T
Opportunities
• High potential to be tapped
• Unexplored rural market
• Export market penetration
• Consolidation
ANALYSIS
Threats
• Cheap Imports
• Slow Industry Growth
•Technological change
• Price sensitivity and demand volatility
• Threat from substitutes
•Huge bottlenecks in foreign invested
projects
Industrial and Trade Policy Resolutions in 1991 with regard to the Steel
industry:

 Licensing requirement for capacity creation has been abolished.

 Steel industry has been removed from the list of industries reserved for the
state sector.
 Automatic approval granted for foreign equity investment in steel has
been increased up to 74%.
 Price and distribution controls were removed from January 1992.
 Restrictions on external trade, both in import and export, have been
removed.
 Import tariff reduced from 105% in 1992/93, to 30% in 1996-97.
 Other policy measures like convertibility of rupee on trade account,
permission to mobilize resources from overseas financial markets, and
rationalization of existing tax structure.
 Big Barons like ArcellorMittal and Posco enter India

 Investments projected to the tune of US$ 30 billion

Bottleneck:

Why Still they are in slippery ground?

 Reduction in economies of scales
 Less capital requirement per tone of capacity
 Less operating cost
 Improved quality.
 Increased labour productivity.
 Increased export
 The market share of public sector SAIL has now come down to
around 34 per cent.
 The government of India encouraged Tatas, Mittals, Essar and
Jindals to develop and expand their capacity. There was full
autonomy to take decisions by these companies.

Effects:
 Increase in profitability.
 Improvement in infrastructure.
 Increase in employment.
 India’s emergence as a global player.
Market Share of Leading Players in Iron and Steel
Industry
Company Production of Steel(in Market share(in
million tonnes) percentage terms)
SAIL 13.5 32
TISCO 5.2 11
RNIL 3.5 8
ESSAR, ISPAT,JSWL 8.4 19
OTHERS 14.5 30
TOTAL 45.1 100
 Its predicted that the steel production will double to 120
billion tonnes by 2010 and will become 280 billion tonnes by
2015.

 Energy savings potentials.

 Environment friendly production- Greenfields

 Further liberalization towards tariff structure, full convertibility
of Indian currency, more equity participation by foreign partners,
rationalization of tax structure etc. will be required.

 R&D focus is to be increased substantially.

 Firms must do technological forecasting.

 Resource utilization must be more effective to improve on the

productivity.

 Investment in infrastructure is crucial to step up demand for steel.