Project Report on Comparative Analysis of Public and Private Sector Steel Companies in India

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Major research Project on Comparative Analysis of Public and Private Sector Steel Companies in India with reference to TATA steel and SAIL.

Transcript

TITLE

ldquoComparative analysis of Private

and

Public sector steel companies

with special reference to TATA

Steel and SAILrdquo

Prepared andSubmitted by-------------------Amit AgrawalMBA (IB) 2006-08School of Economics

DAVV Indore

CONTENTS

1) TITLE

2) INTRODUCTION

a) World Steel Industry An Overviewb) Indian steel Industryc) What is Private limited and Public limitedd) Private sector companies in Indiae) Public sector companies in India

3) REVIEW OF LITERATURE

4) OBJECTIVES

5) RESEARCH METHODOLOGY

a) Research designb) Data collection method

6) DATA ANALYSIS

Comparison between TATA Steel and Steel Authority of India

a) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures

Measures taken by Indian government to improve the industry

National Steel Policy 2005

7) FINDINGS

8) BIBLIOGRAPHY

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 till recently

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 In the last one year the

world has seen two big Mergers amp Acquisitions deals to take place-

The Mittal Steel listed in Holland has acquired the worlds largest steel

company called Arcelor Steel to become the worlds largest producer of Steel

named Arcelor-Mittal

Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds fifth

largest steel company Corus with the highest ever stock price

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 55 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

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

Iron and steel is vital to the Indian economy for economic growth and

economic well-being No practical substitutes exist on a large scale for iron and steel

because of the relatively high cost of alternative materials

Worldwide there are broadly two major categories of steel playersmdashIntegrated

steel producers (ISPs) and mini-millssecondary producers although variations and

combinations of the two exist The key difference between the two is the type of iron

bearing feedstock they consume In an integrated mill this is predominantly iron ore

with a smaller quantity of steel scrap A mini-mill produces steel uses mainly steel

scrap or increasingly other sources of metallic iron such as directly reduced iron

(DRI)hot briquette iron (HBI)

The iron and steel industry not only directly accounts for about 2 of GDP it also

has a bearing on how the consumer goods and downstream infrastructure sectors

develop Further with a share of approximately 10 the sector is amongst the largest

contributors to the central excise India accounted for 34 of the estimated world

steel production of 1129 million tonnes (mt) during 2005 At present India is the 7th

largest crude steel producing country in the world

In 2006-07 production of Finished (Carbon) Steel was 49350 million tonnes

(Prov) Production of Pig Iron in 2006-07 is estimated to be 4960 Million Tonnes

(Prov) The share of Main Producers (ie SAIL RINL and TSL) and secondary

producers in the total production of Finished (Carbon) steel was 35 and 65

respectively during the period of April-December 2006

Size of Industry-

India is among the top 10 global suppliers of steel in the world

More than 35 million tonnes of steel is produced in India per annum

India is also the largest producer of sponge iron in the world

This sector represents around Rs 1 trillion of capital investments and directly

provides employment to around 05 million with the integrated steel plants

accounting for a 40 share

The iron and steel sector also contributes around 62 of Indiarsquos manufactured

goods exports and 46 of total exports by value

Structural Characteristics of Indian Steel Industry-

The industry is dominated by large integrated players like SAIL and Tata Steel

in steel

The Public sector has a significant presence in this industry Steel Authority of

India Ltd (SAIL) has 32 of Indiarsquos installed capacity of crude steel

Tata Steel and Essar Steel are the major private players in the industry

The industryrsquos 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 fallingrising prices and industry

lossesprofits

Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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

What is Private Limited and Public limited

Now letrsquos first understand the meaning and difference between Public Sector

Company and Private Sector Company The term ldquoPrivate Companyrdquo refers to

ownership of a business company in two different waysmdash First referring to ownership

by non-governmental organizations and second referring to ownership of the

companys 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 andor 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

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 During the

period (April-December 2006) 205 million tonne of steel was produced by Private

Sector steel units out of the total production of 3315 million tonne in the country The

private sector units consist of major steel producers in one hand and relatively smaller

amp 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 Indias 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

Over the years Tata Steel has emerged as a thriving nimble steel enterprise

due to its ability to transform itself rapidly to meet the challenges of a highly

competitive global economy and commitment to become a supplier of choice

Constant modernization and introduction of state-of-the-art technology at Tata Steel

has enabled it to stay ahead in the industry

Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

increase in its production and sales volumes The hot metal production at 41 million

tonne is 82 more compared to the last year in the corresponding period and crude

steel production at 37 million tonne is higher by 79 compared to the last year in first

three quarters

The saleable steel production at 37 million tonne registered a significant

increase of 11 The total sales of 353 million tonne has grown by 117 over last

financial year in the corresponding period The domestic sale of long products has

increased by 30

Tata Steel is continuing with its programme of expansion of steel making

capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

2007-08 and thereafter to 10 million tonne by fiscal 2010

Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

schedule with placement of equipment order for Kalinganagar project in Orissa and

commencement of the land acquisition process Jharkhand project is waiting

announcement of R amp R policy of the state Government The construction work of

ferrochrome project in South Africa is in full swing

Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

Corus thus emerging as the fifth largest steel producer in the world

The steel major has won the Prime Ministers Trophy four times This award is

instituted by the Indian ministry of steel and awarded to the countrys best integrated

steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

given to the company with world class operations under the Groups Tata Business

Excellence Model

Areas of business

Apart from the main steel division Tata Steels operations are grouped under

strategic profit centres like tubes growth shop (for its steel plant and material handling

equipment) bearings ferro alloys and minerals rings agrico and wires

Tata Steels products include hot and cold rolled coils and sheets tubes wire

rods construction bars structurals forging quality steel rings and bearings In an

attempt to decommoditise steel the company has recently introduced brands like

Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

Tata Steel is also exploring opportunities in the ferro-chrome and titanium

businesses

Joint ventures associates and subsidiaries

Tata Steel has numerous joint ventures and subsidiaries Among them are

Tinplate Company of India

Tayo Rolls

Tata Ryerson

Tata Refactories

Tata Sponge Iron

Tata Metaliks

Tata Pigments

Jamshedpur Injection Powder (Jamipol)

TM International Logistics

mjunction services

TRF

Jamshedpur Utility and Service Company (JUSCO)

The Indian Steel and Wire Products(ISWP)

Lanka Special Steel

Sila Eastern Company

ESSAR STEEL LTD

Essar Steel is an integrated steel producer with operations all along the value

chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

half of its production abroad mainly to the highly demanding markets of the west and

the growth markets of South East Asia and Middle East Essar ensures excellent

customer services through a modern distribution network

Essar Steelrsquos core manufacturing facilities are located at its steel complex in

Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

Expansion

Presently Essar Steel has embarked upon a capacity expansion for

enhancement of its production capacity from 46 million tonne per annum to 76 million

tonne per annum The capacity expansion programme will consist of 2 units of Corex

units of 15 million tonne per annum each Further value addition will be carried out by

Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

Mill

Products

All Essar Steelrsquos products are world class meeting the highest international

standards supported by excellent marketing and service

JSW STEEL LTD

JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

coke making ndash iron making through blast furnace as well as Corex process ndash steel

making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

technology

JSW Steel has a distinction of being certified to ISO-90012000 Quality

management system ISO-140011996 environment management system and OHSAS

180011999 occupational health and safety management system

During this year JSW Steel has also been conferred with a number of awards

Production Performance

(in million tonne)

Items 2003-04 2004-05 2005-06 April-Dec06

Pellets 325 361 380 293

Hot Metal 163 196 240 219

Slabs 161 187 225 195

Hot Rolled Coils 154 178 210 148

JINDAL STEEL AND POWER LTD (JSPL)

Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

business interests in steel power generation mining iron ore coal and diamond

explorationmining The current turnover of the company is over Rs 3000 crore JSPL

is the worldrsquos largest producer of coal based sponge iron The product range

encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

rails and H beams and columns in technical collaboration with JFE Corporation

Japan These H-beams are the most desired option of structural engineers worldwide

JSPL is the largest private sector investor in the state of Chhattisgarh with a total

investment commitment of more than Rs 10000 crore The company is also setting

up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

4500 crore JSPL has been rated as one of the best environmentally managed

companies in India and committed to environment protection as an integral part of

their business activities

ISPAT INDUSTRIES LTD (IIL)

Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

rolled coils per annum The plant has got a 224 million tonne per annum sintering

plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

based sponge iron plant IIL have uniquely combined the usage of hot metal and

sponge iron in the electric arc furnace for production of liquid steel for the first time in

India IIL have also adopted the state-of-art technology called Compact Strip

Production (CSP) process which has been installed for the first time in India and

produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

products are accepted in the domestic and international market

The production performance of IIL during last three years has been as follows

(in million tonne)

Items 2003-04 2004-05 2005-062006-07

(Up to Dec06)

Hot Metal 129 140 142 114

Sponge Iron 106 105 089 085

Hot Rolled Coils 162 197 215 197

The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

Demag the technology supplier

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

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 SAILs equity and retains voting

control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

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 Companys iron ore limestone and dolomite

mines The company has the distinction of being Indiarsquos largest producer of iron ore

and of having the countryrsquos 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

SAILs 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

SAILs 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

With technical and managerial expertise and know-how in steel making gained

over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

services and consultancy to clients world-wide

SAIL has a well-equipped Research and Development Centre for Iron and Steel

(RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

for the steel industry Besides SAIL has its own in-house Centre for Engineering and

Technology (CET) Management Training Institute (MTI) and Safety Organisation at

Ranchi Our captive mines are under the control of the Raw Materials Division in

Kolkata The Environment Management Division and Growth Division of SAIL operate

from their headquarters in Kolkata Almost all our plants and major units are ISO

Certified

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

Subsidiary

Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

Joint Ventures

SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

NTPC SAIL Power Company Pvt Ltd

Bokaro Power Supply Company Pvt Limited

Mjunction Services Limited

SAIL-Bansal Service Centre Ltd

Bhilai JP Cement Ltd

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

MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

producer of ferro manganese and silico manganese for captive use of SAIL plants

The authorised and paid-up share capital of the company as on 3132006 was Rs 30

crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

paid-up capital

Financial Performance

During the year 2005-06 the company recorded a turnover of Rs 24733 crore

(including conversion income of Rs 17110 crore) and made a net profit after tax of

Rs 2097 crore The turnover and net profit after tax of the company during April

2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

(provisional) respectively

Production Performance

The production of all grades of ferro alloys during 2005-06 is as under

(in tonne)

Materials 2005-06 April- Dec 2006

High Carbon Ferro Manganese 51525 49493

Silco Manganese 46712 32921

Medium Carbon Ferro Manganse 2344 164

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 was commissioned in August

1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

million tonne per annum capacity Right from the year of its integrated operation VSP

established its presence both in the domestic and international markets with its

superior quality of products VSP has been awarded all the three International

Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

180011999 The company has taken significant strides in the area of Corporate

Social Responsibility

Production Performance

(in million tonne)

Items 2004-05 2005-06 2006-07 (April-Dec06)

Hot Metal 3920 4153 3040

Liquid Steel 3560 3603 2676

Saleable Steel 3173 3237 2419

NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

Incorporated on November 15 1958 the National Mineral Development Corporation

Ltd (NMDC) a Government of India Enterprise is engaged in the business of

developing and exploiting mineral resources of the country (other than coal oil

natural gas and atomic minerals) At present its activities are concentrated on mining

of iron ore diamonds and silica sand

NMDC operates the largest mechanised iron ore mines in the country at Bailadila

(Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

Supreme Court of India NMDC is following up the case for early hearing

All the iron ore production units have been accredited with ISO 90012000 and ISO

140012004 certifications RampD Centre of NMDC was also accredited with ISO

90012000 certification

Iron Ore

NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

December 2006) Domestic sales of iron ore was 1550 million tonne during the year

(up to December 2006) Exports of iron ore produced by NMDC is canalised through

MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

Capital Structure

The authorised share capital of the company is Rs 150 crore The paid up equity

share capital was Rs 13216 crore Outstanding loans from Government of India are

nil

Financial Performance

The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

Particulars 2004-05 2005-06 2006-07 (April-Dec06)

SalesTurnover222655 371092 2790

Gross Margin128749 2889 2455

Profit Before Tax122365 277013 2410

MSTC LTD

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

Enterprise was set up on September 9 1964 as a canalising agency for the export of

scrap from the country With the passage of time the Company emerged as the

canalising agency for the import of scrap into the country Import of scrap was de-

canalised by the Government in 1991-92 and MSTC has since then moved on to

marketing ferrous and miscellaneous scrap arising out of steel plants and other

industries and importing coal coke petroleum products semi finished steel products

like HR coils and export of primarily iron ore The company has also established an e-

auction portal and undertakes e-auction of coal diamonds and steel scrap and has

developed an e-procurement portal in house

Capital Structure

The company has an authorised capital of Rs 5 crore and paid up capital was Rs

220 crore as on 31122006 of which approximately 90 is held by Government of

India and balance 10 by members of Steel Furnace Association 16 of India Iron and

Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

bonus shares issued in the year 1993-94 in the ratio 11

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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

handling of BOF slag etc

Financial Performance

Particulars 2004-05 2005-06 2006-07 (Apr-

Dec2006)

Total Turnover ie Service charges realised including miscellaneous Incomeetc

981822 1067937 765557

Gross Margin before Interest amp Depreciation 167879 186514 105284

Interest amp Depreciation 83014 100970 84728

Profit before Tax 84865 85544 20556

MANGANESE ORE (INDIA) LTD (MOIL)

Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

of manganese ore in India At the time of inception 49 of its shares were held by the

Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

proportion by Government of India and the State Governments of Madhya Pradesh 17

and Maharashtra Subsequently in 1977 the Government of India acquired the

shares held by CPMO in MOIL and MOIL became a wholly owned Government

company with effect from October 1977 As on 30112006 Government of India held

8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

holding 961 and 882 shares respectively

MOIL Produces and Sells following Grades of Manganese Ore

1048708 High grade ores for production of ferro manganese

1048708 Medium grade ores for production of silico manganese

1048708 Blast furnace grade ore required for production of hot metal

1048708 Dioxide ore for dry battery cells and chemical industries

Production and 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

Items 2004-05 2005-06 2006-07 (up to Dec2006)

1 Production

a) Manganese Ore (thousand tonne) 94300 86500 82533

b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

c) Ferro Manganese (tonne) 1032500 617000 829400

2 Turnover (Rupees in crore) 37878 33409 29463

3 Profit before Tax (Rupees in crore) 20227 16900 12087

KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

90012000 and ISO 14001 company was established in April 1976 to meet the long

term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

was set up at Kudremukh This project was to be financed in full by Iran However as

Iran stopped further loan disbursements after paying US $ 255 million the project was

completed as per schedule with the funds provided by Government of India While the

project was commissioned on schedule consequent upon the political developments

in Iran they did not lift any quantity of concentrate As a diversification measure the

Government approved the construction of a 3 million tonne per year capacity pellet

plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

million tonne with additionsmodifications The plant went into commercial production

in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

Plant Mangalore

Production

A target of 31 million tonne and 305 million tonne was set for production of iron ore

concentrate and iron oxide pellets respectively during the year 2005-06 Actual

production was 2922 million tonne of concentrate and 2834 million tonne of pellets

The target set for production during the year 2006-07 is 305 million tonne of pellets

In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

production of iron ore concentrate during the year 2006-07 As against a target of 188

million tonne of pellets fixed for the period April to November 2006 the actual

production was 0275 million tonne which represents 15 target fulfilment There is

shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

production of pellets is on account of operational problems being encountered in the

pellet plant after switching over to usage of 100 hematite ore from magnetite ore

There was excessive generation of su er fines (slimes) affecting filtration clogging of

filters overflow and contamination of process water due to filling of cooling pond

affecting production While efforts are continuing to rectify the problems the operation

of pellet plant is yet to stabilize and normal production is yet to commence

The sales revenue during the last five years and up to November 2006 during 2006-

07 is detailed below

(Rs in lakh)

Years Concentrate Pellets Total

2006-07 (up to December 2006) - 12427 12427

2005-06 12091 111137 123228

2004-05 16050 169327 185377

2003-04 20209 82729 102938

2002-03 21135 51579 72714

2001-02 21571 50598 72169

Financial Performance

An overview of the performance of KIOCL during the year 2006-07 (up to November

2006) together with actuals for the previous three years is indicated below

(Rs in lakh)

Particulars 2006-07(up to December 2006)

2005-06 2004-05 2003-04

Total value of Sales 12427 123228 185377 102938

Gross Margin 2620 68706 120863 45945

Profit after Tax 1029 35630 64984 30070

Inventories(excluding finished stock)

20417 15843 8720 7616

BIRD GROUP OF COMPANIES

Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

the following seven companies came under the administrative control of the Ministry of

Steel Government of India

(a) The Orissa Minerals Development Company Limited (OMDC)

(b) The Bisra Stone Lime Company Limited (BSLC)

(c) The Karanpura Development Company Limited (KDCL)

(d) Scott amp Saxby Limited (SSL)

(e) Eastern Investments Limited (EIL)

(f) Burrakar Coal Company Limited (Burrakar)

(g) Borrea Coal Company Limited (Borrea)

The status of the companies is as under

a) Burrakar and Borrea coal companies became non-operational after nationalisation

of coal mines The two companies are in the process of liquidation The official

liquidator has already taken over the assets and liabilities of these two companies

b) EIL being an investment company is having a major stake in the equity shares of

operating companies under the Bird Group

c) OMDC BSLC KDCL amp SSL are operating companies under the Group

Status of the Companies at the Time of Nationalisation

At the time when the Bird Group of Companies came under the administrative control

of the Ministry of Steel Government of India all of them were financially sick and

burdened with various problems With the financial support from the Government of

India problems relating mainly to excessive manpower erosion of working capital and

outstanding liabilities could be settled to a considerable extent

REVIEW OF LITERATURE

RS PANDEY sees a bright future for the steel industry in India provided of course

the iron ore mining policy to be announced by the government soon acts as a catalyst

for growth He discusses the industrys problems and prospects in an interview When

asked about the steel sectors ie private and public he expressed his expert views

The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

Excerpts

The public sector steel companies in India are doing extremely well And therefore

they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

Ltd] which has the Vizag steel plant have undertaken massive expansion plans

Between 1992-93 and now the share of the public sector in steel production had gone

down Today its share is 41 per cent while that of the private sector is 59 per cent In

1992-93 the private sector had a share of only 37 per cent In terms of finished steel

the private sector even in 1992-93 had a 67 per cent share and this has now grown

to 71 per cent But the public sector units are growing even if the private sector is

growing faster

During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

going to increase its capacity from the current 13 million tonnes of hot metal to 225

million tonnes in just four years RINL is set to expand its capacity from three million

tonnes to 63 million tonnes in the next three years So that is a major expansion of

capacity for the PSUs

The public sector should be encouraged all the more Let there be a healthy

competition between public and private sector producers The question of exit comes

when they do not perform Look at the stock prices of SAIL A few years ago the scrip

was at below Rs10 per share Today it is more than Rs130 and the expectations

are that it will go up even higher

When talked about the labour productivity he says Yes labour productivity is low in

SAIL in particular But it is improving The steel major is going to adjust much of its

existing manpower in the expansion phase when its capacity is going to almost

double The management had also undertaken a massive VRS [voluntary retirement

scheme] In RINL labour productivity is not all that bad

Besides SAIL has done very well in various other techno-economic parameters in the

last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

per man per year In 2005-06 it went up to 150 tonnes per man per year an

improvement of 20 per cent In blast furnace productivity also there has been an

improvement as also in the production of high-end special steels and capacity

utilisation

With the improved turnover which comes from higher capacity use and higher

manpower productivity SAILs profits have surged Its gross profit more than doubled

between 2003-04 and 2005-06 The general presumption was that the spurt in profits

was largely due to the high prices of steel An analysis has shown that as far as SAIL

is concerned the higher profit is 29 per cent owing to the price factor in steel and

other input costs and 71 per cent owing to improvement in capacity use and other

factors that are just mentioned

OBJECTIVES

To compare Private and Public steel sector with refrence to TATA Steel and

Steel Authority Of India

To analyse potential of both the companies ie TATA Steel and SAIL

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

Research Methodology

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

a) Research design-

In case of my research ldquoComparative analysis of Indian private and Public

sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

found to be more appropriate

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

Comparison between TATA Steel and Steel Authority of India

The Public sector undertakings (PSUs) under the Ministry of Steel have shown

significant improvements in the last two years The combined profit before tax of all 15

PSUs of the Steel Ministry exhibited an enhancement of more than two times from

Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

The profit before tax for all PSUs also exhibited a significant improvement of

around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

comparable period of last year

Contribution of PSUs to public exchequer has also gone up significantly For

example the contribution of five leading companies namely SAIL RINL NMDC

KIOCL and MOIL to Central and State exchequer by way of excise duty customs

duty dividend corporate tax sales tax royalty etc has gone up by more than double

from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

On the other hand 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

During the period (April-December 2006) 205 million tonne of steel was produced by

Private Sector steel units out of the total production of 3315 million tonne in the

country The private sector units consist of major steel producers in one hand and

relatively smaller amp 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

For comparing both the companies ie Tata Steel and SAIL lets analyse both the

companies on following parameters

Production

Chart showing production of both the companies

Quantity 000 Tonnes

2007-08 APR-DEC07APR-

DEC06 ACTUA

L

AGE OF CURRENT

PRODUCTION OVER

CAPACITY UTILISATION

TARGET TENTATIV

E

TARGET

ACTUAL

APR-DEC07 TARGE

T

APR-DEC06 ACTUA

L

APR-DEC 07

APR-DEC06

SAIL

i)BSP49500 37110 37320 35780 1006 1043 1270 1210

ii)DSP18400 13580 14330 13450 1055 1065 1060 990

iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

iv)BSL43500 32630 30970 30010 949 1032 950 910

v)ISP5000 3760 3520 3450 936 1020 940 920

vi)ASP1470 1070 1140 1130 1065 1009 650 640

vii)VISL

1390 1050 1160 1190 1105 975 1300 1340

TATA 50000 37440 37090 37380 991 992 990 1000

TATA Steel

The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

but it could produce only 493 (mT) For the first 3 quarters of the years company set a

target of 3744 (mT) but could produce 3709 However for the same period in last

year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

to 99 this year

Steel Authority of India

The company had a aggregate production target of 13739 (mT) for the year 2007-08

but it could produce only 126 (mT) a growth of 4 over the previous year However

for the first 3 quarters of the years company set a target of 10265 (mT) and produced

10380 as compared to around 10 (mT) for the same period last year SAIL had a

capacity utilisation of 103 this year as compared to 101 last year

Financials

TATA Steel

The year 2006-07 has seen the highest turnover and profits continuing the trend

of the past four years The Company achieved the best ever sales turnover and

profitability during the year under review A robust Indian economy firm steel prices

higher volumes and several improvement initiatives contributed to the record

performance Finished steel sales were higher by 1133 at 451 million tonnes over

the previous year Export turnover was lower by about 5 due to lower volumes

Average price realisation improved mainly due to higher prices of hot rolled

coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

(2005-06 Rs 5938 crores) an increase of 17 over the previous year

Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

due to additional borrowings for the Companyrsquos domestic expansion programs and

funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

20 compared to the previous year

The record financial results would not have been possible without a matching

performance by the operating departments including the raw materials division The

year witnessed the best ever crude steel production by the Company at 505 million

tonnes an increase of 67 over the previous year Jamshedpur Plant became the

first plant in India to produce more than 5 million tonnes of crude steel in a year The

upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

increase in production was backed by improvements in operating practices and

productivity resulting in a reduction in consumption of raw materials energy

refractories etc

Steel Authority of India

Financial Year 2006-07 has been eventful year for the company with further

momentum in improving operational efficiencies laying strong foundation and building

road map for modernisation and expansion of SAIL Plants with several new initiatives

undertaken with its human resource at the core During the year the company got the

distinction of first metal company in the country to reach a market capitalization of Rs

50000 crore

There have been improvements in all financial parameters which are shown in

the table given below-

SAIL set new record in achieving the turnover of Rs39189 crore and profit

before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

increase of 55

Research and Development

Chart showing production of both the companies

(Rs Crore)

TATA Steel

The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

develop galvannealed skin panels It is the only Indian supplier of bake hardening

steel for body panels

Research is undertaken at Tata Steel in the areas of raw materials including coal

coke energy conservation waste utilisation sintering blast furnace productivity and

phosphorous reduction product development and improvement in life of plant and

machinery The Company spends 7 of its turnover for RampD 17 patents have been

sealed and over 100 are in process

Steel Authority of India

Research and Development Centre for Iron and Steel (RDCIS) has provided

innovative technological inputs to different units of SAIL with special emphasis on

cost reduction product development and application quality improvement energy

conservation and automation Several new products were developed and

commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

strengthened its technology marketing efforts by providing consultancy services

organising specialised testing and transfer of technological innovations to outside

customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

Ltd Kolkata and Ms Monarch Electronics Kolkata etc

During the year 1998 technical papers were publishedpresented besides filing

of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

achievements in New Materialsrdquo given by the Ministry of Science and Technology

Government of India

Environment

TATA Steel

Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

has an ISO-14001 certified service providerlocations are certified to ISO-14001

Jamshedpur is the only town in the country which

Significant achievements by the Company include an improvement in

environment and resource conservation including a reduction in green house erosion

raw materials and water consumption The Company has increased waste re-use and

re-cycling Constant upgradation and modernisation has resulted in several state-of-

the-art pollution control systems being installed to prevent and control pollution The

Company has almost doubled its capital investment in Pollution Abatement in the last

five years

Emissions effluents and wastes

Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

most relevance to the steel industry Considerable reduction has been effected by

Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

granulation is taken into account Other Greenhouse Gas emissions do not result from

Tata Steelrsquos activities

Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

tonnes in 2003-04 as against 790 tonnes used during the previous year

Hazardous Waste under Basel Convention The Company does not import or export

any waste deemed hazardous under the Basel Convention All hazardous wastes

generated are handled as per the requirement of the Hazardous Waste Management

and Handling Rules 19892000

Emissions

Tata Steel has undertaken several initiatives which have resulted in

considerable reduction in stack emission Emissions are well below the Indian and

international standards The emission load including particulate matter Sulphur

Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

undertaken at the Steel Works

Waste handling

Most of the solid waste generated from Steel Works is recycled or reused 18

of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

was used to fill low-lying areas and for peripheral road construction around

Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

power plants was dumped in a designated dump area

Effluent Management

Waste water from the steel making process is being treated with best available

physio-chemical methods as well as being recycled Waste water from the coke plant

is treated biologically where organic pollutants are oxidised and decomposed by micro

organisms The Company has reduced the levels of total pollutant discharge in waste

water streams from 0211 in 1999-2000 to 0178 in 2003-04

Steel Authority of India

Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

environmentally responsible manner to comply with applicable regulations and striving

to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

efficiency and optimize resource consumption through various measures viz

improvement in process technology in the areas of raw materials coke iron and steel

making reuserecycle of the by-products generated and conservation of energy and

water

Solid Waste Management

During 2005-06 SAIL produced approximately 134 million tonne of crude steel

and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

these wastes are being made through internal recycling and selling to outside

agencies The wastes generated in the steel plants are being utilized mainly through

their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

during April-September 2006

Environmental Plantation

Trees have a significant role in protection of environment and ecological balance

Extensive afforestation programme are being followed in all the plants and mines The

basis of choosing the species of plants mainly depends on local soil characteristics

and prevailing meteorological conditions The green belt developed by afforestation

adds to the aesthetic environment which becomes dust and noise barriers

A total number of 145521 saplings have been planted covering an area of 637

hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

hectare in 2004-05 in and around the steel plants of SAIL

Environmental Recognitions

SAIL plants have been awarded various prizes for environmental management in

their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

the Confederation of Indian Industries (CII) for exemplary performance in the

environmental economic andsocial dimensions of sustainable development and the

Greentech Environment Excellence Gold AwardGolden Peacock Environment

Excellence Award in the metal sector 2005 instuted by the World Environment

Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

for 2005 from International Greenland Society

Workforce and Welfare of Society

TATA steel

Tata Steel has not lost focus of this philosophy and has adapted it in a broader

and modern context in its Vision 2007 A lot is dependent on the individual spirit and

enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

provide a work environment that will ensure a sense of purpose and personal growth

for each individual The wish of the company is to see the smile on every face

everyday A pioneer in employee welfare Tata Steel has invested in the power of its

people and enriched empowered and enhanced their lives

Even in its nascent years social scientists Sidney and Beatrice Webb were

brought in to work on welfare schemes In fact some of the initiatives introduced by

Tata Steel were the first of their kind in India and some even in the western countries

at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

source of its competitiveness It focuses on constantly updating and challenging

intellectual capabilities to enable them to excel in performance Special efforts are

made for enhancing strategic thinking skills and analytical abilities of its managers and

workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

available with its people through Knowledge Management and sharing of best

practices

In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

mutual co-operation coordination and understanding between the Management and

the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

among many other prestigious awards and recognition Tata Steel aims at ensuring

transparency fairness and equity in all its interactions with its employees to create an

enthused and happy workforce

In 1916 Social Welfare Scheme was formed by Tata Steel to provide

assistance in the fields of education vocational training self-employment and

family welfare

Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

12 times This facility provides on-the-spot diagnostic medical and advanced

surgical treatment for preventive and curative interventions to people in

inaccessible rural areas

Sir Dorab Tata personally financed four athletes and two wrestlers from India

for the 1920 Antwerp Olympics

The JRD Sports Complex an international stadium with an 8-lane polyurethane

track was inaugurated in 1991 The complex also houses facilities for handball

tennis volleyball hockey basketball boxing table tennis and a modern

gymnasium

The Tata Steel Family Initiatives Foundation is engaged in off ering health

services for the betterment of the people in and around Jamshedpur

At times of natural calamities the company has rushe immediate relief and off

ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

fl ood ravaged Orissa and other such aff ected areas

Horse-riding lessons the Jubilee Amusement park the zoological park etc off

er a unique environment for the children of Jamshedpur to grow up in

In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

Jamshedpur has emerged as the one of the best cities in India

Steel Authority of India

The manpower strength as on 31st March 2006 was 138211 comprising 15206

executives and 123005 non-executives The total reduction in manpower achieved

during the year stood at 4864 which included separation of 881 employees through

voluntary retirement The labour productivity improved by around 12 over previous

year to 150 tonne crude steelmanyear

Some of the areas of assistance which are available to the weaker sections are the

following

The company has provided land for construction of school buildings in some of

the steel townships as well as in other places for spreading education among

the masses

The company has constructed roads in remote areas around the steel plants

and also where the captive mines are located to improve communication and

also increase activities such as organisation of health camps school facilities

drinking water etc under the peripheral development schemes

Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

providing them with education boarding and lodging facilities

Construction of bridges by-pass roads metal-morum path waterways

levellingdressing area around township pre-mixed roads Installation of hand-

pumps tube wells and wells for villagers

Construction of school buildings (including for mentally retarded deaf and

dumb children) madarsas providing school furniture therein and construction

of hostels womenrsquos college building etc

Fourteen scholarships are awarded to deserving SCST undergraduate

engineering students in various disciplines to encourage technical education

among them

In many cases tuition fee in company run schools is exempt for SCST

students Steps are taken to provide education to more and more tribal children

in company schools

The unemployed SCST youth are given specialized training in various

technical trades to develop skill and knowledge Such training is provided free

of cost

Adult literacy campaign is carried out in most of the steel townships Every year

more and more men and women are being covered in this campaign

Development of fishery and cottage industry providing sewing machines to

village mahila mandals and promoting other self-employment generation

schemes

SAIL has established a hockey academy with stadium and hostel facilities at

Rourkela to tap and nurture the talent scattered in surrounding tribal area The

academy was successful in spotting a number of young talented tribal players

and grooms them under expertise of ex-Olympian

Technology

The biggest boost to efficiency in the steel industry has come from the increased

use of continuous casting ndash an indicator of the modernity of the production process Its

share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

now India is thus well on its way to joining the ranks of the leading steelmakers

among the industrial nations (share in EU-25 96) However in India some 6 of

crude steel is still made using the outdated open-hearth process (EU-25 03) which

suggests there is restructuring potential

TATA Steel

Tata Steels stall at the International Trade Fair was adjudged the best along

with SAIL amongst ninety national companies participating in the Trade Fair Thirty

international companies also took part in the exhibition Participating companies from

countries all over the world exhibited latest technologies and know-how List of

participating companies included Baosteel SAIL Heavy Engineering Corporation

Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

companies of national and international repute China was the partner country for the

International Trade Fair this year

In the award winning exhibition Tata Steel showcased its best coal mining practices

cutting-edge technology used in iron ore mining pioneering human resource

practices 78 years of industrial harmony and various other aspects of the worlds best

steel company

The 6th International Trade Fair and Conference an institutionalised global

event is considered to be one of the most prestigious forums for national as well

international participants It is a conclave of the finest minds concerned with the future

direction and growth of these sectors The forum provided the worlds most eminent

metallurgists manufacturers of metallurgical and mining machinery and related

sectors professionals analysts and experts with the opportunity to exchange views on

emerging technologies synergy and strengths and open up wider horizons for

sectorial development

Tata Steel to adopt Corus technology

Tata Steel plans to implement alternate technology used by the British steel

maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

production according to Mr B Muthuraman Managing Director Tata Steel

ldquoWe are looking at alternate technology Corus has developed an alternate

technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

newspersons on the sidelines of the 34th National Management Convention organised

by the All-India Management Association However he declined to give further details

on the type of technology the Indian steel giant plans to implement

Steel Authority of India

Modernisation holds the key to SAILs fortunes in the near future The objective

of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

and productive capacity and in the process become more energy-efficient and

improve quality The key component of the ongoing modernisation drive - already

completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

ingot casting facilities with basic oxygen furnaces for steel-making and employing

continuous casting techniques A senior SAIL official says Continuous casting and

basic oxygen furnaces ensure better quality steel through processes more easily

monitored for quality control The basic oxygen surfaces method is significantly faster

more automated and permits greater flexibility Continuous casting is more efficient

than the traditional ingot casting methods and gives increased yields while enabling

better quality standards SAIL is also modernising its finishing mills and is adding

secondary refining facilities to improve quality

Safety measures

A unique feature of safety management in steel industry is that a bipartite forum

named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

was formed in 1973 at national level having representatives from steel plants in SAIL

RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

Committee With a view to inculcate safety consciousness JCSSI organises seminars

workshops training programme safety competitions for member organisations JCSSI

with the co-operation and support of Trade Union representatives formulates policies

and guidelines for its member plants and monitors the implementation

Tata Steel

Safety has always been a prime focus at Tata Steel A Safety Committee a

Safety department and a Safety Trophy helped spread the message all across the

company

TATA reaffirms its commitment to provide safe working place and clean

environment to its employees and other stakeholders as an integral part of its

business philosophy and values We will continually enhance our Environmental

Occupational Health amp Safety (EHS) performance in our activities products and

services through a structured EHS management framework Towards this

commitment we shall

Establish and achieve EHS objectives and targets

Ensure compliance with applicable EHS legislation and other requirement and

go beyond

Conserve natural resources and energy by constantly seeking to reduce

consumption and promoting waste avoidance and recycling measures

Eliminate minimize andor control adverse environmental impacts and

occupational health and safety risks by adopting appropriate state-of-the-art

technology and best EHS management practices at all levels sand functions

Enhance awareness skill and competence of our employees and contractors

so as to enable them to demonstrate their involvement responsibility and

accountability for sound EHS performance

Steel Authority of India

SAIL has a separate corporate unit called the SAIL Safety Organisation to

monitor safety system amp activities- SAIL also has a comprehensive safety policy

Annual Performance Plans (APP) for the areas of safety and fire services are

formulated and review of implementation of APP is done during Heads of

Safety meeting

Internal and external safety audits of major departments particularly hazardous

areas are conducted every year and points arising from these audits are

liquidated Safety aspects have been incorporated in standard operating

practices (SOP) and standard maintenance practices (SMP)

All major capital repairsshut downs are closely monitored round the clock

Periodic drives are conducted to inculcate safety awarenessculture up to

grass-root level apart from regular inspections as per checklists to identify

unsafe conditionsacts

Safety training is imparted to target group employees at various levels HRD

intervention in the area of safety covers Heads of Departments Line Managers

amp Departmental Safety Officers Besides area specific workshops are

conducted at different locations on important topics like gas safety railroad

safety safety in iron steel amp coke making etc

Consistent efforts were made by SAIL Safety Organisation for improving safety

standards in the company by taking measures like intensive safety drives in works

area and conducting safety audits in hazardous departments of different plants and

mines In addition specific workshops on safety aspects were organised in various

SAIL steel plants

Measures taken by Indian government to improve the industry

Now letrsquos 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-

1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

among others was removed from the list of industries reserved for the public

sector and also exempted from the provisions of compulsory licensing under the

Industries (Development and Regulation) Act 1951

2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

of `high priority industries for automatic approval for foreign equity investment up

to 51 This limit has been recently increased to 100

3 Price and distribution of steel were deregulated from January 1992 At the same

time it was ensured that priority continued to be accorded for meeting the

requirements of small scale industries exporters of engineering goods and North

Eastern Region of the country besides strategic sectors such as Defence and

Railways

4 The trade policy has been liberalised and import and export of iron and steel is

freely allowed There are no quantitative restrictions on import of iron and steel

items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

regulating the imports is the tariff mechanism Tariffs on various items of iron and

steel have drastically come down since 1991-92 levels and the government is

committed to bring them down to the international levels In Chapter 72 there are

two items viz 72042110 and 72042910 which fall in the restricted list of imports

5 Iron amp Steel are freely importable as per the Extant Policy

6 Iron amp Steel are freely exportable

7 Advance Licensing Scheme allows duty free import of raw materials for exports

8 The floor price for seconds and defectives continues till date

9 Imports of seconds and defectives of steel are allowed only through three

designated ports of Mumbai Calcutta and Chennai

10Mandatory pre inspection certificate by a reputed international agency for every

import consignment of seconds and defectives

11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

the customs duty on non-alloy steel was further reduced from 10 per cent to 5

per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

15 per cent to 5 per cent

12Further customs duty on several raw materials used by the steel sector like

noncoking coal metcoke and nickel has been reduced to 5 per cent and on

coking coal to zero

13To bring down the prices of steel the excise duty on steel products was reduced

from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

that the duty regime will be reviewed Budget 2004-05 revised this partially by

increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

cut on moderating prices was not achieved

14The union Budget 2007-08 the import duty on seconds and defective has been

further reduced from 20 to 10

Special assistance being provided by Ministry of Steel to Private Sector

1 Ministry of Steel is extending all possible support as detailed below for the

development of Iron and Steel Sector in the country

2 The Ministry is providing linkage for raw materials rail movement clearance etc for

new plants and expansion of existing ones wherever applied for

3 To ensure an un-interrupted supply of raw materials to the producers

4 The Ministry has been interacting with All India Financial institutions to expedite

clearance of projects

5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

Plants are held at the level of Secretary

6 Ministry of Steel identifies infra-structural and related facilities required by steel

industry so that their absence does not lead to bottlenecks in the future growth of

the Iron and Steel Sector and takes up these issues with the concerned ministries

7 The Ministry has encouraged the setting up of Institute for Steel Development and

Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

country are members of this Institute which has been set up with the objective of

promoting developing and propagating the proper and effective use of steel

8 In order to resolve the problems faced by existing amp new steel plants amp to assist

major steel plants being implemented Govt has setup a Project Coordination

Group under the Chairmanship of Steel Minister

NATIONAL STEEL POLICY 2005

The progress of the steel industry has a critical influence on the pace of Indiarsquos

development and as such great importance is attached to capacity expansion in line

with expected demand at cost and prices which make Indian steel internationally

competitive The existing regime of liberalization decontrol and deregulation of

industry in the country has opened up new opportunities for the expansion of the steel

industry With a view to accelerating the growth of the steel sector and attaining the

vision of India becoming a developed economy by 2020 the Ministry of Steel

formulated a National Steel Policy (NSP) in 2005

The following salient features can be derived after analysing the NSP 2005

The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

towards reform restructuring and globalisation

The long-term goal of the NSP is that India should have a modern and efficient

steel industry of world standards catering to diversified steel demand The focus of

the policy is to achieve global competitiveness not only in terms of cost quality and

product-mix but also in terms of global benchmarks of efficiency and productivity

In order to achieve the goal of 110 million tones of steel production by 2019-20 the

NSP seeks to remove the supply-side constraints to the growth of this industry in

an open globally integrated and competitive environment

The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

policy goal On the demand side the strategy would be to create incremental

demand through promotional efforts creation of awareness and strengthening the

delivery chain particularly in rural areas On the supply side the strategy would be

to facilitate creation of additional capacity remove procedural and policy

bottlenecks in the availability of inputs such as iron ore and coal make higher

investments in RampD and encourage the creation of infrastructure such as roads

railways and ports

The NSP acknowledges the low per capita consumption of steel in the country

especially in the rural areas and the need to boost steel consumption to improve

quality of life and help in meeting the growing aspirations of masses

In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

industry would need additional capital In addition funds would be required for

technological upgrade of existing facilities In order to mobilize such vast resources

NSP seeks to encourage foreign direct investment In addition the policy also

seeks to make the fiscal incentives available to infrastructure projects accessible

to the steel industry

The NSP seeks to support developing of risk-hedging instruments like futures and

derivatives to contain price volatility in the steel market

The NSP seeks to strengthen the existing training and research facilities available

to the domestic steel industry so as to provide suitable training programmes

especially for the secondary small-scale units and also to collect and analyse data

on important parameters of the industry

The NSP seeks to mount aggressive RampD efforts to create manufacturing

capability for special types of steel substitute coking coal use iron ore fines

develop new products suited to rural needs enhance material and energy

efficiency utilize waste and arrest environmental degradation

The NSP acknowledges the important role played by the secondary steel sector in

providing employment meeting local demand of steel in rural and semi-urban

areas and meeting the countryrsquos demand of some special products and seeks to

endeavour to provide the necessary feedstock to these units at reasonable prices

from major plants through the existing mechanism of State Small Industries

Corporations

The NSP recognizes the fact that integration of the Indian steel industry with the

global economy requires that the industry should be protected from unfair trade

practices The NSP therefore envisages institution of mechanisms for import

surveillance and monitoring export subsidies in other countries

The present per capita consumption of steel in the country is very low compared to the

world average As mentioned above one of the objectives of the NSP is to augment

the demand and consumption of steel in the country by conscious promotion of steel

usage With a view to create a mass awareness campaign on conscious promotion of

steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

The Committee is being serviced by Institute for Steel Development and Growth

(INSDAG) The objective of the Committee is to promote steel usage in the country by

way of an awareness campaign with particular emphasis on rural sectors The

Committee also aims at educating the designers architects builders and planners

regarding the qualitative and cost effective applications of steel in various structures

including buildings bridges flyovers and airports

FUTURE OF INDIAN STEEL INDUSTRY

India is amongst a few countries in the world having the dual advantage of fast

growing domestic demand coupled with access to raw materials Further the trend

that is already discernible is that the axis of global steel production consumption is

shifting towards Asia With their large populations China and India already account for

35 of the total world steel production - more than double of Europe Asia is

expected to outpace other regions of the world to an even greater extent in the coming

years

Amongst the Asian nations China has established a huge unbridgeable lead It

is accepted that China will continue to be the leader However India is slated to

emerge as the second Asian giant in the next eight years Figuratively speaking while

the Dragon has reached maturity the Lotus is about to bloom in resplendent

splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

China swallowed almost 32 of global steel It is unlikely that future production and

consumption would continue to flourish at growth rates of 8 and 18 respectively as

has been the case over the last few years On the other hand it is sun-rise time for

India where the demand has increased by 7-8 in the last couple of years In the long

run Indian steel is likely to be more cost-effective since unlike China India has

relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

can sustain domestic production of 120-130 million tonnes for at least 25-30 years

However the position with coal is not so favourable Though thermal coal

reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

traditional blast furnace route would require coking coal India does not have adequate

reserves of coking coal nor is the meagre amount available of appropriate quality

Thus the steel industry always had to contend with the dual problems of inadequate

availability and poor quality of Indian coking coal This has been partly addressed by

adopting alternative iron making processes that are not dependent on coking coal it

can not be denied that coal is the biggest cause for concern for bulk steel production

in India

Because of the shortage of indigenous coal attempts have been made by steel

producers to ensure long-term supplies by tying up with global majors or by acquiring

mines in other countries This is the only long-term solution but with a global shortage

of coal it may not remain cost-effective in the long run

India is the seventh largest producer of steel and may further improve its position

going by the current trends A series of investment decisions by major domestic

players and international steel giants such as Steel Authority of India Ltd Tata Steel

POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

The keen interest shown by various prospective investors is not only due to

expectations of strong growth in domestic demand but also due to indigenous

availability of key resources like iron ore and skilled workforce

After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

consumption has accelerated to 91 per cent

With the likely growth of Indian economy at around 7 per cent per annum

demand for steel is expected to remain strong and is projected to reach a level of 90

million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

demand is sustainable considering the fact that Indias per capita consumption of steel

is still very low at 31 kgs per head compared to the world average of 145 kgs The

very low level of per capita consumption of steel in India is highlighted further when

compared with the consumption levels of its peer group consisting of countries like

China Brazil Mexico and Republic of Korea as also with selected developed

countries

Though there are realistic constraints in India to achieving as rapid a growth as in

China there seems to be consensus among analysts that India is likely to witness a

growth rate in steel consumption higher than the historically observed rate of 6 to 7

percent If the growth rate (9 per cent) of last three years is maintained then we will

achieve the 110 million tonnes landmark even by 2018 Though some analysts are

more conservative due to cyclicity of steel business it may be mentioned that in a

country like India cyclicity is more in terms of prices rather than volumes of production

Exports

Similar optimism prevails with regard to export of iron and steel Export of steel

starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

rising domestic demand and low capacity additions Exports now constitute around 17

per cent of total production and Indias presence in the developing and developed

world is being increasingly felt Indian steel producers have recently been able to

supply specialized grades and products used for sophisticated applications like

automobiles On the cost front some of our producers are counted amongst the least

cost producers of the world For an average reference plant India is competitively

placed in the middle of the hierarchy of steel producing nations

However we have a long way to go to catch up with the leading exporters of the

world such as Japan the CIS countries Brazil etc It is however expected that by

2019-20 India will be able to export around 26 million tonnes of steel representing 24

per cent of total projected production The projected export ratio compares well with

the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

The projected production of steel by 2019-20 to meet the domestic and export

demand will be around 110 million tonnes Management of resources and

infrastructural growth is going to be critical in achievement of the production level

envisaged The broad requirements of various resources will increase manifold from

the current level The bottlenecks in availability of critical inputs and various facilities

need to be removed through concerted efforts of Government and industry The broad

strategy to overcome these constraints as well as meet the strategic goals of the steel

sector has been discussed in the National Steel Policy which has been recently

approved by the Government

As stated earlier the long-term goal of the National Steel Policy is that India

should have a modern and efficient steel industry of world standards catering to a

diversified steel demand The focus of the policy is to achieve global competitiveness

not only in terms of cost quality and product mix but also in terms of global

benchmarks of efficiency and productivity The policy envisages adopting a multi-

pronged strategy to achieve these goals On the demand side the strategy would be

to create incremental demand through promotional efforts creation of awareness and

strengthening the delivery chain particularly in rural areas On the supply side the

strategy would be to facilitate creation of additional capacity remove procedural and

policy bottlenecks in the availability of inputs such as iron ore and coal make higher

investments in RampD and HRD and encourage the creation of infrastructure such as

roads railways and ports

The production figures exports and imports of finished carbon steel and pig iron

and apparent consumption patterns of finished carbon steel as indicated by TATA

Steel and SAIL attest to the continuing growth for both the sectors

FINDINGS

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 increased its profit over the year particularly in 2006-07

Both the companies are planning to adopt modern technology which is going to

help them to compete in world market but they need to be less dependent on

state of art technology and coal for long term prospects

Public sector has undergone retrenchment for the employees and improved

has its lobour productivity but it is still lacking behind as compared to private

sector

SAIL has reduced the no of accidents due to improper handling of machinery

still no of accidents are more than that of TATA Steel

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

ie 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 have to be met

comprehensively if we are to take our legitimate place in the world as a developed

nation by 2020

BIBLIOGRAPHY

Annual report (2006-07) published by ministry of steel

Annual report (2006-07) published by TATA Steel

Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

REPORTrsquo posted by SAIL on its website

lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

held on 07 Nov 2006

Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

wwwsteelnicin (Official website of ministry of industry)

wwwtatasteelcom (Official website of TATA Steel)

wwwsailcoin (Official website of Steel Authority of India)

wwwworldsteelorg (official website of International Iron amp Steel Institute)

wwwjpcindiansteelnicin (Website of joint planning committee)

  • DATA ANALYSIS
  • Comparison between TATA Steel and Steel Authority of India
  • Production
  • Quantity 000 Tonnes
  • Financials
  • Research and Development
  • (Rs Crore)
  • TATA Steel
  • Steel Authority of India
  • Environment
  • TATA Steel
  • Emissions effluents and wastes
  • Emissions
  • Waste handling
  • Effluent Management
  • Steel Authority of India
  • Solid Waste Management
  • Environmental Plantation
  • Environmental Recognitions
  • Workforce and Welfare of Society
  • TATA steel
  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
  • Steel Authority of India
  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
  • Technology
  • Steel Authority of India
  • Safety measures
  • Tata Steel
  • Steel Authority of India
  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
  • Measures taken by Indian government to improve the industry
  • Now letrsquos 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-
  • Special assistance being provided by Ministry of Steel to Private Sector
  • FUTURE OF INDIAN STEEL INDUSTRY

    DAVV Indore

    CONTENTS

    1) TITLE

    2) INTRODUCTION

    a) World Steel Industry An Overviewb) Indian steel Industryc) What is Private limited and Public limitedd) Private sector companies in Indiae) Public sector companies in India

    3) REVIEW OF LITERATURE

    4) OBJECTIVES

    5) RESEARCH METHODOLOGY

    a) Research designb) Data collection method

    6) DATA ANALYSIS

    Comparison between TATA Steel and Steel Authority of India

    a) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures

    Measures taken by Indian government to improve the industry

    National Steel Policy 2005

    7) FINDINGS

    8) BIBLIOGRAPHY

    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 till recently

    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 In the last one year the

    world has seen two big Mergers amp Acquisitions deals to take place-

    The Mittal Steel listed in Holland has acquired the worlds largest steel

    company called Arcelor Steel to become the worlds largest producer of Steel

    named Arcelor-Mittal

    Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds fifth

    largest steel company Corus with the highest ever stock price

    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 55 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

    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

    Iron and steel is vital to the Indian economy for economic growth and

    economic well-being No practical substitutes exist on a large scale for iron and steel

    because of the relatively high cost of alternative materials

    Worldwide there are broadly two major categories of steel playersmdashIntegrated

    steel producers (ISPs) and mini-millssecondary producers although variations and

    combinations of the two exist The key difference between the two is the type of iron

    bearing feedstock they consume In an integrated mill this is predominantly iron ore

    with a smaller quantity of steel scrap A mini-mill produces steel uses mainly steel

    scrap or increasingly other sources of metallic iron such as directly reduced iron

    (DRI)hot briquette iron (HBI)

    The iron and steel industry not only directly accounts for about 2 of GDP it also

    has a bearing on how the consumer goods and downstream infrastructure sectors

    develop Further with a share of approximately 10 the sector is amongst the largest

    contributors to the central excise India accounted for 34 of the estimated world

    steel production of 1129 million tonnes (mt) during 2005 At present India is the 7th

    largest crude steel producing country in the world

    In 2006-07 production of Finished (Carbon) Steel was 49350 million tonnes

    (Prov) Production of Pig Iron in 2006-07 is estimated to be 4960 Million Tonnes

    (Prov) The share of Main Producers (ie SAIL RINL and TSL) and secondary

    producers in the total production of Finished (Carbon) steel was 35 and 65

    respectively during the period of April-December 2006

    Size of Industry-

    India is among the top 10 global suppliers of steel in the world

    More than 35 million tonnes of steel is produced in India per annum

    India is also the largest producer of sponge iron in the world

    This sector represents around Rs 1 trillion of capital investments and directly

    provides employment to around 05 million with the integrated steel plants

    accounting for a 40 share

    The iron and steel sector also contributes around 62 of Indiarsquos manufactured

    goods exports and 46 of total exports by value

    Structural Characteristics of Indian Steel Industry-

    The industry is dominated by large integrated players like SAIL and Tata Steel

    in steel

    The Public sector has a significant presence in this industry Steel Authority of

    India Ltd (SAIL) has 32 of Indiarsquos installed capacity of crude steel

    Tata Steel and Essar Steel are the major private players in the industry

    The industryrsquos 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 fallingrising prices and industry

    lossesprofits

    Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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

    What is Private Limited and Public limited

    Now letrsquos first understand the meaning and difference between Public Sector

    Company and Private Sector Company The term ldquoPrivate Companyrdquo refers to

    ownership of a business company in two different waysmdash First referring to ownership

    by non-governmental organizations and second referring to ownership of the

    companys 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 andor 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

    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 During the

    period (April-December 2006) 205 million tonne of steel was produced by Private

    Sector steel units out of the total production of 3315 million tonne in the country The

    private sector units consist of major steel producers in one hand and relatively smaller

    amp 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 Indias 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

    Over the years Tata Steel has emerged as a thriving nimble steel enterprise

    due to its ability to transform itself rapidly to meet the challenges of a highly

    competitive global economy and commitment to become a supplier of choice

    Constant modernization and introduction of state-of-the-art technology at Tata Steel

    has enabled it to stay ahead in the industry

    Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

    increase in its production and sales volumes The hot metal production at 41 million

    tonne is 82 more compared to the last year in the corresponding period and crude

    steel production at 37 million tonne is higher by 79 compared to the last year in first

    three quarters

    The saleable steel production at 37 million tonne registered a significant

    increase of 11 The total sales of 353 million tonne has grown by 117 over last

    financial year in the corresponding period The domestic sale of long products has

    increased by 30

    Tata Steel is continuing with its programme of expansion of steel making

    capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

    2007-08 and thereafter to 10 million tonne by fiscal 2010

    Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

    schedule with placement of equipment order for Kalinganagar project in Orissa and

    commencement of the land acquisition process Jharkhand project is waiting

    announcement of R amp R policy of the state Government The construction work of

    ferrochrome project in South Africa is in full swing

    Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

    Corus thus emerging as the fifth largest steel producer in the world

    The steel major has won the Prime Ministers Trophy four times This award is

    instituted by the Indian ministry of steel and awarded to the countrys best integrated

    steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

    given to the company with world class operations under the Groups Tata Business

    Excellence Model

    Areas of business

    Apart from the main steel division Tata Steels operations are grouped under

    strategic profit centres like tubes growth shop (for its steel plant and material handling

    equipment) bearings ferro alloys and minerals rings agrico and wires

    Tata Steels products include hot and cold rolled coils and sheets tubes wire

    rods construction bars structurals forging quality steel rings and bearings In an

    attempt to decommoditise steel the company has recently introduced brands like

    Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

    corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

    Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

    Tata Steel is also exploring opportunities in the ferro-chrome and titanium

    businesses

    Joint ventures associates and subsidiaries

    Tata Steel has numerous joint ventures and subsidiaries Among them are

    Tinplate Company of India

    Tayo Rolls

    Tata Ryerson

    Tata Refactories

    Tata Sponge Iron

    Tata Metaliks

    Tata Pigments

    Jamshedpur Injection Powder (Jamipol)

    TM International Logistics

    mjunction services

    TRF

    Jamshedpur Utility and Service Company (JUSCO)

    The Indian Steel and Wire Products(ISWP)

    Lanka Special Steel

    Sila Eastern Company

    ESSAR STEEL LTD

    Essar Steel is an integrated steel producer with operations all along the value

    chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

    complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

    half of its production abroad mainly to the highly demanding markets of the west and

    the growth markets of South East Asia and Middle East Essar ensures excellent

    customer services through a modern distribution network

    Essar Steelrsquos core manufacturing facilities are located at its steel complex in

    Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

    Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

    tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

    down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

    at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

    Expansion

    Presently Essar Steel has embarked upon a capacity expansion for

    enhancement of its production capacity from 46 million tonne per annum to 76 million

    tonne per annum The capacity expansion programme will consist of 2 units of Corex

    units of 15 million tonne per annum each Further value addition will be carried out by

    Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

    Mill

    Products

    All Essar Steelrsquos products are world class meeting the highest international

    standards supported by excellent marketing and service

    JSW STEEL LTD

    JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

    process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

    coke making ndash iron making through blast furnace as well as Corex process ndash steel

    making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

    facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

    tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

    tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

    Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

    casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

    technology

    JSW Steel has a distinction of being certified to ISO-90012000 Quality

    management system ISO-140011996 environment management system and OHSAS

    180011999 occupational health and safety management system

    During this year JSW Steel has also been conferred with a number of awards

    Production Performance

    (in million tonne)

    Items 2003-04 2004-05 2005-06 April-Dec06

    Pellets 325 361 380 293

    Hot Metal 163 196 240 219

    Slabs 161 187 225 195

    Hot Rolled Coils 154 178 210 148

    JINDAL STEEL AND POWER LTD (JSPL)

    Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

    business interests in steel power generation mining iron ore coal and diamond

    explorationmining The current turnover of the company is over Rs 3000 crore JSPL

    is the worldrsquos largest producer of coal based sponge iron The product range

    encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

    rails and H beams and columns in technical collaboration with JFE Corporation

    Japan These H-beams are the most desired option of structural engineers worldwide

    JSPL is the largest private sector investor in the state of Chhattisgarh with a total

    investment commitment of more than Rs 10000 crore The company is also setting

    up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

    5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

    Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

    watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

    4500 crore JSPL has been rated as one of the best environmentally managed

    companies in India and committed to environment protection as an integral part of

    their business activities

    ISPAT INDUSTRIES LTD (IIL)

    Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

    Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

    rolled coils per annum The plant has got a 224 million tonne per annum sintering

    plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

    based sponge iron plant IIL have uniquely combined the usage of hot metal and

    sponge iron in the electric arc furnace for production of liquid steel for the first time in

    India IIL have also adopted the state-of-art technology called Compact Strip

    Production (CSP) process which has been installed for the first time in India and

    produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

    products are accepted in the domestic and international market

    The production performance of IIL during last three years has been as follows

    (in million tonne)

    Items 2003-04 2004-05 2005-062006-07

    (Up to Dec06)

    Hot Metal 129 140 142 114

    Sponge Iron 106 105 089 085

    Hot Rolled Coils 162 197 215 197

    The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

    with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

    global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

    Demag the technology supplier

    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

    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 SAILs equity and retains voting

    control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

    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 Companys iron ore limestone and dolomite

    mines The company has the distinction of being Indiarsquos largest producer of iron ore

    and of having the countryrsquos 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

    SAILs 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

    SAILs 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

    With technical and managerial expertise and know-how in steel making gained

    over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

    services and consultancy to clients world-wide

    SAIL has a well-equipped Research and Development Centre for Iron and Steel

    (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

    for the steel industry Besides SAIL has its own in-house Centre for Engineering and

    Technology (CET) Management Training Institute (MTI) and Safety Organisation at

    Ranchi Our captive mines are under the control of the Raw Materials Division in

    Kolkata The Environment Management Division and Growth Division of SAIL operate

    from their headquarters in Kolkata Almost all our plants and major units are ISO

    Certified

    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

    Subsidiary

    Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

    Joint Ventures

    SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

    NTPC SAIL Power Company Pvt Ltd

    Bokaro Power Supply Company Pvt Limited

    Mjunction Services Limited

    SAIL-Bansal Service Centre Ltd

    Bhilai JP Cement Ltd

    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

    MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

    Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

    producer of ferro manganese and silico manganese for captive use of SAIL plants

    The authorised and paid-up share capital of the company as on 3132006 was Rs 30

    crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

    paid-up capital

    Financial Performance

    During the year 2005-06 the company recorded a turnover of Rs 24733 crore

    (including conversion income of Rs 17110 crore) and made a net profit after tax of

    Rs 2097 crore The turnover and net profit after tax of the company during April

    2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

    (provisional) respectively

    Production Performance

    The production of all grades of ferro alloys during 2005-06 is as under

    (in tonne)

    Materials 2005-06 April- Dec 2006

    High Carbon Ferro Manganese 51525 49493

    Silco Manganese 46712 32921

    Medium Carbon Ferro Manganse 2344 164

    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 was commissioned in August

    1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

    million tonne per annum capacity Right from the year of its integrated operation VSP

    established its presence both in the domestic and international markets with its

    superior quality of products VSP has been awarded all the three International

    Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

    180011999 The company has taken significant strides in the area of Corporate

    Social Responsibility

    Production Performance

    (in million tonne)

    Items 2004-05 2005-06 2006-07 (April-Dec06)

    Hot Metal 3920 4153 3040

    Liquid Steel 3560 3603 2676

    Saleable Steel 3173 3237 2419

    NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

    Incorporated on November 15 1958 the National Mineral Development Corporation

    Ltd (NMDC) a Government of India Enterprise is engaged in the business of

    developing and exploiting mineral resources of the country (other than coal oil

    natural gas and atomic minerals) At present its activities are concentrated on mining

    of iron ore diamonds and silica sand

    NMDC operates the largest mechanised iron ore mines in the country at Bailadila

    (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

    Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

    activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

    from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

    Supreme Court of India NMDC is following up the case for early hearing

    All the iron ore production units have been accredited with ISO 90012000 and ISO

    140012004 certifications RampD Centre of NMDC was also accredited with ISO

    90012000 certification

    Iron Ore

    NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

    December 2006) Domestic sales of iron ore was 1550 million tonne during the year

    (up to December 2006) Exports of iron ore produced by NMDC is canalised through

    MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

    exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

    Capital Structure

    The authorised share capital of the company is Rs 150 crore The paid up equity

    share capital was Rs 13216 crore Outstanding loans from Government of India are

    nil

    Financial Performance

    The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

    Particulars 2004-05 2005-06 2006-07 (April-Dec06)

    SalesTurnover222655 371092 2790

    Gross Margin128749 2889 2455

    Profit Before Tax122365 277013 2410

    MSTC LTD

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

    Enterprise was set up on September 9 1964 as a canalising agency for the export of

    scrap from the country With the passage of time the Company emerged as the

    canalising agency for the import of scrap into the country Import of scrap was de-

    canalised by the Government in 1991-92 and MSTC has since then moved on to

    marketing ferrous and miscellaneous scrap arising out of steel plants and other

    industries and importing coal coke petroleum products semi finished steel products

    like HR coils and export of primarily iron ore The company has also established an e-

    auction portal and undertakes e-auction of coal diamonds and steel scrap and has

    developed an e-procurement portal in house

    Capital Structure

    The company has an authorised capital of Rs 5 crore and paid up capital was Rs

    220 crore as on 31122006 of which approximately 90 is held by Government of

    India and balance 10 by members of Steel Furnace Association 16 of India Iron and

    Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

    bonus shares issued in the year 1993-94 in the ratio 11

    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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

    handling of BOF slag etc

    Financial Performance

    Particulars 2004-05 2005-06 2006-07 (Apr-

    Dec2006)

    Total Turnover ie Service charges realised including miscellaneous Incomeetc

    981822 1067937 765557

    Gross Margin before Interest amp Depreciation 167879 186514 105284

    Interest amp Depreciation 83014 100970 84728

    Profit before Tax 84865 85544 20556

    MANGANESE ORE (INDIA) LTD (MOIL)

    Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

    of manganese ore in India At the time of inception 49 of its shares were held by the

    Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

    proportion by Government of India and the State Governments of Madhya Pradesh 17

    and Maharashtra Subsequently in 1977 the Government of India acquired the

    shares held by CPMO in MOIL and MOIL became a wholly owned Government

    company with effect from October 1977 As on 30112006 Government of India held

    8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

    holding 961 and 882 shares respectively

    MOIL Produces and Sells following Grades of Manganese Ore

    1048708 High grade ores for production of ferro manganese

    1048708 Medium grade ores for production of silico manganese

    1048708 Blast furnace grade ore required for production of hot metal

    1048708 Dioxide ore for dry battery cells and chemical industries

    Production and 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

    Items 2004-05 2005-06 2006-07 (up to Dec2006)

    1 Production

    a) Manganese Ore (thousand tonne) 94300 86500 82533

    b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

    c) Ferro Manganese (tonne) 1032500 617000 829400

    2 Turnover (Rupees in crore) 37878 33409 29463

    3 Profit before Tax (Rupees in crore) 20227 16900 12087

    KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

    Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

    90012000 and ISO 14001 company was established in April 1976 to meet the long

    term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

    was set up at Kudremukh This project was to be financed in full by Iran However as

    Iran stopped further loan disbursements after paying US $ 255 million the project was

    completed as per schedule with the funds provided by Government of India While the

    project was commissioned on schedule consequent upon the political developments

    in Iran they did not lift any quantity of concentrate As a diversification measure the

    Government approved the construction of a 3 million tonne per year capacity pellet

    plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

    million tonne with additionsmodifications The plant went into commercial production

    in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

    units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

    Plant Mangalore

    Production

    A target of 31 million tonne and 305 million tonne was set for production of iron ore

    concentrate and iron oxide pellets respectively during the year 2005-06 Actual

    production was 2922 million tonne of concentrate and 2834 million tonne of pellets

    The target set for production during the year 2006-07 is 305 million tonne of pellets

    In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

    activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

    production of iron ore concentrate during the year 2006-07 As against a target of 188

    million tonne of pellets fixed for the period April to November 2006 the actual

    production was 0275 million tonne which represents 15 target fulfilment There is

    shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

    production of pellets is on account of operational problems being encountered in the

    pellet plant after switching over to usage of 100 hematite ore from magnetite ore

    There was excessive generation of su er fines (slimes) affecting filtration clogging of

    filters overflow and contamination of process water due to filling of cooling pond

    affecting production While efforts are continuing to rectify the problems the operation

    of pellet plant is yet to stabilize and normal production is yet to commence

    The sales revenue during the last five years and up to November 2006 during 2006-

    07 is detailed below

    (Rs in lakh)

    Years Concentrate Pellets Total

    2006-07 (up to December 2006) - 12427 12427

    2005-06 12091 111137 123228

    2004-05 16050 169327 185377

    2003-04 20209 82729 102938

    2002-03 21135 51579 72714

    2001-02 21571 50598 72169

    Financial Performance

    An overview of the performance of KIOCL during the year 2006-07 (up to November

    2006) together with actuals for the previous three years is indicated below

    (Rs in lakh)

    Particulars 2006-07(up to December 2006)

    2005-06 2004-05 2003-04

    Total value of Sales 12427 123228 185377 102938

    Gross Margin 2620 68706 120863 45945

    Profit after Tax 1029 35630 64984 30070

    Inventories(excluding finished stock)

    20417 15843 8720 7616

    BIRD GROUP OF COMPANIES

    Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

    the following seven companies came under the administrative control of the Ministry of

    Steel Government of India

    (a) The Orissa Minerals Development Company Limited (OMDC)

    (b) The Bisra Stone Lime Company Limited (BSLC)

    (c) The Karanpura Development Company Limited (KDCL)

    (d) Scott amp Saxby Limited (SSL)

    (e) Eastern Investments Limited (EIL)

    (f) Burrakar Coal Company Limited (Burrakar)

    (g) Borrea Coal Company Limited (Borrea)

    The status of the companies is as under

    a) Burrakar and Borrea coal companies became non-operational after nationalisation

    of coal mines The two companies are in the process of liquidation The official

    liquidator has already taken over the assets and liabilities of these two companies

    b) EIL being an investment company is having a major stake in the equity shares of

    operating companies under the Bird Group

    c) OMDC BSLC KDCL amp SSL are operating companies under the Group

    Status of the Companies at the Time of Nationalisation

    At the time when the Bird Group of Companies came under the administrative control

    of the Ministry of Steel Government of India all of them were financially sick and

    burdened with various problems With the financial support from the Government of

    India problems relating mainly to excessive manpower erosion of working capital and

    outstanding liabilities could be settled to a considerable extent

    REVIEW OF LITERATURE

    RS PANDEY sees a bright future for the steel industry in India provided of course

    the iron ore mining policy to be announced by the government soon acts as a catalyst

    for growth He discusses the industrys problems and prospects in an interview When

    asked about the steel sectors ie private and public he expressed his expert views

    The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

    Excerpts

    The public sector steel companies in India are doing extremely well And therefore

    they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

    Ltd] which has the Vizag steel plant have undertaken massive expansion plans

    Between 1992-93 and now the share of the public sector in steel production had gone

    down Today its share is 41 per cent while that of the private sector is 59 per cent In

    1992-93 the private sector had a share of only 37 per cent In terms of finished steel

    the private sector even in 1992-93 had a 67 per cent share and this has now grown

    to 71 per cent But the public sector units are growing even if the private sector is

    growing faster

    During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

    going to increase its capacity from the current 13 million tonnes of hot metal to 225

    million tonnes in just four years RINL is set to expand its capacity from three million

    tonnes to 63 million tonnes in the next three years So that is a major expansion of

    capacity for the PSUs

    The public sector should be encouraged all the more Let there be a healthy

    competition between public and private sector producers The question of exit comes

    when they do not perform Look at the stock prices of SAIL A few years ago the scrip

    was at below Rs10 per share Today it is more than Rs130 and the expectations

    are that it will go up even higher

    When talked about the labour productivity he says Yes labour productivity is low in

    SAIL in particular But it is improving The steel major is going to adjust much of its

    existing manpower in the expansion phase when its capacity is going to almost

    double The management had also undertaken a massive VRS [voluntary retirement

    scheme] In RINL labour productivity is not all that bad

    Besides SAIL has done very well in various other techno-economic parameters in the

    last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

    per man per year In 2005-06 it went up to 150 tonnes per man per year an

    improvement of 20 per cent In blast furnace productivity also there has been an

    improvement as also in the production of high-end special steels and capacity

    utilisation

    With the improved turnover which comes from higher capacity use and higher

    manpower productivity SAILs profits have surged Its gross profit more than doubled

    between 2003-04 and 2005-06 The general presumption was that the spurt in profits

    was largely due to the high prices of steel An analysis has shown that as far as SAIL

    is concerned the higher profit is 29 per cent owing to the price factor in steel and

    other input costs and 71 per cent owing to improvement in capacity use and other

    factors that are just mentioned

    OBJECTIVES

    To compare Private and Public steel sector with refrence to TATA Steel and

    Steel Authority Of India

    To analyse potential of both the companies ie TATA Steel and SAIL

    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

    Research Methodology

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

    a) Research design-

    In case of my research ldquoComparative analysis of Indian private and Public

    sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

    found to be more appropriate

    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

    Comparison between TATA Steel and Steel Authority of India

    The Public sector undertakings (PSUs) under the Ministry of Steel have shown

    significant improvements in the last two years The combined profit before tax of all 15

    PSUs of the Steel Ministry exhibited an enhancement of more than two times from

    Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

    The profit before tax for all PSUs also exhibited a significant improvement of

    around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

    Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

    comparable period of last year

    Contribution of PSUs to public exchequer has also gone up significantly For

    example the contribution of five leading companies namely SAIL RINL NMDC

    KIOCL and MOIL to Central and State exchequer by way of excise duty customs

    duty dividend corporate tax sales tax royalty etc has gone up by more than double

    from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

    On the other hand 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

    During the period (April-December 2006) 205 million tonne of steel was produced by

    Private Sector steel units out of the total production of 3315 million tonne in the

    country The private sector units consist of major steel producers in one hand and

    relatively smaller amp 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

    For comparing both the companies ie Tata Steel and SAIL lets analyse both the

    companies on following parameters

    Production

    Chart showing production of both the companies

    Quantity 000 Tonnes

    2007-08 APR-DEC07APR-

    DEC06 ACTUA

    L

    AGE OF CURRENT

    PRODUCTION OVER

    CAPACITY UTILISATION

    TARGET TENTATIV

    E

    TARGET

    ACTUAL

    APR-DEC07 TARGE

    T

    APR-DEC06 ACTUA

    L

    APR-DEC 07

    APR-DEC06

    SAIL

    i)BSP49500 37110 37320 35780 1006 1043 1270 1210

    ii)DSP18400 13580 14330 13450 1055 1065 1060 990

    iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

    iv)BSL43500 32630 30970 30010 949 1032 950 910

    v)ISP5000 3760 3520 3450 936 1020 940 920

    vi)ASP1470 1070 1140 1130 1065 1009 650 640

    vii)VISL

    1390 1050 1160 1190 1105 975 1300 1340

    TATA 50000 37440 37090 37380 991 992 990 1000

    TATA Steel

    The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

    but it could produce only 493 (mT) For the first 3 quarters of the years company set a

    target of 3744 (mT) but could produce 3709 However for the same period in last

    year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

    to 99 this year

    Steel Authority of India

    The company had a aggregate production target of 13739 (mT) for the year 2007-08

    but it could produce only 126 (mT) a growth of 4 over the previous year However

    for the first 3 quarters of the years company set a target of 10265 (mT) and produced

    10380 as compared to around 10 (mT) for the same period last year SAIL had a

    capacity utilisation of 103 this year as compared to 101 last year

    Financials

    TATA Steel

    The year 2006-07 has seen the highest turnover and profits continuing the trend

    of the past four years The Company achieved the best ever sales turnover and

    profitability during the year under review A robust Indian economy firm steel prices

    higher volumes and several improvement initiatives contributed to the record

    performance Finished steel sales were higher by 1133 at 451 million tonnes over

    the previous year Export turnover was lower by about 5 due to lower volumes

    Average price realisation improved mainly due to higher prices of hot rolled

    coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

    (2005-06 Rs 5938 crores) an increase of 17 over the previous year

    Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

    due to additional borrowings for the Companyrsquos domestic expansion programs and

    funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

    providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

    crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

    before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

    after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

    20 compared to the previous year

    The record financial results would not have been possible without a matching

    performance by the operating departments including the raw materials division The

    year witnessed the best ever crude steel production by the Company at 505 million

    tonnes an increase of 67 over the previous year Jamshedpur Plant became the

    first plant in India to produce more than 5 million tonnes of crude steel in a year The

    upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

    rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

    Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

    increase in production was backed by improvements in operating practices and

    productivity resulting in a reduction in consumption of raw materials energy

    refractories etc

    Steel Authority of India

    Financial Year 2006-07 has been eventful year for the company with further

    momentum in improving operational efficiencies laying strong foundation and building

    road map for modernisation and expansion of SAIL Plants with several new initiatives

    undertaken with its human resource at the core During the year the company got the

    distinction of first metal company in the country to reach a market capitalization of Rs

    50000 crore

    There have been improvements in all financial parameters which are shown in

    the table given below-

    SAIL set new record in achieving the turnover of Rs39189 crore and profit

    before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

    previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

    increase of 55

    Research and Development

    Chart showing production of both the companies

    (Rs Crore)

    TATA Steel

    The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

    develop galvannealed skin panels It is the only Indian supplier of bake hardening

    steel for body panels

    Research is undertaken at Tata Steel in the areas of raw materials including coal

    coke energy conservation waste utilisation sintering blast furnace productivity and

    phosphorous reduction product development and improvement in life of plant and

    machinery The Company spends 7 of its turnover for RampD 17 patents have been

    sealed and over 100 are in process

    Steel Authority of India

    Research and Development Centre for Iron and Steel (RDCIS) has provided

    innovative technological inputs to different units of SAIL with special emphasis on

    cost reduction product development and application quality improvement energy

    conservation and automation Several new products were developed and

    commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

    Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

    specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

    micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

    Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

    Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

    strengthened its technology marketing efforts by providing consultancy services

    organising specialised testing and transfer of technological innovations to outside

    customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

    Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

    Ltd Kolkata and Ms Monarch Electronics Kolkata etc

    During the year 1998 technical papers were publishedpresented besides filing

    of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

    awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

    achievements in New Materialsrdquo given by the Ministry of Science and Technology

    Government of India

    Environment

    TATA Steel

    Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

    Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

    has an ISO-14001 certified service providerlocations are certified to ISO-14001

    Jamshedpur is the only town in the country which

    Significant achievements by the Company include an improvement in

    environment and resource conservation including a reduction in green house erosion

    raw materials and water consumption The Company has increased waste re-use and

    re-cycling Constant upgradation and modernisation has resulted in several state-of-

    the-art pollution control systems being installed to prevent and control pollution The

    Company has almost doubled its capital investment in Pollution Abatement in the last

    five years

    Emissions effluents and wastes

    Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

    most relevance to the steel industry Considerable reduction has been effected by

    Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

    granulation is taken into account Other Greenhouse Gas emissions do not result from

    Tata Steelrsquos activities

    Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

    tonnes in 2003-04 as against 790 tonnes used during the previous year

    Hazardous Waste under Basel Convention The Company does not import or export

    any waste deemed hazardous under the Basel Convention All hazardous wastes

    generated are handled as per the requirement of the Hazardous Waste Management

    and Handling Rules 19892000

    Emissions

    Tata Steel has undertaken several initiatives which have resulted in

    considerable reduction in stack emission Emissions are well below the Indian and

    international standards The emission load including particulate matter Sulphur

    Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

    undertaken at the Steel Works

    Waste handling

    Most of the solid waste generated from Steel Works is recycled or reused 18

    of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

    was used to fill low-lying areas and for peripheral road construction around

    Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

    power plants was dumped in a designated dump area

    Effluent Management

    Waste water from the steel making process is being treated with best available

    physio-chemical methods as well as being recycled Waste water from the coke plant

    is treated biologically where organic pollutants are oxidised and decomposed by micro

    organisms The Company has reduced the levels of total pollutant discharge in waste

    water streams from 0211 in 1999-2000 to 0178 in 2003-04

    Steel Authority of India

    Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

    environmentally responsible manner to comply with applicable regulations and striving

    to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

    efficiency and optimize resource consumption through various measures viz

    improvement in process technology in the areas of raw materials coke iron and steel

    making reuserecycle of the by-products generated and conservation of energy and

    water

    Solid Waste Management

    During 2005-06 SAIL produced approximately 134 million tonne of crude steel

    and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

    Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

    these wastes are being made through internal recycling and selling to outside

    agencies The wastes generated in the steel plants are being utilized mainly through

    their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

    during April-September 2006

    Environmental Plantation

    Trees have a significant role in protection of environment and ecological balance

    Extensive afforestation programme are being followed in all the plants and mines The

    basis of choosing the species of plants mainly depends on local soil characteristics

    and prevailing meteorological conditions The green belt developed by afforestation

    adds to the aesthetic environment which becomes dust and noise barriers

    A total number of 145521 saplings have been planted covering an area of 637

    hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

    hectare in 2004-05 in and around the steel plants of SAIL

    Environmental Recognitions

    SAIL plants have been awarded various prizes for environmental management in

    their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

    the Confederation of Indian Industries (CII) for exemplary performance in the

    environmental economic andsocial dimensions of sustainable development and the

    Greentech Environment Excellence Gold AwardGolden Peacock Environment

    Excellence Award in the metal sector 2005 instuted by the World Environment

    Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

    for 2005 from International Greenland Society

    Workforce and Welfare of Society

    TATA steel

    Tata Steel has not lost focus of this philosophy and has adapted it in a broader

    and modern context in its Vision 2007 A lot is dependent on the individual spirit and

    enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

    provide a work environment that will ensure a sense of purpose and personal growth

    for each individual The wish of the company is to see the smile on every face

    everyday A pioneer in employee welfare Tata Steel has invested in the power of its

    people and enriched empowered and enhanced their lives

    Even in its nascent years social scientists Sidney and Beatrice Webb were

    brought in to work on welfare schemes In fact some of the initiatives introduced by

    Tata Steel were the first of their kind in India and some even in the western countries

    at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

    source of its competitiveness It focuses on constantly updating and challenging

    intellectual capabilities to enable them to excel in performance Special efforts are

    made for enhancing strategic thinking skills and analytical abilities of its managers and

    workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

    available with its people through Knowledge Management and sharing of best

    practices

    In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

    mutual co-operation coordination and understanding between the Management and

    the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

    among many other prestigious awards and recognition Tata Steel aims at ensuring

    transparency fairness and equity in all its interactions with its employees to create an

    enthused and happy workforce

    In 1916 Social Welfare Scheme was formed by Tata Steel to provide

    assistance in the fields of education vocational training self-employment and

    family welfare

    Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

    12 times This facility provides on-the-spot diagnostic medical and advanced

    surgical treatment for preventive and curative interventions to people in

    inaccessible rural areas

    Sir Dorab Tata personally financed four athletes and two wrestlers from India

    for the 1920 Antwerp Olympics

    The JRD Sports Complex an international stadium with an 8-lane polyurethane

    track was inaugurated in 1991 The complex also houses facilities for handball

    tennis volleyball hockey basketball boxing table tennis and a modern

    gymnasium

    The Tata Steel Family Initiatives Foundation is engaged in off ering health

    services for the betterment of the people in and around Jamshedpur

    At times of natural calamities the company has rushe immediate relief and off

    ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

    fl ood ravaged Orissa and other such aff ected areas

    Horse-riding lessons the Jubilee Amusement park the zoological park etc off

    er a unique environment for the children of Jamshedpur to grow up in

    In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

    Jamshedpur has emerged as the one of the best cities in India

    Steel Authority of India

    The manpower strength as on 31st March 2006 was 138211 comprising 15206

    executives and 123005 non-executives The total reduction in manpower achieved

    during the year stood at 4864 which included separation of 881 employees through

    voluntary retirement The labour productivity improved by around 12 over previous

    year to 150 tonne crude steelmanyear

    Some of the areas of assistance which are available to the weaker sections are the

    following

    The company has provided land for construction of school buildings in some of

    the steel townships as well as in other places for spreading education among

    the masses

    The company has constructed roads in remote areas around the steel plants

    and also where the captive mines are located to improve communication and

    also increase activities such as organisation of health camps school facilities

    drinking water etc under the peripheral development schemes

    Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

    Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

    providing them with education boarding and lodging facilities

    Construction of bridges by-pass roads metal-morum path waterways

    levellingdressing area around township pre-mixed roads Installation of hand-

    pumps tube wells and wells for villagers

    Construction of school buildings (including for mentally retarded deaf and

    dumb children) madarsas providing school furniture therein and construction

    of hostels womenrsquos college building etc

    Fourteen scholarships are awarded to deserving SCST undergraduate

    engineering students in various disciplines to encourage technical education

    among them

    In many cases tuition fee in company run schools is exempt for SCST

    students Steps are taken to provide education to more and more tribal children

    in company schools

    The unemployed SCST youth are given specialized training in various

    technical trades to develop skill and knowledge Such training is provided free

    of cost

    Adult literacy campaign is carried out in most of the steel townships Every year

    more and more men and women are being covered in this campaign

    Development of fishery and cottage industry providing sewing machines to

    village mahila mandals and promoting other self-employment generation

    schemes

    SAIL has established a hockey academy with stadium and hostel facilities at

    Rourkela to tap and nurture the talent scattered in surrounding tribal area The

    academy was successful in spotting a number of young talented tribal players

    and grooms them under expertise of ex-Olympian

    Technology

    The biggest boost to efficiency in the steel industry has come from the increased

    use of continuous casting ndash an indicator of the modernity of the production process Its

    share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

    now India is thus well on its way to joining the ranks of the leading steelmakers

    among the industrial nations (share in EU-25 96) However in India some 6 of

    crude steel is still made using the outdated open-hearth process (EU-25 03) which

    suggests there is restructuring potential

    TATA Steel

    Tata Steels stall at the International Trade Fair was adjudged the best along

    with SAIL amongst ninety national companies participating in the Trade Fair Thirty

    international companies also took part in the exhibition Participating companies from

    countries all over the world exhibited latest technologies and know-how List of

    participating companies included Baosteel SAIL Heavy Engineering Corporation

    Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

    companies of national and international repute China was the partner country for the

    International Trade Fair this year

    In the award winning exhibition Tata Steel showcased its best coal mining practices

    cutting-edge technology used in iron ore mining pioneering human resource

    practices 78 years of industrial harmony and various other aspects of the worlds best

    steel company

    The 6th International Trade Fair and Conference an institutionalised global

    event is considered to be one of the most prestigious forums for national as well

    international participants It is a conclave of the finest minds concerned with the future

    direction and growth of these sectors The forum provided the worlds most eminent

    metallurgists manufacturers of metallurgical and mining machinery and related

    sectors professionals analysts and experts with the opportunity to exchange views on

    emerging technologies synergy and strengths and open up wider horizons for

    sectorial development

    Tata Steel to adopt Corus technology

    Tata Steel plans to implement alternate technology used by the British steel

    maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

    production according to Mr B Muthuraman Managing Director Tata Steel

    ldquoWe are looking at alternate technology Corus has developed an alternate

    technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

    newspersons on the sidelines of the 34th National Management Convention organised

    by the All-India Management Association However he declined to give further details

    on the type of technology the Indian steel giant plans to implement

    Steel Authority of India

    Modernisation holds the key to SAILs fortunes in the near future The objective

    of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

    and productive capacity and in the process become more energy-efficient and

    improve quality The key component of the ongoing modernisation drive - already

    completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

    ingot casting facilities with basic oxygen furnaces for steel-making and employing

    continuous casting techniques A senior SAIL official says Continuous casting and

    basic oxygen furnaces ensure better quality steel through processes more easily

    monitored for quality control The basic oxygen surfaces method is significantly faster

    more automated and permits greater flexibility Continuous casting is more efficient

    than the traditional ingot casting methods and gives increased yields while enabling

    better quality standards SAIL is also modernising its finishing mills and is adding

    secondary refining facilities to improve quality

    Safety measures

    A unique feature of safety management in steel industry is that a bipartite forum

    named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

    was formed in 1973 at national level having representatives from steel plants in SAIL

    RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

    Committee With a view to inculcate safety consciousness JCSSI organises seminars

    workshops training programme safety competitions for member organisations JCSSI

    with the co-operation and support of Trade Union representatives formulates policies

    and guidelines for its member plants and monitors the implementation

    Tata Steel

    Safety has always been a prime focus at Tata Steel A Safety Committee a

    Safety department and a Safety Trophy helped spread the message all across the

    company

    TATA reaffirms its commitment to provide safe working place and clean

    environment to its employees and other stakeholders as an integral part of its

    business philosophy and values We will continually enhance our Environmental

    Occupational Health amp Safety (EHS) performance in our activities products and

    services through a structured EHS management framework Towards this

    commitment we shall

    Establish and achieve EHS objectives and targets

    Ensure compliance with applicable EHS legislation and other requirement and

    go beyond

    Conserve natural resources and energy by constantly seeking to reduce

    consumption and promoting waste avoidance and recycling measures

    Eliminate minimize andor control adverse environmental impacts and

    occupational health and safety risks by adopting appropriate state-of-the-art

    technology and best EHS management practices at all levels sand functions

    Enhance awareness skill and competence of our employees and contractors

    so as to enable them to demonstrate their involvement responsibility and

    accountability for sound EHS performance

    Steel Authority of India

    SAIL has a separate corporate unit called the SAIL Safety Organisation to

    monitor safety system amp activities- SAIL also has a comprehensive safety policy

    Annual Performance Plans (APP) for the areas of safety and fire services are

    formulated and review of implementation of APP is done during Heads of

    Safety meeting

    Internal and external safety audits of major departments particularly hazardous

    areas are conducted every year and points arising from these audits are

    liquidated Safety aspects have been incorporated in standard operating

    practices (SOP) and standard maintenance practices (SMP)

    All major capital repairsshut downs are closely monitored round the clock

    Periodic drives are conducted to inculcate safety awarenessculture up to

    grass-root level apart from regular inspections as per checklists to identify

    unsafe conditionsacts

    Safety training is imparted to target group employees at various levels HRD

    intervention in the area of safety covers Heads of Departments Line Managers

    amp Departmental Safety Officers Besides area specific workshops are

    conducted at different locations on important topics like gas safety railroad

    safety safety in iron steel amp coke making etc

    Consistent efforts were made by SAIL Safety Organisation for improving safety

    standards in the company by taking measures like intensive safety drives in works

    area and conducting safety audits in hazardous departments of different plants and

    mines In addition specific workshops on safety aspects were organised in various

    SAIL steel plants

    Measures taken by Indian government to improve the industry

    Now letrsquos 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-

    1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

    among others was removed from the list of industries reserved for the public

    sector and also exempted from the provisions of compulsory licensing under the

    Industries (Development and Regulation) Act 1951

    2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

    of `high priority industries for automatic approval for foreign equity investment up

    to 51 This limit has been recently increased to 100

    3 Price and distribution of steel were deregulated from January 1992 At the same

    time it was ensured that priority continued to be accorded for meeting the

    requirements of small scale industries exporters of engineering goods and North

    Eastern Region of the country besides strategic sectors such as Defence and

    Railways

    4 The trade policy has been liberalised and import and export of iron and steel is

    freely allowed There are no quantitative restrictions on import of iron and steel

    items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

    regulating the imports is the tariff mechanism Tariffs on various items of iron and

    steel have drastically come down since 1991-92 levels and the government is

    committed to bring them down to the international levels In Chapter 72 there are

    two items viz 72042110 and 72042910 which fall in the restricted list of imports

    5 Iron amp Steel are freely importable as per the Extant Policy

    6 Iron amp Steel are freely exportable

    7 Advance Licensing Scheme allows duty free import of raw materials for exports

    8 The floor price for seconds and defectives continues till date

    9 Imports of seconds and defectives of steel are allowed only through three

    designated ports of Mumbai Calcutta and Chennai

    10Mandatory pre inspection certificate by a reputed international agency for every

    import consignment of seconds and defectives

    11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

    10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

    the customs duty on non-alloy steel was further reduced from 10 per cent to 5

    per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

    15 per cent to 5 per cent

    12Further customs duty on several raw materials used by the steel sector like

    noncoking coal metcoke and nickel has been reduced to 5 per cent and on

    coking coal to zero

    13To bring down the prices of steel the excise duty on steel products was reduced

    from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

    that the duty regime will be reviewed Budget 2004-05 revised this partially by

    increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

    cut on moderating prices was not achieved

    14The union Budget 2007-08 the import duty on seconds and defective has been

    further reduced from 20 to 10

    Special assistance being provided by Ministry of Steel to Private Sector

    1 Ministry of Steel is extending all possible support as detailed below for the

    development of Iron and Steel Sector in the country

    2 The Ministry is providing linkage for raw materials rail movement clearance etc for

    new plants and expansion of existing ones wherever applied for

    3 To ensure an un-interrupted supply of raw materials to the producers

    4 The Ministry has been interacting with All India Financial institutions to expedite

    clearance of projects

    5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

    Plants are held at the level of Secretary

    6 Ministry of Steel identifies infra-structural and related facilities required by steel

    industry so that their absence does not lead to bottlenecks in the future growth of

    the Iron and Steel Sector and takes up these issues with the concerned ministries

    7 The Ministry has encouraged the setting up of Institute for Steel Development and

    Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

    country are members of this Institute which has been set up with the objective of

    promoting developing and propagating the proper and effective use of steel

    8 In order to resolve the problems faced by existing amp new steel plants amp to assist

    major steel plants being implemented Govt has setup a Project Coordination

    Group under the Chairmanship of Steel Minister

    NATIONAL STEEL POLICY 2005

    The progress of the steel industry has a critical influence on the pace of Indiarsquos

    development and as such great importance is attached to capacity expansion in line

    with expected demand at cost and prices which make Indian steel internationally

    competitive The existing regime of liberalization decontrol and deregulation of

    industry in the country has opened up new opportunities for the expansion of the steel

    industry With a view to accelerating the growth of the steel sector and attaining the

    vision of India becoming a developed economy by 2020 the Ministry of Steel

    formulated a National Steel Policy (NSP) in 2005

    The following salient features can be derived after analysing the NSP 2005

    The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

    towards reform restructuring and globalisation

    The long-term goal of the NSP is that India should have a modern and efficient

    steel industry of world standards catering to diversified steel demand The focus of

    the policy is to achieve global competitiveness not only in terms of cost quality and

    product-mix but also in terms of global benchmarks of efficiency and productivity

    In order to achieve the goal of 110 million tones of steel production by 2019-20 the

    NSP seeks to remove the supply-side constraints to the growth of this industry in

    an open globally integrated and competitive environment

    The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

    policy goal On the demand side the strategy would be to create incremental

    demand through promotional efforts creation of awareness and strengthening the

    delivery chain particularly in rural areas On the supply side the strategy would be

    to facilitate creation of additional capacity remove procedural and policy

    bottlenecks in the availability of inputs such as iron ore and coal make higher

    investments in RampD and encourage the creation of infrastructure such as roads

    railways and ports

    The NSP acknowledges the low per capita consumption of steel in the country

    especially in the rural areas and the need to boost steel consumption to improve

    quality of life and help in meeting the growing aspirations of masses

    In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

    industry would need additional capital In addition funds would be required for

    technological upgrade of existing facilities In order to mobilize such vast resources

    NSP seeks to encourage foreign direct investment In addition the policy also

    seeks to make the fiscal incentives available to infrastructure projects accessible

    to the steel industry

    The NSP seeks to support developing of risk-hedging instruments like futures and

    derivatives to contain price volatility in the steel market

    The NSP seeks to strengthen the existing training and research facilities available

    to the domestic steel industry so as to provide suitable training programmes

    especially for the secondary small-scale units and also to collect and analyse data

    on important parameters of the industry

    The NSP seeks to mount aggressive RampD efforts to create manufacturing

    capability for special types of steel substitute coking coal use iron ore fines

    develop new products suited to rural needs enhance material and energy

    efficiency utilize waste and arrest environmental degradation

    The NSP acknowledges the important role played by the secondary steel sector in

    providing employment meeting local demand of steel in rural and semi-urban

    areas and meeting the countryrsquos demand of some special products and seeks to

    endeavour to provide the necessary feedstock to these units at reasonable prices

    from major plants through the existing mechanism of State Small Industries

    Corporations

    The NSP recognizes the fact that integration of the Indian steel industry with the

    global economy requires that the industry should be protected from unfair trade

    practices The NSP therefore envisages institution of mechanisms for import

    surveillance and monitoring export subsidies in other countries

    The present per capita consumption of steel in the country is very low compared to the

    world average As mentioned above one of the objectives of the NSP is to augment

    the demand and consumption of steel in the country by conscious promotion of steel

    usage With a view to create a mass awareness campaign on conscious promotion of

    steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

    the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

    The Committee is being serviced by Institute for Steel Development and Growth

    (INSDAG) The objective of the Committee is to promote steel usage in the country by

    way of an awareness campaign with particular emphasis on rural sectors The

    Committee also aims at educating the designers architects builders and planners

    regarding the qualitative and cost effective applications of steel in various structures

    including buildings bridges flyovers and airports

    FUTURE OF INDIAN STEEL INDUSTRY

    India is amongst a few countries in the world having the dual advantage of fast

    growing domestic demand coupled with access to raw materials Further the trend

    that is already discernible is that the axis of global steel production consumption is

    shifting towards Asia With their large populations China and India already account for

    35 of the total world steel production - more than double of Europe Asia is

    expected to outpace other regions of the world to an even greater extent in the coming

    years

    Amongst the Asian nations China has established a huge unbridgeable lead It

    is accepted that China will continue to be the leader However India is slated to

    emerge as the second Asian giant in the next eight years Figuratively speaking while

    the Dragon has reached maturity the Lotus is about to bloom in resplendent

    splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

    China swallowed almost 32 of global steel It is unlikely that future production and

    consumption would continue to flourish at growth rates of 8 and 18 respectively as

    has been the case over the last few years On the other hand it is sun-rise time for

    India where the demand has increased by 7-8 in the last couple of years In the long

    run Indian steel is likely to be more cost-effective since unlike China India has

    relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

    can sustain domestic production of 120-130 million tonnes for at least 25-30 years

    However the position with coal is not so favourable Though thermal coal

    reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

    traditional blast furnace route would require coking coal India does not have adequate

    reserves of coking coal nor is the meagre amount available of appropriate quality

    Thus the steel industry always had to contend with the dual problems of inadequate

    availability and poor quality of Indian coking coal This has been partly addressed by

    adopting alternative iron making processes that are not dependent on coking coal it

    can not be denied that coal is the biggest cause for concern for bulk steel production

    in India

    Because of the shortage of indigenous coal attempts have been made by steel

    producers to ensure long-term supplies by tying up with global majors or by acquiring

    mines in other countries This is the only long-term solution but with a global shortage

    of coal it may not remain cost-effective in the long run

    India is the seventh largest producer of steel and may further improve its position

    going by the current trends A series of investment decisions by major domestic

    players and international steel giants such as Steel Authority of India Ltd Tata Steel

    POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

    The keen interest shown by various prospective investors is not only due to

    expectations of strong growth in domestic demand but also due to indigenous

    availability of key resources like iron ore and skilled workforce

    After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

    steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

    finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

    2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

    consumption has accelerated to 91 per cent

    With the likely growth of Indian economy at around 7 per cent per annum

    demand for steel is expected to remain strong and is projected to reach a level of 90

    million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

    demand is sustainable considering the fact that Indias per capita consumption of steel

    is still very low at 31 kgs per head compared to the world average of 145 kgs The

    very low level of per capita consumption of steel in India is highlighted further when

    compared with the consumption levels of its peer group consisting of countries like

    China Brazil Mexico and Republic of Korea as also with selected developed

    countries

    Though there are realistic constraints in India to achieving as rapid a growth as in

    China there seems to be consensus among analysts that India is likely to witness a

    growth rate in steel consumption higher than the historically observed rate of 6 to 7

    percent If the growth rate (9 per cent) of last three years is maintained then we will

    achieve the 110 million tonnes landmark even by 2018 Though some analysts are

    more conservative due to cyclicity of steel business it may be mentioned that in a

    country like India cyclicity is more in terms of prices rather than volumes of production

    Exports

    Similar optimism prevails with regard to export of iron and steel Export of steel

    starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

    2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

    rising domestic demand and low capacity additions Exports now constitute around 17

    per cent of total production and Indias presence in the developing and developed

    world is being increasingly felt Indian steel producers have recently been able to

    supply specialized grades and products used for sophisticated applications like

    automobiles On the cost front some of our producers are counted amongst the least

    cost producers of the world For an average reference plant India is competitively

    placed in the middle of the hierarchy of steel producing nations

    However we have a long way to go to catch up with the leading exporters of the

    world such as Japan the CIS countries Brazil etc It is however expected that by

    2019-20 India will be able to export around 26 million tonnes of steel representing 24

    per cent of total projected production The projected export ratio compares well with

    the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

    The projected production of steel by 2019-20 to meet the domestic and export

    demand will be around 110 million tonnes Management of resources and

    infrastructural growth is going to be critical in achievement of the production level

    envisaged The broad requirements of various resources will increase manifold from

    the current level The bottlenecks in availability of critical inputs and various facilities

    need to be removed through concerted efforts of Government and industry The broad

    strategy to overcome these constraints as well as meet the strategic goals of the steel

    sector has been discussed in the National Steel Policy which has been recently

    approved by the Government

    As stated earlier the long-term goal of the National Steel Policy is that India

    should have a modern and efficient steel industry of world standards catering to a

    diversified steel demand The focus of the policy is to achieve global competitiveness

    not only in terms of cost quality and product mix but also in terms of global

    benchmarks of efficiency and productivity The policy envisages adopting a multi-

    pronged strategy to achieve these goals On the demand side the strategy would be

    to create incremental demand through promotional efforts creation of awareness and

    strengthening the delivery chain particularly in rural areas On the supply side the

    strategy would be to facilitate creation of additional capacity remove procedural and

    policy bottlenecks in the availability of inputs such as iron ore and coal make higher

    investments in RampD and HRD and encourage the creation of infrastructure such as

    roads railways and ports

    The production figures exports and imports of finished carbon steel and pig iron

    and apparent consumption patterns of finished carbon steel as indicated by TATA

    Steel and SAIL attest to the continuing growth for both the sectors

    FINDINGS

    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 increased its profit over the year particularly in 2006-07

    Both the companies are planning to adopt modern technology which is going to

    help them to compete in world market but they need to be less dependent on

    state of art technology and coal for long term prospects

    Public sector has undergone retrenchment for the employees and improved

    has its lobour productivity but it is still lacking behind as compared to private

    sector

    SAIL has reduced the no of accidents due to improper handling of machinery

    still no of accidents are more than that of TATA Steel

    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

    ie 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 have to be met

    comprehensively if we are to take our legitimate place in the world as a developed

    nation by 2020

    BIBLIOGRAPHY

    Annual report (2006-07) published by ministry of steel

    Annual report (2006-07) published by TATA Steel

    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

    REPORTrsquo posted by SAIL on its website

    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

    held on 07 Nov 2006

    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

    wwwsteelnicin (Official website of ministry of industry)

    wwwtatasteelcom (Official website of TATA Steel)

    wwwsailcoin (Official website of Steel Authority of India)

    wwwworldsteelorg (official website of International Iron amp Steel Institute)

    wwwjpcindiansteelnicin (Website of joint planning committee)

    • DATA ANALYSIS
    • Comparison between TATA Steel and Steel Authority of India
    • Production
    • Quantity 000 Tonnes
    • Financials
    • Research and Development
    • (Rs Crore)
    • TATA Steel
    • Steel Authority of India
    • Environment
    • TATA Steel
    • Emissions effluents and wastes
    • Emissions
    • Waste handling
    • Effluent Management
    • Steel Authority of India
    • Solid Waste Management
    • Environmental Plantation
    • Environmental Recognitions
    • Workforce and Welfare of Society
    • TATA steel
    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
    • Steel Authority of India
    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
    • Technology
    • Steel Authority of India
    • Safety measures
    • Tata Steel
    • Steel Authority of India
    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
    • Measures taken by Indian government to improve the industry
    • Now letrsquos 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-
    • Special assistance being provided by Ministry of Steel to Private Sector
    • FUTURE OF INDIAN STEEL INDUSTRY

      National Steel Policy 2005

      7) FINDINGS

      8) BIBLIOGRAPHY

      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 till recently

      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 In the last one year the

      world has seen two big Mergers amp Acquisitions deals to take place-

      The Mittal Steel listed in Holland has acquired the worlds largest steel

      company called Arcelor Steel to become the worlds largest producer of Steel

      named Arcelor-Mittal

      Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds fifth

      largest steel company Corus with the highest ever stock price

      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 55 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

      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

      Iron and steel is vital to the Indian economy for economic growth and

      economic well-being No practical substitutes exist on a large scale for iron and steel

      because of the relatively high cost of alternative materials

      Worldwide there are broadly two major categories of steel playersmdashIntegrated

      steel producers (ISPs) and mini-millssecondary producers although variations and

      combinations of the two exist The key difference between the two is the type of iron

      bearing feedstock they consume In an integrated mill this is predominantly iron ore

      with a smaller quantity of steel scrap A mini-mill produces steel uses mainly steel

      scrap or increasingly other sources of metallic iron such as directly reduced iron

      (DRI)hot briquette iron (HBI)

      The iron and steel industry not only directly accounts for about 2 of GDP it also

      has a bearing on how the consumer goods and downstream infrastructure sectors

      develop Further with a share of approximately 10 the sector is amongst the largest

      contributors to the central excise India accounted for 34 of the estimated world

      steel production of 1129 million tonnes (mt) during 2005 At present India is the 7th

      largest crude steel producing country in the world

      In 2006-07 production of Finished (Carbon) Steel was 49350 million tonnes

      (Prov) Production of Pig Iron in 2006-07 is estimated to be 4960 Million Tonnes

      (Prov) The share of Main Producers (ie SAIL RINL and TSL) and secondary

      producers in the total production of Finished (Carbon) steel was 35 and 65

      respectively during the period of April-December 2006

      Size of Industry-

      India is among the top 10 global suppliers of steel in the world

      More than 35 million tonnes of steel is produced in India per annum

      India is also the largest producer of sponge iron in the world

      This sector represents around Rs 1 trillion of capital investments and directly

      provides employment to around 05 million with the integrated steel plants

      accounting for a 40 share

      The iron and steel sector also contributes around 62 of Indiarsquos manufactured

      goods exports and 46 of total exports by value

      Structural Characteristics of Indian Steel Industry-

      The industry is dominated by large integrated players like SAIL and Tata Steel

      in steel

      The Public sector has a significant presence in this industry Steel Authority of

      India Ltd (SAIL) has 32 of Indiarsquos installed capacity of crude steel

      Tata Steel and Essar Steel are the major private players in the industry

      The industryrsquos 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 fallingrising prices and industry

      lossesprofits

      Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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

      What is Private Limited and Public limited

      Now letrsquos first understand the meaning and difference between Public Sector

      Company and Private Sector Company The term ldquoPrivate Companyrdquo refers to

      ownership of a business company in two different waysmdash First referring to ownership

      by non-governmental organizations and second referring to ownership of the

      companys 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 andor 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

      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 During the

      period (April-December 2006) 205 million tonne of steel was produced by Private

      Sector steel units out of the total production of 3315 million tonne in the country The

      private sector units consist of major steel producers in one hand and relatively smaller

      amp 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 Indias 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

      Over the years Tata Steel has emerged as a thriving nimble steel enterprise

      due to its ability to transform itself rapidly to meet the challenges of a highly

      competitive global economy and commitment to become a supplier of choice

      Constant modernization and introduction of state-of-the-art technology at Tata Steel

      has enabled it to stay ahead in the industry

      Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

      increase in its production and sales volumes The hot metal production at 41 million

      tonne is 82 more compared to the last year in the corresponding period and crude

      steel production at 37 million tonne is higher by 79 compared to the last year in first

      three quarters

      The saleable steel production at 37 million tonne registered a significant

      increase of 11 The total sales of 353 million tonne has grown by 117 over last

      financial year in the corresponding period The domestic sale of long products has

      increased by 30

      Tata Steel is continuing with its programme of expansion of steel making

      capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

      2007-08 and thereafter to 10 million tonne by fiscal 2010

      Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

      schedule with placement of equipment order for Kalinganagar project in Orissa and

      commencement of the land acquisition process Jharkhand project is waiting

      announcement of R amp R policy of the state Government The construction work of

      ferrochrome project in South Africa is in full swing

      Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

      Corus thus emerging as the fifth largest steel producer in the world

      The steel major has won the Prime Ministers Trophy four times This award is

      instituted by the Indian ministry of steel and awarded to the countrys best integrated

      steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

      given to the company with world class operations under the Groups Tata Business

      Excellence Model

      Areas of business

      Apart from the main steel division Tata Steels operations are grouped under

      strategic profit centres like tubes growth shop (for its steel plant and material handling

      equipment) bearings ferro alloys and minerals rings agrico and wires

      Tata Steels products include hot and cold rolled coils and sheets tubes wire

      rods construction bars structurals forging quality steel rings and bearings In an

      attempt to decommoditise steel the company has recently introduced brands like

      Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

      corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

      Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

      Tata Steel is also exploring opportunities in the ferro-chrome and titanium

      businesses

      Joint ventures associates and subsidiaries

      Tata Steel has numerous joint ventures and subsidiaries Among them are

      Tinplate Company of India

      Tayo Rolls

      Tata Ryerson

      Tata Refactories

      Tata Sponge Iron

      Tata Metaliks

      Tata Pigments

      Jamshedpur Injection Powder (Jamipol)

      TM International Logistics

      mjunction services

      TRF

      Jamshedpur Utility and Service Company (JUSCO)

      The Indian Steel and Wire Products(ISWP)

      Lanka Special Steel

      Sila Eastern Company

      ESSAR STEEL LTD

      Essar Steel is an integrated steel producer with operations all along the value

      chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

      complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

      half of its production abroad mainly to the highly demanding markets of the west and

      the growth markets of South East Asia and Middle East Essar ensures excellent

      customer services through a modern distribution network

      Essar Steelrsquos core manufacturing facilities are located at its steel complex in

      Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

      Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

      tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

      down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

      at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

      Expansion

      Presently Essar Steel has embarked upon a capacity expansion for

      enhancement of its production capacity from 46 million tonne per annum to 76 million

      tonne per annum The capacity expansion programme will consist of 2 units of Corex

      units of 15 million tonne per annum each Further value addition will be carried out by

      Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

      Mill

      Products

      All Essar Steelrsquos products are world class meeting the highest international

      standards supported by excellent marketing and service

      JSW STEEL LTD

      JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

      process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

      coke making ndash iron making through blast furnace as well as Corex process ndash steel

      making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

      facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

      tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

      tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

      Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

      casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

      technology

      JSW Steel has a distinction of being certified to ISO-90012000 Quality

      management system ISO-140011996 environment management system and OHSAS

      180011999 occupational health and safety management system

      During this year JSW Steel has also been conferred with a number of awards

      Production Performance

      (in million tonne)

      Items 2003-04 2004-05 2005-06 April-Dec06

      Pellets 325 361 380 293

      Hot Metal 163 196 240 219

      Slabs 161 187 225 195

      Hot Rolled Coils 154 178 210 148

      JINDAL STEEL AND POWER LTD (JSPL)

      Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

      business interests in steel power generation mining iron ore coal and diamond

      explorationmining The current turnover of the company is over Rs 3000 crore JSPL

      is the worldrsquos largest producer of coal based sponge iron The product range

      encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

      rails and H beams and columns in technical collaboration with JFE Corporation

      Japan These H-beams are the most desired option of structural engineers worldwide

      JSPL is the largest private sector investor in the state of Chhattisgarh with a total

      investment commitment of more than Rs 10000 crore The company is also setting

      up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

      5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

      Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

      watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

      4500 crore JSPL has been rated as one of the best environmentally managed

      companies in India and committed to environment protection as an integral part of

      their business activities

      ISPAT INDUSTRIES LTD (IIL)

      Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

      Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

      rolled coils per annum The plant has got a 224 million tonne per annum sintering

      plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

      based sponge iron plant IIL have uniquely combined the usage of hot metal and

      sponge iron in the electric arc furnace for production of liquid steel for the first time in

      India IIL have also adopted the state-of-art technology called Compact Strip

      Production (CSP) process which has been installed for the first time in India and

      produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

      products are accepted in the domestic and international market

      The production performance of IIL during last three years has been as follows

      (in million tonne)

      Items 2003-04 2004-05 2005-062006-07

      (Up to Dec06)

      Hot Metal 129 140 142 114

      Sponge Iron 106 105 089 085

      Hot Rolled Coils 162 197 215 197

      The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

      with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

      global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

      Demag the technology supplier

      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

      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 SAILs equity and retains voting

      control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

      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 Companys iron ore limestone and dolomite

      mines The company has the distinction of being Indiarsquos largest producer of iron ore

      and of having the countryrsquos 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

      SAILs 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

      SAILs 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

      With technical and managerial expertise and know-how in steel making gained

      over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

      services and consultancy to clients world-wide

      SAIL has a well-equipped Research and Development Centre for Iron and Steel

      (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

      for the steel industry Besides SAIL has its own in-house Centre for Engineering and

      Technology (CET) Management Training Institute (MTI) and Safety Organisation at

      Ranchi Our captive mines are under the control of the Raw Materials Division in

      Kolkata The Environment Management Division and Growth Division of SAIL operate

      from their headquarters in Kolkata Almost all our plants and major units are ISO

      Certified

      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

      Subsidiary

      Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

      Joint Ventures

      SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

      NTPC SAIL Power Company Pvt Ltd

      Bokaro Power Supply Company Pvt Limited

      Mjunction Services Limited

      SAIL-Bansal Service Centre Ltd

      Bhilai JP Cement Ltd

      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

      MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

      Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

      producer of ferro manganese and silico manganese for captive use of SAIL plants

      The authorised and paid-up share capital of the company as on 3132006 was Rs 30

      crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

      paid-up capital

      Financial Performance

      During the year 2005-06 the company recorded a turnover of Rs 24733 crore

      (including conversion income of Rs 17110 crore) and made a net profit after tax of

      Rs 2097 crore The turnover and net profit after tax of the company during April

      2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

      (provisional) respectively

      Production Performance

      The production of all grades of ferro alloys during 2005-06 is as under

      (in tonne)

      Materials 2005-06 April- Dec 2006

      High Carbon Ferro Manganese 51525 49493

      Silco Manganese 46712 32921

      Medium Carbon Ferro Manganse 2344 164

      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 was commissioned in August

      1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

      million tonne per annum capacity Right from the year of its integrated operation VSP

      established its presence both in the domestic and international markets with its

      superior quality of products VSP has been awarded all the three International

      Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

      180011999 The company has taken significant strides in the area of Corporate

      Social Responsibility

      Production Performance

      (in million tonne)

      Items 2004-05 2005-06 2006-07 (April-Dec06)

      Hot Metal 3920 4153 3040

      Liquid Steel 3560 3603 2676

      Saleable Steel 3173 3237 2419

      NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

      Incorporated on November 15 1958 the National Mineral Development Corporation

      Ltd (NMDC) a Government of India Enterprise is engaged in the business of

      developing and exploiting mineral resources of the country (other than coal oil

      natural gas and atomic minerals) At present its activities are concentrated on mining

      of iron ore diamonds and silica sand

      NMDC operates the largest mechanised iron ore mines in the country at Bailadila

      (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

      Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

      activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

      from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

      Supreme Court of India NMDC is following up the case for early hearing

      All the iron ore production units have been accredited with ISO 90012000 and ISO

      140012004 certifications RampD Centre of NMDC was also accredited with ISO

      90012000 certification

      Iron Ore

      NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

      December 2006) Domestic sales of iron ore was 1550 million tonne during the year

      (up to December 2006) Exports of iron ore produced by NMDC is canalised through

      MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

      exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

      Capital Structure

      The authorised share capital of the company is Rs 150 crore The paid up equity

      share capital was Rs 13216 crore Outstanding loans from Government of India are

      nil

      Financial Performance

      The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

      Particulars 2004-05 2005-06 2006-07 (April-Dec06)

      SalesTurnover222655 371092 2790

      Gross Margin128749 2889 2455

      Profit Before Tax122365 277013 2410

      MSTC LTD

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

      Enterprise was set up on September 9 1964 as a canalising agency for the export of

      scrap from the country With the passage of time the Company emerged as the

      canalising agency for the import of scrap into the country Import of scrap was de-

      canalised by the Government in 1991-92 and MSTC has since then moved on to

      marketing ferrous and miscellaneous scrap arising out of steel plants and other

      industries and importing coal coke petroleum products semi finished steel products

      like HR coils and export of primarily iron ore The company has also established an e-

      auction portal and undertakes e-auction of coal diamonds and steel scrap and has

      developed an e-procurement portal in house

      Capital Structure

      The company has an authorised capital of Rs 5 crore and paid up capital was Rs

      220 crore as on 31122006 of which approximately 90 is held by Government of

      India and balance 10 by members of Steel Furnace Association 16 of India Iron and

      Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

      bonus shares issued in the year 1993-94 in the ratio 11

      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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

      handling of BOF slag etc

      Financial Performance

      Particulars 2004-05 2005-06 2006-07 (Apr-

      Dec2006)

      Total Turnover ie Service charges realised including miscellaneous Incomeetc

      981822 1067937 765557

      Gross Margin before Interest amp Depreciation 167879 186514 105284

      Interest amp Depreciation 83014 100970 84728

      Profit before Tax 84865 85544 20556

      MANGANESE ORE (INDIA) LTD (MOIL)

      Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

      of manganese ore in India At the time of inception 49 of its shares were held by the

      Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

      proportion by Government of India and the State Governments of Madhya Pradesh 17

      and Maharashtra Subsequently in 1977 the Government of India acquired the

      shares held by CPMO in MOIL and MOIL became a wholly owned Government

      company with effect from October 1977 As on 30112006 Government of India held

      8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

      holding 961 and 882 shares respectively

      MOIL Produces and Sells following Grades of Manganese Ore

      1048708 High grade ores for production of ferro manganese

      1048708 Medium grade ores for production of silico manganese

      1048708 Blast furnace grade ore required for production of hot metal

      1048708 Dioxide ore for dry battery cells and chemical industries

      Production and 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

      Items 2004-05 2005-06 2006-07 (up to Dec2006)

      1 Production

      a) Manganese Ore (thousand tonne) 94300 86500 82533

      b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

      c) Ferro Manganese (tonne) 1032500 617000 829400

      2 Turnover (Rupees in crore) 37878 33409 29463

      3 Profit before Tax (Rupees in crore) 20227 16900 12087

      KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

      Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

      90012000 and ISO 14001 company was established in April 1976 to meet the long

      term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

      was set up at Kudremukh This project was to be financed in full by Iran However as

      Iran stopped further loan disbursements after paying US $ 255 million the project was

      completed as per schedule with the funds provided by Government of India While the

      project was commissioned on schedule consequent upon the political developments

      in Iran they did not lift any quantity of concentrate As a diversification measure the

      Government approved the construction of a 3 million tonne per year capacity pellet

      plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

      million tonne with additionsmodifications The plant went into commercial production

      in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

      units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

      Plant Mangalore

      Production

      A target of 31 million tonne and 305 million tonne was set for production of iron ore

      concentrate and iron oxide pellets respectively during the year 2005-06 Actual

      production was 2922 million tonne of concentrate and 2834 million tonne of pellets

      The target set for production during the year 2006-07 is 305 million tonne of pellets

      In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

      activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

      production of iron ore concentrate during the year 2006-07 As against a target of 188

      million tonne of pellets fixed for the period April to November 2006 the actual

      production was 0275 million tonne which represents 15 target fulfilment There is

      shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

      production of pellets is on account of operational problems being encountered in the

      pellet plant after switching over to usage of 100 hematite ore from magnetite ore

      There was excessive generation of su er fines (slimes) affecting filtration clogging of

      filters overflow and contamination of process water due to filling of cooling pond

      affecting production While efforts are continuing to rectify the problems the operation

      of pellet plant is yet to stabilize and normal production is yet to commence

      The sales revenue during the last five years and up to November 2006 during 2006-

      07 is detailed below

      (Rs in lakh)

      Years Concentrate Pellets Total

      2006-07 (up to December 2006) - 12427 12427

      2005-06 12091 111137 123228

      2004-05 16050 169327 185377

      2003-04 20209 82729 102938

      2002-03 21135 51579 72714

      2001-02 21571 50598 72169

      Financial Performance

      An overview of the performance of KIOCL during the year 2006-07 (up to November

      2006) together with actuals for the previous three years is indicated below

      (Rs in lakh)

      Particulars 2006-07(up to December 2006)

      2005-06 2004-05 2003-04

      Total value of Sales 12427 123228 185377 102938

      Gross Margin 2620 68706 120863 45945

      Profit after Tax 1029 35630 64984 30070

      Inventories(excluding finished stock)

      20417 15843 8720 7616

      BIRD GROUP OF COMPANIES

      Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

      the following seven companies came under the administrative control of the Ministry of

      Steel Government of India

      (a) The Orissa Minerals Development Company Limited (OMDC)

      (b) The Bisra Stone Lime Company Limited (BSLC)

      (c) The Karanpura Development Company Limited (KDCL)

      (d) Scott amp Saxby Limited (SSL)

      (e) Eastern Investments Limited (EIL)

      (f) Burrakar Coal Company Limited (Burrakar)

      (g) Borrea Coal Company Limited (Borrea)

      The status of the companies is as under

      a) Burrakar and Borrea coal companies became non-operational after nationalisation

      of coal mines The two companies are in the process of liquidation The official

      liquidator has already taken over the assets and liabilities of these two companies

      b) EIL being an investment company is having a major stake in the equity shares of

      operating companies under the Bird Group

      c) OMDC BSLC KDCL amp SSL are operating companies under the Group

      Status of the Companies at the Time of Nationalisation

      At the time when the Bird Group of Companies came under the administrative control

      of the Ministry of Steel Government of India all of them were financially sick and

      burdened with various problems With the financial support from the Government of

      India problems relating mainly to excessive manpower erosion of working capital and

      outstanding liabilities could be settled to a considerable extent

      REVIEW OF LITERATURE

      RS PANDEY sees a bright future for the steel industry in India provided of course

      the iron ore mining policy to be announced by the government soon acts as a catalyst

      for growth He discusses the industrys problems and prospects in an interview When

      asked about the steel sectors ie private and public he expressed his expert views

      The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

      Excerpts

      The public sector steel companies in India are doing extremely well And therefore

      they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

      Ltd] which has the Vizag steel plant have undertaken massive expansion plans

      Between 1992-93 and now the share of the public sector in steel production had gone

      down Today its share is 41 per cent while that of the private sector is 59 per cent In

      1992-93 the private sector had a share of only 37 per cent In terms of finished steel

      the private sector even in 1992-93 had a 67 per cent share and this has now grown

      to 71 per cent But the public sector units are growing even if the private sector is

      growing faster

      During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

      going to increase its capacity from the current 13 million tonnes of hot metal to 225

      million tonnes in just four years RINL is set to expand its capacity from three million

      tonnes to 63 million tonnes in the next three years So that is a major expansion of

      capacity for the PSUs

      The public sector should be encouraged all the more Let there be a healthy

      competition between public and private sector producers The question of exit comes

      when they do not perform Look at the stock prices of SAIL A few years ago the scrip

      was at below Rs10 per share Today it is more than Rs130 and the expectations

      are that it will go up even higher

      When talked about the labour productivity he says Yes labour productivity is low in

      SAIL in particular But it is improving The steel major is going to adjust much of its

      existing manpower in the expansion phase when its capacity is going to almost

      double The management had also undertaken a massive VRS [voluntary retirement

      scheme] In RINL labour productivity is not all that bad

      Besides SAIL has done very well in various other techno-economic parameters in the

      last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

      per man per year In 2005-06 it went up to 150 tonnes per man per year an

      improvement of 20 per cent In blast furnace productivity also there has been an

      improvement as also in the production of high-end special steels and capacity

      utilisation

      With the improved turnover which comes from higher capacity use and higher

      manpower productivity SAILs profits have surged Its gross profit more than doubled

      between 2003-04 and 2005-06 The general presumption was that the spurt in profits

      was largely due to the high prices of steel An analysis has shown that as far as SAIL

      is concerned the higher profit is 29 per cent owing to the price factor in steel and

      other input costs and 71 per cent owing to improvement in capacity use and other

      factors that are just mentioned

      OBJECTIVES

      To compare Private and Public steel sector with refrence to TATA Steel and

      Steel Authority Of India

      To analyse potential of both the companies ie TATA Steel and SAIL

      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

      Research Methodology

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

      a) Research design-

      In case of my research ldquoComparative analysis of Indian private and Public

      sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

      found to be more appropriate

      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

      Comparison between TATA Steel and Steel Authority of India

      The Public sector undertakings (PSUs) under the Ministry of Steel have shown

      significant improvements in the last two years The combined profit before tax of all 15

      PSUs of the Steel Ministry exhibited an enhancement of more than two times from

      Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

      The profit before tax for all PSUs also exhibited a significant improvement of

      around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

      Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

      comparable period of last year

      Contribution of PSUs to public exchequer has also gone up significantly For

      example the contribution of five leading companies namely SAIL RINL NMDC

      KIOCL and MOIL to Central and State exchequer by way of excise duty customs

      duty dividend corporate tax sales tax royalty etc has gone up by more than double

      from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

      On the other hand 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

      During the period (April-December 2006) 205 million tonne of steel was produced by

      Private Sector steel units out of the total production of 3315 million tonne in the

      country The private sector units consist of major steel producers in one hand and

      relatively smaller amp 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

      For comparing both the companies ie Tata Steel and SAIL lets analyse both the

      companies on following parameters

      Production

      Chart showing production of both the companies

      Quantity 000 Tonnes

      2007-08 APR-DEC07APR-

      DEC06 ACTUA

      L

      AGE OF CURRENT

      PRODUCTION OVER

      CAPACITY UTILISATION

      TARGET TENTATIV

      E

      TARGET

      ACTUAL

      APR-DEC07 TARGE

      T

      APR-DEC06 ACTUA

      L

      APR-DEC 07

      APR-DEC06

      SAIL

      i)BSP49500 37110 37320 35780 1006 1043 1270 1210

      ii)DSP18400 13580 14330 13450 1055 1065 1060 990

      iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

      iv)BSL43500 32630 30970 30010 949 1032 950 910

      v)ISP5000 3760 3520 3450 936 1020 940 920

      vi)ASP1470 1070 1140 1130 1065 1009 650 640

      vii)VISL

      1390 1050 1160 1190 1105 975 1300 1340

      TATA 50000 37440 37090 37380 991 992 990 1000

      TATA Steel

      The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

      but it could produce only 493 (mT) For the first 3 quarters of the years company set a

      target of 3744 (mT) but could produce 3709 However for the same period in last

      year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

      to 99 this year

      Steel Authority of India

      The company had a aggregate production target of 13739 (mT) for the year 2007-08

      but it could produce only 126 (mT) a growth of 4 over the previous year However

      for the first 3 quarters of the years company set a target of 10265 (mT) and produced

      10380 as compared to around 10 (mT) for the same period last year SAIL had a

      capacity utilisation of 103 this year as compared to 101 last year

      Financials

      TATA Steel

      The year 2006-07 has seen the highest turnover and profits continuing the trend

      of the past four years The Company achieved the best ever sales turnover and

      profitability during the year under review A robust Indian economy firm steel prices

      higher volumes and several improvement initiatives contributed to the record

      performance Finished steel sales were higher by 1133 at 451 million tonnes over

      the previous year Export turnover was lower by about 5 due to lower volumes

      Average price realisation improved mainly due to higher prices of hot rolled

      coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

      (2005-06 Rs 5938 crores) an increase of 17 over the previous year

      Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

      due to additional borrowings for the Companyrsquos domestic expansion programs and

      funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

      providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

      crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

      before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

      after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

      20 compared to the previous year

      The record financial results would not have been possible without a matching

      performance by the operating departments including the raw materials division The

      year witnessed the best ever crude steel production by the Company at 505 million

      tonnes an increase of 67 over the previous year Jamshedpur Plant became the

      first plant in India to produce more than 5 million tonnes of crude steel in a year The

      upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

      rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

      Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

      increase in production was backed by improvements in operating practices and

      productivity resulting in a reduction in consumption of raw materials energy

      refractories etc

      Steel Authority of India

      Financial Year 2006-07 has been eventful year for the company with further

      momentum in improving operational efficiencies laying strong foundation and building

      road map for modernisation and expansion of SAIL Plants with several new initiatives

      undertaken with its human resource at the core During the year the company got the

      distinction of first metal company in the country to reach a market capitalization of Rs

      50000 crore

      There have been improvements in all financial parameters which are shown in

      the table given below-

      SAIL set new record in achieving the turnover of Rs39189 crore and profit

      before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

      previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

      increase of 55

      Research and Development

      Chart showing production of both the companies

      (Rs Crore)

      TATA Steel

      The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

      develop galvannealed skin panels It is the only Indian supplier of bake hardening

      steel for body panels

      Research is undertaken at Tata Steel in the areas of raw materials including coal

      coke energy conservation waste utilisation sintering blast furnace productivity and

      phosphorous reduction product development and improvement in life of plant and

      machinery The Company spends 7 of its turnover for RampD 17 patents have been

      sealed and over 100 are in process

      Steel Authority of India

      Research and Development Centre for Iron and Steel (RDCIS) has provided

      innovative technological inputs to different units of SAIL with special emphasis on

      cost reduction product development and application quality improvement energy

      conservation and automation Several new products were developed and

      commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

      Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

      specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

      micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

      Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

      Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

      strengthened its technology marketing efforts by providing consultancy services

      organising specialised testing and transfer of technological innovations to outside

      customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

      Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

      Ltd Kolkata and Ms Monarch Electronics Kolkata etc

      During the year 1998 technical papers were publishedpresented besides filing

      of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

      awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

      achievements in New Materialsrdquo given by the Ministry of Science and Technology

      Government of India

      Environment

      TATA Steel

      Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

      Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

      has an ISO-14001 certified service providerlocations are certified to ISO-14001

      Jamshedpur is the only town in the country which

      Significant achievements by the Company include an improvement in

      environment and resource conservation including a reduction in green house erosion

      raw materials and water consumption The Company has increased waste re-use and

      re-cycling Constant upgradation and modernisation has resulted in several state-of-

      the-art pollution control systems being installed to prevent and control pollution The

      Company has almost doubled its capital investment in Pollution Abatement in the last

      five years

      Emissions effluents and wastes

      Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

      most relevance to the steel industry Considerable reduction has been effected by

      Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

      granulation is taken into account Other Greenhouse Gas emissions do not result from

      Tata Steelrsquos activities

      Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

      tonnes in 2003-04 as against 790 tonnes used during the previous year

      Hazardous Waste under Basel Convention The Company does not import or export

      any waste deemed hazardous under the Basel Convention All hazardous wastes

      generated are handled as per the requirement of the Hazardous Waste Management

      and Handling Rules 19892000

      Emissions

      Tata Steel has undertaken several initiatives which have resulted in

      considerable reduction in stack emission Emissions are well below the Indian and

      international standards The emission load including particulate matter Sulphur

      Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

      undertaken at the Steel Works

      Waste handling

      Most of the solid waste generated from Steel Works is recycled or reused 18

      of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

      was used to fill low-lying areas and for peripheral road construction around

      Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

      power plants was dumped in a designated dump area

      Effluent Management

      Waste water from the steel making process is being treated with best available

      physio-chemical methods as well as being recycled Waste water from the coke plant

      is treated biologically where organic pollutants are oxidised and decomposed by micro

      organisms The Company has reduced the levels of total pollutant discharge in waste

      water streams from 0211 in 1999-2000 to 0178 in 2003-04

      Steel Authority of India

      Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

      environmentally responsible manner to comply with applicable regulations and striving

      to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

      efficiency and optimize resource consumption through various measures viz

      improvement in process technology in the areas of raw materials coke iron and steel

      making reuserecycle of the by-products generated and conservation of energy and

      water

      Solid Waste Management

      During 2005-06 SAIL produced approximately 134 million tonne of crude steel

      and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

      Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

      these wastes are being made through internal recycling and selling to outside

      agencies The wastes generated in the steel plants are being utilized mainly through

      their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

      during April-September 2006

      Environmental Plantation

      Trees have a significant role in protection of environment and ecological balance

      Extensive afforestation programme are being followed in all the plants and mines The

      basis of choosing the species of plants mainly depends on local soil characteristics

      and prevailing meteorological conditions The green belt developed by afforestation

      adds to the aesthetic environment which becomes dust and noise barriers

      A total number of 145521 saplings have been planted covering an area of 637

      hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

      hectare in 2004-05 in and around the steel plants of SAIL

      Environmental Recognitions

      SAIL plants have been awarded various prizes for environmental management in

      their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

      the Confederation of Indian Industries (CII) for exemplary performance in the

      environmental economic andsocial dimensions of sustainable development and the

      Greentech Environment Excellence Gold AwardGolden Peacock Environment

      Excellence Award in the metal sector 2005 instuted by the World Environment

      Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

      for 2005 from International Greenland Society

      Workforce and Welfare of Society

      TATA steel

      Tata Steel has not lost focus of this philosophy and has adapted it in a broader

      and modern context in its Vision 2007 A lot is dependent on the individual spirit and

      enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

      provide a work environment that will ensure a sense of purpose and personal growth

      for each individual The wish of the company is to see the smile on every face

      everyday A pioneer in employee welfare Tata Steel has invested in the power of its

      people and enriched empowered and enhanced their lives

      Even in its nascent years social scientists Sidney and Beatrice Webb were

      brought in to work on welfare schemes In fact some of the initiatives introduced by

      Tata Steel were the first of their kind in India and some even in the western countries

      at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

      source of its competitiveness It focuses on constantly updating and challenging

      intellectual capabilities to enable them to excel in performance Special efforts are

      made for enhancing strategic thinking skills and analytical abilities of its managers and

      workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

      available with its people through Knowledge Management and sharing of best

      practices

      In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

      mutual co-operation coordination and understanding between the Management and

      the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

      among many other prestigious awards and recognition Tata Steel aims at ensuring

      transparency fairness and equity in all its interactions with its employees to create an

      enthused and happy workforce

      In 1916 Social Welfare Scheme was formed by Tata Steel to provide

      assistance in the fields of education vocational training self-employment and

      family welfare

      Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

      12 times This facility provides on-the-spot diagnostic medical and advanced

      surgical treatment for preventive and curative interventions to people in

      inaccessible rural areas

      Sir Dorab Tata personally financed four athletes and two wrestlers from India

      for the 1920 Antwerp Olympics

      The JRD Sports Complex an international stadium with an 8-lane polyurethane

      track was inaugurated in 1991 The complex also houses facilities for handball

      tennis volleyball hockey basketball boxing table tennis and a modern

      gymnasium

      The Tata Steel Family Initiatives Foundation is engaged in off ering health

      services for the betterment of the people in and around Jamshedpur

      At times of natural calamities the company has rushe immediate relief and off

      ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

      fl ood ravaged Orissa and other such aff ected areas

      Horse-riding lessons the Jubilee Amusement park the zoological park etc off

      er a unique environment for the children of Jamshedpur to grow up in

      In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

      Jamshedpur has emerged as the one of the best cities in India

      Steel Authority of India

      The manpower strength as on 31st March 2006 was 138211 comprising 15206

      executives and 123005 non-executives The total reduction in manpower achieved

      during the year stood at 4864 which included separation of 881 employees through

      voluntary retirement The labour productivity improved by around 12 over previous

      year to 150 tonne crude steelmanyear

      Some of the areas of assistance which are available to the weaker sections are the

      following

      The company has provided land for construction of school buildings in some of

      the steel townships as well as in other places for spreading education among

      the masses

      The company has constructed roads in remote areas around the steel plants

      and also where the captive mines are located to improve communication and

      also increase activities such as organisation of health camps school facilities

      drinking water etc under the peripheral development schemes

      Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

      Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

      providing them with education boarding and lodging facilities

      Construction of bridges by-pass roads metal-morum path waterways

      levellingdressing area around township pre-mixed roads Installation of hand-

      pumps tube wells and wells for villagers

      Construction of school buildings (including for mentally retarded deaf and

      dumb children) madarsas providing school furniture therein and construction

      of hostels womenrsquos college building etc

      Fourteen scholarships are awarded to deserving SCST undergraduate

      engineering students in various disciplines to encourage technical education

      among them

      In many cases tuition fee in company run schools is exempt for SCST

      students Steps are taken to provide education to more and more tribal children

      in company schools

      The unemployed SCST youth are given specialized training in various

      technical trades to develop skill and knowledge Such training is provided free

      of cost

      Adult literacy campaign is carried out in most of the steel townships Every year

      more and more men and women are being covered in this campaign

      Development of fishery and cottage industry providing sewing machines to

      village mahila mandals and promoting other self-employment generation

      schemes

      SAIL has established a hockey academy with stadium and hostel facilities at

      Rourkela to tap and nurture the talent scattered in surrounding tribal area The

      academy was successful in spotting a number of young talented tribal players

      and grooms them under expertise of ex-Olympian

      Technology

      The biggest boost to efficiency in the steel industry has come from the increased

      use of continuous casting ndash an indicator of the modernity of the production process Its

      share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

      now India is thus well on its way to joining the ranks of the leading steelmakers

      among the industrial nations (share in EU-25 96) However in India some 6 of

      crude steel is still made using the outdated open-hearth process (EU-25 03) which

      suggests there is restructuring potential

      TATA Steel

      Tata Steels stall at the International Trade Fair was adjudged the best along

      with SAIL amongst ninety national companies participating in the Trade Fair Thirty

      international companies also took part in the exhibition Participating companies from

      countries all over the world exhibited latest technologies and know-how List of

      participating companies included Baosteel SAIL Heavy Engineering Corporation

      Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

      companies of national and international repute China was the partner country for the

      International Trade Fair this year

      In the award winning exhibition Tata Steel showcased its best coal mining practices

      cutting-edge technology used in iron ore mining pioneering human resource

      practices 78 years of industrial harmony and various other aspects of the worlds best

      steel company

      The 6th International Trade Fair and Conference an institutionalised global

      event is considered to be one of the most prestigious forums for national as well

      international participants It is a conclave of the finest minds concerned with the future

      direction and growth of these sectors The forum provided the worlds most eminent

      metallurgists manufacturers of metallurgical and mining machinery and related

      sectors professionals analysts and experts with the opportunity to exchange views on

      emerging technologies synergy and strengths and open up wider horizons for

      sectorial development

      Tata Steel to adopt Corus technology

      Tata Steel plans to implement alternate technology used by the British steel

      maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

      production according to Mr B Muthuraman Managing Director Tata Steel

      ldquoWe are looking at alternate technology Corus has developed an alternate

      technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

      newspersons on the sidelines of the 34th National Management Convention organised

      by the All-India Management Association However he declined to give further details

      on the type of technology the Indian steel giant plans to implement

      Steel Authority of India

      Modernisation holds the key to SAILs fortunes in the near future The objective

      of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

      and productive capacity and in the process become more energy-efficient and

      improve quality The key component of the ongoing modernisation drive - already

      completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

      ingot casting facilities with basic oxygen furnaces for steel-making and employing

      continuous casting techniques A senior SAIL official says Continuous casting and

      basic oxygen furnaces ensure better quality steel through processes more easily

      monitored for quality control The basic oxygen surfaces method is significantly faster

      more automated and permits greater flexibility Continuous casting is more efficient

      than the traditional ingot casting methods and gives increased yields while enabling

      better quality standards SAIL is also modernising its finishing mills and is adding

      secondary refining facilities to improve quality

      Safety measures

      A unique feature of safety management in steel industry is that a bipartite forum

      named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

      was formed in 1973 at national level having representatives from steel plants in SAIL

      RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

      Committee With a view to inculcate safety consciousness JCSSI organises seminars

      workshops training programme safety competitions for member organisations JCSSI

      with the co-operation and support of Trade Union representatives formulates policies

      and guidelines for its member plants and monitors the implementation

      Tata Steel

      Safety has always been a prime focus at Tata Steel A Safety Committee a

      Safety department and a Safety Trophy helped spread the message all across the

      company

      TATA reaffirms its commitment to provide safe working place and clean

      environment to its employees and other stakeholders as an integral part of its

      business philosophy and values We will continually enhance our Environmental

      Occupational Health amp Safety (EHS) performance in our activities products and

      services through a structured EHS management framework Towards this

      commitment we shall

      Establish and achieve EHS objectives and targets

      Ensure compliance with applicable EHS legislation and other requirement and

      go beyond

      Conserve natural resources and energy by constantly seeking to reduce

      consumption and promoting waste avoidance and recycling measures

      Eliminate minimize andor control adverse environmental impacts and

      occupational health and safety risks by adopting appropriate state-of-the-art

      technology and best EHS management practices at all levels sand functions

      Enhance awareness skill and competence of our employees and contractors

      so as to enable them to demonstrate their involvement responsibility and

      accountability for sound EHS performance

      Steel Authority of India

      SAIL has a separate corporate unit called the SAIL Safety Organisation to

      monitor safety system amp activities- SAIL also has a comprehensive safety policy

      Annual Performance Plans (APP) for the areas of safety and fire services are

      formulated and review of implementation of APP is done during Heads of

      Safety meeting

      Internal and external safety audits of major departments particularly hazardous

      areas are conducted every year and points arising from these audits are

      liquidated Safety aspects have been incorporated in standard operating

      practices (SOP) and standard maintenance practices (SMP)

      All major capital repairsshut downs are closely monitored round the clock

      Periodic drives are conducted to inculcate safety awarenessculture up to

      grass-root level apart from regular inspections as per checklists to identify

      unsafe conditionsacts

      Safety training is imparted to target group employees at various levels HRD

      intervention in the area of safety covers Heads of Departments Line Managers

      amp Departmental Safety Officers Besides area specific workshops are

      conducted at different locations on important topics like gas safety railroad

      safety safety in iron steel amp coke making etc

      Consistent efforts were made by SAIL Safety Organisation for improving safety

      standards in the company by taking measures like intensive safety drives in works

      area and conducting safety audits in hazardous departments of different plants and

      mines In addition specific workshops on safety aspects were organised in various

      SAIL steel plants

      Measures taken by Indian government to improve the industry

      Now letrsquos 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-

      1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

      among others was removed from the list of industries reserved for the public

      sector and also exempted from the provisions of compulsory licensing under the

      Industries (Development and Regulation) Act 1951

      2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

      of `high priority industries for automatic approval for foreign equity investment up

      to 51 This limit has been recently increased to 100

      3 Price and distribution of steel were deregulated from January 1992 At the same

      time it was ensured that priority continued to be accorded for meeting the

      requirements of small scale industries exporters of engineering goods and North

      Eastern Region of the country besides strategic sectors such as Defence and

      Railways

      4 The trade policy has been liberalised and import and export of iron and steel is

      freely allowed There are no quantitative restrictions on import of iron and steel

      items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

      regulating the imports is the tariff mechanism Tariffs on various items of iron and

      steel have drastically come down since 1991-92 levels and the government is

      committed to bring them down to the international levels In Chapter 72 there are

      two items viz 72042110 and 72042910 which fall in the restricted list of imports

      5 Iron amp Steel are freely importable as per the Extant Policy

      6 Iron amp Steel are freely exportable

      7 Advance Licensing Scheme allows duty free import of raw materials for exports

      8 The floor price for seconds and defectives continues till date

      9 Imports of seconds and defectives of steel are allowed only through three

      designated ports of Mumbai Calcutta and Chennai

      10Mandatory pre inspection certificate by a reputed international agency for every

      import consignment of seconds and defectives

      11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

      10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

      the customs duty on non-alloy steel was further reduced from 10 per cent to 5

      per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

      15 per cent to 5 per cent

      12Further customs duty on several raw materials used by the steel sector like

      noncoking coal metcoke and nickel has been reduced to 5 per cent and on

      coking coal to zero

      13To bring down the prices of steel the excise duty on steel products was reduced

      from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

      that the duty regime will be reviewed Budget 2004-05 revised this partially by

      increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

      cut on moderating prices was not achieved

      14The union Budget 2007-08 the import duty on seconds and defective has been

      further reduced from 20 to 10

      Special assistance being provided by Ministry of Steel to Private Sector

      1 Ministry of Steel is extending all possible support as detailed below for the

      development of Iron and Steel Sector in the country

      2 The Ministry is providing linkage for raw materials rail movement clearance etc for

      new plants and expansion of existing ones wherever applied for

      3 To ensure an un-interrupted supply of raw materials to the producers

      4 The Ministry has been interacting with All India Financial institutions to expedite

      clearance of projects

      5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

      Plants are held at the level of Secretary

      6 Ministry of Steel identifies infra-structural and related facilities required by steel

      industry so that their absence does not lead to bottlenecks in the future growth of

      the Iron and Steel Sector and takes up these issues with the concerned ministries

      7 The Ministry has encouraged the setting up of Institute for Steel Development and

      Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

      country are members of this Institute which has been set up with the objective of

      promoting developing and propagating the proper and effective use of steel

      8 In order to resolve the problems faced by existing amp new steel plants amp to assist

      major steel plants being implemented Govt has setup a Project Coordination

      Group under the Chairmanship of Steel Minister

      NATIONAL STEEL POLICY 2005

      The progress of the steel industry has a critical influence on the pace of Indiarsquos

      development and as such great importance is attached to capacity expansion in line

      with expected demand at cost and prices which make Indian steel internationally

      competitive The existing regime of liberalization decontrol and deregulation of

      industry in the country has opened up new opportunities for the expansion of the steel

      industry With a view to accelerating the growth of the steel sector and attaining the

      vision of India becoming a developed economy by 2020 the Ministry of Steel

      formulated a National Steel Policy (NSP) in 2005

      The following salient features can be derived after analysing the NSP 2005

      The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

      towards reform restructuring and globalisation

      The long-term goal of the NSP is that India should have a modern and efficient

      steel industry of world standards catering to diversified steel demand The focus of

      the policy is to achieve global competitiveness not only in terms of cost quality and

      product-mix but also in terms of global benchmarks of efficiency and productivity

      In order to achieve the goal of 110 million tones of steel production by 2019-20 the

      NSP seeks to remove the supply-side constraints to the growth of this industry in

      an open globally integrated and competitive environment

      The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

      policy goal On the demand side the strategy would be to create incremental

      demand through promotional efforts creation of awareness and strengthening the

      delivery chain particularly in rural areas On the supply side the strategy would be

      to facilitate creation of additional capacity remove procedural and policy

      bottlenecks in the availability of inputs such as iron ore and coal make higher

      investments in RampD and encourage the creation of infrastructure such as roads

      railways and ports

      The NSP acknowledges the low per capita consumption of steel in the country

      especially in the rural areas and the need to boost steel consumption to improve

      quality of life and help in meeting the growing aspirations of masses

      In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

      industry would need additional capital In addition funds would be required for

      technological upgrade of existing facilities In order to mobilize such vast resources

      NSP seeks to encourage foreign direct investment In addition the policy also

      seeks to make the fiscal incentives available to infrastructure projects accessible

      to the steel industry

      The NSP seeks to support developing of risk-hedging instruments like futures and

      derivatives to contain price volatility in the steel market

      The NSP seeks to strengthen the existing training and research facilities available

      to the domestic steel industry so as to provide suitable training programmes

      especially for the secondary small-scale units and also to collect and analyse data

      on important parameters of the industry

      The NSP seeks to mount aggressive RampD efforts to create manufacturing

      capability for special types of steel substitute coking coal use iron ore fines

      develop new products suited to rural needs enhance material and energy

      efficiency utilize waste and arrest environmental degradation

      The NSP acknowledges the important role played by the secondary steel sector in

      providing employment meeting local demand of steel in rural and semi-urban

      areas and meeting the countryrsquos demand of some special products and seeks to

      endeavour to provide the necessary feedstock to these units at reasonable prices

      from major plants through the existing mechanism of State Small Industries

      Corporations

      The NSP recognizes the fact that integration of the Indian steel industry with the

      global economy requires that the industry should be protected from unfair trade

      practices The NSP therefore envisages institution of mechanisms for import

      surveillance and monitoring export subsidies in other countries

      The present per capita consumption of steel in the country is very low compared to the

      world average As mentioned above one of the objectives of the NSP is to augment

      the demand and consumption of steel in the country by conscious promotion of steel

      usage With a view to create a mass awareness campaign on conscious promotion of

      steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

      the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

      The Committee is being serviced by Institute for Steel Development and Growth

      (INSDAG) The objective of the Committee is to promote steel usage in the country by

      way of an awareness campaign with particular emphasis on rural sectors The

      Committee also aims at educating the designers architects builders and planners

      regarding the qualitative and cost effective applications of steel in various structures

      including buildings bridges flyovers and airports

      FUTURE OF INDIAN STEEL INDUSTRY

      India is amongst a few countries in the world having the dual advantage of fast

      growing domestic demand coupled with access to raw materials Further the trend

      that is already discernible is that the axis of global steel production consumption is

      shifting towards Asia With their large populations China and India already account for

      35 of the total world steel production - more than double of Europe Asia is

      expected to outpace other regions of the world to an even greater extent in the coming

      years

      Amongst the Asian nations China has established a huge unbridgeable lead It

      is accepted that China will continue to be the leader However India is slated to

      emerge as the second Asian giant in the next eight years Figuratively speaking while

      the Dragon has reached maturity the Lotus is about to bloom in resplendent

      splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

      China swallowed almost 32 of global steel It is unlikely that future production and

      consumption would continue to flourish at growth rates of 8 and 18 respectively as

      has been the case over the last few years On the other hand it is sun-rise time for

      India where the demand has increased by 7-8 in the last couple of years In the long

      run Indian steel is likely to be more cost-effective since unlike China India has

      relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

      can sustain domestic production of 120-130 million tonnes for at least 25-30 years

      However the position with coal is not so favourable Though thermal coal

      reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

      traditional blast furnace route would require coking coal India does not have adequate

      reserves of coking coal nor is the meagre amount available of appropriate quality

      Thus the steel industry always had to contend with the dual problems of inadequate

      availability and poor quality of Indian coking coal This has been partly addressed by

      adopting alternative iron making processes that are not dependent on coking coal it

      can not be denied that coal is the biggest cause for concern for bulk steel production

      in India

      Because of the shortage of indigenous coal attempts have been made by steel

      producers to ensure long-term supplies by tying up with global majors or by acquiring

      mines in other countries This is the only long-term solution but with a global shortage

      of coal it may not remain cost-effective in the long run

      India is the seventh largest producer of steel and may further improve its position

      going by the current trends A series of investment decisions by major domestic

      players and international steel giants such as Steel Authority of India Ltd Tata Steel

      POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

      The keen interest shown by various prospective investors is not only due to

      expectations of strong growth in domestic demand but also due to indigenous

      availability of key resources like iron ore and skilled workforce

      After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

      steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

      finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

      2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

      consumption has accelerated to 91 per cent

      With the likely growth of Indian economy at around 7 per cent per annum

      demand for steel is expected to remain strong and is projected to reach a level of 90

      million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

      demand is sustainable considering the fact that Indias per capita consumption of steel

      is still very low at 31 kgs per head compared to the world average of 145 kgs The

      very low level of per capita consumption of steel in India is highlighted further when

      compared with the consumption levels of its peer group consisting of countries like

      China Brazil Mexico and Republic of Korea as also with selected developed

      countries

      Though there are realistic constraints in India to achieving as rapid a growth as in

      China there seems to be consensus among analysts that India is likely to witness a

      growth rate in steel consumption higher than the historically observed rate of 6 to 7

      percent If the growth rate (9 per cent) of last three years is maintained then we will

      achieve the 110 million tonnes landmark even by 2018 Though some analysts are

      more conservative due to cyclicity of steel business it may be mentioned that in a

      country like India cyclicity is more in terms of prices rather than volumes of production

      Exports

      Similar optimism prevails with regard to export of iron and steel Export of steel

      starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

      2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

      rising domestic demand and low capacity additions Exports now constitute around 17

      per cent of total production and Indias presence in the developing and developed

      world is being increasingly felt Indian steel producers have recently been able to

      supply specialized grades and products used for sophisticated applications like

      automobiles On the cost front some of our producers are counted amongst the least

      cost producers of the world For an average reference plant India is competitively

      placed in the middle of the hierarchy of steel producing nations

      However we have a long way to go to catch up with the leading exporters of the

      world such as Japan the CIS countries Brazil etc It is however expected that by

      2019-20 India will be able to export around 26 million tonnes of steel representing 24

      per cent of total projected production The projected export ratio compares well with

      the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

      The projected production of steel by 2019-20 to meet the domestic and export

      demand will be around 110 million tonnes Management of resources and

      infrastructural growth is going to be critical in achievement of the production level

      envisaged The broad requirements of various resources will increase manifold from

      the current level The bottlenecks in availability of critical inputs and various facilities

      need to be removed through concerted efforts of Government and industry The broad

      strategy to overcome these constraints as well as meet the strategic goals of the steel

      sector has been discussed in the National Steel Policy which has been recently

      approved by the Government

      As stated earlier the long-term goal of the National Steel Policy is that India

      should have a modern and efficient steel industry of world standards catering to a

      diversified steel demand The focus of the policy is to achieve global competitiveness

      not only in terms of cost quality and product mix but also in terms of global

      benchmarks of efficiency and productivity The policy envisages adopting a multi-

      pronged strategy to achieve these goals On the demand side the strategy would be

      to create incremental demand through promotional efforts creation of awareness and

      strengthening the delivery chain particularly in rural areas On the supply side the

      strategy would be to facilitate creation of additional capacity remove procedural and

      policy bottlenecks in the availability of inputs such as iron ore and coal make higher

      investments in RampD and HRD and encourage the creation of infrastructure such as

      roads railways and ports

      The production figures exports and imports of finished carbon steel and pig iron

      and apparent consumption patterns of finished carbon steel as indicated by TATA

      Steel and SAIL attest to the continuing growth for both the sectors

      FINDINGS

      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 increased its profit over the year particularly in 2006-07

      Both the companies are planning to adopt modern technology which is going to

      help them to compete in world market but they need to be less dependent on

      state of art technology and coal for long term prospects

      Public sector has undergone retrenchment for the employees and improved

      has its lobour productivity but it is still lacking behind as compared to private

      sector

      SAIL has reduced the no of accidents due to improper handling of machinery

      still no of accidents are more than that of TATA Steel

      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

      ie 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 have to be met

      comprehensively if we are to take our legitimate place in the world as a developed

      nation by 2020

      BIBLIOGRAPHY

      Annual report (2006-07) published by ministry of steel

      Annual report (2006-07) published by TATA Steel

      Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

      REPORTrsquo posted by SAIL on its website

      lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

      held on 07 Nov 2006

      Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

      wwwsteelnicin (Official website of ministry of industry)

      wwwtatasteelcom (Official website of TATA Steel)

      wwwsailcoin (Official website of Steel Authority of India)

      wwwworldsteelorg (official website of International Iron amp Steel Institute)

      wwwjpcindiansteelnicin (Website of joint planning committee)

      • DATA ANALYSIS
      • Comparison between TATA Steel and Steel Authority of India
      • Production
      • Quantity 000 Tonnes
      • Financials
      • Research and Development
      • (Rs Crore)
      • TATA Steel
      • Steel Authority of India
      • Environment
      • TATA Steel
      • Emissions effluents and wastes
      • Emissions
      • Waste handling
      • Effluent Management
      • Steel Authority of India
      • Solid Waste Management
      • Environmental Plantation
      • Environmental Recognitions
      • Workforce and Welfare of Society
      • TATA steel
      • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
      • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
      • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
      • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
      • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
      • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
      • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
      • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
      • Steel Authority of India
      • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
      • Technology
      • Steel Authority of India
      • Safety measures
      • Tata Steel
      • Steel Authority of India
      • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
      • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
      • Measures taken by Indian government to improve the industry
      • Now letrsquos 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-
      • Special assistance being provided by Ministry of Steel to Private Sector
      • FUTURE OF INDIAN STEEL INDUSTRY

        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 55 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

        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

        Iron and steel is vital to the Indian economy for economic growth and

        economic well-being No practical substitutes exist on a large scale for iron and steel

        because of the relatively high cost of alternative materials

        Worldwide there are broadly two major categories of steel playersmdashIntegrated

        steel producers (ISPs) and mini-millssecondary producers although variations and

        combinations of the two exist The key difference between the two is the type of iron

        bearing feedstock they consume In an integrated mill this is predominantly iron ore

        with a smaller quantity of steel scrap A mini-mill produces steel uses mainly steel

        scrap or increasingly other sources of metallic iron such as directly reduced iron

        (DRI)hot briquette iron (HBI)

        The iron and steel industry not only directly accounts for about 2 of GDP it also

        has a bearing on how the consumer goods and downstream infrastructure sectors

        develop Further with a share of approximately 10 the sector is amongst the largest

        contributors to the central excise India accounted for 34 of the estimated world

        steel production of 1129 million tonnes (mt) during 2005 At present India is the 7th

        largest crude steel producing country in the world

        In 2006-07 production of Finished (Carbon) Steel was 49350 million tonnes

        (Prov) Production of Pig Iron in 2006-07 is estimated to be 4960 Million Tonnes

        (Prov) The share of Main Producers (ie SAIL RINL and TSL) and secondary

        producers in the total production of Finished (Carbon) steel was 35 and 65

        respectively during the period of April-December 2006

        Size of Industry-

        India is among the top 10 global suppliers of steel in the world

        More than 35 million tonnes of steel is produced in India per annum

        India is also the largest producer of sponge iron in the world

        This sector represents around Rs 1 trillion of capital investments and directly

        provides employment to around 05 million with the integrated steel plants

        accounting for a 40 share

        The iron and steel sector also contributes around 62 of Indiarsquos manufactured

        goods exports and 46 of total exports by value

        Structural Characteristics of Indian Steel Industry-

        The industry is dominated by large integrated players like SAIL and Tata Steel

        in steel

        The Public sector has a significant presence in this industry Steel Authority of

        India Ltd (SAIL) has 32 of Indiarsquos installed capacity of crude steel

        Tata Steel and Essar Steel are the major private players in the industry

        The industryrsquos 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 fallingrising prices and industry

        lossesprofits

        Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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

        What is Private Limited and Public limited

        Now letrsquos first understand the meaning and difference between Public Sector

        Company and Private Sector Company The term ldquoPrivate Companyrdquo refers to

        ownership of a business company in two different waysmdash First referring to ownership

        by non-governmental organizations and second referring to ownership of the

        companys 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 andor 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

        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 During the

        period (April-December 2006) 205 million tonne of steel was produced by Private

        Sector steel units out of the total production of 3315 million tonne in the country The

        private sector units consist of major steel producers in one hand and relatively smaller

        amp 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 Indias 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

        Over the years Tata Steel has emerged as a thriving nimble steel enterprise

        due to its ability to transform itself rapidly to meet the challenges of a highly

        competitive global economy and commitment to become a supplier of choice

        Constant modernization and introduction of state-of-the-art technology at Tata Steel

        has enabled it to stay ahead in the industry

        Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

        increase in its production and sales volumes The hot metal production at 41 million

        tonne is 82 more compared to the last year in the corresponding period and crude

        steel production at 37 million tonne is higher by 79 compared to the last year in first

        three quarters

        The saleable steel production at 37 million tonne registered a significant

        increase of 11 The total sales of 353 million tonne has grown by 117 over last

        financial year in the corresponding period The domestic sale of long products has

        increased by 30

        Tata Steel is continuing with its programme of expansion of steel making

        capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

        2007-08 and thereafter to 10 million tonne by fiscal 2010

        Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

        schedule with placement of equipment order for Kalinganagar project in Orissa and

        commencement of the land acquisition process Jharkhand project is waiting

        announcement of R amp R policy of the state Government The construction work of

        ferrochrome project in South Africa is in full swing

        Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

        Corus thus emerging as the fifth largest steel producer in the world

        The steel major has won the Prime Ministers Trophy four times This award is

        instituted by the Indian ministry of steel and awarded to the countrys best integrated

        steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

        given to the company with world class operations under the Groups Tata Business

        Excellence Model

        Areas of business

        Apart from the main steel division Tata Steels operations are grouped under

        strategic profit centres like tubes growth shop (for its steel plant and material handling

        equipment) bearings ferro alloys and minerals rings agrico and wires

        Tata Steels products include hot and cold rolled coils and sheets tubes wire

        rods construction bars structurals forging quality steel rings and bearings In an

        attempt to decommoditise steel the company has recently introduced brands like

        Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

        corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

        Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

        Tata Steel is also exploring opportunities in the ferro-chrome and titanium

        businesses

        Joint ventures associates and subsidiaries

        Tata Steel has numerous joint ventures and subsidiaries Among them are

        Tinplate Company of India

        Tayo Rolls

        Tata Ryerson

        Tata Refactories

        Tata Sponge Iron

        Tata Metaliks

        Tata Pigments

        Jamshedpur Injection Powder (Jamipol)

        TM International Logistics

        mjunction services

        TRF

        Jamshedpur Utility and Service Company (JUSCO)

        The Indian Steel and Wire Products(ISWP)

        Lanka Special Steel

        Sila Eastern Company

        ESSAR STEEL LTD

        Essar Steel is an integrated steel producer with operations all along the value

        chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

        complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

        half of its production abroad mainly to the highly demanding markets of the west and

        the growth markets of South East Asia and Middle East Essar ensures excellent

        customer services through a modern distribution network

        Essar Steelrsquos core manufacturing facilities are located at its steel complex in

        Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

        Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

        tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

        down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

        at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

        Expansion

        Presently Essar Steel has embarked upon a capacity expansion for

        enhancement of its production capacity from 46 million tonne per annum to 76 million

        tonne per annum The capacity expansion programme will consist of 2 units of Corex

        units of 15 million tonne per annum each Further value addition will be carried out by

        Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

        Mill

        Products

        All Essar Steelrsquos products are world class meeting the highest international

        standards supported by excellent marketing and service

        JSW STEEL LTD

        JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

        process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

        coke making ndash iron making through blast furnace as well as Corex process ndash steel

        making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

        facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

        tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

        tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

        Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

        casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

        technology

        JSW Steel has a distinction of being certified to ISO-90012000 Quality

        management system ISO-140011996 environment management system and OHSAS

        180011999 occupational health and safety management system

        During this year JSW Steel has also been conferred with a number of awards

        Production Performance

        (in million tonne)

        Items 2003-04 2004-05 2005-06 April-Dec06

        Pellets 325 361 380 293

        Hot Metal 163 196 240 219

        Slabs 161 187 225 195

        Hot Rolled Coils 154 178 210 148

        JINDAL STEEL AND POWER LTD (JSPL)

        Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

        business interests in steel power generation mining iron ore coal and diamond

        explorationmining The current turnover of the company is over Rs 3000 crore JSPL

        is the worldrsquos largest producer of coal based sponge iron The product range

        encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

        rails and H beams and columns in technical collaboration with JFE Corporation

        Japan These H-beams are the most desired option of structural engineers worldwide

        JSPL is the largest private sector investor in the state of Chhattisgarh with a total

        investment commitment of more than Rs 10000 crore The company is also setting

        up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

        5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

        Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

        watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

        4500 crore JSPL has been rated as one of the best environmentally managed

        companies in India and committed to environment protection as an integral part of

        their business activities

        ISPAT INDUSTRIES LTD (IIL)

        Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

        Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

        rolled coils per annum The plant has got a 224 million tonne per annum sintering

        plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

        based sponge iron plant IIL have uniquely combined the usage of hot metal and

        sponge iron in the electric arc furnace for production of liquid steel for the first time in

        India IIL have also adopted the state-of-art technology called Compact Strip

        Production (CSP) process which has been installed for the first time in India and

        produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

        products are accepted in the domestic and international market

        The production performance of IIL during last three years has been as follows

        (in million tonne)

        Items 2003-04 2004-05 2005-062006-07

        (Up to Dec06)

        Hot Metal 129 140 142 114

        Sponge Iron 106 105 089 085

        Hot Rolled Coils 162 197 215 197

        The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

        with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

        global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

        Demag the technology supplier

        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

        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 SAILs equity and retains voting

        control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

        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 Companys iron ore limestone and dolomite

        mines The company has the distinction of being Indiarsquos largest producer of iron ore

        and of having the countryrsquos 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

        SAILs 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

        SAILs 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

        With technical and managerial expertise and know-how in steel making gained

        over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

        services and consultancy to clients world-wide

        SAIL has a well-equipped Research and Development Centre for Iron and Steel

        (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

        for the steel industry Besides SAIL has its own in-house Centre for Engineering and

        Technology (CET) Management Training Institute (MTI) and Safety Organisation at

        Ranchi Our captive mines are under the control of the Raw Materials Division in

        Kolkata The Environment Management Division and Growth Division of SAIL operate

        from their headquarters in Kolkata Almost all our plants and major units are ISO

        Certified

        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

        Subsidiary

        Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

        Joint Ventures

        SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

        NTPC SAIL Power Company Pvt Ltd

        Bokaro Power Supply Company Pvt Limited

        Mjunction Services Limited

        SAIL-Bansal Service Centre Ltd

        Bhilai JP Cement Ltd

        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

        MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

        Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

        producer of ferro manganese and silico manganese for captive use of SAIL plants

        The authorised and paid-up share capital of the company as on 3132006 was Rs 30

        crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

        paid-up capital

        Financial Performance

        During the year 2005-06 the company recorded a turnover of Rs 24733 crore

        (including conversion income of Rs 17110 crore) and made a net profit after tax of

        Rs 2097 crore The turnover and net profit after tax of the company during April

        2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

        (provisional) respectively

        Production Performance

        The production of all grades of ferro alloys during 2005-06 is as under

        (in tonne)

        Materials 2005-06 April- Dec 2006

        High Carbon Ferro Manganese 51525 49493

        Silco Manganese 46712 32921

        Medium Carbon Ferro Manganse 2344 164

        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 was commissioned in August

        1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

        million tonne per annum capacity Right from the year of its integrated operation VSP

        established its presence both in the domestic and international markets with its

        superior quality of products VSP has been awarded all the three International

        Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

        180011999 The company has taken significant strides in the area of Corporate

        Social Responsibility

        Production Performance

        (in million tonne)

        Items 2004-05 2005-06 2006-07 (April-Dec06)

        Hot Metal 3920 4153 3040

        Liquid Steel 3560 3603 2676

        Saleable Steel 3173 3237 2419

        NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

        Incorporated on November 15 1958 the National Mineral Development Corporation

        Ltd (NMDC) a Government of India Enterprise is engaged in the business of

        developing and exploiting mineral resources of the country (other than coal oil

        natural gas and atomic minerals) At present its activities are concentrated on mining

        of iron ore diamonds and silica sand

        NMDC operates the largest mechanised iron ore mines in the country at Bailadila

        (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

        Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

        activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

        from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

        Supreme Court of India NMDC is following up the case for early hearing

        All the iron ore production units have been accredited with ISO 90012000 and ISO

        140012004 certifications RampD Centre of NMDC was also accredited with ISO

        90012000 certification

        Iron Ore

        NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

        December 2006) Domestic sales of iron ore was 1550 million tonne during the year

        (up to December 2006) Exports of iron ore produced by NMDC is canalised through

        MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

        exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

        Capital Structure

        The authorised share capital of the company is Rs 150 crore The paid up equity

        share capital was Rs 13216 crore Outstanding loans from Government of India are

        nil

        Financial Performance

        The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

        Particulars 2004-05 2005-06 2006-07 (April-Dec06)

        SalesTurnover222655 371092 2790

        Gross Margin128749 2889 2455

        Profit Before Tax122365 277013 2410

        MSTC LTD

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

        Enterprise was set up on September 9 1964 as a canalising agency for the export of

        scrap from the country With the passage of time the Company emerged as the

        canalising agency for the import of scrap into the country Import of scrap was de-

        canalised by the Government in 1991-92 and MSTC has since then moved on to

        marketing ferrous and miscellaneous scrap arising out of steel plants and other

        industries and importing coal coke petroleum products semi finished steel products

        like HR coils and export of primarily iron ore The company has also established an e-

        auction portal and undertakes e-auction of coal diamonds and steel scrap and has

        developed an e-procurement portal in house

        Capital Structure

        The company has an authorised capital of Rs 5 crore and paid up capital was Rs

        220 crore as on 31122006 of which approximately 90 is held by Government of

        India and balance 10 by members of Steel Furnace Association 16 of India Iron and

        Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

        bonus shares issued in the year 1993-94 in the ratio 11

        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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

        handling of BOF slag etc

        Financial Performance

        Particulars 2004-05 2005-06 2006-07 (Apr-

        Dec2006)

        Total Turnover ie Service charges realised including miscellaneous Incomeetc

        981822 1067937 765557

        Gross Margin before Interest amp Depreciation 167879 186514 105284

        Interest amp Depreciation 83014 100970 84728

        Profit before Tax 84865 85544 20556

        MANGANESE ORE (INDIA) LTD (MOIL)

        Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

        of manganese ore in India At the time of inception 49 of its shares were held by the

        Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

        proportion by Government of India and the State Governments of Madhya Pradesh 17

        and Maharashtra Subsequently in 1977 the Government of India acquired the

        shares held by CPMO in MOIL and MOIL became a wholly owned Government

        company with effect from October 1977 As on 30112006 Government of India held

        8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

        holding 961 and 882 shares respectively

        MOIL Produces and Sells following Grades of Manganese Ore

        1048708 High grade ores for production of ferro manganese

        1048708 Medium grade ores for production of silico manganese

        1048708 Blast furnace grade ore required for production of hot metal

        1048708 Dioxide ore for dry battery cells and chemical industries

        Production and 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

        Items 2004-05 2005-06 2006-07 (up to Dec2006)

        1 Production

        a) Manganese Ore (thousand tonne) 94300 86500 82533

        b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

        c) Ferro Manganese (tonne) 1032500 617000 829400

        2 Turnover (Rupees in crore) 37878 33409 29463

        3 Profit before Tax (Rupees in crore) 20227 16900 12087

        KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

        Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

        90012000 and ISO 14001 company was established in April 1976 to meet the long

        term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

        was set up at Kudremukh This project was to be financed in full by Iran However as

        Iran stopped further loan disbursements after paying US $ 255 million the project was

        completed as per schedule with the funds provided by Government of India While the

        project was commissioned on schedule consequent upon the political developments

        in Iran they did not lift any quantity of concentrate As a diversification measure the

        Government approved the construction of a 3 million tonne per year capacity pellet

        plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

        million tonne with additionsmodifications The plant went into commercial production

        in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

        units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

        Plant Mangalore

        Production

        A target of 31 million tonne and 305 million tonne was set for production of iron ore

        concentrate and iron oxide pellets respectively during the year 2005-06 Actual

        production was 2922 million tonne of concentrate and 2834 million tonne of pellets

        The target set for production during the year 2006-07 is 305 million tonne of pellets

        In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

        activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

        production of iron ore concentrate during the year 2006-07 As against a target of 188

        million tonne of pellets fixed for the period April to November 2006 the actual

        production was 0275 million tonne which represents 15 target fulfilment There is

        shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

        production of pellets is on account of operational problems being encountered in the

        pellet plant after switching over to usage of 100 hematite ore from magnetite ore

        There was excessive generation of su er fines (slimes) affecting filtration clogging of

        filters overflow and contamination of process water due to filling of cooling pond

        affecting production While efforts are continuing to rectify the problems the operation

        of pellet plant is yet to stabilize and normal production is yet to commence

        The sales revenue during the last five years and up to November 2006 during 2006-

        07 is detailed below

        (Rs in lakh)

        Years Concentrate Pellets Total

        2006-07 (up to December 2006) - 12427 12427

        2005-06 12091 111137 123228

        2004-05 16050 169327 185377

        2003-04 20209 82729 102938

        2002-03 21135 51579 72714

        2001-02 21571 50598 72169

        Financial Performance

        An overview of the performance of KIOCL during the year 2006-07 (up to November

        2006) together with actuals for the previous three years is indicated below

        (Rs in lakh)

        Particulars 2006-07(up to December 2006)

        2005-06 2004-05 2003-04

        Total value of Sales 12427 123228 185377 102938

        Gross Margin 2620 68706 120863 45945

        Profit after Tax 1029 35630 64984 30070

        Inventories(excluding finished stock)

        20417 15843 8720 7616

        BIRD GROUP OF COMPANIES

        Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

        the following seven companies came under the administrative control of the Ministry of

        Steel Government of India

        (a) The Orissa Minerals Development Company Limited (OMDC)

        (b) The Bisra Stone Lime Company Limited (BSLC)

        (c) The Karanpura Development Company Limited (KDCL)

        (d) Scott amp Saxby Limited (SSL)

        (e) Eastern Investments Limited (EIL)

        (f) Burrakar Coal Company Limited (Burrakar)

        (g) Borrea Coal Company Limited (Borrea)

        The status of the companies is as under

        a) Burrakar and Borrea coal companies became non-operational after nationalisation

        of coal mines The two companies are in the process of liquidation The official

        liquidator has already taken over the assets and liabilities of these two companies

        b) EIL being an investment company is having a major stake in the equity shares of

        operating companies under the Bird Group

        c) OMDC BSLC KDCL amp SSL are operating companies under the Group

        Status of the Companies at the Time of Nationalisation

        At the time when the Bird Group of Companies came under the administrative control

        of the Ministry of Steel Government of India all of them were financially sick and

        burdened with various problems With the financial support from the Government of

        India problems relating mainly to excessive manpower erosion of working capital and

        outstanding liabilities could be settled to a considerable extent

        REVIEW OF LITERATURE

        RS PANDEY sees a bright future for the steel industry in India provided of course

        the iron ore mining policy to be announced by the government soon acts as a catalyst

        for growth He discusses the industrys problems and prospects in an interview When

        asked about the steel sectors ie private and public he expressed his expert views

        The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

        Excerpts

        The public sector steel companies in India are doing extremely well And therefore

        they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

        Ltd] which has the Vizag steel plant have undertaken massive expansion plans

        Between 1992-93 and now the share of the public sector in steel production had gone

        down Today its share is 41 per cent while that of the private sector is 59 per cent In

        1992-93 the private sector had a share of only 37 per cent In terms of finished steel

        the private sector even in 1992-93 had a 67 per cent share and this has now grown

        to 71 per cent But the public sector units are growing even if the private sector is

        growing faster

        During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

        going to increase its capacity from the current 13 million tonnes of hot metal to 225

        million tonnes in just four years RINL is set to expand its capacity from three million

        tonnes to 63 million tonnes in the next three years So that is a major expansion of

        capacity for the PSUs

        The public sector should be encouraged all the more Let there be a healthy

        competition between public and private sector producers The question of exit comes

        when they do not perform Look at the stock prices of SAIL A few years ago the scrip

        was at below Rs10 per share Today it is more than Rs130 and the expectations

        are that it will go up even higher

        When talked about the labour productivity he says Yes labour productivity is low in

        SAIL in particular But it is improving The steel major is going to adjust much of its

        existing manpower in the expansion phase when its capacity is going to almost

        double The management had also undertaken a massive VRS [voluntary retirement

        scheme] In RINL labour productivity is not all that bad

        Besides SAIL has done very well in various other techno-economic parameters in the

        last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

        per man per year In 2005-06 it went up to 150 tonnes per man per year an

        improvement of 20 per cent In blast furnace productivity also there has been an

        improvement as also in the production of high-end special steels and capacity

        utilisation

        With the improved turnover which comes from higher capacity use and higher

        manpower productivity SAILs profits have surged Its gross profit more than doubled

        between 2003-04 and 2005-06 The general presumption was that the spurt in profits

        was largely due to the high prices of steel An analysis has shown that as far as SAIL

        is concerned the higher profit is 29 per cent owing to the price factor in steel and

        other input costs and 71 per cent owing to improvement in capacity use and other

        factors that are just mentioned

        OBJECTIVES

        To compare Private and Public steel sector with refrence to TATA Steel and

        Steel Authority Of India

        To analyse potential of both the companies ie TATA Steel and SAIL

        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

        Research Methodology

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

        a) Research design-

        In case of my research ldquoComparative analysis of Indian private and Public

        sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

        found to be more appropriate

        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

        Comparison between TATA Steel and Steel Authority of India

        The Public sector undertakings (PSUs) under the Ministry of Steel have shown

        significant improvements in the last two years The combined profit before tax of all 15

        PSUs of the Steel Ministry exhibited an enhancement of more than two times from

        Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

        The profit before tax for all PSUs also exhibited a significant improvement of

        around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

        Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

        comparable period of last year

        Contribution of PSUs to public exchequer has also gone up significantly For

        example the contribution of five leading companies namely SAIL RINL NMDC

        KIOCL and MOIL to Central and State exchequer by way of excise duty customs

        duty dividend corporate tax sales tax royalty etc has gone up by more than double

        from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

        On the other hand 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

        During the period (April-December 2006) 205 million tonne of steel was produced by

        Private Sector steel units out of the total production of 3315 million tonne in the

        country The private sector units consist of major steel producers in one hand and

        relatively smaller amp 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

        For comparing both the companies ie Tata Steel and SAIL lets analyse both the

        companies on following parameters

        Production

        Chart showing production of both the companies

        Quantity 000 Tonnes

        2007-08 APR-DEC07APR-

        DEC06 ACTUA

        L

        AGE OF CURRENT

        PRODUCTION OVER

        CAPACITY UTILISATION

        TARGET TENTATIV

        E

        TARGET

        ACTUAL

        APR-DEC07 TARGE

        T

        APR-DEC06 ACTUA

        L

        APR-DEC 07

        APR-DEC06

        SAIL

        i)BSP49500 37110 37320 35780 1006 1043 1270 1210

        ii)DSP18400 13580 14330 13450 1055 1065 1060 990

        iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

        iv)BSL43500 32630 30970 30010 949 1032 950 910

        v)ISP5000 3760 3520 3450 936 1020 940 920

        vi)ASP1470 1070 1140 1130 1065 1009 650 640

        vii)VISL

        1390 1050 1160 1190 1105 975 1300 1340

        TATA 50000 37440 37090 37380 991 992 990 1000

        TATA Steel

        The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

        but it could produce only 493 (mT) For the first 3 quarters of the years company set a

        target of 3744 (mT) but could produce 3709 However for the same period in last

        year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

        to 99 this year

        Steel Authority of India

        The company had a aggregate production target of 13739 (mT) for the year 2007-08

        but it could produce only 126 (mT) a growth of 4 over the previous year However

        for the first 3 quarters of the years company set a target of 10265 (mT) and produced

        10380 as compared to around 10 (mT) for the same period last year SAIL had a

        capacity utilisation of 103 this year as compared to 101 last year

        Financials

        TATA Steel

        The year 2006-07 has seen the highest turnover and profits continuing the trend

        of the past four years The Company achieved the best ever sales turnover and

        profitability during the year under review A robust Indian economy firm steel prices

        higher volumes and several improvement initiatives contributed to the record

        performance Finished steel sales were higher by 1133 at 451 million tonnes over

        the previous year Export turnover was lower by about 5 due to lower volumes

        Average price realisation improved mainly due to higher prices of hot rolled

        coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

        (2005-06 Rs 5938 crores) an increase of 17 over the previous year

        Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

        due to additional borrowings for the Companyrsquos domestic expansion programs and

        funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

        providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

        crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

        before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

        after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

        20 compared to the previous year

        The record financial results would not have been possible without a matching

        performance by the operating departments including the raw materials division The

        year witnessed the best ever crude steel production by the Company at 505 million

        tonnes an increase of 67 over the previous year Jamshedpur Plant became the

        first plant in India to produce more than 5 million tonnes of crude steel in a year The

        upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

        rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

        Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

        increase in production was backed by improvements in operating practices and

        productivity resulting in a reduction in consumption of raw materials energy

        refractories etc

        Steel Authority of India

        Financial Year 2006-07 has been eventful year for the company with further

        momentum in improving operational efficiencies laying strong foundation and building

        road map for modernisation and expansion of SAIL Plants with several new initiatives

        undertaken with its human resource at the core During the year the company got the

        distinction of first metal company in the country to reach a market capitalization of Rs

        50000 crore

        There have been improvements in all financial parameters which are shown in

        the table given below-

        SAIL set new record in achieving the turnover of Rs39189 crore and profit

        before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

        previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

        increase of 55

        Research and Development

        Chart showing production of both the companies

        (Rs Crore)

        TATA Steel

        The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

        develop galvannealed skin panels It is the only Indian supplier of bake hardening

        steel for body panels

        Research is undertaken at Tata Steel in the areas of raw materials including coal

        coke energy conservation waste utilisation sintering blast furnace productivity and

        phosphorous reduction product development and improvement in life of plant and

        machinery The Company spends 7 of its turnover for RampD 17 patents have been

        sealed and over 100 are in process

        Steel Authority of India

        Research and Development Centre for Iron and Steel (RDCIS) has provided

        innovative technological inputs to different units of SAIL with special emphasis on

        cost reduction product development and application quality improvement energy

        conservation and automation Several new products were developed and

        commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

        Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

        specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

        micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

        Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

        Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

        strengthened its technology marketing efforts by providing consultancy services

        organising specialised testing and transfer of technological innovations to outside

        customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

        Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

        Ltd Kolkata and Ms Monarch Electronics Kolkata etc

        During the year 1998 technical papers were publishedpresented besides filing

        of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

        awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

        achievements in New Materialsrdquo given by the Ministry of Science and Technology

        Government of India

        Environment

        TATA Steel

        Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

        Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

        has an ISO-14001 certified service providerlocations are certified to ISO-14001

        Jamshedpur is the only town in the country which

        Significant achievements by the Company include an improvement in

        environment and resource conservation including a reduction in green house erosion

        raw materials and water consumption The Company has increased waste re-use and

        re-cycling Constant upgradation and modernisation has resulted in several state-of-

        the-art pollution control systems being installed to prevent and control pollution The

        Company has almost doubled its capital investment in Pollution Abatement in the last

        five years

        Emissions effluents and wastes

        Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

        most relevance to the steel industry Considerable reduction has been effected by

        Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

        granulation is taken into account Other Greenhouse Gas emissions do not result from

        Tata Steelrsquos activities

        Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

        tonnes in 2003-04 as against 790 tonnes used during the previous year

        Hazardous Waste under Basel Convention The Company does not import or export

        any waste deemed hazardous under the Basel Convention All hazardous wastes

        generated are handled as per the requirement of the Hazardous Waste Management

        and Handling Rules 19892000

        Emissions

        Tata Steel has undertaken several initiatives which have resulted in

        considerable reduction in stack emission Emissions are well below the Indian and

        international standards The emission load including particulate matter Sulphur

        Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

        undertaken at the Steel Works

        Waste handling

        Most of the solid waste generated from Steel Works is recycled or reused 18

        of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

        was used to fill low-lying areas and for peripheral road construction around

        Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

        power plants was dumped in a designated dump area

        Effluent Management

        Waste water from the steel making process is being treated with best available

        physio-chemical methods as well as being recycled Waste water from the coke plant

        is treated biologically where organic pollutants are oxidised and decomposed by micro

        organisms The Company has reduced the levels of total pollutant discharge in waste

        water streams from 0211 in 1999-2000 to 0178 in 2003-04

        Steel Authority of India

        Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

        environmentally responsible manner to comply with applicable regulations and striving

        to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

        efficiency and optimize resource consumption through various measures viz

        improvement in process technology in the areas of raw materials coke iron and steel

        making reuserecycle of the by-products generated and conservation of energy and

        water

        Solid Waste Management

        During 2005-06 SAIL produced approximately 134 million tonne of crude steel

        and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

        Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

        these wastes are being made through internal recycling and selling to outside

        agencies The wastes generated in the steel plants are being utilized mainly through

        their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

        during April-September 2006

        Environmental Plantation

        Trees have a significant role in protection of environment and ecological balance

        Extensive afforestation programme are being followed in all the plants and mines The

        basis of choosing the species of plants mainly depends on local soil characteristics

        and prevailing meteorological conditions The green belt developed by afforestation

        adds to the aesthetic environment which becomes dust and noise barriers

        A total number of 145521 saplings have been planted covering an area of 637

        hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

        hectare in 2004-05 in and around the steel plants of SAIL

        Environmental Recognitions

        SAIL plants have been awarded various prizes for environmental management in

        their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

        the Confederation of Indian Industries (CII) for exemplary performance in the

        environmental economic andsocial dimensions of sustainable development and the

        Greentech Environment Excellence Gold AwardGolden Peacock Environment

        Excellence Award in the metal sector 2005 instuted by the World Environment

        Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

        for 2005 from International Greenland Society

        Workforce and Welfare of Society

        TATA steel

        Tata Steel has not lost focus of this philosophy and has adapted it in a broader

        and modern context in its Vision 2007 A lot is dependent on the individual spirit and

        enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

        provide a work environment that will ensure a sense of purpose and personal growth

        for each individual The wish of the company is to see the smile on every face

        everyday A pioneer in employee welfare Tata Steel has invested in the power of its

        people and enriched empowered and enhanced their lives

        Even in its nascent years social scientists Sidney and Beatrice Webb were

        brought in to work on welfare schemes In fact some of the initiatives introduced by

        Tata Steel were the first of their kind in India and some even in the western countries

        at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

        source of its competitiveness It focuses on constantly updating and challenging

        intellectual capabilities to enable them to excel in performance Special efforts are

        made for enhancing strategic thinking skills and analytical abilities of its managers and

        workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

        available with its people through Knowledge Management and sharing of best

        practices

        In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

        mutual co-operation coordination and understanding between the Management and

        the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

        among many other prestigious awards and recognition Tata Steel aims at ensuring

        transparency fairness and equity in all its interactions with its employees to create an

        enthused and happy workforce

        In 1916 Social Welfare Scheme was formed by Tata Steel to provide

        assistance in the fields of education vocational training self-employment and

        family welfare

        Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

        12 times This facility provides on-the-spot diagnostic medical and advanced

        surgical treatment for preventive and curative interventions to people in

        inaccessible rural areas

        Sir Dorab Tata personally financed four athletes and two wrestlers from India

        for the 1920 Antwerp Olympics

        The JRD Sports Complex an international stadium with an 8-lane polyurethane

        track was inaugurated in 1991 The complex also houses facilities for handball

        tennis volleyball hockey basketball boxing table tennis and a modern

        gymnasium

        The Tata Steel Family Initiatives Foundation is engaged in off ering health

        services for the betterment of the people in and around Jamshedpur

        At times of natural calamities the company has rushe immediate relief and off

        ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

        fl ood ravaged Orissa and other such aff ected areas

        Horse-riding lessons the Jubilee Amusement park the zoological park etc off

        er a unique environment for the children of Jamshedpur to grow up in

        In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

        Jamshedpur has emerged as the one of the best cities in India

        Steel Authority of India

        The manpower strength as on 31st March 2006 was 138211 comprising 15206

        executives and 123005 non-executives The total reduction in manpower achieved

        during the year stood at 4864 which included separation of 881 employees through

        voluntary retirement The labour productivity improved by around 12 over previous

        year to 150 tonne crude steelmanyear

        Some of the areas of assistance which are available to the weaker sections are the

        following

        The company has provided land for construction of school buildings in some of

        the steel townships as well as in other places for spreading education among

        the masses

        The company has constructed roads in remote areas around the steel plants

        and also where the captive mines are located to improve communication and

        also increase activities such as organisation of health camps school facilities

        drinking water etc under the peripheral development schemes

        Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

        Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

        providing them with education boarding and lodging facilities

        Construction of bridges by-pass roads metal-morum path waterways

        levellingdressing area around township pre-mixed roads Installation of hand-

        pumps tube wells and wells for villagers

        Construction of school buildings (including for mentally retarded deaf and

        dumb children) madarsas providing school furniture therein and construction

        of hostels womenrsquos college building etc

        Fourteen scholarships are awarded to deserving SCST undergraduate

        engineering students in various disciplines to encourage technical education

        among them

        In many cases tuition fee in company run schools is exempt for SCST

        students Steps are taken to provide education to more and more tribal children

        in company schools

        The unemployed SCST youth are given specialized training in various

        technical trades to develop skill and knowledge Such training is provided free

        of cost

        Adult literacy campaign is carried out in most of the steel townships Every year

        more and more men and women are being covered in this campaign

        Development of fishery and cottage industry providing sewing machines to

        village mahila mandals and promoting other self-employment generation

        schemes

        SAIL has established a hockey academy with stadium and hostel facilities at

        Rourkela to tap and nurture the talent scattered in surrounding tribal area The

        academy was successful in spotting a number of young talented tribal players

        and grooms them under expertise of ex-Olympian

        Technology

        The biggest boost to efficiency in the steel industry has come from the increased

        use of continuous casting ndash an indicator of the modernity of the production process Its

        share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

        now India is thus well on its way to joining the ranks of the leading steelmakers

        among the industrial nations (share in EU-25 96) However in India some 6 of

        crude steel is still made using the outdated open-hearth process (EU-25 03) which

        suggests there is restructuring potential

        TATA Steel

        Tata Steels stall at the International Trade Fair was adjudged the best along

        with SAIL amongst ninety national companies participating in the Trade Fair Thirty

        international companies also took part in the exhibition Participating companies from

        countries all over the world exhibited latest technologies and know-how List of

        participating companies included Baosteel SAIL Heavy Engineering Corporation

        Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

        companies of national and international repute China was the partner country for the

        International Trade Fair this year

        In the award winning exhibition Tata Steel showcased its best coal mining practices

        cutting-edge technology used in iron ore mining pioneering human resource

        practices 78 years of industrial harmony and various other aspects of the worlds best

        steel company

        The 6th International Trade Fair and Conference an institutionalised global

        event is considered to be one of the most prestigious forums for national as well

        international participants It is a conclave of the finest minds concerned with the future

        direction and growth of these sectors The forum provided the worlds most eminent

        metallurgists manufacturers of metallurgical and mining machinery and related

        sectors professionals analysts and experts with the opportunity to exchange views on

        emerging technologies synergy and strengths and open up wider horizons for

        sectorial development

        Tata Steel to adopt Corus technology

        Tata Steel plans to implement alternate technology used by the British steel

        maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

        production according to Mr B Muthuraman Managing Director Tata Steel

        ldquoWe are looking at alternate technology Corus has developed an alternate

        technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

        newspersons on the sidelines of the 34th National Management Convention organised

        by the All-India Management Association However he declined to give further details

        on the type of technology the Indian steel giant plans to implement

        Steel Authority of India

        Modernisation holds the key to SAILs fortunes in the near future The objective

        of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

        and productive capacity and in the process become more energy-efficient and

        improve quality The key component of the ongoing modernisation drive - already

        completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

        ingot casting facilities with basic oxygen furnaces for steel-making and employing

        continuous casting techniques A senior SAIL official says Continuous casting and

        basic oxygen furnaces ensure better quality steel through processes more easily

        monitored for quality control The basic oxygen surfaces method is significantly faster

        more automated and permits greater flexibility Continuous casting is more efficient

        than the traditional ingot casting methods and gives increased yields while enabling

        better quality standards SAIL is also modernising its finishing mills and is adding

        secondary refining facilities to improve quality

        Safety measures

        A unique feature of safety management in steel industry is that a bipartite forum

        named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

        was formed in 1973 at national level having representatives from steel plants in SAIL

        RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

        Committee With a view to inculcate safety consciousness JCSSI organises seminars

        workshops training programme safety competitions for member organisations JCSSI

        with the co-operation and support of Trade Union representatives formulates policies

        and guidelines for its member plants and monitors the implementation

        Tata Steel

        Safety has always been a prime focus at Tata Steel A Safety Committee a

        Safety department and a Safety Trophy helped spread the message all across the

        company

        TATA reaffirms its commitment to provide safe working place and clean

        environment to its employees and other stakeholders as an integral part of its

        business philosophy and values We will continually enhance our Environmental

        Occupational Health amp Safety (EHS) performance in our activities products and

        services through a structured EHS management framework Towards this

        commitment we shall

        Establish and achieve EHS objectives and targets

        Ensure compliance with applicable EHS legislation and other requirement and

        go beyond

        Conserve natural resources and energy by constantly seeking to reduce

        consumption and promoting waste avoidance and recycling measures

        Eliminate minimize andor control adverse environmental impacts and

        occupational health and safety risks by adopting appropriate state-of-the-art

        technology and best EHS management practices at all levels sand functions

        Enhance awareness skill and competence of our employees and contractors

        so as to enable them to demonstrate their involvement responsibility and

        accountability for sound EHS performance

        Steel Authority of India

        SAIL has a separate corporate unit called the SAIL Safety Organisation to

        monitor safety system amp activities- SAIL also has a comprehensive safety policy

        Annual Performance Plans (APP) for the areas of safety and fire services are

        formulated and review of implementation of APP is done during Heads of

        Safety meeting

        Internal and external safety audits of major departments particularly hazardous

        areas are conducted every year and points arising from these audits are

        liquidated Safety aspects have been incorporated in standard operating

        practices (SOP) and standard maintenance practices (SMP)

        All major capital repairsshut downs are closely monitored round the clock

        Periodic drives are conducted to inculcate safety awarenessculture up to

        grass-root level apart from regular inspections as per checklists to identify

        unsafe conditionsacts

        Safety training is imparted to target group employees at various levels HRD

        intervention in the area of safety covers Heads of Departments Line Managers

        amp Departmental Safety Officers Besides area specific workshops are

        conducted at different locations on important topics like gas safety railroad

        safety safety in iron steel amp coke making etc

        Consistent efforts were made by SAIL Safety Organisation for improving safety

        standards in the company by taking measures like intensive safety drives in works

        area and conducting safety audits in hazardous departments of different plants and

        mines In addition specific workshops on safety aspects were organised in various

        SAIL steel plants

        Measures taken by Indian government to improve the industry

        Now letrsquos 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-

        1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

        among others was removed from the list of industries reserved for the public

        sector and also exempted from the provisions of compulsory licensing under the

        Industries (Development and Regulation) Act 1951

        2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

        of `high priority industries for automatic approval for foreign equity investment up

        to 51 This limit has been recently increased to 100

        3 Price and distribution of steel were deregulated from January 1992 At the same

        time it was ensured that priority continued to be accorded for meeting the

        requirements of small scale industries exporters of engineering goods and North

        Eastern Region of the country besides strategic sectors such as Defence and

        Railways

        4 The trade policy has been liberalised and import and export of iron and steel is

        freely allowed There are no quantitative restrictions on import of iron and steel

        items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

        regulating the imports is the tariff mechanism Tariffs on various items of iron and

        steel have drastically come down since 1991-92 levels and the government is

        committed to bring them down to the international levels In Chapter 72 there are

        two items viz 72042110 and 72042910 which fall in the restricted list of imports

        5 Iron amp Steel are freely importable as per the Extant Policy

        6 Iron amp Steel are freely exportable

        7 Advance Licensing Scheme allows duty free import of raw materials for exports

        8 The floor price for seconds and defectives continues till date

        9 Imports of seconds and defectives of steel are allowed only through three

        designated ports of Mumbai Calcutta and Chennai

        10Mandatory pre inspection certificate by a reputed international agency for every

        import consignment of seconds and defectives

        11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

        10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

        the customs duty on non-alloy steel was further reduced from 10 per cent to 5

        per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

        15 per cent to 5 per cent

        12Further customs duty on several raw materials used by the steel sector like

        noncoking coal metcoke and nickel has been reduced to 5 per cent and on

        coking coal to zero

        13To bring down the prices of steel the excise duty on steel products was reduced

        from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

        that the duty regime will be reviewed Budget 2004-05 revised this partially by

        increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

        cut on moderating prices was not achieved

        14The union Budget 2007-08 the import duty on seconds and defective has been

        further reduced from 20 to 10

        Special assistance being provided by Ministry of Steel to Private Sector

        1 Ministry of Steel is extending all possible support as detailed below for the

        development of Iron and Steel Sector in the country

        2 The Ministry is providing linkage for raw materials rail movement clearance etc for

        new plants and expansion of existing ones wherever applied for

        3 To ensure an un-interrupted supply of raw materials to the producers

        4 The Ministry has been interacting with All India Financial institutions to expedite

        clearance of projects

        5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

        Plants are held at the level of Secretary

        6 Ministry of Steel identifies infra-structural and related facilities required by steel

        industry so that their absence does not lead to bottlenecks in the future growth of

        the Iron and Steel Sector and takes up these issues with the concerned ministries

        7 The Ministry has encouraged the setting up of Institute for Steel Development and

        Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

        country are members of this Institute which has been set up with the objective of

        promoting developing and propagating the proper and effective use of steel

        8 In order to resolve the problems faced by existing amp new steel plants amp to assist

        major steel plants being implemented Govt has setup a Project Coordination

        Group under the Chairmanship of Steel Minister

        NATIONAL STEEL POLICY 2005

        The progress of the steel industry has a critical influence on the pace of Indiarsquos

        development and as such great importance is attached to capacity expansion in line

        with expected demand at cost and prices which make Indian steel internationally

        competitive The existing regime of liberalization decontrol and deregulation of

        industry in the country has opened up new opportunities for the expansion of the steel

        industry With a view to accelerating the growth of the steel sector and attaining the

        vision of India becoming a developed economy by 2020 the Ministry of Steel

        formulated a National Steel Policy (NSP) in 2005

        The following salient features can be derived after analysing the NSP 2005

        The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

        towards reform restructuring and globalisation

        The long-term goal of the NSP is that India should have a modern and efficient

        steel industry of world standards catering to diversified steel demand The focus of

        the policy is to achieve global competitiveness not only in terms of cost quality and

        product-mix but also in terms of global benchmarks of efficiency and productivity

        In order to achieve the goal of 110 million tones of steel production by 2019-20 the

        NSP seeks to remove the supply-side constraints to the growth of this industry in

        an open globally integrated and competitive environment

        The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

        policy goal On the demand side the strategy would be to create incremental

        demand through promotional efforts creation of awareness and strengthening the

        delivery chain particularly in rural areas On the supply side the strategy would be

        to facilitate creation of additional capacity remove procedural and policy

        bottlenecks in the availability of inputs such as iron ore and coal make higher

        investments in RampD and encourage the creation of infrastructure such as roads

        railways and ports

        The NSP acknowledges the low per capita consumption of steel in the country

        especially in the rural areas and the need to boost steel consumption to improve

        quality of life and help in meeting the growing aspirations of masses

        In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

        industry would need additional capital In addition funds would be required for

        technological upgrade of existing facilities In order to mobilize such vast resources

        NSP seeks to encourage foreign direct investment In addition the policy also

        seeks to make the fiscal incentives available to infrastructure projects accessible

        to the steel industry

        The NSP seeks to support developing of risk-hedging instruments like futures and

        derivatives to contain price volatility in the steel market

        The NSP seeks to strengthen the existing training and research facilities available

        to the domestic steel industry so as to provide suitable training programmes

        especially for the secondary small-scale units and also to collect and analyse data

        on important parameters of the industry

        The NSP seeks to mount aggressive RampD efforts to create manufacturing

        capability for special types of steel substitute coking coal use iron ore fines

        develop new products suited to rural needs enhance material and energy

        efficiency utilize waste and arrest environmental degradation

        The NSP acknowledges the important role played by the secondary steel sector in

        providing employment meeting local demand of steel in rural and semi-urban

        areas and meeting the countryrsquos demand of some special products and seeks to

        endeavour to provide the necessary feedstock to these units at reasonable prices

        from major plants through the existing mechanism of State Small Industries

        Corporations

        The NSP recognizes the fact that integration of the Indian steel industry with the

        global economy requires that the industry should be protected from unfair trade

        practices The NSP therefore envisages institution of mechanisms for import

        surveillance and monitoring export subsidies in other countries

        The present per capita consumption of steel in the country is very low compared to the

        world average As mentioned above one of the objectives of the NSP is to augment

        the demand and consumption of steel in the country by conscious promotion of steel

        usage With a view to create a mass awareness campaign on conscious promotion of

        steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

        the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

        The Committee is being serviced by Institute for Steel Development and Growth

        (INSDAG) The objective of the Committee is to promote steel usage in the country by

        way of an awareness campaign with particular emphasis on rural sectors The

        Committee also aims at educating the designers architects builders and planners

        regarding the qualitative and cost effective applications of steel in various structures

        including buildings bridges flyovers and airports

        FUTURE OF INDIAN STEEL INDUSTRY

        India is amongst a few countries in the world having the dual advantage of fast

        growing domestic demand coupled with access to raw materials Further the trend

        that is already discernible is that the axis of global steel production consumption is

        shifting towards Asia With their large populations China and India already account for

        35 of the total world steel production - more than double of Europe Asia is

        expected to outpace other regions of the world to an even greater extent in the coming

        years

        Amongst the Asian nations China has established a huge unbridgeable lead It

        is accepted that China will continue to be the leader However India is slated to

        emerge as the second Asian giant in the next eight years Figuratively speaking while

        the Dragon has reached maturity the Lotus is about to bloom in resplendent

        splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

        China swallowed almost 32 of global steel It is unlikely that future production and

        consumption would continue to flourish at growth rates of 8 and 18 respectively as

        has been the case over the last few years On the other hand it is sun-rise time for

        India where the demand has increased by 7-8 in the last couple of years In the long

        run Indian steel is likely to be more cost-effective since unlike China India has

        relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

        can sustain domestic production of 120-130 million tonnes for at least 25-30 years

        However the position with coal is not so favourable Though thermal coal

        reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

        traditional blast furnace route would require coking coal India does not have adequate

        reserves of coking coal nor is the meagre amount available of appropriate quality

        Thus the steel industry always had to contend with the dual problems of inadequate

        availability and poor quality of Indian coking coal This has been partly addressed by

        adopting alternative iron making processes that are not dependent on coking coal it

        can not be denied that coal is the biggest cause for concern for bulk steel production

        in India

        Because of the shortage of indigenous coal attempts have been made by steel

        producers to ensure long-term supplies by tying up with global majors or by acquiring

        mines in other countries This is the only long-term solution but with a global shortage

        of coal it may not remain cost-effective in the long run

        India is the seventh largest producer of steel and may further improve its position

        going by the current trends A series of investment decisions by major domestic

        players and international steel giants such as Steel Authority of India Ltd Tata Steel

        POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

        The keen interest shown by various prospective investors is not only due to

        expectations of strong growth in domestic demand but also due to indigenous

        availability of key resources like iron ore and skilled workforce

        After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

        steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

        finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

        2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

        consumption has accelerated to 91 per cent

        With the likely growth of Indian economy at around 7 per cent per annum

        demand for steel is expected to remain strong and is projected to reach a level of 90

        million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

        demand is sustainable considering the fact that Indias per capita consumption of steel

        is still very low at 31 kgs per head compared to the world average of 145 kgs The

        very low level of per capita consumption of steel in India is highlighted further when

        compared with the consumption levels of its peer group consisting of countries like

        China Brazil Mexico and Republic of Korea as also with selected developed

        countries

        Though there are realistic constraints in India to achieving as rapid a growth as in

        China there seems to be consensus among analysts that India is likely to witness a

        growth rate in steel consumption higher than the historically observed rate of 6 to 7

        percent If the growth rate (9 per cent) of last three years is maintained then we will

        achieve the 110 million tonnes landmark even by 2018 Though some analysts are

        more conservative due to cyclicity of steel business it may be mentioned that in a

        country like India cyclicity is more in terms of prices rather than volumes of production

        Exports

        Similar optimism prevails with regard to export of iron and steel Export of steel

        starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

        2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

        rising domestic demand and low capacity additions Exports now constitute around 17

        per cent of total production and Indias presence in the developing and developed

        world is being increasingly felt Indian steel producers have recently been able to

        supply specialized grades and products used for sophisticated applications like

        automobiles On the cost front some of our producers are counted amongst the least

        cost producers of the world For an average reference plant India is competitively

        placed in the middle of the hierarchy of steel producing nations

        However we have a long way to go to catch up with the leading exporters of the

        world such as Japan the CIS countries Brazil etc It is however expected that by

        2019-20 India will be able to export around 26 million tonnes of steel representing 24

        per cent of total projected production The projected export ratio compares well with

        the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

        The projected production of steel by 2019-20 to meet the domestic and export

        demand will be around 110 million tonnes Management of resources and

        infrastructural growth is going to be critical in achievement of the production level

        envisaged The broad requirements of various resources will increase manifold from

        the current level The bottlenecks in availability of critical inputs and various facilities

        need to be removed through concerted efforts of Government and industry The broad

        strategy to overcome these constraints as well as meet the strategic goals of the steel

        sector has been discussed in the National Steel Policy which has been recently

        approved by the Government

        As stated earlier the long-term goal of the National Steel Policy is that India

        should have a modern and efficient steel industry of world standards catering to a

        diversified steel demand The focus of the policy is to achieve global competitiveness

        not only in terms of cost quality and product mix but also in terms of global

        benchmarks of efficiency and productivity The policy envisages adopting a multi-

        pronged strategy to achieve these goals On the demand side the strategy would be

        to create incremental demand through promotional efforts creation of awareness and

        strengthening the delivery chain particularly in rural areas On the supply side the

        strategy would be to facilitate creation of additional capacity remove procedural and

        policy bottlenecks in the availability of inputs such as iron ore and coal make higher

        investments in RampD and HRD and encourage the creation of infrastructure such as

        roads railways and ports

        The production figures exports and imports of finished carbon steel and pig iron

        and apparent consumption patterns of finished carbon steel as indicated by TATA

        Steel and SAIL attest to the continuing growth for both the sectors

        FINDINGS

        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 increased its profit over the year particularly in 2006-07

        Both the companies are planning to adopt modern technology which is going to

        help them to compete in world market but they need to be less dependent on

        state of art technology and coal for long term prospects

        Public sector has undergone retrenchment for the employees and improved

        has its lobour productivity but it is still lacking behind as compared to private

        sector

        SAIL has reduced the no of accidents due to improper handling of machinery

        still no of accidents are more than that of TATA Steel

        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

        ie 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 have to be met

        comprehensively if we are to take our legitimate place in the world as a developed

        nation by 2020

        BIBLIOGRAPHY

        Annual report (2006-07) published by ministry of steel

        Annual report (2006-07) published by TATA Steel

        Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

        REPORTrsquo posted by SAIL on its website

        lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

        held on 07 Nov 2006

        Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

        wwwsteelnicin (Official website of ministry of industry)

        wwwtatasteelcom (Official website of TATA Steel)

        wwwsailcoin (Official website of Steel Authority of India)

        wwwworldsteelorg (official website of International Iron amp Steel Institute)

        wwwjpcindiansteelnicin (Website of joint planning committee)

        • DATA ANALYSIS
        • Comparison between TATA Steel and Steel Authority of India
        • Production
        • Quantity 000 Tonnes
        • Financials
        • Research and Development
        • (Rs Crore)
        • TATA Steel
        • Steel Authority of India
        • Environment
        • TATA Steel
        • Emissions effluents and wastes
        • Emissions
        • Waste handling
        • Effluent Management
        • Steel Authority of India
        • Solid Waste Management
        • Environmental Plantation
        • Environmental Recognitions
        • Workforce and Welfare of Society
        • TATA steel
        • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
        • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
        • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
        • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
        • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
        • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
        • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
        • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
        • Steel Authority of India
        • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
        • Technology
        • Steel Authority of India
        • Safety measures
        • Tata Steel
        • Steel Authority of India
        • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
        • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
        • Measures taken by Indian government to improve the industry
        • Now letrsquos 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-
        • Special assistance being provided by Ministry of Steel to Private Sector
        • FUTURE OF INDIAN STEEL INDUSTRY

          Iron and steel is vital to the Indian economy for economic growth and

          economic well-being No practical substitutes exist on a large scale for iron and steel

          because of the relatively high cost of alternative materials

          Worldwide there are broadly two major categories of steel playersmdashIntegrated

          steel producers (ISPs) and mini-millssecondary producers although variations and

          combinations of the two exist The key difference between the two is the type of iron

          bearing feedstock they consume In an integrated mill this is predominantly iron ore

          with a smaller quantity of steel scrap A mini-mill produces steel uses mainly steel

          scrap or increasingly other sources of metallic iron such as directly reduced iron

          (DRI)hot briquette iron (HBI)

          The iron and steel industry not only directly accounts for about 2 of GDP it also

          has a bearing on how the consumer goods and downstream infrastructure sectors

          develop Further with a share of approximately 10 the sector is amongst the largest

          contributors to the central excise India accounted for 34 of the estimated world

          steel production of 1129 million tonnes (mt) during 2005 At present India is the 7th

          largest crude steel producing country in the world

          In 2006-07 production of Finished (Carbon) Steel was 49350 million tonnes

          (Prov) Production of Pig Iron in 2006-07 is estimated to be 4960 Million Tonnes

          (Prov) The share of Main Producers (ie SAIL RINL and TSL) and secondary

          producers in the total production of Finished (Carbon) steel was 35 and 65

          respectively during the period of April-December 2006

          Size of Industry-

          India is among the top 10 global suppliers of steel in the world

          More than 35 million tonnes of steel is produced in India per annum

          India is also the largest producer of sponge iron in the world

          This sector represents around Rs 1 trillion of capital investments and directly

          provides employment to around 05 million with the integrated steel plants

          accounting for a 40 share

          The iron and steel sector also contributes around 62 of Indiarsquos manufactured

          goods exports and 46 of total exports by value

          Structural Characteristics of Indian Steel Industry-

          The industry is dominated by large integrated players like SAIL and Tata Steel

          in steel

          The Public sector has a significant presence in this industry Steel Authority of

          India Ltd (SAIL) has 32 of Indiarsquos installed capacity of crude steel

          Tata Steel and Essar Steel are the major private players in the industry

          The industryrsquos 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 fallingrising prices and industry

          lossesprofits

          Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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

          What is Private Limited and Public limited

          Now letrsquos first understand the meaning and difference between Public Sector

          Company and Private Sector Company The term ldquoPrivate Companyrdquo refers to

          ownership of a business company in two different waysmdash First referring to ownership

          by non-governmental organizations and second referring to ownership of the

          companys 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 andor 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

          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 During the

          period (April-December 2006) 205 million tonne of steel was produced by Private

          Sector steel units out of the total production of 3315 million tonne in the country The

          private sector units consist of major steel producers in one hand and relatively smaller

          amp 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 Indias 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

          Over the years Tata Steel has emerged as a thriving nimble steel enterprise

          due to its ability to transform itself rapidly to meet the challenges of a highly

          competitive global economy and commitment to become a supplier of choice

          Constant modernization and introduction of state-of-the-art technology at Tata Steel

          has enabled it to stay ahead in the industry

          Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

          increase in its production and sales volumes The hot metal production at 41 million

          tonne is 82 more compared to the last year in the corresponding period and crude

          steel production at 37 million tonne is higher by 79 compared to the last year in first

          three quarters

          The saleable steel production at 37 million tonne registered a significant

          increase of 11 The total sales of 353 million tonne has grown by 117 over last

          financial year in the corresponding period The domestic sale of long products has

          increased by 30

          Tata Steel is continuing with its programme of expansion of steel making

          capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

          2007-08 and thereafter to 10 million tonne by fiscal 2010

          Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

          schedule with placement of equipment order for Kalinganagar project in Orissa and

          commencement of the land acquisition process Jharkhand project is waiting

          announcement of R amp R policy of the state Government The construction work of

          ferrochrome project in South Africa is in full swing

          Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

          Corus thus emerging as the fifth largest steel producer in the world

          The steel major has won the Prime Ministers Trophy four times This award is

          instituted by the Indian ministry of steel and awarded to the countrys best integrated

          steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

          given to the company with world class operations under the Groups Tata Business

          Excellence Model

          Areas of business

          Apart from the main steel division Tata Steels operations are grouped under

          strategic profit centres like tubes growth shop (for its steel plant and material handling

          equipment) bearings ferro alloys and minerals rings agrico and wires

          Tata Steels products include hot and cold rolled coils and sheets tubes wire

          rods construction bars structurals forging quality steel rings and bearings In an

          attempt to decommoditise steel the company has recently introduced brands like

          Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

          corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

          Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

          Tata Steel is also exploring opportunities in the ferro-chrome and titanium

          businesses

          Joint ventures associates and subsidiaries

          Tata Steel has numerous joint ventures and subsidiaries Among them are

          Tinplate Company of India

          Tayo Rolls

          Tata Ryerson

          Tata Refactories

          Tata Sponge Iron

          Tata Metaliks

          Tata Pigments

          Jamshedpur Injection Powder (Jamipol)

          TM International Logistics

          mjunction services

          TRF

          Jamshedpur Utility and Service Company (JUSCO)

          The Indian Steel and Wire Products(ISWP)

          Lanka Special Steel

          Sila Eastern Company

          ESSAR STEEL LTD

          Essar Steel is an integrated steel producer with operations all along the value

          chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

          complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

          half of its production abroad mainly to the highly demanding markets of the west and

          the growth markets of South East Asia and Middle East Essar ensures excellent

          customer services through a modern distribution network

          Essar Steelrsquos core manufacturing facilities are located at its steel complex in

          Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

          Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

          tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

          down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

          at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

          Expansion

          Presently Essar Steel has embarked upon a capacity expansion for

          enhancement of its production capacity from 46 million tonne per annum to 76 million

          tonne per annum The capacity expansion programme will consist of 2 units of Corex

          units of 15 million tonne per annum each Further value addition will be carried out by

          Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

          Mill

          Products

          All Essar Steelrsquos products are world class meeting the highest international

          standards supported by excellent marketing and service

          JSW STEEL LTD

          JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

          process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

          coke making ndash iron making through blast furnace as well as Corex process ndash steel

          making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

          facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

          tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

          tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

          Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

          casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

          technology

          JSW Steel has a distinction of being certified to ISO-90012000 Quality

          management system ISO-140011996 environment management system and OHSAS

          180011999 occupational health and safety management system

          During this year JSW Steel has also been conferred with a number of awards

          Production Performance

          (in million tonne)

          Items 2003-04 2004-05 2005-06 April-Dec06

          Pellets 325 361 380 293

          Hot Metal 163 196 240 219

          Slabs 161 187 225 195

          Hot Rolled Coils 154 178 210 148

          JINDAL STEEL AND POWER LTD (JSPL)

          Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

          business interests in steel power generation mining iron ore coal and diamond

          explorationmining The current turnover of the company is over Rs 3000 crore JSPL

          is the worldrsquos largest producer of coal based sponge iron The product range

          encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

          rails and H beams and columns in technical collaboration with JFE Corporation

          Japan These H-beams are the most desired option of structural engineers worldwide

          JSPL is the largest private sector investor in the state of Chhattisgarh with a total

          investment commitment of more than Rs 10000 crore The company is also setting

          up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

          5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

          Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

          watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

          4500 crore JSPL has been rated as one of the best environmentally managed

          companies in India and committed to environment protection as an integral part of

          their business activities

          ISPAT INDUSTRIES LTD (IIL)

          Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

          Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

          rolled coils per annum The plant has got a 224 million tonne per annum sintering

          plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

          based sponge iron plant IIL have uniquely combined the usage of hot metal and

          sponge iron in the electric arc furnace for production of liquid steel for the first time in

          India IIL have also adopted the state-of-art technology called Compact Strip

          Production (CSP) process which has been installed for the first time in India and

          produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

          products are accepted in the domestic and international market

          The production performance of IIL during last three years has been as follows

          (in million tonne)

          Items 2003-04 2004-05 2005-062006-07

          (Up to Dec06)

          Hot Metal 129 140 142 114

          Sponge Iron 106 105 089 085

          Hot Rolled Coils 162 197 215 197

          The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

          with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

          global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

          Demag the technology supplier

          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

          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 SAILs equity and retains voting

          control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

          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 Companys iron ore limestone and dolomite

          mines The company has the distinction of being Indiarsquos largest producer of iron ore

          and of having the countryrsquos 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

          SAILs 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

          SAILs 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

          With technical and managerial expertise and know-how in steel making gained

          over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

          services and consultancy to clients world-wide

          SAIL has a well-equipped Research and Development Centre for Iron and Steel

          (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

          for the steel industry Besides SAIL has its own in-house Centre for Engineering and

          Technology (CET) Management Training Institute (MTI) and Safety Organisation at

          Ranchi Our captive mines are under the control of the Raw Materials Division in

          Kolkata The Environment Management Division and Growth Division of SAIL operate

          from their headquarters in Kolkata Almost all our plants and major units are ISO

          Certified

          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

          Subsidiary

          Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

          Joint Ventures

          SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

          NTPC SAIL Power Company Pvt Ltd

          Bokaro Power Supply Company Pvt Limited

          Mjunction Services Limited

          SAIL-Bansal Service Centre Ltd

          Bhilai JP Cement Ltd

          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

          MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

          Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

          producer of ferro manganese and silico manganese for captive use of SAIL plants

          The authorised and paid-up share capital of the company as on 3132006 was Rs 30

          crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

          paid-up capital

          Financial Performance

          During the year 2005-06 the company recorded a turnover of Rs 24733 crore

          (including conversion income of Rs 17110 crore) and made a net profit after tax of

          Rs 2097 crore The turnover and net profit after tax of the company during April

          2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

          (provisional) respectively

          Production Performance

          The production of all grades of ferro alloys during 2005-06 is as under

          (in tonne)

          Materials 2005-06 April- Dec 2006

          High Carbon Ferro Manganese 51525 49493

          Silco Manganese 46712 32921

          Medium Carbon Ferro Manganse 2344 164

          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 was commissioned in August

          1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

          million tonne per annum capacity Right from the year of its integrated operation VSP

          established its presence both in the domestic and international markets with its

          superior quality of products VSP has been awarded all the three International

          Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

          180011999 The company has taken significant strides in the area of Corporate

          Social Responsibility

          Production Performance

          (in million tonne)

          Items 2004-05 2005-06 2006-07 (April-Dec06)

          Hot Metal 3920 4153 3040

          Liquid Steel 3560 3603 2676

          Saleable Steel 3173 3237 2419

          NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

          Incorporated on November 15 1958 the National Mineral Development Corporation

          Ltd (NMDC) a Government of India Enterprise is engaged in the business of

          developing and exploiting mineral resources of the country (other than coal oil

          natural gas and atomic minerals) At present its activities are concentrated on mining

          of iron ore diamonds and silica sand

          NMDC operates the largest mechanised iron ore mines in the country at Bailadila

          (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

          Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

          activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

          from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

          Supreme Court of India NMDC is following up the case for early hearing

          All the iron ore production units have been accredited with ISO 90012000 and ISO

          140012004 certifications RampD Centre of NMDC was also accredited with ISO

          90012000 certification

          Iron Ore

          NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

          December 2006) Domestic sales of iron ore was 1550 million tonne during the year

          (up to December 2006) Exports of iron ore produced by NMDC is canalised through

          MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

          exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

          Capital Structure

          The authorised share capital of the company is Rs 150 crore The paid up equity

          share capital was Rs 13216 crore Outstanding loans from Government of India are

          nil

          Financial Performance

          The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

          Particulars 2004-05 2005-06 2006-07 (April-Dec06)

          SalesTurnover222655 371092 2790

          Gross Margin128749 2889 2455

          Profit Before Tax122365 277013 2410

          MSTC LTD

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

          Enterprise was set up on September 9 1964 as a canalising agency for the export of

          scrap from the country With the passage of time the Company emerged as the

          canalising agency for the import of scrap into the country Import of scrap was de-

          canalised by the Government in 1991-92 and MSTC has since then moved on to

          marketing ferrous and miscellaneous scrap arising out of steel plants and other

          industries and importing coal coke petroleum products semi finished steel products

          like HR coils and export of primarily iron ore The company has also established an e-

          auction portal and undertakes e-auction of coal diamonds and steel scrap and has

          developed an e-procurement portal in house

          Capital Structure

          The company has an authorised capital of Rs 5 crore and paid up capital was Rs

          220 crore as on 31122006 of which approximately 90 is held by Government of

          India and balance 10 by members of Steel Furnace Association 16 of India Iron and

          Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

          bonus shares issued in the year 1993-94 in the ratio 11

          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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

          handling of BOF slag etc

          Financial Performance

          Particulars 2004-05 2005-06 2006-07 (Apr-

          Dec2006)

          Total Turnover ie Service charges realised including miscellaneous Incomeetc

          981822 1067937 765557

          Gross Margin before Interest amp Depreciation 167879 186514 105284

          Interest amp Depreciation 83014 100970 84728

          Profit before Tax 84865 85544 20556

          MANGANESE ORE (INDIA) LTD (MOIL)

          Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

          of manganese ore in India At the time of inception 49 of its shares were held by the

          Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

          proportion by Government of India and the State Governments of Madhya Pradesh 17

          and Maharashtra Subsequently in 1977 the Government of India acquired the

          shares held by CPMO in MOIL and MOIL became a wholly owned Government

          company with effect from October 1977 As on 30112006 Government of India held

          8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

          holding 961 and 882 shares respectively

          MOIL Produces and Sells following Grades of Manganese Ore

          1048708 High grade ores for production of ferro manganese

          1048708 Medium grade ores for production of silico manganese

          1048708 Blast furnace grade ore required for production of hot metal

          1048708 Dioxide ore for dry battery cells and chemical industries

          Production and 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

          Items 2004-05 2005-06 2006-07 (up to Dec2006)

          1 Production

          a) Manganese Ore (thousand tonne) 94300 86500 82533

          b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

          c) Ferro Manganese (tonne) 1032500 617000 829400

          2 Turnover (Rupees in crore) 37878 33409 29463

          3 Profit before Tax (Rupees in crore) 20227 16900 12087

          KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

          Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

          90012000 and ISO 14001 company was established in April 1976 to meet the long

          term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

          was set up at Kudremukh This project was to be financed in full by Iran However as

          Iran stopped further loan disbursements after paying US $ 255 million the project was

          completed as per schedule with the funds provided by Government of India While the

          project was commissioned on schedule consequent upon the political developments

          in Iran they did not lift any quantity of concentrate As a diversification measure the

          Government approved the construction of a 3 million tonne per year capacity pellet

          plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

          million tonne with additionsmodifications The plant went into commercial production

          in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

          units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

          Plant Mangalore

          Production

          A target of 31 million tonne and 305 million tonne was set for production of iron ore

          concentrate and iron oxide pellets respectively during the year 2005-06 Actual

          production was 2922 million tonne of concentrate and 2834 million tonne of pellets

          The target set for production during the year 2006-07 is 305 million tonne of pellets

          In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

          activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

          production of iron ore concentrate during the year 2006-07 As against a target of 188

          million tonne of pellets fixed for the period April to November 2006 the actual

          production was 0275 million tonne which represents 15 target fulfilment There is

          shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

          production of pellets is on account of operational problems being encountered in the

          pellet plant after switching over to usage of 100 hematite ore from magnetite ore

          There was excessive generation of su er fines (slimes) affecting filtration clogging of

          filters overflow and contamination of process water due to filling of cooling pond

          affecting production While efforts are continuing to rectify the problems the operation

          of pellet plant is yet to stabilize and normal production is yet to commence

          The sales revenue during the last five years and up to November 2006 during 2006-

          07 is detailed below

          (Rs in lakh)

          Years Concentrate Pellets Total

          2006-07 (up to December 2006) - 12427 12427

          2005-06 12091 111137 123228

          2004-05 16050 169327 185377

          2003-04 20209 82729 102938

          2002-03 21135 51579 72714

          2001-02 21571 50598 72169

          Financial Performance

          An overview of the performance of KIOCL during the year 2006-07 (up to November

          2006) together with actuals for the previous three years is indicated below

          (Rs in lakh)

          Particulars 2006-07(up to December 2006)

          2005-06 2004-05 2003-04

          Total value of Sales 12427 123228 185377 102938

          Gross Margin 2620 68706 120863 45945

          Profit after Tax 1029 35630 64984 30070

          Inventories(excluding finished stock)

          20417 15843 8720 7616

          BIRD GROUP OF COMPANIES

          Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

          the following seven companies came under the administrative control of the Ministry of

          Steel Government of India

          (a) The Orissa Minerals Development Company Limited (OMDC)

          (b) The Bisra Stone Lime Company Limited (BSLC)

          (c) The Karanpura Development Company Limited (KDCL)

          (d) Scott amp Saxby Limited (SSL)

          (e) Eastern Investments Limited (EIL)

          (f) Burrakar Coal Company Limited (Burrakar)

          (g) Borrea Coal Company Limited (Borrea)

          The status of the companies is as under

          a) Burrakar and Borrea coal companies became non-operational after nationalisation

          of coal mines The two companies are in the process of liquidation The official

          liquidator has already taken over the assets and liabilities of these two companies

          b) EIL being an investment company is having a major stake in the equity shares of

          operating companies under the Bird Group

          c) OMDC BSLC KDCL amp SSL are operating companies under the Group

          Status of the Companies at the Time of Nationalisation

          At the time when the Bird Group of Companies came under the administrative control

          of the Ministry of Steel Government of India all of them were financially sick and

          burdened with various problems With the financial support from the Government of

          India problems relating mainly to excessive manpower erosion of working capital and

          outstanding liabilities could be settled to a considerable extent

          REVIEW OF LITERATURE

          RS PANDEY sees a bright future for the steel industry in India provided of course

          the iron ore mining policy to be announced by the government soon acts as a catalyst

          for growth He discusses the industrys problems and prospects in an interview When

          asked about the steel sectors ie private and public he expressed his expert views

          The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

          Excerpts

          The public sector steel companies in India are doing extremely well And therefore

          they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

          Ltd] which has the Vizag steel plant have undertaken massive expansion plans

          Between 1992-93 and now the share of the public sector in steel production had gone

          down Today its share is 41 per cent while that of the private sector is 59 per cent In

          1992-93 the private sector had a share of only 37 per cent In terms of finished steel

          the private sector even in 1992-93 had a 67 per cent share and this has now grown

          to 71 per cent But the public sector units are growing even if the private sector is

          growing faster

          During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

          going to increase its capacity from the current 13 million tonnes of hot metal to 225

          million tonnes in just four years RINL is set to expand its capacity from three million

          tonnes to 63 million tonnes in the next three years So that is a major expansion of

          capacity for the PSUs

          The public sector should be encouraged all the more Let there be a healthy

          competition between public and private sector producers The question of exit comes

          when they do not perform Look at the stock prices of SAIL A few years ago the scrip

          was at below Rs10 per share Today it is more than Rs130 and the expectations

          are that it will go up even higher

          When talked about the labour productivity he says Yes labour productivity is low in

          SAIL in particular But it is improving The steel major is going to adjust much of its

          existing manpower in the expansion phase when its capacity is going to almost

          double The management had also undertaken a massive VRS [voluntary retirement

          scheme] In RINL labour productivity is not all that bad

          Besides SAIL has done very well in various other techno-economic parameters in the

          last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

          per man per year In 2005-06 it went up to 150 tonnes per man per year an

          improvement of 20 per cent In blast furnace productivity also there has been an

          improvement as also in the production of high-end special steels and capacity

          utilisation

          With the improved turnover which comes from higher capacity use and higher

          manpower productivity SAILs profits have surged Its gross profit more than doubled

          between 2003-04 and 2005-06 The general presumption was that the spurt in profits

          was largely due to the high prices of steel An analysis has shown that as far as SAIL

          is concerned the higher profit is 29 per cent owing to the price factor in steel and

          other input costs and 71 per cent owing to improvement in capacity use and other

          factors that are just mentioned

          OBJECTIVES

          To compare Private and Public steel sector with refrence to TATA Steel and

          Steel Authority Of India

          To analyse potential of both the companies ie TATA Steel and SAIL

          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

          Research Methodology

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

          a) Research design-

          In case of my research ldquoComparative analysis of Indian private and Public

          sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

          found to be more appropriate

          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

          Comparison between TATA Steel and Steel Authority of India

          The Public sector undertakings (PSUs) under the Ministry of Steel have shown

          significant improvements in the last two years The combined profit before tax of all 15

          PSUs of the Steel Ministry exhibited an enhancement of more than two times from

          Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

          The profit before tax for all PSUs also exhibited a significant improvement of

          around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

          Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

          comparable period of last year

          Contribution of PSUs to public exchequer has also gone up significantly For

          example the contribution of five leading companies namely SAIL RINL NMDC

          KIOCL and MOIL to Central and State exchequer by way of excise duty customs

          duty dividend corporate tax sales tax royalty etc has gone up by more than double

          from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

          On the other hand 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

          During the period (April-December 2006) 205 million tonne of steel was produced by

          Private Sector steel units out of the total production of 3315 million tonne in the

          country The private sector units consist of major steel producers in one hand and

          relatively smaller amp 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

          For comparing both the companies ie Tata Steel and SAIL lets analyse both the

          companies on following parameters

          Production

          Chart showing production of both the companies

          Quantity 000 Tonnes

          2007-08 APR-DEC07APR-

          DEC06 ACTUA

          L

          AGE OF CURRENT

          PRODUCTION OVER

          CAPACITY UTILISATION

          TARGET TENTATIV

          E

          TARGET

          ACTUAL

          APR-DEC07 TARGE

          T

          APR-DEC06 ACTUA

          L

          APR-DEC 07

          APR-DEC06

          SAIL

          i)BSP49500 37110 37320 35780 1006 1043 1270 1210

          ii)DSP18400 13580 14330 13450 1055 1065 1060 990

          iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

          iv)BSL43500 32630 30970 30010 949 1032 950 910

          v)ISP5000 3760 3520 3450 936 1020 940 920

          vi)ASP1470 1070 1140 1130 1065 1009 650 640

          vii)VISL

          1390 1050 1160 1190 1105 975 1300 1340

          TATA 50000 37440 37090 37380 991 992 990 1000

          TATA Steel

          The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

          but it could produce only 493 (mT) For the first 3 quarters of the years company set a

          target of 3744 (mT) but could produce 3709 However for the same period in last

          year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

          to 99 this year

          Steel Authority of India

          The company had a aggregate production target of 13739 (mT) for the year 2007-08

          but it could produce only 126 (mT) a growth of 4 over the previous year However

          for the first 3 quarters of the years company set a target of 10265 (mT) and produced

          10380 as compared to around 10 (mT) for the same period last year SAIL had a

          capacity utilisation of 103 this year as compared to 101 last year

          Financials

          TATA Steel

          The year 2006-07 has seen the highest turnover and profits continuing the trend

          of the past four years The Company achieved the best ever sales turnover and

          profitability during the year under review A robust Indian economy firm steel prices

          higher volumes and several improvement initiatives contributed to the record

          performance Finished steel sales were higher by 1133 at 451 million tonnes over

          the previous year Export turnover was lower by about 5 due to lower volumes

          Average price realisation improved mainly due to higher prices of hot rolled

          coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

          (2005-06 Rs 5938 crores) an increase of 17 over the previous year

          Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

          due to additional borrowings for the Companyrsquos domestic expansion programs and

          funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

          providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

          crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

          before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

          after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

          20 compared to the previous year

          The record financial results would not have been possible without a matching

          performance by the operating departments including the raw materials division The

          year witnessed the best ever crude steel production by the Company at 505 million

          tonnes an increase of 67 over the previous year Jamshedpur Plant became the

          first plant in India to produce more than 5 million tonnes of crude steel in a year The

          upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

          rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

          Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

          increase in production was backed by improvements in operating practices and

          productivity resulting in a reduction in consumption of raw materials energy

          refractories etc

          Steel Authority of India

          Financial Year 2006-07 has been eventful year for the company with further

          momentum in improving operational efficiencies laying strong foundation and building

          road map for modernisation and expansion of SAIL Plants with several new initiatives

          undertaken with its human resource at the core During the year the company got the

          distinction of first metal company in the country to reach a market capitalization of Rs

          50000 crore

          There have been improvements in all financial parameters which are shown in

          the table given below-

          SAIL set new record in achieving the turnover of Rs39189 crore and profit

          before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

          previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

          increase of 55

          Research and Development

          Chart showing production of both the companies

          (Rs Crore)

          TATA Steel

          The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

          develop galvannealed skin panels It is the only Indian supplier of bake hardening

          steel for body panels

          Research is undertaken at Tata Steel in the areas of raw materials including coal

          coke energy conservation waste utilisation sintering blast furnace productivity and

          phosphorous reduction product development and improvement in life of plant and

          machinery The Company spends 7 of its turnover for RampD 17 patents have been

          sealed and over 100 are in process

          Steel Authority of India

          Research and Development Centre for Iron and Steel (RDCIS) has provided

          innovative technological inputs to different units of SAIL with special emphasis on

          cost reduction product development and application quality improvement energy

          conservation and automation Several new products were developed and

          commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

          Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

          specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

          micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

          Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

          Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

          strengthened its technology marketing efforts by providing consultancy services

          organising specialised testing and transfer of technological innovations to outside

          customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

          Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

          Ltd Kolkata and Ms Monarch Electronics Kolkata etc

          During the year 1998 technical papers were publishedpresented besides filing

          of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

          awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

          achievements in New Materialsrdquo given by the Ministry of Science and Technology

          Government of India

          Environment

          TATA Steel

          Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

          Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

          has an ISO-14001 certified service providerlocations are certified to ISO-14001

          Jamshedpur is the only town in the country which

          Significant achievements by the Company include an improvement in

          environment and resource conservation including a reduction in green house erosion

          raw materials and water consumption The Company has increased waste re-use and

          re-cycling Constant upgradation and modernisation has resulted in several state-of-

          the-art pollution control systems being installed to prevent and control pollution The

          Company has almost doubled its capital investment in Pollution Abatement in the last

          five years

          Emissions effluents and wastes

          Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

          most relevance to the steel industry Considerable reduction has been effected by

          Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

          granulation is taken into account Other Greenhouse Gas emissions do not result from

          Tata Steelrsquos activities

          Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

          tonnes in 2003-04 as against 790 tonnes used during the previous year

          Hazardous Waste under Basel Convention The Company does not import or export

          any waste deemed hazardous under the Basel Convention All hazardous wastes

          generated are handled as per the requirement of the Hazardous Waste Management

          and Handling Rules 19892000

          Emissions

          Tata Steel has undertaken several initiatives which have resulted in

          considerable reduction in stack emission Emissions are well below the Indian and

          international standards The emission load including particulate matter Sulphur

          Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

          undertaken at the Steel Works

          Waste handling

          Most of the solid waste generated from Steel Works is recycled or reused 18

          of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

          was used to fill low-lying areas and for peripheral road construction around

          Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

          power plants was dumped in a designated dump area

          Effluent Management

          Waste water from the steel making process is being treated with best available

          physio-chemical methods as well as being recycled Waste water from the coke plant

          is treated biologically where organic pollutants are oxidised and decomposed by micro

          organisms The Company has reduced the levels of total pollutant discharge in waste

          water streams from 0211 in 1999-2000 to 0178 in 2003-04

          Steel Authority of India

          Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

          environmentally responsible manner to comply with applicable regulations and striving

          to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

          efficiency and optimize resource consumption through various measures viz

          improvement in process technology in the areas of raw materials coke iron and steel

          making reuserecycle of the by-products generated and conservation of energy and

          water

          Solid Waste Management

          During 2005-06 SAIL produced approximately 134 million tonne of crude steel

          and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

          Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

          these wastes are being made through internal recycling and selling to outside

          agencies The wastes generated in the steel plants are being utilized mainly through

          their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

          during April-September 2006

          Environmental Plantation

          Trees have a significant role in protection of environment and ecological balance

          Extensive afforestation programme are being followed in all the plants and mines The

          basis of choosing the species of plants mainly depends on local soil characteristics

          and prevailing meteorological conditions The green belt developed by afforestation

          adds to the aesthetic environment which becomes dust and noise barriers

          A total number of 145521 saplings have been planted covering an area of 637

          hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

          hectare in 2004-05 in and around the steel plants of SAIL

          Environmental Recognitions

          SAIL plants have been awarded various prizes for environmental management in

          their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

          the Confederation of Indian Industries (CII) for exemplary performance in the

          environmental economic andsocial dimensions of sustainable development and the

          Greentech Environment Excellence Gold AwardGolden Peacock Environment

          Excellence Award in the metal sector 2005 instuted by the World Environment

          Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

          for 2005 from International Greenland Society

          Workforce and Welfare of Society

          TATA steel

          Tata Steel has not lost focus of this philosophy and has adapted it in a broader

          and modern context in its Vision 2007 A lot is dependent on the individual spirit and

          enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

          provide a work environment that will ensure a sense of purpose and personal growth

          for each individual The wish of the company is to see the smile on every face

          everyday A pioneer in employee welfare Tata Steel has invested in the power of its

          people and enriched empowered and enhanced their lives

          Even in its nascent years social scientists Sidney and Beatrice Webb were

          brought in to work on welfare schemes In fact some of the initiatives introduced by

          Tata Steel were the first of their kind in India and some even in the western countries

          at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

          source of its competitiveness It focuses on constantly updating and challenging

          intellectual capabilities to enable them to excel in performance Special efforts are

          made for enhancing strategic thinking skills and analytical abilities of its managers and

          workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

          available with its people through Knowledge Management and sharing of best

          practices

          In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

          mutual co-operation coordination and understanding between the Management and

          the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

          among many other prestigious awards and recognition Tata Steel aims at ensuring

          transparency fairness and equity in all its interactions with its employees to create an

          enthused and happy workforce

          In 1916 Social Welfare Scheme was formed by Tata Steel to provide

          assistance in the fields of education vocational training self-employment and

          family welfare

          Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

          12 times This facility provides on-the-spot diagnostic medical and advanced

          surgical treatment for preventive and curative interventions to people in

          inaccessible rural areas

          Sir Dorab Tata personally financed four athletes and two wrestlers from India

          for the 1920 Antwerp Olympics

          The JRD Sports Complex an international stadium with an 8-lane polyurethane

          track was inaugurated in 1991 The complex also houses facilities for handball

          tennis volleyball hockey basketball boxing table tennis and a modern

          gymnasium

          The Tata Steel Family Initiatives Foundation is engaged in off ering health

          services for the betterment of the people in and around Jamshedpur

          At times of natural calamities the company has rushe immediate relief and off

          ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

          fl ood ravaged Orissa and other such aff ected areas

          Horse-riding lessons the Jubilee Amusement park the zoological park etc off

          er a unique environment for the children of Jamshedpur to grow up in

          In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

          Jamshedpur has emerged as the one of the best cities in India

          Steel Authority of India

          The manpower strength as on 31st March 2006 was 138211 comprising 15206

          executives and 123005 non-executives The total reduction in manpower achieved

          during the year stood at 4864 which included separation of 881 employees through

          voluntary retirement The labour productivity improved by around 12 over previous

          year to 150 tonne crude steelmanyear

          Some of the areas of assistance which are available to the weaker sections are the

          following

          The company has provided land for construction of school buildings in some of

          the steel townships as well as in other places for spreading education among

          the masses

          The company has constructed roads in remote areas around the steel plants

          and also where the captive mines are located to improve communication and

          also increase activities such as organisation of health camps school facilities

          drinking water etc under the peripheral development schemes

          Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

          Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

          providing them with education boarding and lodging facilities

          Construction of bridges by-pass roads metal-morum path waterways

          levellingdressing area around township pre-mixed roads Installation of hand-

          pumps tube wells and wells for villagers

          Construction of school buildings (including for mentally retarded deaf and

          dumb children) madarsas providing school furniture therein and construction

          of hostels womenrsquos college building etc

          Fourteen scholarships are awarded to deserving SCST undergraduate

          engineering students in various disciplines to encourage technical education

          among them

          In many cases tuition fee in company run schools is exempt for SCST

          students Steps are taken to provide education to more and more tribal children

          in company schools

          The unemployed SCST youth are given specialized training in various

          technical trades to develop skill and knowledge Such training is provided free

          of cost

          Adult literacy campaign is carried out in most of the steel townships Every year

          more and more men and women are being covered in this campaign

          Development of fishery and cottage industry providing sewing machines to

          village mahila mandals and promoting other self-employment generation

          schemes

          SAIL has established a hockey academy with stadium and hostel facilities at

          Rourkela to tap and nurture the talent scattered in surrounding tribal area The

          academy was successful in spotting a number of young talented tribal players

          and grooms them under expertise of ex-Olympian

          Technology

          The biggest boost to efficiency in the steel industry has come from the increased

          use of continuous casting ndash an indicator of the modernity of the production process Its

          share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

          now India is thus well on its way to joining the ranks of the leading steelmakers

          among the industrial nations (share in EU-25 96) However in India some 6 of

          crude steel is still made using the outdated open-hearth process (EU-25 03) which

          suggests there is restructuring potential

          TATA Steel

          Tata Steels stall at the International Trade Fair was adjudged the best along

          with SAIL amongst ninety national companies participating in the Trade Fair Thirty

          international companies also took part in the exhibition Participating companies from

          countries all over the world exhibited latest technologies and know-how List of

          participating companies included Baosteel SAIL Heavy Engineering Corporation

          Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

          companies of national and international repute China was the partner country for the

          International Trade Fair this year

          In the award winning exhibition Tata Steel showcased its best coal mining practices

          cutting-edge technology used in iron ore mining pioneering human resource

          practices 78 years of industrial harmony and various other aspects of the worlds best

          steel company

          The 6th International Trade Fair and Conference an institutionalised global

          event is considered to be one of the most prestigious forums for national as well

          international participants It is a conclave of the finest minds concerned with the future

          direction and growth of these sectors The forum provided the worlds most eminent

          metallurgists manufacturers of metallurgical and mining machinery and related

          sectors professionals analysts and experts with the opportunity to exchange views on

          emerging technologies synergy and strengths and open up wider horizons for

          sectorial development

          Tata Steel to adopt Corus technology

          Tata Steel plans to implement alternate technology used by the British steel

          maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

          production according to Mr B Muthuraman Managing Director Tata Steel

          ldquoWe are looking at alternate technology Corus has developed an alternate

          technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

          newspersons on the sidelines of the 34th National Management Convention organised

          by the All-India Management Association However he declined to give further details

          on the type of technology the Indian steel giant plans to implement

          Steel Authority of India

          Modernisation holds the key to SAILs fortunes in the near future The objective

          of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

          and productive capacity and in the process become more energy-efficient and

          improve quality The key component of the ongoing modernisation drive - already

          completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

          ingot casting facilities with basic oxygen furnaces for steel-making and employing

          continuous casting techniques A senior SAIL official says Continuous casting and

          basic oxygen furnaces ensure better quality steel through processes more easily

          monitored for quality control The basic oxygen surfaces method is significantly faster

          more automated and permits greater flexibility Continuous casting is more efficient

          than the traditional ingot casting methods and gives increased yields while enabling

          better quality standards SAIL is also modernising its finishing mills and is adding

          secondary refining facilities to improve quality

          Safety measures

          A unique feature of safety management in steel industry is that a bipartite forum

          named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

          was formed in 1973 at national level having representatives from steel plants in SAIL

          RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

          Committee With a view to inculcate safety consciousness JCSSI organises seminars

          workshops training programme safety competitions for member organisations JCSSI

          with the co-operation and support of Trade Union representatives formulates policies

          and guidelines for its member plants and monitors the implementation

          Tata Steel

          Safety has always been a prime focus at Tata Steel A Safety Committee a

          Safety department and a Safety Trophy helped spread the message all across the

          company

          TATA reaffirms its commitment to provide safe working place and clean

          environment to its employees and other stakeholders as an integral part of its

          business philosophy and values We will continually enhance our Environmental

          Occupational Health amp Safety (EHS) performance in our activities products and

          services through a structured EHS management framework Towards this

          commitment we shall

          Establish and achieve EHS objectives and targets

          Ensure compliance with applicable EHS legislation and other requirement and

          go beyond

          Conserve natural resources and energy by constantly seeking to reduce

          consumption and promoting waste avoidance and recycling measures

          Eliminate minimize andor control adverse environmental impacts and

          occupational health and safety risks by adopting appropriate state-of-the-art

          technology and best EHS management practices at all levels sand functions

          Enhance awareness skill and competence of our employees and contractors

          so as to enable them to demonstrate their involvement responsibility and

          accountability for sound EHS performance

          Steel Authority of India

          SAIL has a separate corporate unit called the SAIL Safety Organisation to

          monitor safety system amp activities- SAIL also has a comprehensive safety policy

          Annual Performance Plans (APP) for the areas of safety and fire services are

          formulated and review of implementation of APP is done during Heads of

          Safety meeting

          Internal and external safety audits of major departments particularly hazardous

          areas are conducted every year and points arising from these audits are

          liquidated Safety aspects have been incorporated in standard operating

          practices (SOP) and standard maintenance practices (SMP)

          All major capital repairsshut downs are closely monitored round the clock

          Periodic drives are conducted to inculcate safety awarenessculture up to

          grass-root level apart from regular inspections as per checklists to identify

          unsafe conditionsacts

          Safety training is imparted to target group employees at various levels HRD

          intervention in the area of safety covers Heads of Departments Line Managers

          amp Departmental Safety Officers Besides area specific workshops are

          conducted at different locations on important topics like gas safety railroad

          safety safety in iron steel amp coke making etc

          Consistent efforts were made by SAIL Safety Organisation for improving safety

          standards in the company by taking measures like intensive safety drives in works

          area and conducting safety audits in hazardous departments of different plants and

          mines In addition specific workshops on safety aspects were organised in various

          SAIL steel plants

          Measures taken by Indian government to improve the industry

          Now letrsquos 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-

          1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

          among others was removed from the list of industries reserved for the public

          sector and also exempted from the provisions of compulsory licensing under the

          Industries (Development and Regulation) Act 1951

          2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

          of `high priority industries for automatic approval for foreign equity investment up

          to 51 This limit has been recently increased to 100

          3 Price and distribution of steel were deregulated from January 1992 At the same

          time it was ensured that priority continued to be accorded for meeting the

          requirements of small scale industries exporters of engineering goods and North

          Eastern Region of the country besides strategic sectors such as Defence and

          Railways

          4 The trade policy has been liberalised and import and export of iron and steel is

          freely allowed There are no quantitative restrictions on import of iron and steel

          items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

          regulating the imports is the tariff mechanism Tariffs on various items of iron and

          steel have drastically come down since 1991-92 levels and the government is

          committed to bring them down to the international levels In Chapter 72 there are

          two items viz 72042110 and 72042910 which fall in the restricted list of imports

          5 Iron amp Steel are freely importable as per the Extant Policy

          6 Iron amp Steel are freely exportable

          7 Advance Licensing Scheme allows duty free import of raw materials for exports

          8 The floor price for seconds and defectives continues till date

          9 Imports of seconds and defectives of steel are allowed only through three

          designated ports of Mumbai Calcutta and Chennai

          10Mandatory pre inspection certificate by a reputed international agency for every

          import consignment of seconds and defectives

          11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

          10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

          the customs duty on non-alloy steel was further reduced from 10 per cent to 5

          per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

          15 per cent to 5 per cent

          12Further customs duty on several raw materials used by the steel sector like

          noncoking coal metcoke and nickel has been reduced to 5 per cent and on

          coking coal to zero

          13To bring down the prices of steel the excise duty on steel products was reduced

          from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

          that the duty regime will be reviewed Budget 2004-05 revised this partially by

          increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

          cut on moderating prices was not achieved

          14The union Budget 2007-08 the import duty on seconds and defective has been

          further reduced from 20 to 10

          Special assistance being provided by Ministry of Steel to Private Sector

          1 Ministry of Steel is extending all possible support as detailed below for the

          development of Iron and Steel Sector in the country

          2 The Ministry is providing linkage for raw materials rail movement clearance etc for

          new plants and expansion of existing ones wherever applied for

          3 To ensure an un-interrupted supply of raw materials to the producers

          4 The Ministry has been interacting with All India Financial institutions to expedite

          clearance of projects

          5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

          Plants are held at the level of Secretary

          6 Ministry of Steel identifies infra-structural and related facilities required by steel

          industry so that their absence does not lead to bottlenecks in the future growth of

          the Iron and Steel Sector and takes up these issues with the concerned ministries

          7 The Ministry has encouraged the setting up of Institute for Steel Development and

          Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

          country are members of this Institute which has been set up with the objective of

          promoting developing and propagating the proper and effective use of steel

          8 In order to resolve the problems faced by existing amp new steel plants amp to assist

          major steel plants being implemented Govt has setup a Project Coordination

          Group under the Chairmanship of Steel Minister

          NATIONAL STEEL POLICY 2005

          The progress of the steel industry has a critical influence on the pace of Indiarsquos

          development and as such great importance is attached to capacity expansion in line

          with expected demand at cost and prices which make Indian steel internationally

          competitive The existing regime of liberalization decontrol and deregulation of

          industry in the country has opened up new opportunities for the expansion of the steel

          industry With a view to accelerating the growth of the steel sector and attaining the

          vision of India becoming a developed economy by 2020 the Ministry of Steel

          formulated a National Steel Policy (NSP) in 2005

          The following salient features can be derived after analysing the NSP 2005

          The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

          towards reform restructuring and globalisation

          The long-term goal of the NSP is that India should have a modern and efficient

          steel industry of world standards catering to diversified steel demand The focus of

          the policy is to achieve global competitiveness not only in terms of cost quality and

          product-mix but also in terms of global benchmarks of efficiency and productivity

          In order to achieve the goal of 110 million tones of steel production by 2019-20 the

          NSP seeks to remove the supply-side constraints to the growth of this industry in

          an open globally integrated and competitive environment

          The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

          policy goal On the demand side the strategy would be to create incremental

          demand through promotional efforts creation of awareness and strengthening the

          delivery chain particularly in rural areas On the supply side the strategy would be

          to facilitate creation of additional capacity remove procedural and policy

          bottlenecks in the availability of inputs such as iron ore and coal make higher

          investments in RampD and encourage the creation of infrastructure such as roads

          railways and ports

          The NSP acknowledges the low per capita consumption of steel in the country

          especially in the rural areas and the need to boost steel consumption to improve

          quality of life and help in meeting the growing aspirations of masses

          In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

          industry would need additional capital In addition funds would be required for

          technological upgrade of existing facilities In order to mobilize such vast resources

          NSP seeks to encourage foreign direct investment In addition the policy also

          seeks to make the fiscal incentives available to infrastructure projects accessible

          to the steel industry

          The NSP seeks to support developing of risk-hedging instruments like futures and

          derivatives to contain price volatility in the steel market

          The NSP seeks to strengthen the existing training and research facilities available

          to the domestic steel industry so as to provide suitable training programmes

          especially for the secondary small-scale units and also to collect and analyse data

          on important parameters of the industry

          The NSP seeks to mount aggressive RampD efforts to create manufacturing

          capability for special types of steel substitute coking coal use iron ore fines

          develop new products suited to rural needs enhance material and energy

          efficiency utilize waste and arrest environmental degradation

          The NSP acknowledges the important role played by the secondary steel sector in

          providing employment meeting local demand of steel in rural and semi-urban

          areas and meeting the countryrsquos demand of some special products and seeks to

          endeavour to provide the necessary feedstock to these units at reasonable prices

          from major plants through the existing mechanism of State Small Industries

          Corporations

          The NSP recognizes the fact that integration of the Indian steel industry with the

          global economy requires that the industry should be protected from unfair trade

          practices The NSP therefore envisages institution of mechanisms for import

          surveillance and monitoring export subsidies in other countries

          The present per capita consumption of steel in the country is very low compared to the

          world average As mentioned above one of the objectives of the NSP is to augment

          the demand and consumption of steel in the country by conscious promotion of steel

          usage With a view to create a mass awareness campaign on conscious promotion of

          steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

          the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

          The Committee is being serviced by Institute for Steel Development and Growth

          (INSDAG) The objective of the Committee is to promote steel usage in the country by

          way of an awareness campaign with particular emphasis on rural sectors The

          Committee also aims at educating the designers architects builders and planners

          regarding the qualitative and cost effective applications of steel in various structures

          including buildings bridges flyovers and airports

          FUTURE OF INDIAN STEEL INDUSTRY

          India is amongst a few countries in the world having the dual advantage of fast

          growing domestic demand coupled with access to raw materials Further the trend

          that is already discernible is that the axis of global steel production consumption is

          shifting towards Asia With their large populations China and India already account for

          35 of the total world steel production - more than double of Europe Asia is

          expected to outpace other regions of the world to an even greater extent in the coming

          years

          Amongst the Asian nations China has established a huge unbridgeable lead It

          is accepted that China will continue to be the leader However India is slated to

          emerge as the second Asian giant in the next eight years Figuratively speaking while

          the Dragon has reached maturity the Lotus is about to bloom in resplendent

          splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

          China swallowed almost 32 of global steel It is unlikely that future production and

          consumption would continue to flourish at growth rates of 8 and 18 respectively as

          has been the case over the last few years On the other hand it is sun-rise time for

          India where the demand has increased by 7-8 in the last couple of years In the long

          run Indian steel is likely to be more cost-effective since unlike China India has

          relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

          can sustain domestic production of 120-130 million tonnes for at least 25-30 years

          However the position with coal is not so favourable Though thermal coal

          reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

          traditional blast furnace route would require coking coal India does not have adequate

          reserves of coking coal nor is the meagre amount available of appropriate quality

          Thus the steel industry always had to contend with the dual problems of inadequate

          availability and poor quality of Indian coking coal This has been partly addressed by

          adopting alternative iron making processes that are not dependent on coking coal it

          can not be denied that coal is the biggest cause for concern for bulk steel production

          in India

          Because of the shortage of indigenous coal attempts have been made by steel

          producers to ensure long-term supplies by tying up with global majors or by acquiring

          mines in other countries This is the only long-term solution but with a global shortage

          of coal it may not remain cost-effective in the long run

          India is the seventh largest producer of steel and may further improve its position

          going by the current trends A series of investment decisions by major domestic

          players and international steel giants such as Steel Authority of India Ltd Tata Steel

          POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

          The keen interest shown by various prospective investors is not only due to

          expectations of strong growth in domestic demand but also due to indigenous

          availability of key resources like iron ore and skilled workforce

          After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

          steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

          finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

          2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

          consumption has accelerated to 91 per cent

          With the likely growth of Indian economy at around 7 per cent per annum

          demand for steel is expected to remain strong and is projected to reach a level of 90

          million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

          demand is sustainable considering the fact that Indias per capita consumption of steel

          is still very low at 31 kgs per head compared to the world average of 145 kgs The

          very low level of per capita consumption of steel in India is highlighted further when

          compared with the consumption levels of its peer group consisting of countries like

          China Brazil Mexico and Republic of Korea as also with selected developed

          countries

          Though there are realistic constraints in India to achieving as rapid a growth as in

          China there seems to be consensus among analysts that India is likely to witness a

          growth rate in steel consumption higher than the historically observed rate of 6 to 7

          percent If the growth rate (9 per cent) of last three years is maintained then we will

          achieve the 110 million tonnes landmark even by 2018 Though some analysts are

          more conservative due to cyclicity of steel business it may be mentioned that in a

          country like India cyclicity is more in terms of prices rather than volumes of production

          Exports

          Similar optimism prevails with regard to export of iron and steel Export of steel

          starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

          2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

          rising domestic demand and low capacity additions Exports now constitute around 17

          per cent of total production and Indias presence in the developing and developed

          world is being increasingly felt Indian steel producers have recently been able to

          supply specialized grades and products used for sophisticated applications like

          automobiles On the cost front some of our producers are counted amongst the least

          cost producers of the world For an average reference plant India is competitively

          placed in the middle of the hierarchy of steel producing nations

          However we have a long way to go to catch up with the leading exporters of the

          world such as Japan the CIS countries Brazil etc It is however expected that by

          2019-20 India will be able to export around 26 million tonnes of steel representing 24

          per cent of total projected production The projected export ratio compares well with

          the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

          The projected production of steel by 2019-20 to meet the domestic and export

          demand will be around 110 million tonnes Management of resources and

          infrastructural growth is going to be critical in achievement of the production level

          envisaged The broad requirements of various resources will increase manifold from

          the current level The bottlenecks in availability of critical inputs and various facilities

          need to be removed through concerted efforts of Government and industry The broad

          strategy to overcome these constraints as well as meet the strategic goals of the steel

          sector has been discussed in the National Steel Policy which has been recently

          approved by the Government

          As stated earlier the long-term goal of the National Steel Policy is that India

          should have a modern and efficient steel industry of world standards catering to a

          diversified steel demand The focus of the policy is to achieve global competitiveness

          not only in terms of cost quality and product mix but also in terms of global

          benchmarks of efficiency and productivity The policy envisages adopting a multi-

          pronged strategy to achieve these goals On the demand side the strategy would be

          to create incremental demand through promotional efforts creation of awareness and

          strengthening the delivery chain particularly in rural areas On the supply side the

          strategy would be to facilitate creation of additional capacity remove procedural and

          policy bottlenecks in the availability of inputs such as iron ore and coal make higher

          investments in RampD and HRD and encourage the creation of infrastructure such as

          roads railways and ports

          The production figures exports and imports of finished carbon steel and pig iron

          and apparent consumption patterns of finished carbon steel as indicated by TATA

          Steel and SAIL attest to the continuing growth for both the sectors

          FINDINGS

          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 increased its profit over the year particularly in 2006-07

          Both the companies are planning to adopt modern technology which is going to

          help them to compete in world market but they need to be less dependent on

          state of art technology and coal for long term prospects

          Public sector has undergone retrenchment for the employees and improved

          has its lobour productivity but it is still lacking behind as compared to private

          sector

          SAIL has reduced the no of accidents due to improper handling of machinery

          still no of accidents are more than that of TATA Steel

          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

          ie 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 have to be met

          comprehensively if we are to take our legitimate place in the world as a developed

          nation by 2020

          BIBLIOGRAPHY

          Annual report (2006-07) published by ministry of steel

          Annual report (2006-07) published by TATA Steel

          Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

          REPORTrsquo posted by SAIL on its website

          lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

          held on 07 Nov 2006

          Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

          wwwsteelnicin (Official website of ministry of industry)

          wwwtatasteelcom (Official website of TATA Steel)

          wwwsailcoin (Official website of Steel Authority of India)

          wwwworldsteelorg (official website of International Iron amp Steel Institute)

          wwwjpcindiansteelnicin (Website of joint planning committee)

          • DATA ANALYSIS
          • Comparison between TATA Steel and Steel Authority of India
          • Production
          • Quantity 000 Tonnes
          • Financials
          • Research and Development
          • (Rs Crore)
          • TATA Steel
          • Steel Authority of India
          • Environment
          • TATA Steel
          • Emissions effluents and wastes
          • Emissions
          • Waste handling
          • Effluent Management
          • Steel Authority of India
          • Solid Waste Management
          • Environmental Plantation
          • Environmental Recognitions
          • Workforce and Welfare of Society
          • TATA steel
          • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
          • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
          • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
          • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
          • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
          • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
          • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
          • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
          • Steel Authority of India
          • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
          • Technology
          • Steel Authority of India
          • Safety measures
          • Tata Steel
          • Steel Authority of India
          • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
          • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
          • Measures taken by Indian government to improve the industry
          • Now letrsquos 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-
          • Special assistance being provided by Ministry of Steel to Private Sector
          • FUTURE OF INDIAN STEEL INDUSTRY

            The iron and steel sector also contributes around 62 of Indiarsquos manufactured

            goods exports and 46 of total exports by value

            Structural Characteristics of Indian Steel Industry-

            The industry is dominated by large integrated players like SAIL and Tata Steel

            in steel

            The Public sector has a significant presence in this industry Steel Authority of

            India Ltd (SAIL) has 32 of Indiarsquos installed capacity of crude steel

            Tata Steel and Essar Steel are the major private players in the industry

            The industryrsquos 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 fallingrising prices and industry

            lossesprofits

            Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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

            What is Private Limited and Public limited

            Now letrsquos first understand the meaning and difference between Public Sector

            Company and Private Sector Company The term ldquoPrivate Companyrdquo refers to

            ownership of a business company in two different waysmdash First referring to ownership

            by non-governmental organizations and second referring to ownership of the

            companys 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 andor 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

            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 During the

            period (April-December 2006) 205 million tonne of steel was produced by Private

            Sector steel units out of the total production of 3315 million tonne in the country The

            private sector units consist of major steel producers in one hand and relatively smaller

            amp 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 Indias 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

            Over the years Tata Steel has emerged as a thriving nimble steel enterprise

            due to its ability to transform itself rapidly to meet the challenges of a highly

            competitive global economy and commitment to become a supplier of choice

            Constant modernization and introduction of state-of-the-art technology at Tata Steel

            has enabled it to stay ahead in the industry

            Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

            increase in its production and sales volumes The hot metal production at 41 million

            tonne is 82 more compared to the last year in the corresponding period and crude

            steel production at 37 million tonne is higher by 79 compared to the last year in first

            three quarters

            The saleable steel production at 37 million tonne registered a significant

            increase of 11 The total sales of 353 million tonne has grown by 117 over last

            financial year in the corresponding period The domestic sale of long products has

            increased by 30

            Tata Steel is continuing with its programme of expansion of steel making

            capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

            2007-08 and thereafter to 10 million tonne by fiscal 2010

            Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

            schedule with placement of equipment order for Kalinganagar project in Orissa and

            commencement of the land acquisition process Jharkhand project is waiting

            announcement of R amp R policy of the state Government The construction work of

            ferrochrome project in South Africa is in full swing

            Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

            Corus thus emerging as the fifth largest steel producer in the world

            The steel major has won the Prime Ministers Trophy four times This award is

            instituted by the Indian ministry of steel and awarded to the countrys best integrated

            steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

            given to the company with world class operations under the Groups Tata Business

            Excellence Model

            Areas of business

            Apart from the main steel division Tata Steels operations are grouped under

            strategic profit centres like tubes growth shop (for its steel plant and material handling

            equipment) bearings ferro alloys and minerals rings agrico and wires

            Tata Steels products include hot and cold rolled coils and sheets tubes wire

            rods construction bars structurals forging quality steel rings and bearings In an

            attempt to decommoditise steel the company has recently introduced brands like

            Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

            corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

            Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

            Tata Steel is also exploring opportunities in the ferro-chrome and titanium

            businesses

            Joint ventures associates and subsidiaries

            Tata Steel has numerous joint ventures and subsidiaries Among them are

            Tinplate Company of India

            Tayo Rolls

            Tata Ryerson

            Tata Refactories

            Tata Sponge Iron

            Tata Metaliks

            Tata Pigments

            Jamshedpur Injection Powder (Jamipol)

            TM International Logistics

            mjunction services

            TRF

            Jamshedpur Utility and Service Company (JUSCO)

            The Indian Steel and Wire Products(ISWP)

            Lanka Special Steel

            Sila Eastern Company

            ESSAR STEEL LTD

            Essar Steel is an integrated steel producer with operations all along the value

            chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

            complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

            half of its production abroad mainly to the highly demanding markets of the west and

            the growth markets of South East Asia and Middle East Essar ensures excellent

            customer services through a modern distribution network

            Essar Steelrsquos core manufacturing facilities are located at its steel complex in

            Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

            Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

            tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

            down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

            at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

            Expansion

            Presently Essar Steel has embarked upon a capacity expansion for

            enhancement of its production capacity from 46 million tonne per annum to 76 million

            tonne per annum The capacity expansion programme will consist of 2 units of Corex

            units of 15 million tonne per annum each Further value addition will be carried out by

            Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

            Mill

            Products

            All Essar Steelrsquos products are world class meeting the highest international

            standards supported by excellent marketing and service

            JSW STEEL LTD

            JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

            process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

            coke making ndash iron making through blast furnace as well as Corex process ndash steel

            making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

            facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

            tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

            tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

            Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

            casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

            technology

            JSW Steel has a distinction of being certified to ISO-90012000 Quality

            management system ISO-140011996 environment management system and OHSAS

            180011999 occupational health and safety management system

            During this year JSW Steel has also been conferred with a number of awards

            Production Performance

            (in million tonne)

            Items 2003-04 2004-05 2005-06 April-Dec06

            Pellets 325 361 380 293

            Hot Metal 163 196 240 219

            Slabs 161 187 225 195

            Hot Rolled Coils 154 178 210 148

            JINDAL STEEL AND POWER LTD (JSPL)

            Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

            business interests in steel power generation mining iron ore coal and diamond

            explorationmining The current turnover of the company is over Rs 3000 crore JSPL

            is the worldrsquos largest producer of coal based sponge iron The product range

            encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

            rails and H beams and columns in technical collaboration with JFE Corporation

            Japan These H-beams are the most desired option of structural engineers worldwide

            JSPL is the largest private sector investor in the state of Chhattisgarh with a total

            investment commitment of more than Rs 10000 crore The company is also setting

            up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

            5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

            Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

            watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

            4500 crore JSPL has been rated as one of the best environmentally managed

            companies in India and committed to environment protection as an integral part of

            their business activities

            ISPAT INDUSTRIES LTD (IIL)

            Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

            Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

            rolled coils per annum The plant has got a 224 million tonne per annum sintering

            plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

            based sponge iron plant IIL have uniquely combined the usage of hot metal and

            sponge iron in the electric arc furnace for production of liquid steel for the first time in

            India IIL have also adopted the state-of-art technology called Compact Strip

            Production (CSP) process which has been installed for the first time in India and

            produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

            products are accepted in the domestic and international market

            The production performance of IIL during last three years has been as follows

            (in million tonne)

            Items 2003-04 2004-05 2005-062006-07

            (Up to Dec06)

            Hot Metal 129 140 142 114

            Sponge Iron 106 105 089 085

            Hot Rolled Coils 162 197 215 197

            The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

            with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

            global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

            Demag the technology supplier

            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

            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 SAILs equity and retains voting

            control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

            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 Companys iron ore limestone and dolomite

            mines The company has the distinction of being Indiarsquos largest producer of iron ore

            and of having the countryrsquos 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

            SAILs 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

            SAILs 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

            With technical and managerial expertise and know-how in steel making gained

            over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

            services and consultancy to clients world-wide

            SAIL has a well-equipped Research and Development Centre for Iron and Steel

            (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

            for the steel industry Besides SAIL has its own in-house Centre for Engineering and

            Technology (CET) Management Training Institute (MTI) and Safety Organisation at

            Ranchi Our captive mines are under the control of the Raw Materials Division in

            Kolkata The Environment Management Division and Growth Division of SAIL operate

            from their headquarters in Kolkata Almost all our plants and major units are ISO

            Certified

            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

            Subsidiary

            Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

            Joint Ventures

            SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

            NTPC SAIL Power Company Pvt Ltd

            Bokaro Power Supply Company Pvt Limited

            Mjunction Services Limited

            SAIL-Bansal Service Centre Ltd

            Bhilai JP Cement Ltd

            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

            MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

            Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

            producer of ferro manganese and silico manganese for captive use of SAIL plants

            The authorised and paid-up share capital of the company as on 3132006 was Rs 30

            crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

            paid-up capital

            Financial Performance

            During the year 2005-06 the company recorded a turnover of Rs 24733 crore

            (including conversion income of Rs 17110 crore) and made a net profit after tax of

            Rs 2097 crore The turnover and net profit after tax of the company during April

            2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

            (provisional) respectively

            Production Performance

            The production of all grades of ferro alloys during 2005-06 is as under

            (in tonne)

            Materials 2005-06 April- Dec 2006

            High Carbon Ferro Manganese 51525 49493

            Silco Manganese 46712 32921

            Medium Carbon Ferro Manganse 2344 164

            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 was commissioned in August

            1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

            million tonne per annum capacity Right from the year of its integrated operation VSP

            established its presence both in the domestic and international markets with its

            superior quality of products VSP has been awarded all the three International

            Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

            180011999 The company has taken significant strides in the area of Corporate

            Social Responsibility

            Production Performance

            (in million tonne)

            Items 2004-05 2005-06 2006-07 (April-Dec06)

            Hot Metal 3920 4153 3040

            Liquid Steel 3560 3603 2676

            Saleable Steel 3173 3237 2419

            NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

            Incorporated on November 15 1958 the National Mineral Development Corporation

            Ltd (NMDC) a Government of India Enterprise is engaged in the business of

            developing and exploiting mineral resources of the country (other than coal oil

            natural gas and atomic minerals) At present its activities are concentrated on mining

            of iron ore diamonds and silica sand

            NMDC operates the largest mechanised iron ore mines in the country at Bailadila

            (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

            Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

            activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

            from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

            Supreme Court of India NMDC is following up the case for early hearing

            All the iron ore production units have been accredited with ISO 90012000 and ISO

            140012004 certifications RampD Centre of NMDC was also accredited with ISO

            90012000 certification

            Iron Ore

            NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

            December 2006) Domestic sales of iron ore was 1550 million tonne during the year

            (up to December 2006) Exports of iron ore produced by NMDC is canalised through

            MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

            exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

            Capital Structure

            The authorised share capital of the company is Rs 150 crore The paid up equity

            share capital was Rs 13216 crore Outstanding loans from Government of India are

            nil

            Financial Performance

            The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

            Particulars 2004-05 2005-06 2006-07 (April-Dec06)

            SalesTurnover222655 371092 2790

            Gross Margin128749 2889 2455

            Profit Before Tax122365 277013 2410

            MSTC LTD

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

            Enterprise was set up on September 9 1964 as a canalising agency for the export of

            scrap from the country With the passage of time the Company emerged as the

            canalising agency for the import of scrap into the country Import of scrap was de-

            canalised by the Government in 1991-92 and MSTC has since then moved on to

            marketing ferrous and miscellaneous scrap arising out of steel plants and other

            industries and importing coal coke petroleum products semi finished steel products

            like HR coils and export of primarily iron ore The company has also established an e-

            auction portal and undertakes e-auction of coal diamonds and steel scrap and has

            developed an e-procurement portal in house

            Capital Structure

            The company has an authorised capital of Rs 5 crore and paid up capital was Rs

            220 crore as on 31122006 of which approximately 90 is held by Government of

            India and balance 10 by members of Steel Furnace Association 16 of India Iron and

            Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

            bonus shares issued in the year 1993-94 in the ratio 11

            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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

            handling of BOF slag etc

            Financial Performance

            Particulars 2004-05 2005-06 2006-07 (Apr-

            Dec2006)

            Total Turnover ie Service charges realised including miscellaneous Incomeetc

            981822 1067937 765557

            Gross Margin before Interest amp Depreciation 167879 186514 105284

            Interest amp Depreciation 83014 100970 84728

            Profit before Tax 84865 85544 20556

            MANGANESE ORE (INDIA) LTD (MOIL)

            Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

            of manganese ore in India At the time of inception 49 of its shares were held by the

            Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

            proportion by Government of India and the State Governments of Madhya Pradesh 17

            and Maharashtra Subsequently in 1977 the Government of India acquired the

            shares held by CPMO in MOIL and MOIL became a wholly owned Government

            company with effect from October 1977 As on 30112006 Government of India held

            8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

            holding 961 and 882 shares respectively

            MOIL Produces and Sells following Grades of Manganese Ore

            1048708 High grade ores for production of ferro manganese

            1048708 Medium grade ores for production of silico manganese

            1048708 Blast furnace grade ore required for production of hot metal

            1048708 Dioxide ore for dry battery cells and chemical industries

            Production and 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

            Items 2004-05 2005-06 2006-07 (up to Dec2006)

            1 Production

            a) Manganese Ore (thousand tonne) 94300 86500 82533

            b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

            c) Ferro Manganese (tonne) 1032500 617000 829400

            2 Turnover (Rupees in crore) 37878 33409 29463

            3 Profit before Tax (Rupees in crore) 20227 16900 12087

            KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

            Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

            90012000 and ISO 14001 company was established in April 1976 to meet the long

            term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

            was set up at Kudremukh This project was to be financed in full by Iran However as

            Iran stopped further loan disbursements after paying US $ 255 million the project was

            completed as per schedule with the funds provided by Government of India While the

            project was commissioned on schedule consequent upon the political developments

            in Iran they did not lift any quantity of concentrate As a diversification measure the

            Government approved the construction of a 3 million tonne per year capacity pellet

            plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

            million tonne with additionsmodifications The plant went into commercial production

            in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

            units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

            Plant Mangalore

            Production

            A target of 31 million tonne and 305 million tonne was set for production of iron ore

            concentrate and iron oxide pellets respectively during the year 2005-06 Actual

            production was 2922 million tonne of concentrate and 2834 million tonne of pellets

            The target set for production during the year 2006-07 is 305 million tonne of pellets

            In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

            activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

            production of iron ore concentrate during the year 2006-07 As against a target of 188

            million tonne of pellets fixed for the period April to November 2006 the actual

            production was 0275 million tonne which represents 15 target fulfilment There is

            shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

            production of pellets is on account of operational problems being encountered in the

            pellet plant after switching over to usage of 100 hematite ore from magnetite ore

            There was excessive generation of su er fines (slimes) affecting filtration clogging of

            filters overflow and contamination of process water due to filling of cooling pond

            affecting production While efforts are continuing to rectify the problems the operation

            of pellet plant is yet to stabilize and normal production is yet to commence

            The sales revenue during the last five years and up to November 2006 during 2006-

            07 is detailed below

            (Rs in lakh)

            Years Concentrate Pellets Total

            2006-07 (up to December 2006) - 12427 12427

            2005-06 12091 111137 123228

            2004-05 16050 169327 185377

            2003-04 20209 82729 102938

            2002-03 21135 51579 72714

            2001-02 21571 50598 72169

            Financial Performance

            An overview of the performance of KIOCL during the year 2006-07 (up to November

            2006) together with actuals for the previous three years is indicated below

            (Rs in lakh)

            Particulars 2006-07(up to December 2006)

            2005-06 2004-05 2003-04

            Total value of Sales 12427 123228 185377 102938

            Gross Margin 2620 68706 120863 45945

            Profit after Tax 1029 35630 64984 30070

            Inventories(excluding finished stock)

            20417 15843 8720 7616

            BIRD GROUP OF COMPANIES

            Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

            the following seven companies came under the administrative control of the Ministry of

            Steel Government of India

            (a) The Orissa Minerals Development Company Limited (OMDC)

            (b) The Bisra Stone Lime Company Limited (BSLC)

            (c) The Karanpura Development Company Limited (KDCL)

            (d) Scott amp Saxby Limited (SSL)

            (e) Eastern Investments Limited (EIL)

            (f) Burrakar Coal Company Limited (Burrakar)

            (g) Borrea Coal Company Limited (Borrea)

            The status of the companies is as under

            a) Burrakar and Borrea coal companies became non-operational after nationalisation

            of coal mines The two companies are in the process of liquidation The official

            liquidator has already taken over the assets and liabilities of these two companies

            b) EIL being an investment company is having a major stake in the equity shares of

            operating companies under the Bird Group

            c) OMDC BSLC KDCL amp SSL are operating companies under the Group

            Status of the Companies at the Time of Nationalisation

            At the time when the Bird Group of Companies came under the administrative control

            of the Ministry of Steel Government of India all of them were financially sick and

            burdened with various problems With the financial support from the Government of

            India problems relating mainly to excessive manpower erosion of working capital and

            outstanding liabilities could be settled to a considerable extent

            REVIEW OF LITERATURE

            RS PANDEY sees a bright future for the steel industry in India provided of course

            the iron ore mining policy to be announced by the government soon acts as a catalyst

            for growth He discusses the industrys problems and prospects in an interview When

            asked about the steel sectors ie private and public he expressed his expert views

            The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

            Excerpts

            The public sector steel companies in India are doing extremely well And therefore

            they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

            Ltd] which has the Vizag steel plant have undertaken massive expansion plans

            Between 1992-93 and now the share of the public sector in steel production had gone

            down Today its share is 41 per cent while that of the private sector is 59 per cent In

            1992-93 the private sector had a share of only 37 per cent In terms of finished steel

            the private sector even in 1992-93 had a 67 per cent share and this has now grown

            to 71 per cent But the public sector units are growing even if the private sector is

            growing faster

            During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

            going to increase its capacity from the current 13 million tonnes of hot metal to 225

            million tonnes in just four years RINL is set to expand its capacity from three million

            tonnes to 63 million tonnes in the next three years So that is a major expansion of

            capacity for the PSUs

            The public sector should be encouraged all the more Let there be a healthy

            competition between public and private sector producers The question of exit comes

            when they do not perform Look at the stock prices of SAIL A few years ago the scrip

            was at below Rs10 per share Today it is more than Rs130 and the expectations

            are that it will go up even higher

            When talked about the labour productivity he says Yes labour productivity is low in

            SAIL in particular But it is improving The steel major is going to adjust much of its

            existing manpower in the expansion phase when its capacity is going to almost

            double The management had also undertaken a massive VRS [voluntary retirement

            scheme] In RINL labour productivity is not all that bad

            Besides SAIL has done very well in various other techno-economic parameters in the

            last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

            per man per year In 2005-06 it went up to 150 tonnes per man per year an

            improvement of 20 per cent In blast furnace productivity also there has been an

            improvement as also in the production of high-end special steels and capacity

            utilisation

            With the improved turnover which comes from higher capacity use and higher

            manpower productivity SAILs profits have surged Its gross profit more than doubled

            between 2003-04 and 2005-06 The general presumption was that the spurt in profits

            was largely due to the high prices of steel An analysis has shown that as far as SAIL

            is concerned the higher profit is 29 per cent owing to the price factor in steel and

            other input costs and 71 per cent owing to improvement in capacity use and other

            factors that are just mentioned

            OBJECTIVES

            To compare Private and Public steel sector with refrence to TATA Steel and

            Steel Authority Of India

            To analyse potential of both the companies ie TATA Steel and SAIL

            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

            Research Methodology

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

            a) Research design-

            In case of my research ldquoComparative analysis of Indian private and Public

            sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

            found to be more appropriate

            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

            Comparison between TATA Steel and Steel Authority of India

            The Public sector undertakings (PSUs) under the Ministry of Steel have shown

            significant improvements in the last two years The combined profit before tax of all 15

            PSUs of the Steel Ministry exhibited an enhancement of more than two times from

            Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

            The profit before tax for all PSUs also exhibited a significant improvement of

            around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

            Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

            comparable period of last year

            Contribution of PSUs to public exchequer has also gone up significantly For

            example the contribution of five leading companies namely SAIL RINL NMDC

            KIOCL and MOIL to Central and State exchequer by way of excise duty customs

            duty dividend corporate tax sales tax royalty etc has gone up by more than double

            from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

            On the other hand 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

            During the period (April-December 2006) 205 million tonne of steel was produced by

            Private Sector steel units out of the total production of 3315 million tonne in the

            country The private sector units consist of major steel producers in one hand and

            relatively smaller amp 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

            For comparing both the companies ie Tata Steel and SAIL lets analyse both the

            companies on following parameters

            Production

            Chart showing production of both the companies

            Quantity 000 Tonnes

            2007-08 APR-DEC07APR-

            DEC06 ACTUA

            L

            AGE OF CURRENT

            PRODUCTION OVER

            CAPACITY UTILISATION

            TARGET TENTATIV

            E

            TARGET

            ACTUAL

            APR-DEC07 TARGE

            T

            APR-DEC06 ACTUA

            L

            APR-DEC 07

            APR-DEC06

            SAIL

            i)BSP49500 37110 37320 35780 1006 1043 1270 1210

            ii)DSP18400 13580 14330 13450 1055 1065 1060 990

            iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

            iv)BSL43500 32630 30970 30010 949 1032 950 910

            v)ISP5000 3760 3520 3450 936 1020 940 920

            vi)ASP1470 1070 1140 1130 1065 1009 650 640

            vii)VISL

            1390 1050 1160 1190 1105 975 1300 1340

            TATA 50000 37440 37090 37380 991 992 990 1000

            TATA Steel

            The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

            but it could produce only 493 (mT) For the first 3 quarters of the years company set a

            target of 3744 (mT) but could produce 3709 However for the same period in last

            year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

            to 99 this year

            Steel Authority of India

            The company had a aggregate production target of 13739 (mT) for the year 2007-08

            but it could produce only 126 (mT) a growth of 4 over the previous year However

            for the first 3 quarters of the years company set a target of 10265 (mT) and produced

            10380 as compared to around 10 (mT) for the same period last year SAIL had a

            capacity utilisation of 103 this year as compared to 101 last year

            Financials

            TATA Steel

            The year 2006-07 has seen the highest turnover and profits continuing the trend

            of the past four years The Company achieved the best ever sales turnover and

            profitability during the year under review A robust Indian economy firm steel prices

            higher volumes and several improvement initiatives contributed to the record

            performance Finished steel sales were higher by 1133 at 451 million tonnes over

            the previous year Export turnover was lower by about 5 due to lower volumes

            Average price realisation improved mainly due to higher prices of hot rolled

            coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

            (2005-06 Rs 5938 crores) an increase of 17 over the previous year

            Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

            due to additional borrowings for the Companyrsquos domestic expansion programs and

            funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

            providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

            crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

            before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

            after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

            20 compared to the previous year

            The record financial results would not have been possible without a matching

            performance by the operating departments including the raw materials division The

            year witnessed the best ever crude steel production by the Company at 505 million

            tonnes an increase of 67 over the previous year Jamshedpur Plant became the

            first plant in India to produce more than 5 million tonnes of crude steel in a year The

            upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

            rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

            Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

            increase in production was backed by improvements in operating practices and

            productivity resulting in a reduction in consumption of raw materials energy

            refractories etc

            Steel Authority of India

            Financial Year 2006-07 has been eventful year for the company with further

            momentum in improving operational efficiencies laying strong foundation and building

            road map for modernisation and expansion of SAIL Plants with several new initiatives

            undertaken with its human resource at the core During the year the company got the

            distinction of first metal company in the country to reach a market capitalization of Rs

            50000 crore

            There have been improvements in all financial parameters which are shown in

            the table given below-

            SAIL set new record in achieving the turnover of Rs39189 crore and profit

            before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

            previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

            increase of 55

            Research and Development

            Chart showing production of both the companies

            (Rs Crore)

            TATA Steel

            The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

            develop galvannealed skin panels It is the only Indian supplier of bake hardening

            steel for body panels

            Research is undertaken at Tata Steel in the areas of raw materials including coal

            coke energy conservation waste utilisation sintering blast furnace productivity and

            phosphorous reduction product development and improvement in life of plant and

            machinery The Company spends 7 of its turnover for RampD 17 patents have been

            sealed and over 100 are in process

            Steel Authority of India

            Research and Development Centre for Iron and Steel (RDCIS) has provided

            innovative technological inputs to different units of SAIL with special emphasis on

            cost reduction product development and application quality improvement energy

            conservation and automation Several new products were developed and

            commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

            Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

            specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

            micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

            Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

            Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

            strengthened its technology marketing efforts by providing consultancy services

            organising specialised testing and transfer of technological innovations to outside

            customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

            Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

            Ltd Kolkata and Ms Monarch Electronics Kolkata etc

            During the year 1998 technical papers were publishedpresented besides filing

            of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

            awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

            achievements in New Materialsrdquo given by the Ministry of Science and Technology

            Government of India

            Environment

            TATA Steel

            Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

            Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

            has an ISO-14001 certified service providerlocations are certified to ISO-14001

            Jamshedpur is the only town in the country which

            Significant achievements by the Company include an improvement in

            environment and resource conservation including a reduction in green house erosion

            raw materials and water consumption The Company has increased waste re-use and

            re-cycling Constant upgradation and modernisation has resulted in several state-of-

            the-art pollution control systems being installed to prevent and control pollution The

            Company has almost doubled its capital investment in Pollution Abatement in the last

            five years

            Emissions effluents and wastes

            Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

            most relevance to the steel industry Considerable reduction has been effected by

            Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

            granulation is taken into account Other Greenhouse Gas emissions do not result from

            Tata Steelrsquos activities

            Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

            tonnes in 2003-04 as against 790 tonnes used during the previous year

            Hazardous Waste under Basel Convention The Company does not import or export

            any waste deemed hazardous under the Basel Convention All hazardous wastes

            generated are handled as per the requirement of the Hazardous Waste Management

            and Handling Rules 19892000

            Emissions

            Tata Steel has undertaken several initiatives which have resulted in

            considerable reduction in stack emission Emissions are well below the Indian and

            international standards The emission load including particulate matter Sulphur

            Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

            undertaken at the Steel Works

            Waste handling

            Most of the solid waste generated from Steel Works is recycled or reused 18

            of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

            was used to fill low-lying areas and for peripheral road construction around

            Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

            power plants was dumped in a designated dump area

            Effluent Management

            Waste water from the steel making process is being treated with best available

            physio-chemical methods as well as being recycled Waste water from the coke plant

            is treated biologically where organic pollutants are oxidised and decomposed by micro

            organisms The Company has reduced the levels of total pollutant discharge in waste

            water streams from 0211 in 1999-2000 to 0178 in 2003-04

            Steel Authority of India

            Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

            environmentally responsible manner to comply with applicable regulations and striving

            to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

            efficiency and optimize resource consumption through various measures viz

            improvement in process technology in the areas of raw materials coke iron and steel

            making reuserecycle of the by-products generated and conservation of energy and

            water

            Solid Waste Management

            During 2005-06 SAIL produced approximately 134 million tonne of crude steel

            and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

            Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

            these wastes are being made through internal recycling and selling to outside

            agencies The wastes generated in the steel plants are being utilized mainly through

            their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

            during April-September 2006

            Environmental Plantation

            Trees have a significant role in protection of environment and ecological balance

            Extensive afforestation programme are being followed in all the plants and mines The

            basis of choosing the species of plants mainly depends on local soil characteristics

            and prevailing meteorological conditions The green belt developed by afforestation

            adds to the aesthetic environment which becomes dust and noise barriers

            A total number of 145521 saplings have been planted covering an area of 637

            hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

            hectare in 2004-05 in and around the steel plants of SAIL

            Environmental Recognitions

            SAIL plants have been awarded various prizes for environmental management in

            their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

            the Confederation of Indian Industries (CII) for exemplary performance in the

            environmental economic andsocial dimensions of sustainable development and the

            Greentech Environment Excellence Gold AwardGolden Peacock Environment

            Excellence Award in the metal sector 2005 instuted by the World Environment

            Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

            for 2005 from International Greenland Society

            Workforce and Welfare of Society

            TATA steel

            Tata Steel has not lost focus of this philosophy and has adapted it in a broader

            and modern context in its Vision 2007 A lot is dependent on the individual spirit and

            enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

            provide a work environment that will ensure a sense of purpose and personal growth

            for each individual The wish of the company is to see the smile on every face

            everyday A pioneer in employee welfare Tata Steel has invested in the power of its

            people and enriched empowered and enhanced their lives

            Even in its nascent years social scientists Sidney and Beatrice Webb were

            brought in to work on welfare schemes In fact some of the initiatives introduced by

            Tata Steel were the first of their kind in India and some even in the western countries

            at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

            source of its competitiveness It focuses on constantly updating and challenging

            intellectual capabilities to enable them to excel in performance Special efforts are

            made for enhancing strategic thinking skills and analytical abilities of its managers and

            workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

            available with its people through Knowledge Management and sharing of best

            practices

            In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

            mutual co-operation coordination and understanding between the Management and

            the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

            among many other prestigious awards and recognition Tata Steel aims at ensuring

            transparency fairness and equity in all its interactions with its employees to create an

            enthused and happy workforce

            In 1916 Social Welfare Scheme was formed by Tata Steel to provide

            assistance in the fields of education vocational training self-employment and

            family welfare

            Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

            12 times This facility provides on-the-spot diagnostic medical and advanced

            surgical treatment for preventive and curative interventions to people in

            inaccessible rural areas

            Sir Dorab Tata personally financed four athletes and two wrestlers from India

            for the 1920 Antwerp Olympics

            The JRD Sports Complex an international stadium with an 8-lane polyurethane

            track was inaugurated in 1991 The complex also houses facilities for handball

            tennis volleyball hockey basketball boxing table tennis and a modern

            gymnasium

            The Tata Steel Family Initiatives Foundation is engaged in off ering health

            services for the betterment of the people in and around Jamshedpur

            At times of natural calamities the company has rushe immediate relief and off

            ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

            fl ood ravaged Orissa and other such aff ected areas

            Horse-riding lessons the Jubilee Amusement park the zoological park etc off

            er a unique environment for the children of Jamshedpur to grow up in

            In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

            Jamshedpur has emerged as the one of the best cities in India

            Steel Authority of India

            The manpower strength as on 31st March 2006 was 138211 comprising 15206

            executives and 123005 non-executives The total reduction in manpower achieved

            during the year stood at 4864 which included separation of 881 employees through

            voluntary retirement The labour productivity improved by around 12 over previous

            year to 150 tonne crude steelmanyear

            Some of the areas of assistance which are available to the weaker sections are the

            following

            The company has provided land for construction of school buildings in some of

            the steel townships as well as in other places for spreading education among

            the masses

            The company has constructed roads in remote areas around the steel plants

            and also where the captive mines are located to improve communication and

            also increase activities such as organisation of health camps school facilities

            drinking water etc under the peripheral development schemes

            Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

            Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

            providing them with education boarding and lodging facilities

            Construction of bridges by-pass roads metal-morum path waterways

            levellingdressing area around township pre-mixed roads Installation of hand-

            pumps tube wells and wells for villagers

            Construction of school buildings (including for mentally retarded deaf and

            dumb children) madarsas providing school furniture therein and construction

            of hostels womenrsquos college building etc

            Fourteen scholarships are awarded to deserving SCST undergraduate

            engineering students in various disciplines to encourage technical education

            among them

            In many cases tuition fee in company run schools is exempt for SCST

            students Steps are taken to provide education to more and more tribal children

            in company schools

            The unemployed SCST youth are given specialized training in various

            technical trades to develop skill and knowledge Such training is provided free

            of cost

            Adult literacy campaign is carried out in most of the steel townships Every year

            more and more men and women are being covered in this campaign

            Development of fishery and cottage industry providing sewing machines to

            village mahila mandals and promoting other self-employment generation

            schemes

            SAIL has established a hockey academy with stadium and hostel facilities at

            Rourkela to tap and nurture the talent scattered in surrounding tribal area The

            academy was successful in spotting a number of young talented tribal players

            and grooms them under expertise of ex-Olympian

            Technology

            The biggest boost to efficiency in the steel industry has come from the increased

            use of continuous casting ndash an indicator of the modernity of the production process Its

            share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

            now India is thus well on its way to joining the ranks of the leading steelmakers

            among the industrial nations (share in EU-25 96) However in India some 6 of

            crude steel is still made using the outdated open-hearth process (EU-25 03) which

            suggests there is restructuring potential

            TATA Steel

            Tata Steels stall at the International Trade Fair was adjudged the best along

            with SAIL amongst ninety national companies participating in the Trade Fair Thirty

            international companies also took part in the exhibition Participating companies from

            countries all over the world exhibited latest technologies and know-how List of

            participating companies included Baosteel SAIL Heavy Engineering Corporation

            Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

            companies of national and international repute China was the partner country for the

            International Trade Fair this year

            In the award winning exhibition Tata Steel showcased its best coal mining practices

            cutting-edge technology used in iron ore mining pioneering human resource

            practices 78 years of industrial harmony and various other aspects of the worlds best

            steel company

            The 6th International Trade Fair and Conference an institutionalised global

            event is considered to be one of the most prestigious forums for national as well

            international participants It is a conclave of the finest minds concerned with the future

            direction and growth of these sectors The forum provided the worlds most eminent

            metallurgists manufacturers of metallurgical and mining machinery and related

            sectors professionals analysts and experts with the opportunity to exchange views on

            emerging technologies synergy and strengths and open up wider horizons for

            sectorial development

            Tata Steel to adopt Corus technology

            Tata Steel plans to implement alternate technology used by the British steel

            maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

            production according to Mr B Muthuraman Managing Director Tata Steel

            ldquoWe are looking at alternate technology Corus has developed an alternate

            technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

            newspersons on the sidelines of the 34th National Management Convention organised

            by the All-India Management Association However he declined to give further details

            on the type of technology the Indian steel giant plans to implement

            Steel Authority of India

            Modernisation holds the key to SAILs fortunes in the near future The objective

            of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

            and productive capacity and in the process become more energy-efficient and

            improve quality The key component of the ongoing modernisation drive - already

            completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

            ingot casting facilities with basic oxygen furnaces for steel-making and employing

            continuous casting techniques A senior SAIL official says Continuous casting and

            basic oxygen furnaces ensure better quality steel through processes more easily

            monitored for quality control The basic oxygen surfaces method is significantly faster

            more automated and permits greater flexibility Continuous casting is more efficient

            than the traditional ingot casting methods and gives increased yields while enabling

            better quality standards SAIL is also modernising its finishing mills and is adding

            secondary refining facilities to improve quality

            Safety measures

            A unique feature of safety management in steel industry is that a bipartite forum

            named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

            was formed in 1973 at national level having representatives from steel plants in SAIL

            RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

            Committee With a view to inculcate safety consciousness JCSSI organises seminars

            workshops training programme safety competitions for member organisations JCSSI

            with the co-operation and support of Trade Union representatives formulates policies

            and guidelines for its member plants and monitors the implementation

            Tata Steel

            Safety has always been a prime focus at Tata Steel A Safety Committee a

            Safety department and a Safety Trophy helped spread the message all across the

            company

            TATA reaffirms its commitment to provide safe working place and clean

            environment to its employees and other stakeholders as an integral part of its

            business philosophy and values We will continually enhance our Environmental

            Occupational Health amp Safety (EHS) performance in our activities products and

            services through a structured EHS management framework Towards this

            commitment we shall

            Establish and achieve EHS objectives and targets

            Ensure compliance with applicable EHS legislation and other requirement and

            go beyond

            Conserve natural resources and energy by constantly seeking to reduce

            consumption and promoting waste avoidance and recycling measures

            Eliminate minimize andor control adverse environmental impacts and

            occupational health and safety risks by adopting appropriate state-of-the-art

            technology and best EHS management practices at all levels sand functions

            Enhance awareness skill and competence of our employees and contractors

            so as to enable them to demonstrate their involvement responsibility and

            accountability for sound EHS performance

            Steel Authority of India

            SAIL has a separate corporate unit called the SAIL Safety Organisation to

            monitor safety system amp activities- SAIL also has a comprehensive safety policy

            Annual Performance Plans (APP) for the areas of safety and fire services are

            formulated and review of implementation of APP is done during Heads of

            Safety meeting

            Internal and external safety audits of major departments particularly hazardous

            areas are conducted every year and points arising from these audits are

            liquidated Safety aspects have been incorporated in standard operating

            practices (SOP) and standard maintenance practices (SMP)

            All major capital repairsshut downs are closely monitored round the clock

            Periodic drives are conducted to inculcate safety awarenessculture up to

            grass-root level apart from regular inspections as per checklists to identify

            unsafe conditionsacts

            Safety training is imparted to target group employees at various levels HRD

            intervention in the area of safety covers Heads of Departments Line Managers

            amp Departmental Safety Officers Besides area specific workshops are

            conducted at different locations on important topics like gas safety railroad

            safety safety in iron steel amp coke making etc

            Consistent efforts were made by SAIL Safety Organisation for improving safety

            standards in the company by taking measures like intensive safety drives in works

            area and conducting safety audits in hazardous departments of different plants and

            mines In addition specific workshops on safety aspects were organised in various

            SAIL steel plants

            Measures taken by Indian government to improve the industry

            Now letrsquos 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-

            1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

            among others was removed from the list of industries reserved for the public

            sector and also exempted from the provisions of compulsory licensing under the

            Industries (Development and Regulation) Act 1951

            2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

            of `high priority industries for automatic approval for foreign equity investment up

            to 51 This limit has been recently increased to 100

            3 Price and distribution of steel were deregulated from January 1992 At the same

            time it was ensured that priority continued to be accorded for meeting the

            requirements of small scale industries exporters of engineering goods and North

            Eastern Region of the country besides strategic sectors such as Defence and

            Railways

            4 The trade policy has been liberalised and import and export of iron and steel is

            freely allowed There are no quantitative restrictions on import of iron and steel

            items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

            regulating the imports is the tariff mechanism Tariffs on various items of iron and

            steel have drastically come down since 1991-92 levels and the government is

            committed to bring them down to the international levels In Chapter 72 there are

            two items viz 72042110 and 72042910 which fall in the restricted list of imports

            5 Iron amp Steel are freely importable as per the Extant Policy

            6 Iron amp Steel are freely exportable

            7 Advance Licensing Scheme allows duty free import of raw materials for exports

            8 The floor price for seconds and defectives continues till date

            9 Imports of seconds and defectives of steel are allowed only through three

            designated ports of Mumbai Calcutta and Chennai

            10Mandatory pre inspection certificate by a reputed international agency for every

            import consignment of seconds and defectives

            11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

            10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

            the customs duty on non-alloy steel was further reduced from 10 per cent to 5

            per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

            15 per cent to 5 per cent

            12Further customs duty on several raw materials used by the steel sector like

            noncoking coal metcoke and nickel has been reduced to 5 per cent and on

            coking coal to zero

            13To bring down the prices of steel the excise duty on steel products was reduced

            from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

            that the duty regime will be reviewed Budget 2004-05 revised this partially by

            increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

            cut on moderating prices was not achieved

            14The union Budget 2007-08 the import duty on seconds and defective has been

            further reduced from 20 to 10

            Special assistance being provided by Ministry of Steel to Private Sector

            1 Ministry of Steel is extending all possible support as detailed below for the

            development of Iron and Steel Sector in the country

            2 The Ministry is providing linkage for raw materials rail movement clearance etc for

            new plants and expansion of existing ones wherever applied for

            3 To ensure an un-interrupted supply of raw materials to the producers

            4 The Ministry has been interacting with All India Financial institutions to expedite

            clearance of projects

            5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

            Plants are held at the level of Secretary

            6 Ministry of Steel identifies infra-structural and related facilities required by steel

            industry so that their absence does not lead to bottlenecks in the future growth of

            the Iron and Steel Sector and takes up these issues with the concerned ministries

            7 The Ministry has encouraged the setting up of Institute for Steel Development and

            Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

            country are members of this Institute which has been set up with the objective of

            promoting developing and propagating the proper and effective use of steel

            8 In order to resolve the problems faced by existing amp new steel plants amp to assist

            major steel plants being implemented Govt has setup a Project Coordination

            Group under the Chairmanship of Steel Minister

            NATIONAL STEEL POLICY 2005

            The progress of the steel industry has a critical influence on the pace of Indiarsquos

            development and as such great importance is attached to capacity expansion in line

            with expected demand at cost and prices which make Indian steel internationally

            competitive The existing regime of liberalization decontrol and deregulation of

            industry in the country has opened up new opportunities for the expansion of the steel

            industry With a view to accelerating the growth of the steel sector and attaining the

            vision of India becoming a developed economy by 2020 the Ministry of Steel

            formulated a National Steel Policy (NSP) in 2005

            The following salient features can be derived after analysing the NSP 2005

            The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

            towards reform restructuring and globalisation

            The long-term goal of the NSP is that India should have a modern and efficient

            steel industry of world standards catering to diversified steel demand The focus of

            the policy is to achieve global competitiveness not only in terms of cost quality and

            product-mix but also in terms of global benchmarks of efficiency and productivity

            In order to achieve the goal of 110 million tones of steel production by 2019-20 the

            NSP seeks to remove the supply-side constraints to the growth of this industry in

            an open globally integrated and competitive environment

            The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

            policy goal On the demand side the strategy would be to create incremental

            demand through promotional efforts creation of awareness and strengthening the

            delivery chain particularly in rural areas On the supply side the strategy would be

            to facilitate creation of additional capacity remove procedural and policy

            bottlenecks in the availability of inputs such as iron ore and coal make higher

            investments in RampD and encourage the creation of infrastructure such as roads

            railways and ports

            The NSP acknowledges the low per capita consumption of steel in the country

            especially in the rural areas and the need to boost steel consumption to improve

            quality of life and help in meeting the growing aspirations of masses

            In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

            industry would need additional capital In addition funds would be required for

            technological upgrade of existing facilities In order to mobilize such vast resources

            NSP seeks to encourage foreign direct investment In addition the policy also

            seeks to make the fiscal incentives available to infrastructure projects accessible

            to the steel industry

            The NSP seeks to support developing of risk-hedging instruments like futures and

            derivatives to contain price volatility in the steel market

            The NSP seeks to strengthen the existing training and research facilities available

            to the domestic steel industry so as to provide suitable training programmes

            especially for the secondary small-scale units and also to collect and analyse data

            on important parameters of the industry

            The NSP seeks to mount aggressive RampD efforts to create manufacturing

            capability for special types of steel substitute coking coal use iron ore fines

            develop new products suited to rural needs enhance material and energy

            efficiency utilize waste and arrest environmental degradation

            The NSP acknowledges the important role played by the secondary steel sector in

            providing employment meeting local demand of steel in rural and semi-urban

            areas and meeting the countryrsquos demand of some special products and seeks to

            endeavour to provide the necessary feedstock to these units at reasonable prices

            from major plants through the existing mechanism of State Small Industries

            Corporations

            The NSP recognizes the fact that integration of the Indian steel industry with the

            global economy requires that the industry should be protected from unfair trade

            practices The NSP therefore envisages institution of mechanisms for import

            surveillance and monitoring export subsidies in other countries

            The present per capita consumption of steel in the country is very low compared to the

            world average As mentioned above one of the objectives of the NSP is to augment

            the demand and consumption of steel in the country by conscious promotion of steel

            usage With a view to create a mass awareness campaign on conscious promotion of

            steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

            the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

            The Committee is being serviced by Institute for Steel Development and Growth

            (INSDAG) The objective of the Committee is to promote steel usage in the country by

            way of an awareness campaign with particular emphasis on rural sectors The

            Committee also aims at educating the designers architects builders and planners

            regarding the qualitative and cost effective applications of steel in various structures

            including buildings bridges flyovers and airports

            FUTURE OF INDIAN STEEL INDUSTRY

            India is amongst a few countries in the world having the dual advantage of fast

            growing domestic demand coupled with access to raw materials Further the trend

            that is already discernible is that the axis of global steel production consumption is

            shifting towards Asia With their large populations China and India already account for

            35 of the total world steel production - more than double of Europe Asia is

            expected to outpace other regions of the world to an even greater extent in the coming

            years

            Amongst the Asian nations China has established a huge unbridgeable lead It

            is accepted that China will continue to be the leader However India is slated to

            emerge as the second Asian giant in the next eight years Figuratively speaking while

            the Dragon has reached maturity the Lotus is about to bloom in resplendent

            splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

            China swallowed almost 32 of global steel It is unlikely that future production and

            consumption would continue to flourish at growth rates of 8 and 18 respectively as

            has been the case over the last few years On the other hand it is sun-rise time for

            India where the demand has increased by 7-8 in the last couple of years In the long

            run Indian steel is likely to be more cost-effective since unlike China India has

            relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

            can sustain domestic production of 120-130 million tonnes for at least 25-30 years

            However the position with coal is not so favourable Though thermal coal

            reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

            traditional blast furnace route would require coking coal India does not have adequate

            reserves of coking coal nor is the meagre amount available of appropriate quality

            Thus the steel industry always had to contend with the dual problems of inadequate

            availability and poor quality of Indian coking coal This has been partly addressed by

            adopting alternative iron making processes that are not dependent on coking coal it

            can not be denied that coal is the biggest cause for concern for bulk steel production

            in India

            Because of the shortage of indigenous coal attempts have been made by steel

            producers to ensure long-term supplies by tying up with global majors or by acquiring

            mines in other countries This is the only long-term solution but with a global shortage

            of coal it may not remain cost-effective in the long run

            India is the seventh largest producer of steel and may further improve its position

            going by the current trends A series of investment decisions by major domestic

            players and international steel giants such as Steel Authority of India Ltd Tata Steel

            POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

            The keen interest shown by various prospective investors is not only due to

            expectations of strong growth in domestic demand but also due to indigenous

            availability of key resources like iron ore and skilled workforce

            After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

            steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

            finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

            2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

            consumption has accelerated to 91 per cent

            With the likely growth of Indian economy at around 7 per cent per annum

            demand for steel is expected to remain strong and is projected to reach a level of 90

            million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

            demand is sustainable considering the fact that Indias per capita consumption of steel

            is still very low at 31 kgs per head compared to the world average of 145 kgs The

            very low level of per capita consumption of steel in India is highlighted further when

            compared with the consumption levels of its peer group consisting of countries like

            China Brazil Mexico and Republic of Korea as also with selected developed

            countries

            Though there are realistic constraints in India to achieving as rapid a growth as in

            China there seems to be consensus among analysts that India is likely to witness a

            growth rate in steel consumption higher than the historically observed rate of 6 to 7

            percent If the growth rate (9 per cent) of last three years is maintained then we will

            achieve the 110 million tonnes landmark even by 2018 Though some analysts are

            more conservative due to cyclicity of steel business it may be mentioned that in a

            country like India cyclicity is more in terms of prices rather than volumes of production

            Exports

            Similar optimism prevails with regard to export of iron and steel Export of steel

            starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

            2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

            rising domestic demand and low capacity additions Exports now constitute around 17

            per cent of total production and Indias presence in the developing and developed

            world is being increasingly felt Indian steel producers have recently been able to

            supply specialized grades and products used for sophisticated applications like

            automobiles On the cost front some of our producers are counted amongst the least

            cost producers of the world For an average reference plant India is competitively

            placed in the middle of the hierarchy of steel producing nations

            However we have a long way to go to catch up with the leading exporters of the

            world such as Japan the CIS countries Brazil etc It is however expected that by

            2019-20 India will be able to export around 26 million tonnes of steel representing 24

            per cent of total projected production The projected export ratio compares well with

            the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

            The projected production of steel by 2019-20 to meet the domestic and export

            demand will be around 110 million tonnes Management of resources and

            infrastructural growth is going to be critical in achievement of the production level

            envisaged The broad requirements of various resources will increase manifold from

            the current level The bottlenecks in availability of critical inputs and various facilities

            need to be removed through concerted efforts of Government and industry The broad

            strategy to overcome these constraints as well as meet the strategic goals of the steel

            sector has been discussed in the National Steel Policy which has been recently

            approved by the Government

            As stated earlier the long-term goal of the National Steel Policy is that India

            should have a modern and efficient steel industry of world standards catering to a

            diversified steel demand The focus of the policy is to achieve global competitiveness

            not only in terms of cost quality and product mix but also in terms of global

            benchmarks of efficiency and productivity The policy envisages adopting a multi-

            pronged strategy to achieve these goals On the demand side the strategy would be

            to create incremental demand through promotional efforts creation of awareness and

            strengthening the delivery chain particularly in rural areas On the supply side the

            strategy would be to facilitate creation of additional capacity remove procedural and

            policy bottlenecks in the availability of inputs such as iron ore and coal make higher

            investments in RampD and HRD and encourage the creation of infrastructure such as

            roads railways and ports

            The production figures exports and imports of finished carbon steel and pig iron

            and apparent consumption patterns of finished carbon steel as indicated by TATA

            Steel and SAIL attest to the continuing growth for both the sectors

            FINDINGS

            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 increased its profit over the year particularly in 2006-07

            Both the companies are planning to adopt modern technology which is going to

            help them to compete in world market but they need to be less dependent on

            state of art technology and coal for long term prospects

            Public sector has undergone retrenchment for the employees and improved

            has its lobour productivity but it is still lacking behind as compared to private

            sector

            SAIL has reduced the no of accidents due to improper handling of machinery

            still no of accidents are more than that of TATA Steel

            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

            ie 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 have to be met

            comprehensively if we are to take our legitimate place in the world as a developed

            nation by 2020

            BIBLIOGRAPHY

            Annual report (2006-07) published by ministry of steel

            Annual report (2006-07) published by TATA Steel

            Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

            REPORTrsquo posted by SAIL on its website

            lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

            held on 07 Nov 2006

            Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

            wwwsteelnicin (Official website of ministry of industry)

            wwwtatasteelcom (Official website of TATA Steel)

            wwwsailcoin (Official website of Steel Authority of India)

            wwwworldsteelorg (official website of International Iron amp Steel Institute)

            wwwjpcindiansteelnicin (Website of joint planning committee)

            • DATA ANALYSIS
            • Comparison between TATA Steel and Steel Authority of India
            • Production
            • Quantity 000 Tonnes
            • Financials
            • Research and Development
            • (Rs Crore)
            • TATA Steel
            • Steel Authority of India
            • Environment
            • TATA Steel
            • Emissions effluents and wastes
            • Emissions
            • Waste handling
            • Effluent Management
            • Steel Authority of India
            • Solid Waste Management
            • Environmental Plantation
            • Environmental Recognitions
            • Workforce and Welfare of Society
            • TATA steel
            • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
            • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
            • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
            • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
            • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
            • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
            • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
            • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
            • Steel Authority of India
            • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
            • Technology
            • Steel Authority of India
            • Safety measures
            • Tata Steel
            • Steel Authority of India
            • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
            • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
            • Measures taken by Indian government to improve the industry
            • Now letrsquos 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-
            • Special assistance being provided by Ministry of Steel to Private Sector
            • FUTURE OF INDIAN STEEL INDUSTRY

              companys 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 andor 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

              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 During the

              period (April-December 2006) 205 million tonne of steel was produced by Private

              Sector steel units out of the total production of 3315 million tonne in the country The

              private sector units consist of major steel producers in one hand and relatively smaller

              amp 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 Indias 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

              Over the years Tata Steel has emerged as a thriving nimble steel enterprise

              due to its ability to transform itself rapidly to meet the challenges of a highly

              competitive global economy and commitment to become a supplier of choice

              Constant modernization and introduction of state-of-the-art technology at Tata Steel

              has enabled it to stay ahead in the industry

              Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

              increase in its production and sales volumes The hot metal production at 41 million

              tonne is 82 more compared to the last year in the corresponding period and crude

              steel production at 37 million tonne is higher by 79 compared to the last year in first

              three quarters

              The saleable steel production at 37 million tonne registered a significant

              increase of 11 The total sales of 353 million tonne has grown by 117 over last

              financial year in the corresponding period The domestic sale of long products has

              increased by 30

              Tata Steel is continuing with its programme of expansion of steel making

              capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

              2007-08 and thereafter to 10 million tonne by fiscal 2010

              Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

              schedule with placement of equipment order for Kalinganagar project in Orissa and

              commencement of the land acquisition process Jharkhand project is waiting

              announcement of R amp R policy of the state Government The construction work of

              ferrochrome project in South Africa is in full swing

              Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

              Corus thus emerging as the fifth largest steel producer in the world

              The steel major has won the Prime Ministers Trophy four times This award is

              instituted by the Indian ministry of steel and awarded to the countrys best integrated

              steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

              given to the company with world class operations under the Groups Tata Business

              Excellence Model

              Areas of business

              Apart from the main steel division Tata Steels operations are grouped under

              strategic profit centres like tubes growth shop (for its steel plant and material handling

              equipment) bearings ferro alloys and minerals rings agrico and wires

              Tata Steels products include hot and cold rolled coils and sheets tubes wire

              rods construction bars structurals forging quality steel rings and bearings In an

              attempt to decommoditise steel the company has recently introduced brands like

              Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

              corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

              Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

              Tata Steel is also exploring opportunities in the ferro-chrome and titanium

              businesses

              Joint ventures associates and subsidiaries

              Tata Steel has numerous joint ventures and subsidiaries Among them are

              Tinplate Company of India

              Tayo Rolls

              Tata Ryerson

              Tata Refactories

              Tata Sponge Iron

              Tata Metaliks

              Tata Pigments

              Jamshedpur Injection Powder (Jamipol)

              TM International Logistics

              mjunction services

              TRF

              Jamshedpur Utility and Service Company (JUSCO)

              The Indian Steel and Wire Products(ISWP)

              Lanka Special Steel

              Sila Eastern Company

              ESSAR STEEL LTD

              Essar Steel is an integrated steel producer with operations all along the value

              chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

              complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

              half of its production abroad mainly to the highly demanding markets of the west and

              the growth markets of South East Asia and Middle East Essar ensures excellent

              customer services through a modern distribution network

              Essar Steelrsquos core manufacturing facilities are located at its steel complex in

              Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

              Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

              tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

              down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

              at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

              Expansion

              Presently Essar Steel has embarked upon a capacity expansion for

              enhancement of its production capacity from 46 million tonne per annum to 76 million

              tonne per annum The capacity expansion programme will consist of 2 units of Corex

              units of 15 million tonne per annum each Further value addition will be carried out by

              Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

              Mill

              Products

              All Essar Steelrsquos products are world class meeting the highest international

              standards supported by excellent marketing and service

              JSW STEEL LTD

              JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

              process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

              coke making ndash iron making through blast furnace as well as Corex process ndash steel

              making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

              facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

              tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

              tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

              Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

              casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

              technology

              JSW Steel has a distinction of being certified to ISO-90012000 Quality

              management system ISO-140011996 environment management system and OHSAS

              180011999 occupational health and safety management system

              During this year JSW Steel has also been conferred with a number of awards

              Production Performance

              (in million tonne)

              Items 2003-04 2004-05 2005-06 April-Dec06

              Pellets 325 361 380 293

              Hot Metal 163 196 240 219

              Slabs 161 187 225 195

              Hot Rolled Coils 154 178 210 148

              JINDAL STEEL AND POWER LTD (JSPL)

              Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

              business interests in steel power generation mining iron ore coal and diamond

              explorationmining The current turnover of the company is over Rs 3000 crore JSPL

              is the worldrsquos largest producer of coal based sponge iron The product range

              encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

              rails and H beams and columns in technical collaboration with JFE Corporation

              Japan These H-beams are the most desired option of structural engineers worldwide

              JSPL is the largest private sector investor in the state of Chhattisgarh with a total

              investment commitment of more than Rs 10000 crore The company is also setting

              up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

              5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

              Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

              watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

              4500 crore JSPL has been rated as one of the best environmentally managed

              companies in India and committed to environment protection as an integral part of

              their business activities

              ISPAT INDUSTRIES LTD (IIL)

              Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

              Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

              rolled coils per annum The plant has got a 224 million tonne per annum sintering

              plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

              based sponge iron plant IIL have uniquely combined the usage of hot metal and

              sponge iron in the electric arc furnace for production of liquid steel for the first time in

              India IIL have also adopted the state-of-art technology called Compact Strip

              Production (CSP) process which has been installed for the first time in India and

              produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

              products are accepted in the domestic and international market

              The production performance of IIL during last three years has been as follows

              (in million tonne)

              Items 2003-04 2004-05 2005-062006-07

              (Up to Dec06)

              Hot Metal 129 140 142 114

              Sponge Iron 106 105 089 085

              Hot Rolled Coils 162 197 215 197

              The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

              with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

              global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

              Demag the technology supplier

              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

              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 SAILs equity and retains voting

              control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

              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 Companys iron ore limestone and dolomite

              mines The company has the distinction of being Indiarsquos largest producer of iron ore

              and of having the countryrsquos 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

              SAILs 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

              SAILs 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

              With technical and managerial expertise and know-how in steel making gained

              over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

              services and consultancy to clients world-wide

              SAIL has a well-equipped Research and Development Centre for Iron and Steel

              (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

              for the steel industry Besides SAIL has its own in-house Centre for Engineering and

              Technology (CET) Management Training Institute (MTI) and Safety Organisation at

              Ranchi Our captive mines are under the control of the Raw Materials Division in

              Kolkata The Environment Management Division and Growth Division of SAIL operate

              from their headquarters in Kolkata Almost all our plants and major units are ISO

              Certified

              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

              Subsidiary

              Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

              Joint Ventures

              SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

              NTPC SAIL Power Company Pvt Ltd

              Bokaro Power Supply Company Pvt Limited

              Mjunction Services Limited

              SAIL-Bansal Service Centre Ltd

              Bhilai JP Cement Ltd

              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

              MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

              Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

              producer of ferro manganese and silico manganese for captive use of SAIL plants

              The authorised and paid-up share capital of the company as on 3132006 was Rs 30

              crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

              paid-up capital

              Financial Performance

              During the year 2005-06 the company recorded a turnover of Rs 24733 crore

              (including conversion income of Rs 17110 crore) and made a net profit after tax of

              Rs 2097 crore The turnover and net profit after tax of the company during April

              2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

              (provisional) respectively

              Production Performance

              The production of all grades of ferro alloys during 2005-06 is as under

              (in tonne)

              Materials 2005-06 April- Dec 2006

              High Carbon Ferro Manganese 51525 49493

              Silco Manganese 46712 32921

              Medium Carbon Ferro Manganse 2344 164

              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 was commissioned in August

              1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

              million tonne per annum capacity Right from the year of its integrated operation VSP

              established its presence both in the domestic and international markets with its

              superior quality of products VSP has been awarded all the three International

              Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

              180011999 The company has taken significant strides in the area of Corporate

              Social Responsibility

              Production Performance

              (in million tonne)

              Items 2004-05 2005-06 2006-07 (April-Dec06)

              Hot Metal 3920 4153 3040

              Liquid Steel 3560 3603 2676

              Saleable Steel 3173 3237 2419

              NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

              Incorporated on November 15 1958 the National Mineral Development Corporation

              Ltd (NMDC) a Government of India Enterprise is engaged in the business of

              developing and exploiting mineral resources of the country (other than coal oil

              natural gas and atomic minerals) At present its activities are concentrated on mining

              of iron ore diamonds and silica sand

              NMDC operates the largest mechanised iron ore mines in the country at Bailadila

              (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

              Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

              activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

              from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

              Supreme Court of India NMDC is following up the case for early hearing

              All the iron ore production units have been accredited with ISO 90012000 and ISO

              140012004 certifications RampD Centre of NMDC was also accredited with ISO

              90012000 certification

              Iron Ore

              NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

              December 2006) Domestic sales of iron ore was 1550 million tonne during the year

              (up to December 2006) Exports of iron ore produced by NMDC is canalised through

              MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

              exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

              Capital Structure

              The authorised share capital of the company is Rs 150 crore The paid up equity

              share capital was Rs 13216 crore Outstanding loans from Government of India are

              nil

              Financial Performance

              The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

              Particulars 2004-05 2005-06 2006-07 (April-Dec06)

              SalesTurnover222655 371092 2790

              Gross Margin128749 2889 2455

              Profit Before Tax122365 277013 2410

              MSTC LTD

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

              Enterprise was set up on September 9 1964 as a canalising agency for the export of

              scrap from the country With the passage of time the Company emerged as the

              canalising agency for the import of scrap into the country Import of scrap was de-

              canalised by the Government in 1991-92 and MSTC has since then moved on to

              marketing ferrous and miscellaneous scrap arising out of steel plants and other

              industries and importing coal coke petroleum products semi finished steel products

              like HR coils and export of primarily iron ore The company has also established an e-

              auction portal and undertakes e-auction of coal diamonds and steel scrap and has

              developed an e-procurement portal in house

              Capital Structure

              The company has an authorised capital of Rs 5 crore and paid up capital was Rs

              220 crore as on 31122006 of which approximately 90 is held by Government of

              India and balance 10 by members of Steel Furnace Association 16 of India Iron and

              Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

              bonus shares issued in the year 1993-94 in the ratio 11

              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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

              handling of BOF slag etc

              Financial Performance

              Particulars 2004-05 2005-06 2006-07 (Apr-

              Dec2006)

              Total Turnover ie Service charges realised including miscellaneous Incomeetc

              981822 1067937 765557

              Gross Margin before Interest amp Depreciation 167879 186514 105284

              Interest amp Depreciation 83014 100970 84728

              Profit before Tax 84865 85544 20556

              MANGANESE ORE (INDIA) LTD (MOIL)

              Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

              of manganese ore in India At the time of inception 49 of its shares were held by the

              Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

              proportion by Government of India and the State Governments of Madhya Pradesh 17

              and Maharashtra Subsequently in 1977 the Government of India acquired the

              shares held by CPMO in MOIL and MOIL became a wholly owned Government

              company with effect from October 1977 As on 30112006 Government of India held

              8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

              holding 961 and 882 shares respectively

              MOIL Produces and Sells following Grades of Manganese Ore

              1048708 High grade ores for production of ferro manganese

              1048708 Medium grade ores for production of silico manganese

              1048708 Blast furnace grade ore required for production of hot metal

              1048708 Dioxide ore for dry battery cells and chemical industries

              Production and 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

              Items 2004-05 2005-06 2006-07 (up to Dec2006)

              1 Production

              a) Manganese Ore (thousand tonne) 94300 86500 82533

              b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

              c) Ferro Manganese (tonne) 1032500 617000 829400

              2 Turnover (Rupees in crore) 37878 33409 29463

              3 Profit before Tax (Rupees in crore) 20227 16900 12087

              KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

              Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

              90012000 and ISO 14001 company was established in April 1976 to meet the long

              term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

              was set up at Kudremukh This project was to be financed in full by Iran However as

              Iran stopped further loan disbursements after paying US $ 255 million the project was

              completed as per schedule with the funds provided by Government of India While the

              project was commissioned on schedule consequent upon the political developments

              in Iran they did not lift any quantity of concentrate As a diversification measure the

              Government approved the construction of a 3 million tonne per year capacity pellet

              plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

              million tonne with additionsmodifications The plant went into commercial production

              in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

              units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

              Plant Mangalore

              Production

              A target of 31 million tonne and 305 million tonne was set for production of iron ore

              concentrate and iron oxide pellets respectively during the year 2005-06 Actual

              production was 2922 million tonne of concentrate and 2834 million tonne of pellets

              The target set for production during the year 2006-07 is 305 million tonne of pellets

              In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

              activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

              production of iron ore concentrate during the year 2006-07 As against a target of 188

              million tonne of pellets fixed for the period April to November 2006 the actual

              production was 0275 million tonne which represents 15 target fulfilment There is

              shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

              production of pellets is on account of operational problems being encountered in the

              pellet plant after switching over to usage of 100 hematite ore from magnetite ore

              There was excessive generation of su er fines (slimes) affecting filtration clogging of

              filters overflow and contamination of process water due to filling of cooling pond

              affecting production While efforts are continuing to rectify the problems the operation

              of pellet plant is yet to stabilize and normal production is yet to commence

              The sales revenue during the last five years and up to November 2006 during 2006-

              07 is detailed below

              (Rs in lakh)

              Years Concentrate Pellets Total

              2006-07 (up to December 2006) - 12427 12427

              2005-06 12091 111137 123228

              2004-05 16050 169327 185377

              2003-04 20209 82729 102938

              2002-03 21135 51579 72714

              2001-02 21571 50598 72169

              Financial Performance

              An overview of the performance of KIOCL during the year 2006-07 (up to November

              2006) together with actuals for the previous three years is indicated below

              (Rs in lakh)

              Particulars 2006-07(up to December 2006)

              2005-06 2004-05 2003-04

              Total value of Sales 12427 123228 185377 102938

              Gross Margin 2620 68706 120863 45945

              Profit after Tax 1029 35630 64984 30070

              Inventories(excluding finished stock)

              20417 15843 8720 7616

              BIRD GROUP OF COMPANIES

              Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

              the following seven companies came under the administrative control of the Ministry of

              Steel Government of India

              (a) The Orissa Minerals Development Company Limited (OMDC)

              (b) The Bisra Stone Lime Company Limited (BSLC)

              (c) The Karanpura Development Company Limited (KDCL)

              (d) Scott amp Saxby Limited (SSL)

              (e) Eastern Investments Limited (EIL)

              (f) Burrakar Coal Company Limited (Burrakar)

              (g) Borrea Coal Company Limited (Borrea)

              The status of the companies is as under

              a) Burrakar and Borrea coal companies became non-operational after nationalisation

              of coal mines The two companies are in the process of liquidation The official

              liquidator has already taken over the assets and liabilities of these two companies

              b) EIL being an investment company is having a major stake in the equity shares of

              operating companies under the Bird Group

              c) OMDC BSLC KDCL amp SSL are operating companies under the Group

              Status of the Companies at the Time of Nationalisation

              At the time when the Bird Group of Companies came under the administrative control

              of the Ministry of Steel Government of India all of them were financially sick and

              burdened with various problems With the financial support from the Government of

              India problems relating mainly to excessive manpower erosion of working capital and

              outstanding liabilities could be settled to a considerable extent

              REVIEW OF LITERATURE

              RS PANDEY sees a bright future for the steel industry in India provided of course

              the iron ore mining policy to be announced by the government soon acts as a catalyst

              for growth He discusses the industrys problems and prospects in an interview When

              asked about the steel sectors ie private and public he expressed his expert views

              The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

              Excerpts

              The public sector steel companies in India are doing extremely well And therefore

              they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

              Ltd] which has the Vizag steel plant have undertaken massive expansion plans

              Between 1992-93 and now the share of the public sector in steel production had gone

              down Today its share is 41 per cent while that of the private sector is 59 per cent In

              1992-93 the private sector had a share of only 37 per cent In terms of finished steel

              the private sector even in 1992-93 had a 67 per cent share and this has now grown

              to 71 per cent But the public sector units are growing even if the private sector is

              growing faster

              During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

              going to increase its capacity from the current 13 million tonnes of hot metal to 225

              million tonnes in just four years RINL is set to expand its capacity from three million

              tonnes to 63 million tonnes in the next three years So that is a major expansion of

              capacity for the PSUs

              The public sector should be encouraged all the more Let there be a healthy

              competition between public and private sector producers The question of exit comes

              when they do not perform Look at the stock prices of SAIL A few years ago the scrip

              was at below Rs10 per share Today it is more than Rs130 and the expectations

              are that it will go up even higher

              When talked about the labour productivity he says Yes labour productivity is low in

              SAIL in particular But it is improving The steel major is going to adjust much of its

              existing manpower in the expansion phase when its capacity is going to almost

              double The management had also undertaken a massive VRS [voluntary retirement

              scheme] In RINL labour productivity is not all that bad

              Besides SAIL has done very well in various other techno-economic parameters in the

              last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

              per man per year In 2005-06 it went up to 150 tonnes per man per year an

              improvement of 20 per cent In blast furnace productivity also there has been an

              improvement as also in the production of high-end special steels and capacity

              utilisation

              With the improved turnover which comes from higher capacity use and higher

              manpower productivity SAILs profits have surged Its gross profit more than doubled

              between 2003-04 and 2005-06 The general presumption was that the spurt in profits

              was largely due to the high prices of steel An analysis has shown that as far as SAIL

              is concerned the higher profit is 29 per cent owing to the price factor in steel and

              other input costs and 71 per cent owing to improvement in capacity use and other

              factors that are just mentioned

              OBJECTIVES

              To compare Private and Public steel sector with refrence to TATA Steel and

              Steel Authority Of India

              To analyse potential of both the companies ie TATA Steel and SAIL

              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

              Research Methodology

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

              a) Research design-

              In case of my research ldquoComparative analysis of Indian private and Public

              sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

              found to be more appropriate

              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

              Comparison between TATA Steel and Steel Authority of India

              The Public sector undertakings (PSUs) under the Ministry of Steel have shown

              significant improvements in the last two years The combined profit before tax of all 15

              PSUs of the Steel Ministry exhibited an enhancement of more than two times from

              Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

              The profit before tax for all PSUs also exhibited a significant improvement of

              around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

              Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

              comparable period of last year

              Contribution of PSUs to public exchequer has also gone up significantly For

              example the contribution of five leading companies namely SAIL RINL NMDC

              KIOCL and MOIL to Central and State exchequer by way of excise duty customs

              duty dividend corporate tax sales tax royalty etc has gone up by more than double

              from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

              On the other hand 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

              During the period (April-December 2006) 205 million tonne of steel was produced by

              Private Sector steel units out of the total production of 3315 million tonne in the

              country The private sector units consist of major steel producers in one hand and

              relatively smaller amp 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

              For comparing both the companies ie Tata Steel and SAIL lets analyse both the

              companies on following parameters

              Production

              Chart showing production of both the companies

              Quantity 000 Tonnes

              2007-08 APR-DEC07APR-

              DEC06 ACTUA

              L

              AGE OF CURRENT

              PRODUCTION OVER

              CAPACITY UTILISATION

              TARGET TENTATIV

              E

              TARGET

              ACTUAL

              APR-DEC07 TARGE

              T

              APR-DEC06 ACTUA

              L

              APR-DEC 07

              APR-DEC06

              SAIL

              i)BSP49500 37110 37320 35780 1006 1043 1270 1210

              ii)DSP18400 13580 14330 13450 1055 1065 1060 990

              iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

              iv)BSL43500 32630 30970 30010 949 1032 950 910

              v)ISP5000 3760 3520 3450 936 1020 940 920

              vi)ASP1470 1070 1140 1130 1065 1009 650 640

              vii)VISL

              1390 1050 1160 1190 1105 975 1300 1340

              TATA 50000 37440 37090 37380 991 992 990 1000

              TATA Steel

              The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

              but it could produce only 493 (mT) For the first 3 quarters of the years company set a

              target of 3744 (mT) but could produce 3709 However for the same period in last

              year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

              to 99 this year

              Steel Authority of India

              The company had a aggregate production target of 13739 (mT) for the year 2007-08

              but it could produce only 126 (mT) a growth of 4 over the previous year However

              for the first 3 quarters of the years company set a target of 10265 (mT) and produced

              10380 as compared to around 10 (mT) for the same period last year SAIL had a

              capacity utilisation of 103 this year as compared to 101 last year

              Financials

              TATA Steel

              The year 2006-07 has seen the highest turnover and profits continuing the trend

              of the past four years The Company achieved the best ever sales turnover and

              profitability during the year under review A robust Indian economy firm steel prices

              higher volumes and several improvement initiatives contributed to the record

              performance Finished steel sales were higher by 1133 at 451 million tonnes over

              the previous year Export turnover was lower by about 5 due to lower volumes

              Average price realisation improved mainly due to higher prices of hot rolled

              coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

              (2005-06 Rs 5938 crores) an increase of 17 over the previous year

              Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

              due to additional borrowings for the Companyrsquos domestic expansion programs and

              funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

              providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

              crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

              before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

              after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

              20 compared to the previous year

              The record financial results would not have been possible without a matching

              performance by the operating departments including the raw materials division The

              year witnessed the best ever crude steel production by the Company at 505 million

              tonnes an increase of 67 over the previous year Jamshedpur Plant became the

              first plant in India to produce more than 5 million tonnes of crude steel in a year The

              upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

              rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

              Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

              increase in production was backed by improvements in operating practices and

              productivity resulting in a reduction in consumption of raw materials energy

              refractories etc

              Steel Authority of India

              Financial Year 2006-07 has been eventful year for the company with further

              momentum in improving operational efficiencies laying strong foundation and building

              road map for modernisation and expansion of SAIL Plants with several new initiatives

              undertaken with its human resource at the core During the year the company got the

              distinction of first metal company in the country to reach a market capitalization of Rs

              50000 crore

              There have been improvements in all financial parameters which are shown in

              the table given below-

              SAIL set new record in achieving the turnover of Rs39189 crore and profit

              before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

              previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

              increase of 55

              Research and Development

              Chart showing production of both the companies

              (Rs Crore)

              TATA Steel

              The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

              develop galvannealed skin panels It is the only Indian supplier of bake hardening

              steel for body panels

              Research is undertaken at Tata Steel in the areas of raw materials including coal

              coke energy conservation waste utilisation sintering blast furnace productivity and

              phosphorous reduction product development and improvement in life of plant and

              machinery The Company spends 7 of its turnover for RampD 17 patents have been

              sealed and over 100 are in process

              Steel Authority of India

              Research and Development Centre for Iron and Steel (RDCIS) has provided

              innovative technological inputs to different units of SAIL with special emphasis on

              cost reduction product development and application quality improvement energy

              conservation and automation Several new products were developed and

              commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

              Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

              specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

              micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

              Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

              Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

              strengthened its technology marketing efforts by providing consultancy services

              organising specialised testing and transfer of technological innovations to outside

              customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

              Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

              Ltd Kolkata and Ms Monarch Electronics Kolkata etc

              During the year 1998 technical papers were publishedpresented besides filing

              of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

              awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

              achievements in New Materialsrdquo given by the Ministry of Science and Technology

              Government of India

              Environment

              TATA Steel

              Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

              Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

              has an ISO-14001 certified service providerlocations are certified to ISO-14001

              Jamshedpur is the only town in the country which

              Significant achievements by the Company include an improvement in

              environment and resource conservation including a reduction in green house erosion

              raw materials and water consumption The Company has increased waste re-use and

              re-cycling Constant upgradation and modernisation has resulted in several state-of-

              the-art pollution control systems being installed to prevent and control pollution The

              Company has almost doubled its capital investment in Pollution Abatement in the last

              five years

              Emissions effluents and wastes

              Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

              most relevance to the steel industry Considerable reduction has been effected by

              Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

              granulation is taken into account Other Greenhouse Gas emissions do not result from

              Tata Steelrsquos activities

              Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

              tonnes in 2003-04 as against 790 tonnes used during the previous year

              Hazardous Waste under Basel Convention The Company does not import or export

              any waste deemed hazardous under the Basel Convention All hazardous wastes

              generated are handled as per the requirement of the Hazardous Waste Management

              and Handling Rules 19892000

              Emissions

              Tata Steel has undertaken several initiatives which have resulted in

              considerable reduction in stack emission Emissions are well below the Indian and

              international standards The emission load including particulate matter Sulphur

              Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

              undertaken at the Steel Works

              Waste handling

              Most of the solid waste generated from Steel Works is recycled or reused 18

              of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

              was used to fill low-lying areas and for peripheral road construction around

              Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

              power plants was dumped in a designated dump area

              Effluent Management

              Waste water from the steel making process is being treated with best available

              physio-chemical methods as well as being recycled Waste water from the coke plant

              is treated biologically where organic pollutants are oxidised and decomposed by micro

              organisms The Company has reduced the levels of total pollutant discharge in waste

              water streams from 0211 in 1999-2000 to 0178 in 2003-04

              Steel Authority of India

              Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

              environmentally responsible manner to comply with applicable regulations and striving

              to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

              efficiency and optimize resource consumption through various measures viz

              improvement in process technology in the areas of raw materials coke iron and steel

              making reuserecycle of the by-products generated and conservation of energy and

              water

              Solid Waste Management

              During 2005-06 SAIL produced approximately 134 million tonne of crude steel

              and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

              Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

              these wastes are being made through internal recycling and selling to outside

              agencies The wastes generated in the steel plants are being utilized mainly through

              their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

              during April-September 2006

              Environmental Plantation

              Trees have a significant role in protection of environment and ecological balance

              Extensive afforestation programme are being followed in all the plants and mines The

              basis of choosing the species of plants mainly depends on local soil characteristics

              and prevailing meteorological conditions The green belt developed by afforestation

              adds to the aesthetic environment which becomes dust and noise barriers

              A total number of 145521 saplings have been planted covering an area of 637

              hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

              hectare in 2004-05 in and around the steel plants of SAIL

              Environmental Recognitions

              SAIL plants have been awarded various prizes for environmental management in

              their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

              the Confederation of Indian Industries (CII) for exemplary performance in the

              environmental economic andsocial dimensions of sustainable development and the

              Greentech Environment Excellence Gold AwardGolden Peacock Environment

              Excellence Award in the metal sector 2005 instuted by the World Environment

              Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

              for 2005 from International Greenland Society

              Workforce and Welfare of Society

              TATA steel

              Tata Steel has not lost focus of this philosophy and has adapted it in a broader

              and modern context in its Vision 2007 A lot is dependent on the individual spirit and

              enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

              provide a work environment that will ensure a sense of purpose and personal growth

              for each individual The wish of the company is to see the smile on every face

              everyday A pioneer in employee welfare Tata Steel has invested in the power of its

              people and enriched empowered and enhanced their lives

              Even in its nascent years social scientists Sidney and Beatrice Webb were

              brought in to work on welfare schemes In fact some of the initiatives introduced by

              Tata Steel were the first of their kind in India and some even in the western countries

              at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

              source of its competitiveness It focuses on constantly updating and challenging

              intellectual capabilities to enable them to excel in performance Special efforts are

              made for enhancing strategic thinking skills and analytical abilities of its managers and

              workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

              available with its people through Knowledge Management and sharing of best

              practices

              In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

              mutual co-operation coordination and understanding between the Management and

              the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

              among many other prestigious awards and recognition Tata Steel aims at ensuring

              transparency fairness and equity in all its interactions with its employees to create an

              enthused and happy workforce

              In 1916 Social Welfare Scheme was formed by Tata Steel to provide

              assistance in the fields of education vocational training self-employment and

              family welfare

              Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

              12 times This facility provides on-the-spot diagnostic medical and advanced

              surgical treatment for preventive and curative interventions to people in

              inaccessible rural areas

              Sir Dorab Tata personally financed four athletes and two wrestlers from India

              for the 1920 Antwerp Olympics

              The JRD Sports Complex an international stadium with an 8-lane polyurethane

              track was inaugurated in 1991 The complex also houses facilities for handball

              tennis volleyball hockey basketball boxing table tennis and a modern

              gymnasium

              The Tata Steel Family Initiatives Foundation is engaged in off ering health

              services for the betterment of the people in and around Jamshedpur

              At times of natural calamities the company has rushe immediate relief and off

              ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

              fl ood ravaged Orissa and other such aff ected areas

              Horse-riding lessons the Jubilee Amusement park the zoological park etc off

              er a unique environment for the children of Jamshedpur to grow up in

              In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

              Jamshedpur has emerged as the one of the best cities in India

              Steel Authority of India

              The manpower strength as on 31st March 2006 was 138211 comprising 15206

              executives and 123005 non-executives The total reduction in manpower achieved

              during the year stood at 4864 which included separation of 881 employees through

              voluntary retirement The labour productivity improved by around 12 over previous

              year to 150 tonne crude steelmanyear

              Some of the areas of assistance which are available to the weaker sections are the

              following

              The company has provided land for construction of school buildings in some of

              the steel townships as well as in other places for spreading education among

              the masses

              The company has constructed roads in remote areas around the steel plants

              and also where the captive mines are located to improve communication and

              also increase activities such as organisation of health camps school facilities

              drinking water etc under the peripheral development schemes

              Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

              Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

              providing them with education boarding and lodging facilities

              Construction of bridges by-pass roads metal-morum path waterways

              levellingdressing area around township pre-mixed roads Installation of hand-

              pumps tube wells and wells for villagers

              Construction of school buildings (including for mentally retarded deaf and

              dumb children) madarsas providing school furniture therein and construction

              of hostels womenrsquos college building etc

              Fourteen scholarships are awarded to deserving SCST undergraduate

              engineering students in various disciplines to encourage technical education

              among them

              In many cases tuition fee in company run schools is exempt for SCST

              students Steps are taken to provide education to more and more tribal children

              in company schools

              The unemployed SCST youth are given specialized training in various

              technical trades to develop skill and knowledge Such training is provided free

              of cost

              Adult literacy campaign is carried out in most of the steel townships Every year

              more and more men and women are being covered in this campaign

              Development of fishery and cottage industry providing sewing machines to

              village mahila mandals and promoting other self-employment generation

              schemes

              SAIL has established a hockey academy with stadium and hostel facilities at

              Rourkela to tap and nurture the talent scattered in surrounding tribal area The

              academy was successful in spotting a number of young talented tribal players

              and grooms them under expertise of ex-Olympian

              Technology

              The biggest boost to efficiency in the steel industry has come from the increased

              use of continuous casting ndash an indicator of the modernity of the production process Its

              share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

              now India is thus well on its way to joining the ranks of the leading steelmakers

              among the industrial nations (share in EU-25 96) However in India some 6 of

              crude steel is still made using the outdated open-hearth process (EU-25 03) which

              suggests there is restructuring potential

              TATA Steel

              Tata Steels stall at the International Trade Fair was adjudged the best along

              with SAIL amongst ninety national companies participating in the Trade Fair Thirty

              international companies also took part in the exhibition Participating companies from

              countries all over the world exhibited latest technologies and know-how List of

              participating companies included Baosteel SAIL Heavy Engineering Corporation

              Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

              companies of national and international repute China was the partner country for the

              International Trade Fair this year

              In the award winning exhibition Tata Steel showcased its best coal mining practices

              cutting-edge technology used in iron ore mining pioneering human resource

              practices 78 years of industrial harmony and various other aspects of the worlds best

              steel company

              The 6th International Trade Fair and Conference an institutionalised global

              event is considered to be one of the most prestigious forums for national as well

              international participants It is a conclave of the finest minds concerned with the future

              direction and growth of these sectors The forum provided the worlds most eminent

              metallurgists manufacturers of metallurgical and mining machinery and related

              sectors professionals analysts and experts with the opportunity to exchange views on

              emerging technologies synergy and strengths and open up wider horizons for

              sectorial development

              Tata Steel to adopt Corus technology

              Tata Steel plans to implement alternate technology used by the British steel

              maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

              production according to Mr B Muthuraman Managing Director Tata Steel

              ldquoWe are looking at alternate technology Corus has developed an alternate

              technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

              newspersons on the sidelines of the 34th National Management Convention organised

              by the All-India Management Association However he declined to give further details

              on the type of technology the Indian steel giant plans to implement

              Steel Authority of India

              Modernisation holds the key to SAILs fortunes in the near future The objective

              of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

              and productive capacity and in the process become more energy-efficient and

              improve quality The key component of the ongoing modernisation drive - already

              completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

              ingot casting facilities with basic oxygen furnaces for steel-making and employing

              continuous casting techniques A senior SAIL official says Continuous casting and

              basic oxygen furnaces ensure better quality steel through processes more easily

              monitored for quality control The basic oxygen surfaces method is significantly faster

              more automated and permits greater flexibility Continuous casting is more efficient

              than the traditional ingot casting methods and gives increased yields while enabling

              better quality standards SAIL is also modernising its finishing mills and is adding

              secondary refining facilities to improve quality

              Safety measures

              A unique feature of safety management in steel industry is that a bipartite forum

              named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

              was formed in 1973 at national level having representatives from steel plants in SAIL

              RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

              Committee With a view to inculcate safety consciousness JCSSI organises seminars

              workshops training programme safety competitions for member organisations JCSSI

              with the co-operation and support of Trade Union representatives formulates policies

              and guidelines for its member plants and monitors the implementation

              Tata Steel

              Safety has always been a prime focus at Tata Steel A Safety Committee a

              Safety department and a Safety Trophy helped spread the message all across the

              company

              TATA reaffirms its commitment to provide safe working place and clean

              environment to its employees and other stakeholders as an integral part of its

              business philosophy and values We will continually enhance our Environmental

              Occupational Health amp Safety (EHS) performance in our activities products and

              services through a structured EHS management framework Towards this

              commitment we shall

              Establish and achieve EHS objectives and targets

              Ensure compliance with applicable EHS legislation and other requirement and

              go beyond

              Conserve natural resources and energy by constantly seeking to reduce

              consumption and promoting waste avoidance and recycling measures

              Eliminate minimize andor control adverse environmental impacts and

              occupational health and safety risks by adopting appropriate state-of-the-art

              technology and best EHS management practices at all levels sand functions

              Enhance awareness skill and competence of our employees and contractors

              so as to enable them to demonstrate their involvement responsibility and

              accountability for sound EHS performance

              Steel Authority of India

              SAIL has a separate corporate unit called the SAIL Safety Organisation to

              monitor safety system amp activities- SAIL also has a comprehensive safety policy

              Annual Performance Plans (APP) for the areas of safety and fire services are

              formulated and review of implementation of APP is done during Heads of

              Safety meeting

              Internal and external safety audits of major departments particularly hazardous

              areas are conducted every year and points arising from these audits are

              liquidated Safety aspects have been incorporated in standard operating

              practices (SOP) and standard maintenance practices (SMP)

              All major capital repairsshut downs are closely monitored round the clock

              Periodic drives are conducted to inculcate safety awarenessculture up to

              grass-root level apart from regular inspections as per checklists to identify

              unsafe conditionsacts

              Safety training is imparted to target group employees at various levels HRD

              intervention in the area of safety covers Heads of Departments Line Managers

              amp Departmental Safety Officers Besides area specific workshops are

              conducted at different locations on important topics like gas safety railroad

              safety safety in iron steel amp coke making etc

              Consistent efforts were made by SAIL Safety Organisation for improving safety

              standards in the company by taking measures like intensive safety drives in works

              area and conducting safety audits in hazardous departments of different plants and

              mines In addition specific workshops on safety aspects were organised in various

              SAIL steel plants

              Measures taken by Indian government to improve the industry

              Now letrsquos 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-

              1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

              among others was removed from the list of industries reserved for the public

              sector and also exempted from the provisions of compulsory licensing under the

              Industries (Development and Regulation) Act 1951

              2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

              of `high priority industries for automatic approval for foreign equity investment up

              to 51 This limit has been recently increased to 100

              3 Price and distribution of steel were deregulated from January 1992 At the same

              time it was ensured that priority continued to be accorded for meeting the

              requirements of small scale industries exporters of engineering goods and North

              Eastern Region of the country besides strategic sectors such as Defence and

              Railways

              4 The trade policy has been liberalised and import and export of iron and steel is

              freely allowed There are no quantitative restrictions on import of iron and steel

              items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

              regulating the imports is the tariff mechanism Tariffs on various items of iron and

              steel have drastically come down since 1991-92 levels and the government is

              committed to bring them down to the international levels In Chapter 72 there are

              two items viz 72042110 and 72042910 which fall in the restricted list of imports

              5 Iron amp Steel are freely importable as per the Extant Policy

              6 Iron amp Steel are freely exportable

              7 Advance Licensing Scheme allows duty free import of raw materials for exports

              8 The floor price for seconds and defectives continues till date

              9 Imports of seconds and defectives of steel are allowed only through three

              designated ports of Mumbai Calcutta and Chennai

              10Mandatory pre inspection certificate by a reputed international agency for every

              import consignment of seconds and defectives

              11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

              10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

              the customs duty on non-alloy steel was further reduced from 10 per cent to 5

              per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

              15 per cent to 5 per cent

              12Further customs duty on several raw materials used by the steel sector like

              noncoking coal metcoke and nickel has been reduced to 5 per cent and on

              coking coal to zero

              13To bring down the prices of steel the excise duty on steel products was reduced

              from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

              that the duty regime will be reviewed Budget 2004-05 revised this partially by

              increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

              cut on moderating prices was not achieved

              14The union Budget 2007-08 the import duty on seconds and defective has been

              further reduced from 20 to 10

              Special assistance being provided by Ministry of Steel to Private Sector

              1 Ministry of Steel is extending all possible support as detailed below for the

              development of Iron and Steel Sector in the country

              2 The Ministry is providing linkage for raw materials rail movement clearance etc for

              new plants and expansion of existing ones wherever applied for

              3 To ensure an un-interrupted supply of raw materials to the producers

              4 The Ministry has been interacting with All India Financial institutions to expedite

              clearance of projects

              5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

              Plants are held at the level of Secretary

              6 Ministry of Steel identifies infra-structural and related facilities required by steel

              industry so that their absence does not lead to bottlenecks in the future growth of

              the Iron and Steel Sector and takes up these issues with the concerned ministries

              7 The Ministry has encouraged the setting up of Institute for Steel Development and

              Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

              country are members of this Institute which has been set up with the objective of

              promoting developing and propagating the proper and effective use of steel

              8 In order to resolve the problems faced by existing amp new steel plants amp to assist

              major steel plants being implemented Govt has setup a Project Coordination

              Group under the Chairmanship of Steel Minister

              NATIONAL STEEL POLICY 2005

              The progress of the steel industry has a critical influence on the pace of Indiarsquos

              development and as such great importance is attached to capacity expansion in line

              with expected demand at cost and prices which make Indian steel internationally

              competitive The existing regime of liberalization decontrol and deregulation of

              industry in the country has opened up new opportunities for the expansion of the steel

              industry With a view to accelerating the growth of the steel sector and attaining the

              vision of India becoming a developed economy by 2020 the Ministry of Steel

              formulated a National Steel Policy (NSP) in 2005

              The following salient features can be derived after analysing the NSP 2005

              The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

              towards reform restructuring and globalisation

              The long-term goal of the NSP is that India should have a modern and efficient

              steel industry of world standards catering to diversified steel demand The focus of

              the policy is to achieve global competitiveness not only in terms of cost quality and

              product-mix but also in terms of global benchmarks of efficiency and productivity

              In order to achieve the goal of 110 million tones of steel production by 2019-20 the

              NSP seeks to remove the supply-side constraints to the growth of this industry in

              an open globally integrated and competitive environment

              The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

              policy goal On the demand side the strategy would be to create incremental

              demand through promotional efforts creation of awareness and strengthening the

              delivery chain particularly in rural areas On the supply side the strategy would be

              to facilitate creation of additional capacity remove procedural and policy

              bottlenecks in the availability of inputs such as iron ore and coal make higher

              investments in RampD and encourage the creation of infrastructure such as roads

              railways and ports

              The NSP acknowledges the low per capita consumption of steel in the country

              especially in the rural areas and the need to boost steel consumption to improve

              quality of life and help in meeting the growing aspirations of masses

              In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

              industry would need additional capital In addition funds would be required for

              technological upgrade of existing facilities In order to mobilize such vast resources

              NSP seeks to encourage foreign direct investment In addition the policy also

              seeks to make the fiscal incentives available to infrastructure projects accessible

              to the steel industry

              The NSP seeks to support developing of risk-hedging instruments like futures and

              derivatives to contain price volatility in the steel market

              The NSP seeks to strengthen the existing training and research facilities available

              to the domestic steel industry so as to provide suitable training programmes

              especially for the secondary small-scale units and also to collect and analyse data

              on important parameters of the industry

              The NSP seeks to mount aggressive RampD efforts to create manufacturing

              capability for special types of steel substitute coking coal use iron ore fines

              develop new products suited to rural needs enhance material and energy

              efficiency utilize waste and arrest environmental degradation

              The NSP acknowledges the important role played by the secondary steel sector in

              providing employment meeting local demand of steel in rural and semi-urban

              areas and meeting the countryrsquos demand of some special products and seeks to

              endeavour to provide the necessary feedstock to these units at reasonable prices

              from major plants through the existing mechanism of State Small Industries

              Corporations

              The NSP recognizes the fact that integration of the Indian steel industry with the

              global economy requires that the industry should be protected from unfair trade

              practices The NSP therefore envisages institution of mechanisms for import

              surveillance and monitoring export subsidies in other countries

              The present per capita consumption of steel in the country is very low compared to the

              world average As mentioned above one of the objectives of the NSP is to augment

              the demand and consumption of steel in the country by conscious promotion of steel

              usage With a view to create a mass awareness campaign on conscious promotion of

              steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

              the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

              The Committee is being serviced by Institute for Steel Development and Growth

              (INSDAG) The objective of the Committee is to promote steel usage in the country by

              way of an awareness campaign with particular emphasis on rural sectors The

              Committee also aims at educating the designers architects builders and planners

              regarding the qualitative and cost effective applications of steel in various structures

              including buildings bridges flyovers and airports

              FUTURE OF INDIAN STEEL INDUSTRY

              India is amongst a few countries in the world having the dual advantage of fast

              growing domestic demand coupled with access to raw materials Further the trend

              that is already discernible is that the axis of global steel production consumption is

              shifting towards Asia With their large populations China and India already account for

              35 of the total world steel production - more than double of Europe Asia is

              expected to outpace other regions of the world to an even greater extent in the coming

              years

              Amongst the Asian nations China has established a huge unbridgeable lead It

              is accepted that China will continue to be the leader However India is slated to

              emerge as the second Asian giant in the next eight years Figuratively speaking while

              the Dragon has reached maturity the Lotus is about to bloom in resplendent

              splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

              China swallowed almost 32 of global steel It is unlikely that future production and

              consumption would continue to flourish at growth rates of 8 and 18 respectively as

              has been the case over the last few years On the other hand it is sun-rise time for

              India where the demand has increased by 7-8 in the last couple of years In the long

              run Indian steel is likely to be more cost-effective since unlike China India has

              relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

              can sustain domestic production of 120-130 million tonnes for at least 25-30 years

              However the position with coal is not so favourable Though thermal coal

              reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

              traditional blast furnace route would require coking coal India does not have adequate

              reserves of coking coal nor is the meagre amount available of appropriate quality

              Thus the steel industry always had to contend with the dual problems of inadequate

              availability and poor quality of Indian coking coal This has been partly addressed by

              adopting alternative iron making processes that are not dependent on coking coal it

              can not be denied that coal is the biggest cause for concern for bulk steel production

              in India

              Because of the shortage of indigenous coal attempts have been made by steel

              producers to ensure long-term supplies by tying up with global majors or by acquiring

              mines in other countries This is the only long-term solution but with a global shortage

              of coal it may not remain cost-effective in the long run

              India is the seventh largest producer of steel and may further improve its position

              going by the current trends A series of investment decisions by major domestic

              players and international steel giants such as Steel Authority of India Ltd Tata Steel

              POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

              The keen interest shown by various prospective investors is not only due to

              expectations of strong growth in domestic demand but also due to indigenous

              availability of key resources like iron ore and skilled workforce

              After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

              steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

              finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

              2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

              consumption has accelerated to 91 per cent

              With the likely growth of Indian economy at around 7 per cent per annum

              demand for steel is expected to remain strong and is projected to reach a level of 90

              million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

              demand is sustainable considering the fact that Indias per capita consumption of steel

              is still very low at 31 kgs per head compared to the world average of 145 kgs The

              very low level of per capita consumption of steel in India is highlighted further when

              compared with the consumption levels of its peer group consisting of countries like

              China Brazil Mexico and Republic of Korea as also with selected developed

              countries

              Though there are realistic constraints in India to achieving as rapid a growth as in

              China there seems to be consensus among analysts that India is likely to witness a

              growth rate in steel consumption higher than the historically observed rate of 6 to 7

              percent If the growth rate (9 per cent) of last three years is maintained then we will

              achieve the 110 million tonnes landmark even by 2018 Though some analysts are

              more conservative due to cyclicity of steel business it may be mentioned that in a

              country like India cyclicity is more in terms of prices rather than volumes of production

              Exports

              Similar optimism prevails with regard to export of iron and steel Export of steel

              starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

              2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

              rising domestic demand and low capacity additions Exports now constitute around 17

              per cent of total production and Indias presence in the developing and developed

              world is being increasingly felt Indian steel producers have recently been able to

              supply specialized grades and products used for sophisticated applications like

              automobiles On the cost front some of our producers are counted amongst the least

              cost producers of the world For an average reference plant India is competitively

              placed in the middle of the hierarchy of steel producing nations

              However we have a long way to go to catch up with the leading exporters of the

              world such as Japan the CIS countries Brazil etc It is however expected that by

              2019-20 India will be able to export around 26 million tonnes of steel representing 24

              per cent of total projected production The projected export ratio compares well with

              the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

              The projected production of steel by 2019-20 to meet the domestic and export

              demand will be around 110 million tonnes Management of resources and

              infrastructural growth is going to be critical in achievement of the production level

              envisaged The broad requirements of various resources will increase manifold from

              the current level The bottlenecks in availability of critical inputs and various facilities

              need to be removed through concerted efforts of Government and industry The broad

              strategy to overcome these constraints as well as meet the strategic goals of the steel

              sector has been discussed in the National Steel Policy which has been recently

              approved by the Government

              As stated earlier the long-term goal of the National Steel Policy is that India

              should have a modern and efficient steel industry of world standards catering to a

              diversified steel demand The focus of the policy is to achieve global competitiveness

              not only in terms of cost quality and product mix but also in terms of global

              benchmarks of efficiency and productivity The policy envisages adopting a multi-

              pronged strategy to achieve these goals On the demand side the strategy would be

              to create incremental demand through promotional efforts creation of awareness and

              strengthening the delivery chain particularly in rural areas On the supply side the

              strategy would be to facilitate creation of additional capacity remove procedural and

              policy bottlenecks in the availability of inputs such as iron ore and coal make higher

              investments in RampD and HRD and encourage the creation of infrastructure such as

              roads railways and ports

              The production figures exports and imports of finished carbon steel and pig iron

              and apparent consumption patterns of finished carbon steel as indicated by TATA

              Steel and SAIL attest to the continuing growth for both the sectors

              FINDINGS

              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 increased its profit over the year particularly in 2006-07

              Both the companies are planning to adopt modern technology which is going to

              help them to compete in world market but they need to be less dependent on

              state of art technology and coal for long term prospects

              Public sector has undergone retrenchment for the employees and improved

              has its lobour productivity but it is still lacking behind as compared to private

              sector

              SAIL has reduced the no of accidents due to improper handling of machinery

              still no of accidents are more than that of TATA Steel

              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

              ie 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 have to be met

              comprehensively if we are to take our legitimate place in the world as a developed

              nation by 2020

              BIBLIOGRAPHY

              Annual report (2006-07) published by ministry of steel

              Annual report (2006-07) published by TATA Steel

              Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

              REPORTrsquo posted by SAIL on its website

              lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

              held on 07 Nov 2006

              Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

              wwwsteelnicin (Official website of ministry of industry)

              wwwtatasteelcom (Official website of TATA Steel)

              wwwsailcoin (Official website of Steel Authority of India)

              wwwworldsteelorg (official website of International Iron amp Steel Institute)

              wwwjpcindiansteelnicin (Website of joint planning committee)

              • DATA ANALYSIS
              • Comparison between TATA Steel and Steel Authority of India
              • Production
              • Quantity 000 Tonnes
              • Financials
              • Research and Development
              • (Rs Crore)
              • TATA Steel
              • Steel Authority of India
              • Environment
              • TATA Steel
              • Emissions effluents and wastes
              • Emissions
              • Waste handling
              • Effluent Management
              • Steel Authority of India
              • Solid Waste Management
              • Environmental Plantation
              • Environmental Recognitions
              • Workforce and Welfare of Society
              • TATA steel
              • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
              • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
              • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
              • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
              • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
              • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
              • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
              • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
              • Steel Authority of India
              • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
              • Technology
              • Steel Authority of India
              • Safety measures
              • Tata Steel
              • Steel Authority of India
              • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
              • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
              • Measures taken by Indian government to improve the industry
              • Now letrsquos 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-
              • Special assistance being provided by Ministry of Steel to Private Sector
              • FUTURE OF INDIAN STEEL INDUSTRY

                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 Indias 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

                Over the years Tata Steel has emerged as a thriving nimble steel enterprise

                due to its ability to transform itself rapidly to meet the challenges of a highly

                competitive global economy and commitment to become a supplier of choice

                Constant modernization and introduction of state-of-the-art technology at Tata Steel

                has enabled it to stay ahead in the industry

                Tata Steel has completed the first nine months of fiscal 2006-07 with impressive

                increase in its production and sales volumes The hot metal production at 41 million

                tonne is 82 more compared to the last year in the corresponding period and crude

                steel production at 37 million tonne is higher by 79 compared to the last year in first

                three quarters

                The saleable steel production at 37 million tonne registered a significant

                increase of 11 The total sales of 353 million tonne has grown by 117 over last

                financial year in the corresponding period The domestic sale of long products has

                increased by 30

                Tata Steel is continuing with its programme of expansion of steel making

                capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

                2007-08 and thereafter to 10 million tonne by fiscal 2010

                Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

                schedule with placement of equipment order for Kalinganagar project in Orissa and

                commencement of the land acquisition process Jharkhand project is waiting

                announcement of R amp R policy of the state Government The construction work of

                ferrochrome project in South Africa is in full swing

                Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

                Corus thus emerging as the fifth largest steel producer in the world

                The steel major has won the Prime Ministers Trophy four times This award is

                instituted by the Indian ministry of steel and awarded to the countrys best integrated

                steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

                given to the company with world class operations under the Groups Tata Business

                Excellence Model

                Areas of business

                Apart from the main steel division Tata Steels operations are grouped under

                strategic profit centres like tubes growth shop (for its steel plant and material handling

                equipment) bearings ferro alloys and minerals rings agrico and wires

                Tata Steels products include hot and cold rolled coils and sheets tubes wire

                rods construction bars structurals forging quality steel rings and bearings In an

                attempt to decommoditise steel the company has recently introduced brands like

                Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

                corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

                Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

                Tata Steel is also exploring opportunities in the ferro-chrome and titanium

                businesses

                Joint ventures associates and subsidiaries

                Tata Steel has numerous joint ventures and subsidiaries Among them are

                Tinplate Company of India

                Tayo Rolls

                Tata Ryerson

                Tata Refactories

                Tata Sponge Iron

                Tata Metaliks

                Tata Pigments

                Jamshedpur Injection Powder (Jamipol)

                TM International Logistics

                mjunction services

                TRF

                Jamshedpur Utility and Service Company (JUSCO)

                The Indian Steel and Wire Products(ISWP)

                Lanka Special Steel

                Sila Eastern Company

                ESSAR STEEL LTD

                Essar Steel is an integrated steel producer with operations all along the value

                chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

                complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

                half of its production abroad mainly to the highly demanding markets of the west and

                the growth markets of South East Asia and Middle East Essar ensures excellent

                customer services through a modern distribution network

                Essar Steelrsquos core manufacturing facilities are located at its steel complex in

                Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

                Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

                tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

                down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

                at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

                Expansion

                Presently Essar Steel has embarked upon a capacity expansion for

                enhancement of its production capacity from 46 million tonne per annum to 76 million

                tonne per annum The capacity expansion programme will consist of 2 units of Corex

                units of 15 million tonne per annum each Further value addition will be carried out by

                Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

                Mill

                Products

                All Essar Steelrsquos products are world class meeting the highest international

                standards supported by excellent marketing and service

                JSW STEEL LTD

                JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

                process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

                coke making ndash iron making through blast furnace as well as Corex process ndash steel

                making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

                facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

                tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

                tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

                Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

                casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

                technology

                JSW Steel has a distinction of being certified to ISO-90012000 Quality

                management system ISO-140011996 environment management system and OHSAS

                180011999 occupational health and safety management system

                During this year JSW Steel has also been conferred with a number of awards

                Production Performance

                (in million tonne)

                Items 2003-04 2004-05 2005-06 April-Dec06

                Pellets 325 361 380 293

                Hot Metal 163 196 240 219

                Slabs 161 187 225 195

                Hot Rolled Coils 154 178 210 148

                JINDAL STEEL AND POWER LTD (JSPL)

                Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

                business interests in steel power generation mining iron ore coal and diamond

                explorationmining The current turnover of the company is over Rs 3000 crore JSPL

                is the worldrsquos largest producer of coal based sponge iron The product range

                encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

                rails and H beams and columns in technical collaboration with JFE Corporation

                Japan These H-beams are the most desired option of structural engineers worldwide

                JSPL is the largest private sector investor in the state of Chhattisgarh with a total

                investment commitment of more than Rs 10000 crore The company is also setting

                up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

                5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

                Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

                watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

                4500 crore JSPL has been rated as one of the best environmentally managed

                companies in India and committed to environment protection as an integral part of

                their business activities

                ISPAT INDUSTRIES LTD (IIL)

                Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

                Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

                rolled coils per annum The plant has got a 224 million tonne per annum sintering

                plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

                based sponge iron plant IIL have uniquely combined the usage of hot metal and

                sponge iron in the electric arc furnace for production of liquid steel for the first time in

                India IIL have also adopted the state-of-art technology called Compact Strip

                Production (CSP) process which has been installed for the first time in India and

                produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

                products are accepted in the domestic and international market

                The production performance of IIL during last three years has been as follows

                (in million tonne)

                Items 2003-04 2004-05 2005-062006-07

                (Up to Dec06)

                Hot Metal 129 140 142 114

                Sponge Iron 106 105 089 085

                Hot Rolled Coils 162 197 215 197

                The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

                with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

                global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

                Demag the technology supplier

                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

                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 SAILs equity and retains voting

                control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

                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 Companys iron ore limestone and dolomite

                mines The company has the distinction of being Indiarsquos largest producer of iron ore

                and of having the countryrsquos 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

                SAILs 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

                SAILs 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

                With technical and managerial expertise and know-how in steel making gained

                over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                services and consultancy to clients world-wide

                SAIL has a well-equipped Research and Development Centre for Iron and Steel

                (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                Ranchi Our captive mines are under the control of the Raw Materials Division in

                Kolkata The Environment Management Division and Growth Division of SAIL operate

                from their headquarters in Kolkata Almost all our plants and major units are ISO

                Certified

                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

                Subsidiary

                Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                Joint Ventures

                SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                NTPC SAIL Power Company Pvt Ltd

                Bokaro Power Supply Company Pvt Limited

                Mjunction Services Limited

                SAIL-Bansal Service Centre Ltd

                Bhilai JP Cement Ltd

                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

                MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                producer of ferro manganese and silico manganese for captive use of SAIL plants

                The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                paid-up capital

                Financial Performance

                During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                (including conversion income of Rs 17110 crore) and made a net profit after tax of

                Rs 2097 crore The turnover and net profit after tax of the company during April

                2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                (provisional) respectively

                Production Performance

                The production of all grades of ferro alloys during 2005-06 is as under

                (in tonne)

                Materials 2005-06 April- Dec 2006

                High Carbon Ferro Manganese 51525 49493

                Silco Manganese 46712 32921

                Medium Carbon Ferro Manganse 2344 164

                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 was commissioned in August

                1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                million tonne per annum capacity Right from the year of its integrated operation VSP

                established its presence both in the domestic and international markets with its

                superior quality of products VSP has been awarded all the three International

                Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                180011999 The company has taken significant strides in the area of Corporate

                Social Responsibility

                Production Performance

                (in million tonne)

                Items 2004-05 2005-06 2006-07 (April-Dec06)

                Hot Metal 3920 4153 3040

                Liquid Steel 3560 3603 2676

                Saleable Steel 3173 3237 2419

                NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                Incorporated on November 15 1958 the National Mineral Development Corporation

                Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                developing and exploiting mineral resources of the country (other than coal oil

                natural gas and atomic minerals) At present its activities are concentrated on mining

                of iron ore diamonds and silica sand

                NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                Supreme Court of India NMDC is following up the case for early hearing

                All the iron ore production units have been accredited with ISO 90012000 and ISO

                140012004 certifications RampD Centre of NMDC was also accredited with ISO

                90012000 certification

                Iron Ore

                NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                Capital Structure

                The authorised share capital of the company is Rs 150 crore The paid up equity

                share capital was Rs 13216 crore Outstanding loans from Government of India are

                nil

                Financial Performance

                The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                SalesTurnover222655 371092 2790

                Gross Margin128749 2889 2455

                Profit Before Tax122365 277013 2410

                MSTC LTD

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

                Enterprise was set up on September 9 1964 as a canalising agency for the export of

                scrap from the country With the passage of time the Company emerged as the

                canalising agency for the import of scrap into the country Import of scrap was de-

                canalised by the Government in 1991-92 and MSTC has since then moved on to

                marketing ferrous and miscellaneous scrap arising out of steel plants and other

                industries and importing coal coke petroleum products semi finished steel products

                like HR coils and export of primarily iron ore The company has also established an e-

                auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                developed an e-procurement portal in house

                Capital Structure

                The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                220 crore as on 31122006 of which approximately 90 is held by Government of

                India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                bonus shares issued in the year 1993-94 in the ratio 11

                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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                handling of BOF slag etc

                Financial Performance

                Particulars 2004-05 2005-06 2006-07 (Apr-

                Dec2006)

                Total Turnover ie Service charges realised including miscellaneous Incomeetc

                981822 1067937 765557

                Gross Margin before Interest amp Depreciation 167879 186514 105284

                Interest amp Depreciation 83014 100970 84728

                Profit before Tax 84865 85544 20556

                MANGANESE ORE (INDIA) LTD (MOIL)

                Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                of manganese ore in India At the time of inception 49 of its shares were held by the

                Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                proportion by Government of India and the State Governments of Madhya Pradesh 17

                and Maharashtra Subsequently in 1977 the Government of India acquired the

                shares held by CPMO in MOIL and MOIL became a wholly owned Government

                company with effect from October 1977 As on 30112006 Government of India held

                8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                holding 961 and 882 shares respectively

                MOIL Produces and Sells following Grades of Manganese Ore

                1048708 High grade ores for production of ferro manganese

                1048708 Medium grade ores for production of silico manganese

                1048708 Blast furnace grade ore required for production of hot metal

                1048708 Dioxide ore for dry battery cells and chemical industries

                Production and 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

                Items 2004-05 2005-06 2006-07 (up to Dec2006)

                1 Production

                a) Manganese Ore (thousand tonne) 94300 86500 82533

                b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                c) Ferro Manganese (tonne) 1032500 617000 829400

                2 Turnover (Rupees in crore) 37878 33409 29463

                3 Profit before Tax (Rupees in crore) 20227 16900 12087

                KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                90012000 and ISO 14001 company was established in April 1976 to meet the long

                term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                was set up at Kudremukh This project was to be financed in full by Iran However as

                Iran stopped further loan disbursements after paying US $ 255 million the project was

                completed as per schedule with the funds provided by Government of India While the

                project was commissioned on schedule consequent upon the political developments

                in Iran they did not lift any quantity of concentrate As a diversification measure the

                Government approved the construction of a 3 million tonne per year capacity pellet

                plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                million tonne with additionsmodifications The plant went into commercial production

                in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                Plant Mangalore

                Production

                A target of 31 million tonne and 305 million tonne was set for production of iron ore

                concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                The target set for production during the year 2006-07 is 305 million tonne of pellets

                In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                production of iron ore concentrate during the year 2006-07 As against a target of 188

                million tonne of pellets fixed for the period April to November 2006 the actual

                production was 0275 million tonne which represents 15 target fulfilment There is

                shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                production of pellets is on account of operational problems being encountered in the

                pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                There was excessive generation of su er fines (slimes) affecting filtration clogging of

                filters overflow and contamination of process water due to filling of cooling pond

                affecting production While efforts are continuing to rectify the problems the operation

                of pellet plant is yet to stabilize and normal production is yet to commence

                The sales revenue during the last five years and up to November 2006 during 2006-

                07 is detailed below

                (Rs in lakh)

                Years Concentrate Pellets Total

                2006-07 (up to December 2006) - 12427 12427

                2005-06 12091 111137 123228

                2004-05 16050 169327 185377

                2003-04 20209 82729 102938

                2002-03 21135 51579 72714

                2001-02 21571 50598 72169

                Financial Performance

                An overview of the performance of KIOCL during the year 2006-07 (up to November

                2006) together with actuals for the previous three years is indicated below

                (Rs in lakh)

                Particulars 2006-07(up to December 2006)

                2005-06 2004-05 2003-04

                Total value of Sales 12427 123228 185377 102938

                Gross Margin 2620 68706 120863 45945

                Profit after Tax 1029 35630 64984 30070

                Inventories(excluding finished stock)

                20417 15843 8720 7616

                BIRD GROUP OF COMPANIES

                Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                the following seven companies came under the administrative control of the Ministry of

                Steel Government of India

                (a) The Orissa Minerals Development Company Limited (OMDC)

                (b) The Bisra Stone Lime Company Limited (BSLC)

                (c) The Karanpura Development Company Limited (KDCL)

                (d) Scott amp Saxby Limited (SSL)

                (e) Eastern Investments Limited (EIL)

                (f) Burrakar Coal Company Limited (Burrakar)

                (g) Borrea Coal Company Limited (Borrea)

                The status of the companies is as under

                a) Burrakar and Borrea coal companies became non-operational after nationalisation

                of coal mines The two companies are in the process of liquidation The official

                liquidator has already taken over the assets and liabilities of these two companies

                b) EIL being an investment company is having a major stake in the equity shares of

                operating companies under the Bird Group

                c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                Status of the Companies at the Time of Nationalisation

                At the time when the Bird Group of Companies came under the administrative control

                of the Ministry of Steel Government of India all of them were financially sick and

                burdened with various problems With the financial support from the Government of

                India problems relating mainly to excessive manpower erosion of working capital and

                outstanding liabilities could be settled to a considerable extent

                REVIEW OF LITERATURE

                RS PANDEY sees a bright future for the steel industry in India provided of course

                the iron ore mining policy to be announced by the government soon acts as a catalyst

                for growth He discusses the industrys problems and prospects in an interview When

                asked about the steel sectors ie private and public he expressed his expert views

                The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                Excerpts

                The public sector steel companies in India are doing extremely well And therefore

                they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                Between 1992-93 and now the share of the public sector in steel production had gone

                down Today its share is 41 per cent while that of the private sector is 59 per cent In

                1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                the private sector even in 1992-93 had a 67 per cent share and this has now grown

                to 71 per cent But the public sector units are growing even if the private sector is

                growing faster

                During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                going to increase its capacity from the current 13 million tonnes of hot metal to 225

                million tonnes in just four years RINL is set to expand its capacity from three million

                tonnes to 63 million tonnes in the next three years So that is a major expansion of

                capacity for the PSUs

                The public sector should be encouraged all the more Let there be a healthy

                competition between public and private sector producers The question of exit comes

                when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                was at below Rs10 per share Today it is more than Rs130 and the expectations

                are that it will go up even higher

                When talked about the labour productivity he says Yes labour productivity is low in

                SAIL in particular But it is improving The steel major is going to adjust much of its

                existing manpower in the expansion phase when its capacity is going to almost

                double The management had also undertaken a massive VRS [voluntary retirement

                scheme] In RINL labour productivity is not all that bad

                Besides SAIL has done very well in various other techno-economic parameters in the

                last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                per man per year In 2005-06 it went up to 150 tonnes per man per year an

                improvement of 20 per cent In blast furnace productivity also there has been an

                improvement as also in the production of high-end special steels and capacity

                utilisation

                With the improved turnover which comes from higher capacity use and higher

                manpower productivity SAILs profits have surged Its gross profit more than doubled

                between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                was largely due to the high prices of steel An analysis has shown that as far as SAIL

                is concerned the higher profit is 29 per cent owing to the price factor in steel and

                other input costs and 71 per cent owing to improvement in capacity use and other

                factors that are just mentioned

                OBJECTIVES

                To compare Private and Public steel sector with refrence to TATA Steel and

                Steel Authority Of India

                To analyse potential of both the companies ie TATA Steel and SAIL

                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

                Research Methodology

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

                a) Research design-

                In case of my research ldquoComparative analysis of Indian private and Public

                sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                found to be more appropriate

                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

                Comparison between TATA Steel and Steel Authority of India

                The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                significant improvements in the last two years The combined profit before tax of all 15

                PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                The profit before tax for all PSUs also exhibited a significant improvement of

                around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                comparable period of last year

                Contribution of PSUs to public exchequer has also gone up significantly For

                example the contribution of five leading companies namely SAIL RINL NMDC

                KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                duty dividend corporate tax sales tax royalty etc has gone up by more than double

                from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                On the other hand 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

                During the period (April-December 2006) 205 million tonne of steel was produced by

                Private Sector steel units out of the total production of 3315 million tonne in the

                country The private sector units consist of major steel producers in one hand and

                relatively smaller amp 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

                For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                companies on following parameters

                Production

                Chart showing production of both the companies

                Quantity 000 Tonnes

                2007-08 APR-DEC07APR-

                DEC06 ACTUA

                L

                AGE OF CURRENT

                PRODUCTION OVER

                CAPACITY UTILISATION

                TARGET TENTATIV

                E

                TARGET

                ACTUAL

                APR-DEC07 TARGE

                T

                APR-DEC06 ACTUA

                L

                APR-DEC 07

                APR-DEC06

                SAIL

                i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                iv)BSL43500 32630 30970 30010 949 1032 950 910

                v)ISP5000 3760 3520 3450 936 1020 940 920

                vi)ASP1470 1070 1140 1130 1065 1009 650 640

                vii)VISL

                1390 1050 1160 1190 1105 975 1300 1340

                TATA 50000 37440 37090 37380 991 992 990 1000

                TATA Steel

                The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                target of 3744 (mT) but could produce 3709 However for the same period in last

                year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                to 99 this year

                Steel Authority of India

                The company had a aggregate production target of 13739 (mT) for the year 2007-08

                but it could produce only 126 (mT) a growth of 4 over the previous year However

                for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                10380 as compared to around 10 (mT) for the same period last year SAIL had a

                capacity utilisation of 103 this year as compared to 101 last year

                Financials

                TATA Steel

                The year 2006-07 has seen the highest turnover and profits continuing the trend

                of the past four years The Company achieved the best ever sales turnover and

                profitability during the year under review A robust Indian economy firm steel prices

                higher volumes and several improvement initiatives contributed to the record

                performance Finished steel sales were higher by 1133 at 451 million tonnes over

                the previous year Export turnover was lower by about 5 due to lower volumes

                Average price realisation improved mainly due to higher prices of hot rolled

                coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                due to additional borrowings for the Companyrsquos domestic expansion programs and

                funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                20 compared to the previous year

                The record financial results would not have been possible without a matching

                performance by the operating departments including the raw materials division The

                year witnessed the best ever crude steel production by the Company at 505 million

                tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                first plant in India to produce more than 5 million tonnes of crude steel in a year The

                upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                increase in production was backed by improvements in operating practices and

                productivity resulting in a reduction in consumption of raw materials energy

                refractories etc

                Steel Authority of India

                Financial Year 2006-07 has been eventful year for the company with further

                momentum in improving operational efficiencies laying strong foundation and building

                road map for modernisation and expansion of SAIL Plants with several new initiatives

                undertaken with its human resource at the core During the year the company got the

                distinction of first metal company in the country to reach a market capitalization of Rs

                50000 crore

                There have been improvements in all financial parameters which are shown in

                the table given below-

                SAIL set new record in achieving the turnover of Rs39189 crore and profit

                before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                increase of 55

                Research and Development

                Chart showing production of both the companies

                (Rs Crore)

                TATA Steel

                The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                develop galvannealed skin panels It is the only Indian supplier of bake hardening

                steel for body panels

                Research is undertaken at Tata Steel in the areas of raw materials including coal

                coke energy conservation waste utilisation sintering blast furnace productivity and

                phosphorous reduction product development and improvement in life of plant and

                machinery The Company spends 7 of its turnover for RampD 17 patents have been

                sealed and over 100 are in process

                Steel Authority of India

                Research and Development Centre for Iron and Steel (RDCIS) has provided

                innovative technological inputs to different units of SAIL with special emphasis on

                cost reduction product development and application quality improvement energy

                conservation and automation Several new products were developed and

                commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                strengthened its technology marketing efforts by providing consultancy services

                organising specialised testing and transfer of technological innovations to outside

                customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                During the year 1998 technical papers were publishedpresented besides filing

                of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                achievements in New Materialsrdquo given by the Ministry of Science and Technology

                Government of India

                Environment

                TATA Steel

                Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                has an ISO-14001 certified service providerlocations are certified to ISO-14001

                Jamshedpur is the only town in the country which

                Significant achievements by the Company include an improvement in

                environment and resource conservation including a reduction in green house erosion

                raw materials and water consumption The Company has increased waste re-use and

                re-cycling Constant upgradation and modernisation has resulted in several state-of-

                the-art pollution control systems being installed to prevent and control pollution The

                Company has almost doubled its capital investment in Pollution Abatement in the last

                five years

                Emissions effluents and wastes

                Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                most relevance to the steel industry Considerable reduction has been effected by

                Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                granulation is taken into account Other Greenhouse Gas emissions do not result from

                Tata Steelrsquos activities

                Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                tonnes in 2003-04 as against 790 tonnes used during the previous year

                Hazardous Waste under Basel Convention The Company does not import or export

                any waste deemed hazardous under the Basel Convention All hazardous wastes

                generated are handled as per the requirement of the Hazardous Waste Management

                and Handling Rules 19892000

                Emissions

                Tata Steel has undertaken several initiatives which have resulted in

                considerable reduction in stack emission Emissions are well below the Indian and

                international standards The emission load including particulate matter Sulphur

                Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                undertaken at the Steel Works

                Waste handling

                Most of the solid waste generated from Steel Works is recycled or reused 18

                of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                was used to fill low-lying areas and for peripheral road construction around

                Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                power plants was dumped in a designated dump area

                Effluent Management

                Waste water from the steel making process is being treated with best available

                physio-chemical methods as well as being recycled Waste water from the coke plant

                is treated biologically where organic pollutants are oxidised and decomposed by micro

                organisms The Company has reduced the levels of total pollutant discharge in waste

                water streams from 0211 in 1999-2000 to 0178 in 2003-04

                Steel Authority of India

                Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                environmentally responsible manner to comply with applicable regulations and striving

                to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                efficiency and optimize resource consumption through various measures viz

                improvement in process technology in the areas of raw materials coke iron and steel

                making reuserecycle of the by-products generated and conservation of energy and

                water

                Solid Waste Management

                During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                these wastes are being made through internal recycling and selling to outside

                agencies The wastes generated in the steel plants are being utilized mainly through

                their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                during April-September 2006

                Environmental Plantation

                Trees have a significant role in protection of environment and ecological balance

                Extensive afforestation programme are being followed in all the plants and mines The

                basis of choosing the species of plants mainly depends on local soil characteristics

                and prevailing meteorological conditions The green belt developed by afforestation

                adds to the aesthetic environment which becomes dust and noise barriers

                A total number of 145521 saplings have been planted covering an area of 637

                hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                hectare in 2004-05 in and around the steel plants of SAIL

                Environmental Recognitions

                SAIL plants have been awarded various prizes for environmental management in

                their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                the Confederation of Indian Industries (CII) for exemplary performance in the

                environmental economic andsocial dimensions of sustainable development and the

                Greentech Environment Excellence Gold AwardGolden Peacock Environment

                Excellence Award in the metal sector 2005 instuted by the World Environment

                Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                for 2005 from International Greenland Society

                Workforce and Welfare of Society

                TATA steel

                Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                provide a work environment that will ensure a sense of purpose and personal growth

                for each individual The wish of the company is to see the smile on every face

                everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                people and enriched empowered and enhanced their lives

                Even in its nascent years social scientists Sidney and Beatrice Webb were

                brought in to work on welfare schemes In fact some of the initiatives introduced by

                Tata Steel were the first of their kind in India and some even in the western countries

                at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                source of its competitiveness It focuses on constantly updating and challenging

                intellectual capabilities to enable them to excel in performance Special efforts are

                made for enhancing strategic thinking skills and analytical abilities of its managers and

                workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                available with its people through Knowledge Management and sharing of best

                practices

                In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                mutual co-operation coordination and understanding between the Management and

                the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                among many other prestigious awards and recognition Tata Steel aims at ensuring

                transparency fairness and equity in all its interactions with its employees to create an

                enthused and happy workforce

                In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                assistance in the fields of education vocational training self-employment and

                family welfare

                Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                12 times This facility provides on-the-spot diagnostic medical and advanced

                surgical treatment for preventive and curative interventions to people in

                inaccessible rural areas

                Sir Dorab Tata personally financed four athletes and two wrestlers from India

                for the 1920 Antwerp Olympics

                The JRD Sports Complex an international stadium with an 8-lane polyurethane

                track was inaugurated in 1991 The complex also houses facilities for handball

                tennis volleyball hockey basketball boxing table tennis and a modern

                gymnasium

                The Tata Steel Family Initiatives Foundation is engaged in off ering health

                services for the betterment of the people in and around Jamshedpur

                At times of natural calamities the company has rushe immediate relief and off

                ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                fl ood ravaged Orissa and other such aff ected areas

                Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                er a unique environment for the children of Jamshedpur to grow up in

                In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                Jamshedpur has emerged as the one of the best cities in India

                Steel Authority of India

                The manpower strength as on 31st March 2006 was 138211 comprising 15206

                executives and 123005 non-executives The total reduction in manpower achieved

                during the year stood at 4864 which included separation of 881 employees through

                voluntary retirement The labour productivity improved by around 12 over previous

                year to 150 tonne crude steelmanyear

                Some of the areas of assistance which are available to the weaker sections are the

                following

                The company has provided land for construction of school buildings in some of

                the steel townships as well as in other places for spreading education among

                the masses

                The company has constructed roads in remote areas around the steel plants

                and also where the captive mines are located to improve communication and

                also increase activities such as organisation of health camps school facilities

                drinking water etc under the peripheral development schemes

                Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                providing them with education boarding and lodging facilities

                Construction of bridges by-pass roads metal-morum path waterways

                levellingdressing area around township pre-mixed roads Installation of hand-

                pumps tube wells and wells for villagers

                Construction of school buildings (including for mentally retarded deaf and

                dumb children) madarsas providing school furniture therein and construction

                of hostels womenrsquos college building etc

                Fourteen scholarships are awarded to deserving SCST undergraduate

                engineering students in various disciplines to encourage technical education

                among them

                In many cases tuition fee in company run schools is exempt for SCST

                students Steps are taken to provide education to more and more tribal children

                in company schools

                The unemployed SCST youth are given specialized training in various

                technical trades to develop skill and knowledge Such training is provided free

                of cost

                Adult literacy campaign is carried out in most of the steel townships Every year

                more and more men and women are being covered in this campaign

                Development of fishery and cottage industry providing sewing machines to

                village mahila mandals and promoting other self-employment generation

                schemes

                SAIL has established a hockey academy with stadium and hostel facilities at

                Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                academy was successful in spotting a number of young talented tribal players

                and grooms them under expertise of ex-Olympian

                Technology

                The biggest boost to efficiency in the steel industry has come from the increased

                use of continuous casting ndash an indicator of the modernity of the production process Its

                share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                now India is thus well on its way to joining the ranks of the leading steelmakers

                among the industrial nations (share in EU-25 96) However in India some 6 of

                crude steel is still made using the outdated open-hearth process (EU-25 03) which

                suggests there is restructuring potential

                TATA Steel

                Tata Steels stall at the International Trade Fair was adjudged the best along

                with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                international companies also took part in the exhibition Participating companies from

                countries all over the world exhibited latest technologies and know-how List of

                participating companies included Baosteel SAIL Heavy Engineering Corporation

                Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                companies of national and international repute China was the partner country for the

                International Trade Fair this year

                In the award winning exhibition Tata Steel showcased its best coal mining practices

                cutting-edge technology used in iron ore mining pioneering human resource

                practices 78 years of industrial harmony and various other aspects of the worlds best

                steel company

                The 6th International Trade Fair and Conference an institutionalised global

                event is considered to be one of the most prestigious forums for national as well

                international participants It is a conclave of the finest minds concerned with the future

                direction and growth of these sectors The forum provided the worlds most eminent

                metallurgists manufacturers of metallurgical and mining machinery and related

                sectors professionals analysts and experts with the opportunity to exchange views on

                emerging technologies synergy and strengths and open up wider horizons for

                sectorial development

                Tata Steel to adopt Corus technology

                Tata Steel plans to implement alternate technology used by the British steel

                maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                production according to Mr B Muthuraman Managing Director Tata Steel

                ldquoWe are looking at alternate technology Corus has developed an alternate

                technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                newspersons on the sidelines of the 34th National Management Convention organised

                by the All-India Management Association However he declined to give further details

                on the type of technology the Indian steel giant plans to implement

                Steel Authority of India

                Modernisation holds the key to SAILs fortunes in the near future The objective

                of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                and productive capacity and in the process become more energy-efficient and

                improve quality The key component of the ongoing modernisation drive - already

                completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                ingot casting facilities with basic oxygen furnaces for steel-making and employing

                continuous casting techniques A senior SAIL official says Continuous casting and

                basic oxygen furnaces ensure better quality steel through processes more easily

                monitored for quality control The basic oxygen surfaces method is significantly faster

                more automated and permits greater flexibility Continuous casting is more efficient

                than the traditional ingot casting methods and gives increased yields while enabling

                better quality standards SAIL is also modernising its finishing mills and is adding

                secondary refining facilities to improve quality

                Safety measures

                A unique feature of safety management in steel industry is that a bipartite forum

                named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                was formed in 1973 at national level having representatives from steel plants in SAIL

                RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                Committee With a view to inculcate safety consciousness JCSSI organises seminars

                workshops training programme safety competitions for member organisations JCSSI

                with the co-operation and support of Trade Union representatives formulates policies

                and guidelines for its member plants and monitors the implementation

                Tata Steel

                Safety has always been a prime focus at Tata Steel A Safety Committee a

                Safety department and a Safety Trophy helped spread the message all across the

                company

                TATA reaffirms its commitment to provide safe working place and clean

                environment to its employees and other stakeholders as an integral part of its

                business philosophy and values We will continually enhance our Environmental

                Occupational Health amp Safety (EHS) performance in our activities products and

                services through a structured EHS management framework Towards this

                commitment we shall

                Establish and achieve EHS objectives and targets

                Ensure compliance with applicable EHS legislation and other requirement and

                go beyond

                Conserve natural resources and energy by constantly seeking to reduce

                consumption and promoting waste avoidance and recycling measures

                Eliminate minimize andor control adverse environmental impacts and

                occupational health and safety risks by adopting appropriate state-of-the-art

                technology and best EHS management practices at all levels sand functions

                Enhance awareness skill and competence of our employees and contractors

                so as to enable them to demonstrate their involvement responsibility and

                accountability for sound EHS performance

                Steel Authority of India

                SAIL has a separate corporate unit called the SAIL Safety Organisation to

                monitor safety system amp activities- SAIL also has a comprehensive safety policy

                Annual Performance Plans (APP) for the areas of safety and fire services are

                formulated and review of implementation of APP is done during Heads of

                Safety meeting

                Internal and external safety audits of major departments particularly hazardous

                areas are conducted every year and points arising from these audits are

                liquidated Safety aspects have been incorporated in standard operating

                practices (SOP) and standard maintenance practices (SMP)

                All major capital repairsshut downs are closely monitored round the clock

                Periodic drives are conducted to inculcate safety awarenessculture up to

                grass-root level apart from regular inspections as per checklists to identify

                unsafe conditionsacts

                Safety training is imparted to target group employees at various levels HRD

                intervention in the area of safety covers Heads of Departments Line Managers

                amp Departmental Safety Officers Besides area specific workshops are

                conducted at different locations on important topics like gas safety railroad

                safety safety in iron steel amp coke making etc

                Consistent efforts were made by SAIL Safety Organisation for improving safety

                standards in the company by taking measures like intensive safety drives in works

                area and conducting safety audits in hazardous departments of different plants and

                mines In addition specific workshops on safety aspects were organised in various

                SAIL steel plants

                Measures taken by Indian government to improve the industry

                Now letrsquos 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-

                1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                among others was removed from the list of industries reserved for the public

                sector and also exempted from the provisions of compulsory licensing under the

                Industries (Development and Regulation) Act 1951

                2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                of `high priority industries for automatic approval for foreign equity investment up

                to 51 This limit has been recently increased to 100

                3 Price and distribution of steel were deregulated from January 1992 At the same

                time it was ensured that priority continued to be accorded for meeting the

                requirements of small scale industries exporters of engineering goods and North

                Eastern Region of the country besides strategic sectors such as Defence and

                Railways

                4 The trade policy has been liberalised and import and export of iron and steel is

                freely allowed There are no quantitative restrictions on import of iron and steel

                items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                regulating the imports is the tariff mechanism Tariffs on various items of iron and

                steel have drastically come down since 1991-92 levels and the government is

                committed to bring them down to the international levels In Chapter 72 there are

                two items viz 72042110 and 72042910 which fall in the restricted list of imports

                5 Iron amp Steel are freely importable as per the Extant Policy

                6 Iron amp Steel are freely exportable

                7 Advance Licensing Scheme allows duty free import of raw materials for exports

                8 The floor price for seconds and defectives continues till date

                9 Imports of seconds and defectives of steel are allowed only through three

                designated ports of Mumbai Calcutta and Chennai

                10Mandatory pre inspection certificate by a reputed international agency for every

                import consignment of seconds and defectives

                11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                15 per cent to 5 per cent

                12Further customs duty on several raw materials used by the steel sector like

                noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                coking coal to zero

                13To bring down the prices of steel the excise duty on steel products was reduced

                from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                that the duty regime will be reviewed Budget 2004-05 revised this partially by

                increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                cut on moderating prices was not achieved

                14The union Budget 2007-08 the import duty on seconds and defective has been

                further reduced from 20 to 10

                Special assistance being provided by Ministry of Steel to Private Sector

                1 Ministry of Steel is extending all possible support as detailed below for the

                development of Iron and Steel Sector in the country

                2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                new plants and expansion of existing ones wherever applied for

                3 To ensure an un-interrupted supply of raw materials to the producers

                4 The Ministry has been interacting with All India Financial institutions to expedite

                clearance of projects

                5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                Plants are held at the level of Secretary

                6 Ministry of Steel identifies infra-structural and related facilities required by steel

                industry so that their absence does not lead to bottlenecks in the future growth of

                the Iron and Steel Sector and takes up these issues with the concerned ministries

                7 The Ministry has encouraged the setting up of Institute for Steel Development and

                Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                country are members of this Institute which has been set up with the objective of

                promoting developing and propagating the proper and effective use of steel

                8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                major steel plants being implemented Govt has setup a Project Coordination

                Group under the Chairmanship of Steel Minister

                NATIONAL STEEL POLICY 2005

                The progress of the steel industry has a critical influence on the pace of Indiarsquos

                development and as such great importance is attached to capacity expansion in line

                with expected demand at cost and prices which make Indian steel internationally

                competitive The existing regime of liberalization decontrol and deregulation of

                industry in the country has opened up new opportunities for the expansion of the steel

                industry With a view to accelerating the growth of the steel sector and attaining the

                vision of India becoming a developed economy by 2020 the Ministry of Steel

                formulated a National Steel Policy (NSP) in 2005

                The following salient features can be derived after analysing the NSP 2005

                The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                towards reform restructuring and globalisation

                The long-term goal of the NSP is that India should have a modern and efficient

                steel industry of world standards catering to diversified steel demand The focus of

                the policy is to achieve global competitiveness not only in terms of cost quality and

                product-mix but also in terms of global benchmarks of efficiency and productivity

                In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                NSP seeks to remove the supply-side constraints to the growth of this industry in

                an open globally integrated and competitive environment

                The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                policy goal On the demand side the strategy would be to create incremental

                demand through promotional efforts creation of awareness and strengthening the

                delivery chain particularly in rural areas On the supply side the strategy would be

                to facilitate creation of additional capacity remove procedural and policy

                bottlenecks in the availability of inputs such as iron ore and coal make higher

                investments in RampD and encourage the creation of infrastructure such as roads

                railways and ports

                The NSP acknowledges the low per capita consumption of steel in the country

                especially in the rural areas and the need to boost steel consumption to improve

                quality of life and help in meeting the growing aspirations of masses

                In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                industry would need additional capital In addition funds would be required for

                technological upgrade of existing facilities In order to mobilize such vast resources

                NSP seeks to encourage foreign direct investment In addition the policy also

                seeks to make the fiscal incentives available to infrastructure projects accessible

                to the steel industry

                The NSP seeks to support developing of risk-hedging instruments like futures and

                derivatives to contain price volatility in the steel market

                The NSP seeks to strengthen the existing training and research facilities available

                to the domestic steel industry so as to provide suitable training programmes

                especially for the secondary small-scale units and also to collect and analyse data

                on important parameters of the industry

                The NSP seeks to mount aggressive RampD efforts to create manufacturing

                capability for special types of steel substitute coking coal use iron ore fines

                develop new products suited to rural needs enhance material and energy

                efficiency utilize waste and arrest environmental degradation

                The NSP acknowledges the important role played by the secondary steel sector in

                providing employment meeting local demand of steel in rural and semi-urban

                areas and meeting the countryrsquos demand of some special products and seeks to

                endeavour to provide the necessary feedstock to these units at reasonable prices

                from major plants through the existing mechanism of State Small Industries

                Corporations

                The NSP recognizes the fact that integration of the Indian steel industry with the

                global economy requires that the industry should be protected from unfair trade

                practices The NSP therefore envisages institution of mechanisms for import

                surveillance and monitoring export subsidies in other countries

                The present per capita consumption of steel in the country is very low compared to the

                world average As mentioned above one of the objectives of the NSP is to augment

                the demand and consumption of steel in the country by conscious promotion of steel

                usage With a view to create a mass awareness campaign on conscious promotion of

                steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                The Committee is being serviced by Institute for Steel Development and Growth

                (INSDAG) The objective of the Committee is to promote steel usage in the country by

                way of an awareness campaign with particular emphasis on rural sectors The

                Committee also aims at educating the designers architects builders and planners

                regarding the qualitative and cost effective applications of steel in various structures

                including buildings bridges flyovers and airports

                FUTURE OF INDIAN STEEL INDUSTRY

                India is amongst a few countries in the world having the dual advantage of fast

                growing domestic demand coupled with access to raw materials Further the trend

                that is already discernible is that the axis of global steel production consumption is

                shifting towards Asia With their large populations China and India already account for

                35 of the total world steel production - more than double of Europe Asia is

                expected to outpace other regions of the world to an even greater extent in the coming

                years

                Amongst the Asian nations China has established a huge unbridgeable lead It

                is accepted that China will continue to be the leader However India is slated to

                emerge as the second Asian giant in the next eight years Figuratively speaking while

                the Dragon has reached maturity the Lotus is about to bloom in resplendent

                splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                China swallowed almost 32 of global steel It is unlikely that future production and

                consumption would continue to flourish at growth rates of 8 and 18 respectively as

                has been the case over the last few years On the other hand it is sun-rise time for

                India where the demand has increased by 7-8 in the last couple of years In the long

                run Indian steel is likely to be more cost-effective since unlike China India has

                relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                However the position with coal is not so favourable Though thermal coal

                reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                traditional blast furnace route would require coking coal India does not have adequate

                reserves of coking coal nor is the meagre amount available of appropriate quality

                Thus the steel industry always had to contend with the dual problems of inadequate

                availability and poor quality of Indian coking coal This has been partly addressed by

                adopting alternative iron making processes that are not dependent on coking coal it

                can not be denied that coal is the biggest cause for concern for bulk steel production

                in India

                Because of the shortage of indigenous coal attempts have been made by steel

                producers to ensure long-term supplies by tying up with global majors or by acquiring

                mines in other countries This is the only long-term solution but with a global shortage

                of coal it may not remain cost-effective in the long run

                India is the seventh largest producer of steel and may further improve its position

                going by the current trends A series of investment decisions by major domestic

                players and international steel giants such as Steel Authority of India Ltd Tata Steel

                POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                The keen interest shown by various prospective investors is not only due to

                expectations of strong growth in domestic demand but also due to indigenous

                availability of key resources like iron ore and skilled workforce

                After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                consumption has accelerated to 91 per cent

                With the likely growth of Indian economy at around 7 per cent per annum

                demand for steel is expected to remain strong and is projected to reach a level of 90

                million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                demand is sustainable considering the fact that Indias per capita consumption of steel

                is still very low at 31 kgs per head compared to the world average of 145 kgs The

                very low level of per capita consumption of steel in India is highlighted further when

                compared with the consumption levels of its peer group consisting of countries like

                China Brazil Mexico and Republic of Korea as also with selected developed

                countries

                Though there are realistic constraints in India to achieving as rapid a growth as in

                China there seems to be consensus among analysts that India is likely to witness a

                growth rate in steel consumption higher than the historically observed rate of 6 to 7

                percent If the growth rate (9 per cent) of last three years is maintained then we will

                achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                more conservative due to cyclicity of steel business it may be mentioned that in a

                country like India cyclicity is more in terms of prices rather than volumes of production

                Exports

                Similar optimism prevails with regard to export of iron and steel Export of steel

                starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                rising domestic demand and low capacity additions Exports now constitute around 17

                per cent of total production and Indias presence in the developing and developed

                world is being increasingly felt Indian steel producers have recently been able to

                supply specialized grades and products used for sophisticated applications like

                automobiles On the cost front some of our producers are counted amongst the least

                cost producers of the world For an average reference plant India is competitively

                placed in the middle of the hierarchy of steel producing nations

                However we have a long way to go to catch up with the leading exporters of the

                world such as Japan the CIS countries Brazil etc It is however expected that by

                2019-20 India will be able to export around 26 million tonnes of steel representing 24

                per cent of total projected production The projected export ratio compares well with

                the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                The projected production of steel by 2019-20 to meet the domestic and export

                demand will be around 110 million tonnes Management of resources and

                infrastructural growth is going to be critical in achievement of the production level

                envisaged The broad requirements of various resources will increase manifold from

                the current level The bottlenecks in availability of critical inputs and various facilities

                need to be removed through concerted efforts of Government and industry The broad

                strategy to overcome these constraints as well as meet the strategic goals of the steel

                sector has been discussed in the National Steel Policy which has been recently

                approved by the Government

                As stated earlier the long-term goal of the National Steel Policy is that India

                should have a modern and efficient steel industry of world standards catering to a

                diversified steel demand The focus of the policy is to achieve global competitiveness

                not only in terms of cost quality and product mix but also in terms of global

                benchmarks of efficiency and productivity The policy envisages adopting a multi-

                pronged strategy to achieve these goals On the demand side the strategy would be

                to create incremental demand through promotional efforts creation of awareness and

                strengthening the delivery chain particularly in rural areas On the supply side the

                strategy would be to facilitate creation of additional capacity remove procedural and

                policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                investments in RampD and HRD and encourage the creation of infrastructure such as

                roads railways and ports

                The production figures exports and imports of finished carbon steel and pig iron

                and apparent consumption patterns of finished carbon steel as indicated by TATA

                Steel and SAIL attest to the continuing growth for both the sectors

                FINDINGS

                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 increased its profit over the year particularly in 2006-07

                Both the companies are planning to adopt modern technology which is going to

                help them to compete in world market but they need to be less dependent on

                state of art technology and coal for long term prospects

                Public sector has undergone retrenchment for the employees and improved

                has its lobour productivity but it is still lacking behind as compared to private

                sector

                SAIL has reduced the no of accidents due to improper handling of machinery

                still no of accidents are more than that of TATA Steel

                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

                ie 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 have to be met

                comprehensively if we are to take our legitimate place in the world as a developed

                nation by 2020

                BIBLIOGRAPHY

                Annual report (2006-07) published by ministry of steel

                Annual report (2006-07) published by TATA Steel

                Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                REPORTrsquo posted by SAIL on its website

                lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                held on 07 Nov 2006

                Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                wwwsteelnicin (Official website of ministry of industry)

                wwwtatasteelcom (Official website of TATA Steel)

                wwwsailcoin (Official website of Steel Authority of India)

                wwwworldsteelorg (official website of International Iron amp Steel Institute)

                wwwjpcindiansteelnicin (Website of joint planning committee)

                • DATA ANALYSIS
                • Comparison between TATA Steel and Steel Authority of India
                • Production
                • Quantity 000 Tonnes
                • Financials
                • Research and Development
                • (Rs Crore)
                • TATA Steel
                • Steel Authority of India
                • Environment
                • TATA Steel
                • Emissions effluents and wastes
                • Emissions
                • Waste handling
                • Effluent Management
                • Steel Authority of India
                • Solid Waste Management
                • Environmental Plantation
                • Environmental Recognitions
                • Workforce and Welfare of Society
                • TATA steel
                • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                • Steel Authority of India
                • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                • Technology
                • Steel Authority of India
                • Safety measures
                • Tata Steel
                • Steel Authority of India
                • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                • Measures taken by Indian government to improve the industry
                • Now letrsquos 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-
                • Special assistance being provided by Ministry of Steel to Private Sector
                • FUTURE OF INDIAN STEEL INDUSTRY

                  Tata Steel is continuing with its programme of expansion of steel making

                  capacity by 18 million tonne to reach the rated capacity of 68 million tonne in fiscal

                  2007-08 and thereafter to 10 million tonne by fiscal 2010

                  Tata Steelrsquos greenfield projects in Orissa and Chhattisgarh are progressing on

                  schedule with placement of equipment order for Kalinganagar project in Orissa and

                  commencement of the land acquisition process Jharkhand project is waiting

                  announcement of R amp R policy of the state Government The construction work of

                  ferrochrome project in South Africa is in full swing

                  Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker

                  Corus thus emerging as the fifth largest steel producer in the world

                  The steel major has won the Prime Ministers Trophy four times This award is

                  instituted by the Indian ministry of steel and awarded to the countrys best integrated

                  steel plant In 2000 it became the first Tata company to win the JRD Tata QV award

                  given to the company with world class operations under the Groups Tata Business

                  Excellence Model

                  Areas of business

                  Apart from the main steel division Tata Steels operations are grouped under

                  strategic profit centres like tubes growth shop (for its steel plant and material handling

                  equipment) bearings ferro alloys and minerals rings agrico and wires

                  Tata Steels products include hot and cold rolled coils and sheets tubes wire

                  rods construction bars structurals forging quality steel rings and bearings In an

                  attempt to decommoditise steel the company has recently introduced brands like

                  Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee (galvanised

                  corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata

                  Wiron (galvanised wire products) and Tata Agrico (hand tools and implements)

                  Tata Steel is also exploring opportunities in the ferro-chrome and titanium

                  businesses

                  Joint ventures associates and subsidiaries

                  Tata Steel has numerous joint ventures and subsidiaries Among them are

                  Tinplate Company of India

                  Tayo Rolls

                  Tata Ryerson

                  Tata Refactories

                  Tata Sponge Iron

                  Tata Metaliks

                  Tata Pigments

                  Jamshedpur Injection Powder (Jamipol)

                  TM International Logistics

                  mjunction services

                  TRF

                  Jamshedpur Utility and Service Company (JUSCO)

                  The Indian Steel and Wire Products(ISWP)

                  Lanka Special Steel

                  Sila Eastern Company

                  ESSAR STEEL LTD

                  Essar Steel is an integrated steel producer with operations all along the value

                  chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

                  complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

                  half of its production abroad mainly to the highly demanding markets of the west and

                  the growth markets of South East Asia and Middle East Essar ensures excellent

                  customer services through a modern distribution network

                  Essar Steelrsquos core manufacturing facilities are located at its steel complex in

                  Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

                  Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

                  tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

                  down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

                  at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

                  Expansion

                  Presently Essar Steel has embarked upon a capacity expansion for

                  enhancement of its production capacity from 46 million tonne per annum to 76 million

                  tonne per annum The capacity expansion programme will consist of 2 units of Corex

                  units of 15 million tonne per annum each Further value addition will be carried out by

                  Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

                  Mill

                  Products

                  All Essar Steelrsquos products are world class meeting the highest international

                  standards supported by excellent marketing and service

                  JSW STEEL LTD

                  JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

                  process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

                  coke making ndash iron making through blast furnace as well as Corex process ndash steel

                  making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

                  facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

                  tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

                  tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

                  Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

                  casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

                  technology

                  JSW Steel has a distinction of being certified to ISO-90012000 Quality

                  management system ISO-140011996 environment management system and OHSAS

                  180011999 occupational health and safety management system

                  During this year JSW Steel has also been conferred with a number of awards

                  Production Performance

                  (in million tonne)

                  Items 2003-04 2004-05 2005-06 April-Dec06

                  Pellets 325 361 380 293

                  Hot Metal 163 196 240 219

                  Slabs 161 187 225 195

                  Hot Rolled Coils 154 178 210 148

                  JINDAL STEEL AND POWER LTD (JSPL)

                  Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

                  business interests in steel power generation mining iron ore coal and diamond

                  explorationmining The current turnover of the company is over Rs 3000 crore JSPL

                  is the worldrsquos largest producer of coal based sponge iron The product range

                  encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

                  rails and H beams and columns in technical collaboration with JFE Corporation

                  Japan These H-beams are the most desired option of structural engineers worldwide

                  JSPL is the largest private sector investor in the state of Chhattisgarh with a total

                  investment commitment of more than Rs 10000 crore The company is also setting

                  up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

                  5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

                  Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

                  watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

                  4500 crore JSPL has been rated as one of the best environmentally managed

                  companies in India and committed to environment protection as an integral part of

                  their business activities

                  ISPAT INDUSTRIES LTD (IIL)

                  Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

                  Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

                  rolled coils per annum The plant has got a 224 million tonne per annum sintering

                  plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

                  based sponge iron plant IIL have uniquely combined the usage of hot metal and

                  sponge iron in the electric arc furnace for production of liquid steel for the first time in

                  India IIL have also adopted the state-of-art technology called Compact Strip

                  Production (CSP) process which has been installed for the first time in India and

                  produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

                  products are accepted in the domestic and international market

                  The production performance of IIL during last three years has been as follows

                  (in million tonne)

                  Items 2003-04 2004-05 2005-062006-07

                  (Up to Dec06)

                  Hot Metal 129 140 142 114

                  Sponge Iron 106 105 089 085

                  Hot Rolled Coils 162 197 215 197

                  The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

                  with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

                  global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

                  Demag the technology supplier

                  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

                  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 SAILs equity and retains voting

                  control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

                  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 Companys iron ore limestone and dolomite

                  mines The company has the distinction of being Indiarsquos largest producer of iron ore

                  and of having the countryrsquos 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

                  SAILs 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

                  SAILs 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

                  With technical and managerial expertise and know-how in steel making gained

                  over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                  services and consultancy to clients world-wide

                  SAIL has a well-equipped Research and Development Centre for Iron and Steel

                  (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                  for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                  Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                  Ranchi Our captive mines are under the control of the Raw Materials Division in

                  Kolkata The Environment Management Division and Growth Division of SAIL operate

                  from their headquarters in Kolkata Almost all our plants and major units are ISO

                  Certified

                  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

                  Subsidiary

                  Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                  Joint Ventures

                  SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                  NTPC SAIL Power Company Pvt Ltd

                  Bokaro Power Supply Company Pvt Limited

                  Mjunction Services Limited

                  SAIL-Bansal Service Centre Ltd

                  Bhilai JP Cement Ltd

                  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

                  MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                  Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                  producer of ferro manganese and silico manganese for captive use of SAIL plants

                  The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                  crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                  paid-up capital

                  Financial Performance

                  During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                  (including conversion income of Rs 17110 crore) and made a net profit after tax of

                  Rs 2097 crore The turnover and net profit after tax of the company during April

                  2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                  (provisional) respectively

                  Production Performance

                  The production of all grades of ferro alloys during 2005-06 is as under

                  (in tonne)

                  Materials 2005-06 April- Dec 2006

                  High Carbon Ferro Manganese 51525 49493

                  Silco Manganese 46712 32921

                  Medium Carbon Ferro Manganse 2344 164

                  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 was commissioned in August

                  1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                  million tonne per annum capacity Right from the year of its integrated operation VSP

                  established its presence both in the domestic and international markets with its

                  superior quality of products VSP has been awarded all the three International

                  Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                  180011999 The company has taken significant strides in the area of Corporate

                  Social Responsibility

                  Production Performance

                  (in million tonne)

                  Items 2004-05 2005-06 2006-07 (April-Dec06)

                  Hot Metal 3920 4153 3040

                  Liquid Steel 3560 3603 2676

                  Saleable Steel 3173 3237 2419

                  NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                  Incorporated on November 15 1958 the National Mineral Development Corporation

                  Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                  developing and exploiting mineral resources of the country (other than coal oil

                  natural gas and atomic minerals) At present its activities are concentrated on mining

                  of iron ore diamonds and silica sand

                  NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                  (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                  Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                  activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                  from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                  Supreme Court of India NMDC is following up the case for early hearing

                  All the iron ore production units have been accredited with ISO 90012000 and ISO

                  140012004 certifications RampD Centre of NMDC was also accredited with ISO

                  90012000 certification

                  Iron Ore

                  NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                  December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                  (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                  MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                  exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                  Capital Structure

                  The authorised share capital of the company is Rs 150 crore The paid up equity

                  share capital was Rs 13216 crore Outstanding loans from Government of India are

                  nil

                  Financial Performance

                  The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                  Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                  SalesTurnover222655 371092 2790

                  Gross Margin128749 2889 2455

                  Profit Before Tax122365 277013 2410

                  MSTC LTD

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

                  Enterprise was set up on September 9 1964 as a canalising agency for the export of

                  scrap from the country With the passage of time the Company emerged as the

                  canalising agency for the import of scrap into the country Import of scrap was de-

                  canalised by the Government in 1991-92 and MSTC has since then moved on to

                  marketing ferrous and miscellaneous scrap arising out of steel plants and other

                  industries and importing coal coke petroleum products semi finished steel products

                  like HR coils and export of primarily iron ore The company has also established an e-

                  auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                  developed an e-procurement portal in house

                  Capital Structure

                  The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                  220 crore as on 31122006 of which approximately 90 is held by Government of

                  India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                  Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                  bonus shares issued in the year 1993-94 in the ratio 11

                  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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                  handling of BOF slag etc

                  Financial Performance

                  Particulars 2004-05 2005-06 2006-07 (Apr-

                  Dec2006)

                  Total Turnover ie Service charges realised including miscellaneous Incomeetc

                  981822 1067937 765557

                  Gross Margin before Interest amp Depreciation 167879 186514 105284

                  Interest amp Depreciation 83014 100970 84728

                  Profit before Tax 84865 85544 20556

                  MANGANESE ORE (INDIA) LTD (MOIL)

                  Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                  of manganese ore in India At the time of inception 49 of its shares were held by the

                  Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                  proportion by Government of India and the State Governments of Madhya Pradesh 17

                  and Maharashtra Subsequently in 1977 the Government of India acquired the

                  shares held by CPMO in MOIL and MOIL became a wholly owned Government

                  company with effect from October 1977 As on 30112006 Government of India held

                  8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                  holding 961 and 882 shares respectively

                  MOIL Produces and Sells following Grades of Manganese Ore

                  1048708 High grade ores for production of ferro manganese

                  1048708 Medium grade ores for production of silico manganese

                  1048708 Blast furnace grade ore required for production of hot metal

                  1048708 Dioxide ore for dry battery cells and chemical industries

                  Production and 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

                  Items 2004-05 2005-06 2006-07 (up to Dec2006)

                  1 Production

                  a) Manganese Ore (thousand tonne) 94300 86500 82533

                  b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                  c) Ferro Manganese (tonne) 1032500 617000 829400

                  2 Turnover (Rupees in crore) 37878 33409 29463

                  3 Profit before Tax (Rupees in crore) 20227 16900 12087

                  KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                  Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                  90012000 and ISO 14001 company was established in April 1976 to meet the long

                  term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                  was set up at Kudremukh This project was to be financed in full by Iran However as

                  Iran stopped further loan disbursements after paying US $ 255 million the project was

                  completed as per schedule with the funds provided by Government of India While the

                  project was commissioned on schedule consequent upon the political developments

                  in Iran they did not lift any quantity of concentrate As a diversification measure the

                  Government approved the construction of a 3 million tonne per year capacity pellet

                  plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                  million tonne with additionsmodifications The plant went into commercial production

                  in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                  units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                  Plant Mangalore

                  Production

                  A target of 31 million tonne and 305 million tonne was set for production of iron ore

                  concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                  production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                  The target set for production during the year 2006-07 is 305 million tonne of pellets

                  In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                  activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                  production of iron ore concentrate during the year 2006-07 As against a target of 188

                  million tonne of pellets fixed for the period April to November 2006 the actual

                  production was 0275 million tonne which represents 15 target fulfilment There is

                  shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                  production of pellets is on account of operational problems being encountered in the

                  pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                  There was excessive generation of su er fines (slimes) affecting filtration clogging of

                  filters overflow and contamination of process water due to filling of cooling pond

                  affecting production While efforts are continuing to rectify the problems the operation

                  of pellet plant is yet to stabilize and normal production is yet to commence

                  The sales revenue during the last five years and up to November 2006 during 2006-

                  07 is detailed below

                  (Rs in lakh)

                  Years Concentrate Pellets Total

                  2006-07 (up to December 2006) - 12427 12427

                  2005-06 12091 111137 123228

                  2004-05 16050 169327 185377

                  2003-04 20209 82729 102938

                  2002-03 21135 51579 72714

                  2001-02 21571 50598 72169

                  Financial Performance

                  An overview of the performance of KIOCL during the year 2006-07 (up to November

                  2006) together with actuals for the previous three years is indicated below

                  (Rs in lakh)

                  Particulars 2006-07(up to December 2006)

                  2005-06 2004-05 2003-04

                  Total value of Sales 12427 123228 185377 102938

                  Gross Margin 2620 68706 120863 45945

                  Profit after Tax 1029 35630 64984 30070

                  Inventories(excluding finished stock)

                  20417 15843 8720 7616

                  BIRD GROUP OF COMPANIES

                  Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                  the following seven companies came under the administrative control of the Ministry of

                  Steel Government of India

                  (a) The Orissa Minerals Development Company Limited (OMDC)

                  (b) The Bisra Stone Lime Company Limited (BSLC)

                  (c) The Karanpura Development Company Limited (KDCL)

                  (d) Scott amp Saxby Limited (SSL)

                  (e) Eastern Investments Limited (EIL)

                  (f) Burrakar Coal Company Limited (Burrakar)

                  (g) Borrea Coal Company Limited (Borrea)

                  The status of the companies is as under

                  a) Burrakar and Borrea coal companies became non-operational after nationalisation

                  of coal mines The two companies are in the process of liquidation The official

                  liquidator has already taken over the assets and liabilities of these two companies

                  b) EIL being an investment company is having a major stake in the equity shares of

                  operating companies under the Bird Group

                  c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                  Status of the Companies at the Time of Nationalisation

                  At the time when the Bird Group of Companies came under the administrative control

                  of the Ministry of Steel Government of India all of them were financially sick and

                  burdened with various problems With the financial support from the Government of

                  India problems relating mainly to excessive manpower erosion of working capital and

                  outstanding liabilities could be settled to a considerable extent

                  REVIEW OF LITERATURE

                  RS PANDEY sees a bright future for the steel industry in India provided of course

                  the iron ore mining policy to be announced by the government soon acts as a catalyst

                  for growth He discusses the industrys problems and prospects in an interview When

                  asked about the steel sectors ie private and public he expressed his expert views

                  The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                  Excerpts

                  The public sector steel companies in India are doing extremely well And therefore

                  they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                  Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                  Between 1992-93 and now the share of the public sector in steel production had gone

                  down Today its share is 41 per cent while that of the private sector is 59 per cent In

                  1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                  the private sector even in 1992-93 had a 67 per cent share and this has now grown

                  to 71 per cent But the public sector units are growing even if the private sector is

                  growing faster

                  During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                  going to increase its capacity from the current 13 million tonnes of hot metal to 225

                  million tonnes in just four years RINL is set to expand its capacity from three million

                  tonnes to 63 million tonnes in the next three years So that is a major expansion of

                  capacity for the PSUs

                  The public sector should be encouraged all the more Let there be a healthy

                  competition between public and private sector producers The question of exit comes

                  when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                  was at below Rs10 per share Today it is more than Rs130 and the expectations

                  are that it will go up even higher

                  When talked about the labour productivity he says Yes labour productivity is low in

                  SAIL in particular But it is improving The steel major is going to adjust much of its

                  existing manpower in the expansion phase when its capacity is going to almost

                  double The management had also undertaken a massive VRS [voluntary retirement

                  scheme] In RINL labour productivity is not all that bad

                  Besides SAIL has done very well in various other techno-economic parameters in the

                  last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                  per man per year In 2005-06 it went up to 150 tonnes per man per year an

                  improvement of 20 per cent In blast furnace productivity also there has been an

                  improvement as also in the production of high-end special steels and capacity

                  utilisation

                  With the improved turnover which comes from higher capacity use and higher

                  manpower productivity SAILs profits have surged Its gross profit more than doubled

                  between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                  was largely due to the high prices of steel An analysis has shown that as far as SAIL

                  is concerned the higher profit is 29 per cent owing to the price factor in steel and

                  other input costs and 71 per cent owing to improvement in capacity use and other

                  factors that are just mentioned

                  OBJECTIVES

                  To compare Private and Public steel sector with refrence to TATA Steel and

                  Steel Authority Of India

                  To analyse potential of both the companies ie TATA Steel and SAIL

                  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

                  Research Methodology

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

                  a) Research design-

                  In case of my research ldquoComparative analysis of Indian private and Public

                  sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                  found to be more appropriate

                  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

                  Comparison between TATA Steel and Steel Authority of India

                  The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                  significant improvements in the last two years The combined profit before tax of all 15

                  PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                  Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                  The profit before tax for all PSUs also exhibited a significant improvement of

                  around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                  Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                  comparable period of last year

                  Contribution of PSUs to public exchequer has also gone up significantly For

                  example the contribution of five leading companies namely SAIL RINL NMDC

                  KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                  duty dividend corporate tax sales tax royalty etc has gone up by more than double

                  from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                  On the other hand 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

                  During the period (April-December 2006) 205 million tonne of steel was produced by

                  Private Sector steel units out of the total production of 3315 million tonne in the

                  country The private sector units consist of major steel producers in one hand and

                  relatively smaller amp 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

                  For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                  companies on following parameters

                  Production

                  Chart showing production of both the companies

                  Quantity 000 Tonnes

                  2007-08 APR-DEC07APR-

                  DEC06 ACTUA

                  L

                  AGE OF CURRENT

                  PRODUCTION OVER

                  CAPACITY UTILISATION

                  TARGET TENTATIV

                  E

                  TARGET

                  ACTUAL

                  APR-DEC07 TARGE

                  T

                  APR-DEC06 ACTUA

                  L

                  APR-DEC 07

                  APR-DEC06

                  SAIL

                  i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                  ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                  iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                  iv)BSL43500 32630 30970 30010 949 1032 950 910

                  v)ISP5000 3760 3520 3450 936 1020 940 920

                  vi)ASP1470 1070 1140 1130 1065 1009 650 640

                  vii)VISL

                  1390 1050 1160 1190 1105 975 1300 1340

                  TATA 50000 37440 37090 37380 991 992 990 1000

                  TATA Steel

                  The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                  but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                  target of 3744 (mT) but could produce 3709 However for the same period in last

                  year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                  to 99 this year

                  Steel Authority of India

                  The company had a aggregate production target of 13739 (mT) for the year 2007-08

                  but it could produce only 126 (mT) a growth of 4 over the previous year However

                  for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                  10380 as compared to around 10 (mT) for the same period last year SAIL had a

                  capacity utilisation of 103 this year as compared to 101 last year

                  Financials

                  TATA Steel

                  The year 2006-07 has seen the highest turnover and profits continuing the trend

                  of the past four years The Company achieved the best ever sales turnover and

                  profitability during the year under review A robust Indian economy firm steel prices

                  higher volumes and several improvement initiatives contributed to the record

                  performance Finished steel sales were higher by 1133 at 451 million tonnes over

                  the previous year Export turnover was lower by about 5 due to lower volumes

                  Average price realisation improved mainly due to higher prices of hot rolled

                  coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                  (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                  Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                  due to additional borrowings for the Companyrsquos domestic expansion programs and

                  funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                  providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                  crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                  before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                  after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                  20 compared to the previous year

                  The record financial results would not have been possible without a matching

                  performance by the operating departments including the raw materials division The

                  year witnessed the best ever crude steel production by the Company at 505 million

                  tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                  first plant in India to produce more than 5 million tonnes of crude steel in a year The

                  upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                  rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                  Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                  increase in production was backed by improvements in operating practices and

                  productivity resulting in a reduction in consumption of raw materials energy

                  refractories etc

                  Steel Authority of India

                  Financial Year 2006-07 has been eventful year for the company with further

                  momentum in improving operational efficiencies laying strong foundation and building

                  road map for modernisation and expansion of SAIL Plants with several new initiatives

                  undertaken with its human resource at the core During the year the company got the

                  distinction of first metal company in the country to reach a market capitalization of Rs

                  50000 crore

                  There have been improvements in all financial parameters which are shown in

                  the table given below-

                  SAIL set new record in achieving the turnover of Rs39189 crore and profit

                  before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                  previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                  increase of 55

                  Research and Development

                  Chart showing production of both the companies

                  (Rs Crore)

                  TATA Steel

                  The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                  develop galvannealed skin panels It is the only Indian supplier of bake hardening

                  steel for body panels

                  Research is undertaken at Tata Steel in the areas of raw materials including coal

                  coke energy conservation waste utilisation sintering blast furnace productivity and

                  phosphorous reduction product development and improvement in life of plant and

                  machinery The Company spends 7 of its turnover for RampD 17 patents have been

                  sealed and over 100 are in process

                  Steel Authority of India

                  Research and Development Centre for Iron and Steel (RDCIS) has provided

                  innovative technological inputs to different units of SAIL with special emphasis on

                  cost reduction product development and application quality improvement energy

                  conservation and automation Several new products were developed and

                  commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                  Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                  specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                  micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                  Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                  Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                  strengthened its technology marketing efforts by providing consultancy services

                  organising specialised testing and transfer of technological innovations to outside

                  customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                  Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                  Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                  During the year 1998 technical papers were publishedpresented besides filing

                  of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                  awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                  achievements in New Materialsrdquo given by the Ministry of Science and Technology

                  Government of India

                  Environment

                  TATA Steel

                  Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                  Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                  has an ISO-14001 certified service providerlocations are certified to ISO-14001

                  Jamshedpur is the only town in the country which

                  Significant achievements by the Company include an improvement in

                  environment and resource conservation including a reduction in green house erosion

                  raw materials and water consumption The Company has increased waste re-use and

                  re-cycling Constant upgradation and modernisation has resulted in several state-of-

                  the-art pollution control systems being installed to prevent and control pollution The

                  Company has almost doubled its capital investment in Pollution Abatement in the last

                  five years

                  Emissions effluents and wastes

                  Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                  most relevance to the steel industry Considerable reduction has been effected by

                  Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                  granulation is taken into account Other Greenhouse Gas emissions do not result from

                  Tata Steelrsquos activities

                  Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                  tonnes in 2003-04 as against 790 tonnes used during the previous year

                  Hazardous Waste under Basel Convention The Company does not import or export

                  any waste deemed hazardous under the Basel Convention All hazardous wastes

                  generated are handled as per the requirement of the Hazardous Waste Management

                  and Handling Rules 19892000

                  Emissions

                  Tata Steel has undertaken several initiatives which have resulted in

                  considerable reduction in stack emission Emissions are well below the Indian and

                  international standards The emission load including particulate matter Sulphur

                  Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                  undertaken at the Steel Works

                  Waste handling

                  Most of the solid waste generated from Steel Works is recycled or reused 18

                  of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                  was used to fill low-lying areas and for peripheral road construction around

                  Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                  power plants was dumped in a designated dump area

                  Effluent Management

                  Waste water from the steel making process is being treated with best available

                  physio-chemical methods as well as being recycled Waste water from the coke plant

                  is treated biologically where organic pollutants are oxidised and decomposed by micro

                  organisms The Company has reduced the levels of total pollutant discharge in waste

                  water streams from 0211 in 1999-2000 to 0178 in 2003-04

                  Steel Authority of India

                  Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                  environmentally responsible manner to comply with applicable regulations and striving

                  to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                  efficiency and optimize resource consumption through various measures viz

                  improvement in process technology in the areas of raw materials coke iron and steel

                  making reuserecycle of the by-products generated and conservation of energy and

                  water

                  Solid Waste Management

                  During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                  and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                  Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                  these wastes are being made through internal recycling and selling to outside

                  agencies The wastes generated in the steel plants are being utilized mainly through

                  their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                  during April-September 2006

                  Environmental Plantation

                  Trees have a significant role in protection of environment and ecological balance

                  Extensive afforestation programme are being followed in all the plants and mines The

                  basis of choosing the species of plants mainly depends on local soil characteristics

                  and prevailing meteorological conditions The green belt developed by afforestation

                  adds to the aesthetic environment which becomes dust and noise barriers

                  A total number of 145521 saplings have been planted covering an area of 637

                  hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                  hectare in 2004-05 in and around the steel plants of SAIL

                  Environmental Recognitions

                  SAIL plants have been awarded various prizes for environmental management in

                  their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                  the Confederation of Indian Industries (CII) for exemplary performance in the

                  environmental economic andsocial dimensions of sustainable development and the

                  Greentech Environment Excellence Gold AwardGolden Peacock Environment

                  Excellence Award in the metal sector 2005 instuted by the World Environment

                  Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                  for 2005 from International Greenland Society

                  Workforce and Welfare of Society

                  TATA steel

                  Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                  and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                  enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                  provide a work environment that will ensure a sense of purpose and personal growth

                  for each individual The wish of the company is to see the smile on every face

                  everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                  people and enriched empowered and enhanced their lives

                  Even in its nascent years social scientists Sidney and Beatrice Webb were

                  brought in to work on welfare schemes In fact some of the initiatives introduced by

                  Tata Steel were the first of their kind in India and some even in the western countries

                  at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                  source of its competitiveness It focuses on constantly updating and challenging

                  intellectual capabilities to enable them to excel in performance Special efforts are

                  made for enhancing strategic thinking skills and analytical abilities of its managers and

                  workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                  available with its people through Knowledge Management and sharing of best

                  practices

                  In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                  mutual co-operation coordination and understanding between the Management and

                  the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                  among many other prestigious awards and recognition Tata Steel aims at ensuring

                  transparency fairness and equity in all its interactions with its employees to create an

                  enthused and happy workforce

                  In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                  assistance in the fields of education vocational training self-employment and

                  family welfare

                  Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                  12 times This facility provides on-the-spot diagnostic medical and advanced

                  surgical treatment for preventive and curative interventions to people in

                  inaccessible rural areas

                  Sir Dorab Tata personally financed four athletes and two wrestlers from India

                  for the 1920 Antwerp Olympics

                  The JRD Sports Complex an international stadium with an 8-lane polyurethane

                  track was inaugurated in 1991 The complex also houses facilities for handball

                  tennis volleyball hockey basketball boxing table tennis and a modern

                  gymnasium

                  The Tata Steel Family Initiatives Foundation is engaged in off ering health

                  services for the betterment of the people in and around Jamshedpur

                  At times of natural calamities the company has rushe immediate relief and off

                  ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                  fl ood ravaged Orissa and other such aff ected areas

                  Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                  er a unique environment for the children of Jamshedpur to grow up in

                  In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                  Jamshedpur has emerged as the one of the best cities in India

                  Steel Authority of India

                  The manpower strength as on 31st March 2006 was 138211 comprising 15206

                  executives and 123005 non-executives The total reduction in manpower achieved

                  during the year stood at 4864 which included separation of 881 employees through

                  voluntary retirement The labour productivity improved by around 12 over previous

                  year to 150 tonne crude steelmanyear

                  Some of the areas of assistance which are available to the weaker sections are the

                  following

                  The company has provided land for construction of school buildings in some of

                  the steel townships as well as in other places for spreading education among

                  the masses

                  The company has constructed roads in remote areas around the steel plants

                  and also where the captive mines are located to improve communication and

                  also increase activities such as organisation of health camps school facilities

                  drinking water etc under the peripheral development schemes

                  Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                  Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                  providing them with education boarding and lodging facilities

                  Construction of bridges by-pass roads metal-morum path waterways

                  levellingdressing area around township pre-mixed roads Installation of hand-

                  pumps tube wells and wells for villagers

                  Construction of school buildings (including for mentally retarded deaf and

                  dumb children) madarsas providing school furniture therein and construction

                  of hostels womenrsquos college building etc

                  Fourteen scholarships are awarded to deserving SCST undergraduate

                  engineering students in various disciplines to encourage technical education

                  among them

                  In many cases tuition fee in company run schools is exempt for SCST

                  students Steps are taken to provide education to more and more tribal children

                  in company schools

                  The unemployed SCST youth are given specialized training in various

                  technical trades to develop skill and knowledge Such training is provided free

                  of cost

                  Adult literacy campaign is carried out in most of the steel townships Every year

                  more and more men and women are being covered in this campaign

                  Development of fishery and cottage industry providing sewing machines to

                  village mahila mandals and promoting other self-employment generation

                  schemes

                  SAIL has established a hockey academy with stadium and hostel facilities at

                  Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                  academy was successful in spotting a number of young talented tribal players

                  and grooms them under expertise of ex-Olympian

                  Technology

                  The biggest boost to efficiency in the steel industry has come from the increased

                  use of continuous casting ndash an indicator of the modernity of the production process Its

                  share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                  now India is thus well on its way to joining the ranks of the leading steelmakers

                  among the industrial nations (share in EU-25 96) However in India some 6 of

                  crude steel is still made using the outdated open-hearth process (EU-25 03) which

                  suggests there is restructuring potential

                  TATA Steel

                  Tata Steels stall at the International Trade Fair was adjudged the best along

                  with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                  international companies also took part in the exhibition Participating companies from

                  countries all over the world exhibited latest technologies and know-how List of

                  participating companies included Baosteel SAIL Heavy Engineering Corporation

                  Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                  companies of national and international repute China was the partner country for the

                  International Trade Fair this year

                  In the award winning exhibition Tata Steel showcased its best coal mining practices

                  cutting-edge technology used in iron ore mining pioneering human resource

                  practices 78 years of industrial harmony and various other aspects of the worlds best

                  steel company

                  The 6th International Trade Fair and Conference an institutionalised global

                  event is considered to be one of the most prestigious forums for national as well

                  international participants It is a conclave of the finest minds concerned with the future

                  direction and growth of these sectors The forum provided the worlds most eminent

                  metallurgists manufacturers of metallurgical and mining machinery and related

                  sectors professionals analysts and experts with the opportunity to exchange views on

                  emerging technologies synergy and strengths and open up wider horizons for

                  sectorial development

                  Tata Steel to adopt Corus technology

                  Tata Steel plans to implement alternate technology used by the British steel

                  maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                  production according to Mr B Muthuraman Managing Director Tata Steel

                  ldquoWe are looking at alternate technology Corus has developed an alternate

                  technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                  newspersons on the sidelines of the 34th National Management Convention organised

                  by the All-India Management Association However he declined to give further details

                  on the type of technology the Indian steel giant plans to implement

                  Steel Authority of India

                  Modernisation holds the key to SAILs fortunes in the near future The objective

                  of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                  and productive capacity and in the process become more energy-efficient and

                  improve quality The key component of the ongoing modernisation drive - already

                  completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                  ingot casting facilities with basic oxygen furnaces for steel-making and employing

                  continuous casting techniques A senior SAIL official says Continuous casting and

                  basic oxygen furnaces ensure better quality steel through processes more easily

                  monitored for quality control The basic oxygen surfaces method is significantly faster

                  more automated and permits greater flexibility Continuous casting is more efficient

                  than the traditional ingot casting methods and gives increased yields while enabling

                  better quality standards SAIL is also modernising its finishing mills and is adding

                  secondary refining facilities to improve quality

                  Safety measures

                  A unique feature of safety management in steel industry is that a bipartite forum

                  named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                  was formed in 1973 at national level having representatives from steel plants in SAIL

                  RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                  Committee With a view to inculcate safety consciousness JCSSI organises seminars

                  workshops training programme safety competitions for member organisations JCSSI

                  with the co-operation and support of Trade Union representatives formulates policies

                  and guidelines for its member plants and monitors the implementation

                  Tata Steel

                  Safety has always been a prime focus at Tata Steel A Safety Committee a

                  Safety department and a Safety Trophy helped spread the message all across the

                  company

                  TATA reaffirms its commitment to provide safe working place and clean

                  environment to its employees and other stakeholders as an integral part of its

                  business philosophy and values We will continually enhance our Environmental

                  Occupational Health amp Safety (EHS) performance in our activities products and

                  services through a structured EHS management framework Towards this

                  commitment we shall

                  Establish and achieve EHS objectives and targets

                  Ensure compliance with applicable EHS legislation and other requirement and

                  go beyond

                  Conserve natural resources and energy by constantly seeking to reduce

                  consumption and promoting waste avoidance and recycling measures

                  Eliminate minimize andor control adverse environmental impacts and

                  occupational health and safety risks by adopting appropriate state-of-the-art

                  technology and best EHS management practices at all levels sand functions

                  Enhance awareness skill and competence of our employees and contractors

                  so as to enable them to demonstrate their involvement responsibility and

                  accountability for sound EHS performance

                  Steel Authority of India

                  SAIL has a separate corporate unit called the SAIL Safety Organisation to

                  monitor safety system amp activities- SAIL also has a comprehensive safety policy

                  Annual Performance Plans (APP) for the areas of safety and fire services are

                  formulated and review of implementation of APP is done during Heads of

                  Safety meeting

                  Internal and external safety audits of major departments particularly hazardous

                  areas are conducted every year and points arising from these audits are

                  liquidated Safety aspects have been incorporated in standard operating

                  practices (SOP) and standard maintenance practices (SMP)

                  All major capital repairsshut downs are closely monitored round the clock

                  Periodic drives are conducted to inculcate safety awarenessculture up to

                  grass-root level apart from regular inspections as per checklists to identify

                  unsafe conditionsacts

                  Safety training is imparted to target group employees at various levels HRD

                  intervention in the area of safety covers Heads of Departments Line Managers

                  amp Departmental Safety Officers Besides area specific workshops are

                  conducted at different locations on important topics like gas safety railroad

                  safety safety in iron steel amp coke making etc

                  Consistent efforts were made by SAIL Safety Organisation for improving safety

                  standards in the company by taking measures like intensive safety drives in works

                  area and conducting safety audits in hazardous departments of different plants and

                  mines In addition specific workshops on safety aspects were organised in various

                  SAIL steel plants

                  Measures taken by Indian government to improve the industry

                  Now letrsquos 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-

                  1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                  among others was removed from the list of industries reserved for the public

                  sector and also exempted from the provisions of compulsory licensing under the

                  Industries (Development and Regulation) Act 1951

                  2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                  of `high priority industries for automatic approval for foreign equity investment up

                  to 51 This limit has been recently increased to 100

                  3 Price and distribution of steel were deregulated from January 1992 At the same

                  time it was ensured that priority continued to be accorded for meeting the

                  requirements of small scale industries exporters of engineering goods and North

                  Eastern Region of the country besides strategic sectors such as Defence and

                  Railways

                  4 The trade policy has been liberalised and import and export of iron and steel is

                  freely allowed There are no quantitative restrictions on import of iron and steel

                  items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                  regulating the imports is the tariff mechanism Tariffs on various items of iron and

                  steel have drastically come down since 1991-92 levels and the government is

                  committed to bring them down to the international levels In Chapter 72 there are

                  two items viz 72042110 and 72042910 which fall in the restricted list of imports

                  5 Iron amp Steel are freely importable as per the Extant Policy

                  6 Iron amp Steel are freely exportable

                  7 Advance Licensing Scheme allows duty free import of raw materials for exports

                  8 The floor price for seconds and defectives continues till date

                  9 Imports of seconds and defectives of steel are allowed only through three

                  designated ports of Mumbai Calcutta and Chennai

                  10Mandatory pre inspection certificate by a reputed international agency for every

                  import consignment of seconds and defectives

                  11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                  10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                  the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                  per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                  15 per cent to 5 per cent

                  12Further customs duty on several raw materials used by the steel sector like

                  noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                  coking coal to zero

                  13To bring down the prices of steel the excise duty on steel products was reduced

                  from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                  that the duty regime will be reviewed Budget 2004-05 revised this partially by

                  increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                  cut on moderating prices was not achieved

                  14The union Budget 2007-08 the import duty on seconds and defective has been

                  further reduced from 20 to 10

                  Special assistance being provided by Ministry of Steel to Private Sector

                  1 Ministry of Steel is extending all possible support as detailed below for the

                  development of Iron and Steel Sector in the country

                  2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                  new plants and expansion of existing ones wherever applied for

                  3 To ensure an un-interrupted supply of raw materials to the producers

                  4 The Ministry has been interacting with All India Financial institutions to expedite

                  clearance of projects

                  5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                  Plants are held at the level of Secretary

                  6 Ministry of Steel identifies infra-structural and related facilities required by steel

                  industry so that their absence does not lead to bottlenecks in the future growth of

                  the Iron and Steel Sector and takes up these issues with the concerned ministries

                  7 The Ministry has encouraged the setting up of Institute for Steel Development and

                  Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                  country are members of this Institute which has been set up with the objective of

                  promoting developing and propagating the proper and effective use of steel

                  8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                  major steel plants being implemented Govt has setup a Project Coordination

                  Group under the Chairmanship of Steel Minister

                  NATIONAL STEEL POLICY 2005

                  The progress of the steel industry has a critical influence on the pace of Indiarsquos

                  development and as such great importance is attached to capacity expansion in line

                  with expected demand at cost and prices which make Indian steel internationally

                  competitive The existing regime of liberalization decontrol and deregulation of

                  industry in the country has opened up new opportunities for the expansion of the steel

                  industry With a view to accelerating the growth of the steel sector and attaining the

                  vision of India becoming a developed economy by 2020 the Ministry of Steel

                  formulated a National Steel Policy (NSP) in 2005

                  The following salient features can be derived after analysing the NSP 2005

                  The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                  towards reform restructuring and globalisation

                  The long-term goal of the NSP is that India should have a modern and efficient

                  steel industry of world standards catering to diversified steel demand The focus of

                  the policy is to achieve global competitiveness not only in terms of cost quality and

                  product-mix but also in terms of global benchmarks of efficiency and productivity

                  In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                  NSP seeks to remove the supply-side constraints to the growth of this industry in

                  an open globally integrated and competitive environment

                  The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                  policy goal On the demand side the strategy would be to create incremental

                  demand through promotional efforts creation of awareness and strengthening the

                  delivery chain particularly in rural areas On the supply side the strategy would be

                  to facilitate creation of additional capacity remove procedural and policy

                  bottlenecks in the availability of inputs such as iron ore and coal make higher

                  investments in RampD and encourage the creation of infrastructure such as roads

                  railways and ports

                  The NSP acknowledges the low per capita consumption of steel in the country

                  especially in the rural areas and the need to boost steel consumption to improve

                  quality of life and help in meeting the growing aspirations of masses

                  In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                  industry would need additional capital In addition funds would be required for

                  technological upgrade of existing facilities In order to mobilize such vast resources

                  NSP seeks to encourage foreign direct investment In addition the policy also

                  seeks to make the fiscal incentives available to infrastructure projects accessible

                  to the steel industry

                  The NSP seeks to support developing of risk-hedging instruments like futures and

                  derivatives to contain price volatility in the steel market

                  The NSP seeks to strengthen the existing training and research facilities available

                  to the domestic steel industry so as to provide suitable training programmes

                  especially for the secondary small-scale units and also to collect and analyse data

                  on important parameters of the industry

                  The NSP seeks to mount aggressive RampD efforts to create manufacturing

                  capability for special types of steel substitute coking coal use iron ore fines

                  develop new products suited to rural needs enhance material and energy

                  efficiency utilize waste and arrest environmental degradation

                  The NSP acknowledges the important role played by the secondary steel sector in

                  providing employment meeting local demand of steel in rural and semi-urban

                  areas and meeting the countryrsquos demand of some special products and seeks to

                  endeavour to provide the necessary feedstock to these units at reasonable prices

                  from major plants through the existing mechanism of State Small Industries

                  Corporations

                  The NSP recognizes the fact that integration of the Indian steel industry with the

                  global economy requires that the industry should be protected from unfair trade

                  practices The NSP therefore envisages institution of mechanisms for import

                  surveillance and monitoring export subsidies in other countries

                  The present per capita consumption of steel in the country is very low compared to the

                  world average As mentioned above one of the objectives of the NSP is to augment

                  the demand and consumption of steel in the country by conscious promotion of steel

                  usage With a view to create a mass awareness campaign on conscious promotion of

                  steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                  the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                  The Committee is being serviced by Institute for Steel Development and Growth

                  (INSDAG) The objective of the Committee is to promote steel usage in the country by

                  way of an awareness campaign with particular emphasis on rural sectors The

                  Committee also aims at educating the designers architects builders and planners

                  regarding the qualitative and cost effective applications of steel in various structures

                  including buildings bridges flyovers and airports

                  FUTURE OF INDIAN STEEL INDUSTRY

                  India is amongst a few countries in the world having the dual advantage of fast

                  growing domestic demand coupled with access to raw materials Further the trend

                  that is already discernible is that the axis of global steel production consumption is

                  shifting towards Asia With their large populations China and India already account for

                  35 of the total world steel production - more than double of Europe Asia is

                  expected to outpace other regions of the world to an even greater extent in the coming

                  years

                  Amongst the Asian nations China has established a huge unbridgeable lead It

                  is accepted that China will continue to be the leader However India is slated to

                  emerge as the second Asian giant in the next eight years Figuratively speaking while

                  the Dragon has reached maturity the Lotus is about to bloom in resplendent

                  splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                  China swallowed almost 32 of global steel It is unlikely that future production and

                  consumption would continue to flourish at growth rates of 8 and 18 respectively as

                  has been the case over the last few years On the other hand it is sun-rise time for

                  India where the demand has increased by 7-8 in the last couple of years In the long

                  run Indian steel is likely to be more cost-effective since unlike China India has

                  relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                  can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                  However the position with coal is not so favourable Though thermal coal

                  reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                  traditional blast furnace route would require coking coal India does not have adequate

                  reserves of coking coal nor is the meagre amount available of appropriate quality

                  Thus the steel industry always had to contend with the dual problems of inadequate

                  availability and poor quality of Indian coking coal This has been partly addressed by

                  adopting alternative iron making processes that are not dependent on coking coal it

                  can not be denied that coal is the biggest cause for concern for bulk steel production

                  in India

                  Because of the shortage of indigenous coal attempts have been made by steel

                  producers to ensure long-term supplies by tying up with global majors or by acquiring

                  mines in other countries This is the only long-term solution but with a global shortage

                  of coal it may not remain cost-effective in the long run

                  India is the seventh largest producer of steel and may further improve its position

                  going by the current trends A series of investment decisions by major domestic

                  players and international steel giants such as Steel Authority of India Ltd Tata Steel

                  POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                  The keen interest shown by various prospective investors is not only due to

                  expectations of strong growth in domestic demand but also due to indigenous

                  availability of key resources like iron ore and skilled workforce

                  After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                  steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                  finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                  2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                  consumption has accelerated to 91 per cent

                  With the likely growth of Indian economy at around 7 per cent per annum

                  demand for steel is expected to remain strong and is projected to reach a level of 90

                  million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                  demand is sustainable considering the fact that Indias per capita consumption of steel

                  is still very low at 31 kgs per head compared to the world average of 145 kgs The

                  very low level of per capita consumption of steel in India is highlighted further when

                  compared with the consumption levels of its peer group consisting of countries like

                  China Brazil Mexico and Republic of Korea as also with selected developed

                  countries

                  Though there are realistic constraints in India to achieving as rapid a growth as in

                  China there seems to be consensus among analysts that India is likely to witness a

                  growth rate in steel consumption higher than the historically observed rate of 6 to 7

                  percent If the growth rate (9 per cent) of last three years is maintained then we will

                  achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                  more conservative due to cyclicity of steel business it may be mentioned that in a

                  country like India cyclicity is more in terms of prices rather than volumes of production

                  Exports

                  Similar optimism prevails with regard to export of iron and steel Export of steel

                  starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                  2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                  rising domestic demand and low capacity additions Exports now constitute around 17

                  per cent of total production and Indias presence in the developing and developed

                  world is being increasingly felt Indian steel producers have recently been able to

                  supply specialized grades and products used for sophisticated applications like

                  automobiles On the cost front some of our producers are counted amongst the least

                  cost producers of the world For an average reference plant India is competitively

                  placed in the middle of the hierarchy of steel producing nations

                  However we have a long way to go to catch up with the leading exporters of the

                  world such as Japan the CIS countries Brazil etc It is however expected that by

                  2019-20 India will be able to export around 26 million tonnes of steel representing 24

                  per cent of total projected production The projected export ratio compares well with

                  the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                  The projected production of steel by 2019-20 to meet the domestic and export

                  demand will be around 110 million tonnes Management of resources and

                  infrastructural growth is going to be critical in achievement of the production level

                  envisaged The broad requirements of various resources will increase manifold from

                  the current level The bottlenecks in availability of critical inputs and various facilities

                  need to be removed through concerted efforts of Government and industry The broad

                  strategy to overcome these constraints as well as meet the strategic goals of the steel

                  sector has been discussed in the National Steel Policy which has been recently

                  approved by the Government

                  As stated earlier the long-term goal of the National Steel Policy is that India

                  should have a modern and efficient steel industry of world standards catering to a

                  diversified steel demand The focus of the policy is to achieve global competitiveness

                  not only in terms of cost quality and product mix but also in terms of global

                  benchmarks of efficiency and productivity The policy envisages adopting a multi-

                  pronged strategy to achieve these goals On the demand side the strategy would be

                  to create incremental demand through promotional efforts creation of awareness and

                  strengthening the delivery chain particularly in rural areas On the supply side the

                  strategy would be to facilitate creation of additional capacity remove procedural and

                  policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                  investments in RampD and HRD and encourage the creation of infrastructure such as

                  roads railways and ports

                  The production figures exports and imports of finished carbon steel and pig iron

                  and apparent consumption patterns of finished carbon steel as indicated by TATA

                  Steel and SAIL attest to the continuing growth for both the sectors

                  FINDINGS

                  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 increased its profit over the year particularly in 2006-07

                  Both the companies are planning to adopt modern technology which is going to

                  help them to compete in world market but they need to be less dependent on

                  state of art technology and coal for long term prospects

                  Public sector has undergone retrenchment for the employees and improved

                  has its lobour productivity but it is still lacking behind as compared to private

                  sector

                  SAIL has reduced the no of accidents due to improper handling of machinery

                  still no of accidents are more than that of TATA Steel

                  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

                  ie 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 have to be met

                  comprehensively if we are to take our legitimate place in the world as a developed

                  nation by 2020

                  BIBLIOGRAPHY

                  Annual report (2006-07) published by ministry of steel

                  Annual report (2006-07) published by TATA Steel

                  Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                  REPORTrsquo posted by SAIL on its website

                  lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                  held on 07 Nov 2006

                  Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                  wwwsteelnicin (Official website of ministry of industry)

                  wwwtatasteelcom (Official website of TATA Steel)

                  wwwsailcoin (Official website of Steel Authority of India)

                  wwwworldsteelorg (official website of International Iron amp Steel Institute)

                  wwwjpcindiansteelnicin (Website of joint planning committee)

                  • DATA ANALYSIS
                  • Comparison between TATA Steel and Steel Authority of India
                  • Production
                  • Quantity 000 Tonnes
                  • Financials
                  • Research and Development
                  • (Rs Crore)
                  • TATA Steel
                  • Steel Authority of India
                  • Environment
                  • TATA Steel
                  • Emissions effluents and wastes
                  • Emissions
                  • Waste handling
                  • Effluent Management
                  • Steel Authority of India
                  • Solid Waste Management
                  • Environmental Plantation
                  • Environmental Recognitions
                  • Workforce and Welfare of Society
                  • TATA steel
                  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                  • Steel Authority of India
                  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                  • Technology
                  • Steel Authority of India
                  • Safety measures
                  • Tata Steel
                  • Steel Authority of India
                  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                  • Measures taken by Indian government to improve the industry
                  • Now letrsquos 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-
                  • Special assistance being provided by Ministry of Steel to Private Sector
                  • FUTURE OF INDIAN STEEL INDUSTRY

                    Tata Steel has numerous joint ventures and subsidiaries Among them are

                    Tinplate Company of India

                    Tayo Rolls

                    Tata Ryerson

                    Tata Refactories

                    Tata Sponge Iron

                    Tata Metaliks

                    Tata Pigments

                    Jamshedpur Injection Powder (Jamipol)

                    TM International Logistics

                    mjunction services

                    TRF

                    Jamshedpur Utility and Service Company (JUSCO)

                    The Indian Steel and Wire Products(ISWP)

                    Lanka Special Steel

                    Sila Eastern Company

                    ESSAR STEEL LTD

                    Essar Steel is an integrated steel producer with operations all along the value

                    chain Essar Steel produces some of the worldrsquos best steel at its state-of-the-art steel

                    complex at Hazira Gujarat It is also Indiarsquos largest exporter of flat products sending

                    half of its production abroad mainly to the highly demanding markets of the west and

                    the growth markets of South East Asia and Middle East Essar ensures excellent

                    customer services through a modern distribution network

                    Essar Steelrsquos core manufacturing facilities are located at its steel complex in

                    Hazira Gujarat The Hazira complex includes a 55 million tonne per annum Hot

                    Briquetted Iron (HBI) plant a 46 mtpa continuous caster slab facility a 36 million

                    tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold roll mill complex with all

                    down stream facilities The facilities are complemented by its own 80 mtpa pellet plant

                    at Vishakapatnam and 04 million tonne per annum cold rolled coil plant at Indonesia

                    Expansion

                    Presently Essar Steel has embarked upon a capacity expansion for

                    enhancement of its production capacity from 46 million tonne per annum to 76 million

                    tonne per annum The capacity expansion programme will consist of 2 units of Corex

                    units of 15 million tonne per annum each Further value addition will be carried out by

                    Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

                    Mill

                    Products

                    All Essar Steelrsquos products are world class meeting the highest international

                    standards supported by excellent marketing and service

                    JSW STEEL LTD

                    JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

                    process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

                    coke making ndash iron making through blast furnace as well as Corex process ndash steel

                    making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

                    facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

                    tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

                    tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

                    Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

                    casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

                    technology

                    JSW Steel has a distinction of being certified to ISO-90012000 Quality

                    management system ISO-140011996 environment management system and OHSAS

                    180011999 occupational health and safety management system

                    During this year JSW Steel has also been conferred with a number of awards

                    Production Performance

                    (in million tonne)

                    Items 2003-04 2004-05 2005-06 April-Dec06

                    Pellets 325 361 380 293

                    Hot Metal 163 196 240 219

                    Slabs 161 187 225 195

                    Hot Rolled Coils 154 178 210 148

                    JINDAL STEEL AND POWER LTD (JSPL)

                    Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

                    business interests in steel power generation mining iron ore coal and diamond

                    explorationmining The current turnover of the company is over Rs 3000 crore JSPL

                    is the worldrsquos largest producer of coal based sponge iron The product range

                    encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

                    rails and H beams and columns in technical collaboration with JFE Corporation

                    Japan These H-beams are the most desired option of structural engineers worldwide

                    JSPL is the largest private sector investor in the state of Chhattisgarh with a total

                    investment commitment of more than Rs 10000 crore The company is also setting

                    up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

                    5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

                    Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

                    watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

                    4500 crore JSPL has been rated as one of the best environmentally managed

                    companies in India and committed to environment protection as an integral part of

                    their business activities

                    ISPAT INDUSTRIES LTD (IIL)

                    Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

                    Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

                    rolled coils per annum The plant has got a 224 million tonne per annum sintering

                    plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

                    based sponge iron plant IIL have uniquely combined the usage of hot metal and

                    sponge iron in the electric arc furnace for production of liquid steel for the first time in

                    India IIL have also adopted the state-of-art technology called Compact Strip

                    Production (CSP) process which has been installed for the first time in India and

                    produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

                    products are accepted in the domestic and international market

                    The production performance of IIL during last three years has been as follows

                    (in million tonne)

                    Items 2003-04 2004-05 2005-062006-07

                    (Up to Dec06)

                    Hot Metal 129 140 142 114

                    Sponge Iron 106 105 089 085

                    Hot Rolled Coils 162 197 215 197

                    The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

                    with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

                    global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

                    Demag the technology supplier

                    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

                    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 SAILs equity and retains voting

                    control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

                    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 Companys iron ore limestone and dolomite

                    mines The company has the distinction of being Indiarsquos largest producer of iron ore

                    and of having the countryrsquos 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

                    SAILs 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

                    SAILs 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

                    With technical and managerial expertise and know-how in steel making gained

                    over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                    services and consultancy to clients world-wide

                    SAIL has a well-equipped Research and Development Centre for Iron and Steel

                    (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                    for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                    Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                    Ranchi Our captive mines are under the control of the Raw Materials Division in

                    Kolkata The Environment Management Division and Growth Division of SAIL operate

                    from their headquarters in Kolkata Almost all our plants and major units are ISO

                    Certified

                    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

                    Subsidiary

                    Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                    Joint Ventures

                    SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                    NTPC SAIL Power Company Pvt Ltd

                    Bokaro Power Supply Company Pvt Limited

                    Mjunction Services Limited

                    SAIL-Bansal Service Centre Ltd

                    Bhilai JP Cement Ltd

                    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

                    MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                    Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                    producer of ferro manganese and silico manganese for captive use of SAIL plants

                    The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                    crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                    paid-up capital

                    Financial Performance

                    During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                    (including conversion income of Rs 17110 crore) and made a net profit after tax of

                    Rs 2097 crore The turnover and net profit after tax of the company during April

                    2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                    (provisional) respectively

                    Production Performance

                    The production of all grades of ferro alloys during 2005-06 is as under

                    (in tonne)

                    Materials 2005-06 April- Dec 2006

                    High Carbon Ferro Manganese 51525 49493

                    Silco Manganese 46712 32921

                    Medium Carbon Ferro Manganse 2344 164

                    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 was commissioned in August

                    1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                    million tonne per annum capacity Right from the year of its integrated operation VSP

                    established its presence both in the domestic and international markets with its

                    superior quality of products VSP has been awarded all the three International

                    Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                    180011999 The company has taken significant strides in the area of Corporate

                    Social Responsibility

                    Production Performance

                    (in million tonne)

                    Items 2004-05 2005-06 2006-07 (April-Dec06)

                    Hot Metal 3920 4153 3040

                    Liquid Steel 3560 3603 2676

                    Saleable Steel 3173 3237 2419

                    NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                    Incorporated on November 15 1958 the National Mineral Development Corporation

                    Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                    developing and exploiting mineral resources of the country (other than coal oil

                    natural gas and atomic minerals) At present its activities are concentrated on mining

                    of iron ore diamonds and silica sand

                    NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                    (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                    Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                    activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                    from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                    Supreme Court of India NMDC is following up the case for early hearing

                    All the iron ore production units have been accredited with ISO 90012000 and ISO

                    140012004 certifications RampD Centre of NMDC was also accredited with ISO

                    90012000 certification

                    Iron Ore

                    NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                    December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                    (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                    MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                    exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                    Capital Structure

                    The authorised share capital of the company is Rs 150 crore The paid up equity

                    share capital was Rs 13216 crore Outstanding loans from Government of India are

                    nil

                    Financial Performance

                    The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                    Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                    SalesTurnover222655 371092 2790

                    Gross Margin128749 2889 2455

                    Profit Before Tax122365 277013 2410

                    MSTC LTD

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

                    Enterprise was set up on September 9 1964 as a canalising agency for the export of

                    scrap from the country With the passage of time the Company emerged as the

                    canalising agency for the import of scrap into the country Import of scrap was de-

                    canalised by the Government in 1991-92 and MSTC has since then moved on to

                    marketing ferrous and miscellaneous scrap arising out of steel plants and other

                    industries and importing coal coke petroleum products semi finished steel products

                    like HR coils and export of primarily iron ore The company has also established an e-

                    auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                    developed an e-procurement portal in house

                    Capital Structure

                    The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                    220 crore as on 31122006 of which approximately 90 is held by Government of

                    India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                    Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                    bonus shares issued in the year 1993-94 in the ratio 11

                    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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                    handling of BOF slag etc

                    Financial Performance

                    Particulars 2004-05 2005-06 2006-07 (Apr-

                    Dec2006)

                    Total Turnover ie Service charges realised including miscellaneous Incomeetc

                    981822 1067937 765557

                    Gross Margin before Interest amp Depreciation 167879 186514 105284

                    Interest amp Depreciation 83014 100970 84728

                    Profit before Tax 84865 85544 20556

                    MANGANESE ORE (INDIA) LTD (MOIL)

                    Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                    of manganese ore in India At the time of inception 49 of its shares were held by the

                    Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                    proportion by Government of India and the State Governments of Madhya Pradesh 17

                    and Maharashtra Subsequently in 1977 the Government of India acquired the

                    shares held by CPMO in MOIL and MOIL became a wholly owned Government

                    company with effect from October 1977 As on 30112006 Government of India held

                    8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                    holding 961 and 882 shares respectively

                    MOIL Produces and Sells following Grades of Manganese Ore

                    1048708 High grade ores for production of ferro manganese

                    1048708 Medium grade ores for production of silico manganese

                    1048708 Blast furnace grade ore required for production of hot metal

                    1048708 Dioxide ore for dry battery cells and chemical industries

                    Production and 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

                    Items 2004-05 2005-06 2006-07 (up to Dec2006)

                    1 Production

                    a) Manganese Ore (thousand tonne) 94300 86500 82533

                    b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                    c) Ferro Manganese (tonne) 1032500 617000 829400

                    2 Turnover (Rupees in crore) 37878 33409 29463

                    3 Profit before Tax (Rupees in crore) 20227 16900 12087

                    KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                    Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                    90012000 and ISO 14001 company was established in April 1976 to meet the long

                    term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                    was set up at Kudremukh This project was to be financed in full by Iran However as

                    Iran stopped further loan disbursements after paying US $ 255 million the project was

                    completed as per schedule with the funds provided by Government of India While the

                    project was commissioned on schedule consequent upon the political developments

                    in Iran they did not lift any quantity of concentrate As a diversification measure the

                    Government approved the construction of a 3 million tonne per year capacity pellet

                    plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                    million tonne with additionsmodifications The plant went into commercial production

                    in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                    units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                    Plant Mangalore

                    Production

                    A target of 31 million tonne and 305 million tonne was set for production of iron ore

                    concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                    production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                    The target set for production during the year 2006-07 is 305 million tonne of pellets

                    In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                    activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                    production of iron ore concentrate during the year 2006-07 As against a target of 188

                    million tonne of pellets fixed for the period April to November 2006 the actual

                    production was 0275 million tonne which represents 15 target fulfilment There is

                    shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                    production of pellets is on account of operational problems being encountered in the

                    pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                    There was excessive generation of su er fines (slimes) affecting filtration clogging of

                    filters overflow and contamination of process water due to filling of cooling pond

                    affecting production While efforts are continuing to rectify the problems the operation

                    of pellet plant is yet to stabilize and normal production is yet to commence

                    The sales revenue during the last five years and up to November 2006 during 2006-

                    07 is detailed below

                    (Rs in lakh)

                    Years Concentrate Pellets Total

                    2006-07 (up to December 2006) - 12427 12427

                    2005-06 12091 111137 123228

                    2004-05 16050 169327 185377

                    2003-04 20209 82729 102938

                    2002-03 21135 51579 72714

                    2001-02 21571 50598 72169

                    Financial Performance

                    An overview of the performance of KIOCL during the year 2006-07 (up to November

                    2006) together with actuals for the previous three years is indicated below

                    (Rs in lakh)

                    Particulars 2006-07(up to December 2006)

                    2005-06 2004-05 2003-04

                    Total value of Sales 12427 123228 185377 102938

                    Gross Margin 2620 68706 120863 45945

                    Profit after Tax 1029 35630 64984 30070

                    Inventories(excluding finished stock)

                    20417 15843 8720 7616

                    BIRD GROUP OF COMPANIES

                    Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                    the following seven companies came under the administrative control of the Ministry of

                    Steel Government of India

                    (a) The Orissa Minerals Development Company Limited (OMDC)

                    (b) The Bisra Stone Lime Company Limited (BSLC)

                    (c) The Karanpura Development Company Limited (KDCL)

                    (d) Scott amp Saxby Limited (SSL)

                    (e) Eastern Investments Limited (EIL)

                    (f) Burrakar Coal Company Limited (Burrakar)

                    (g) Borrea Coal Company Limited (Borrea)

                    The status of the companies is as under

                    a) Burrakar and Borrea coal companies became non-operational after nationalisation

                    of coal mines The two companies are in the process of liquidation The official

                    liquidator has already taken over the assets and liabilities of these two companies

                    b) EIL being an investment company is having a major stake in the equity shares of

                    operating companies under the Bird Group

                    c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                    Status of the Companies at the Time of Nationalisation

                    At the time when the Bird Group of Companies came under the administrative control

                    of the Ministry of Steel Government of India all of them were financially sick and

                    burdened with various problems With the financial support from the Government of

                    India problems relating mainly to excessive manpower erosion of working capital and

                    outstanding liabilities could be settled to a considerable extent

                    REVIEW OF LITERATURE

                    RS PANDEY sees a bright future for the steel industry in India provided of course

                    the iron ore mining policy to be announced by the government soon acts as a catalyst

                    for growth He discusses the industrys problems and prospects in an interview When

                    asked about the steel sectors ie private and public he expressed his expert views

                    The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                    Excerpts

                    The public sector steel companies in India are doing extremely well And therefore

                    they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                    Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                    Between 1992-93 and now the share of the public sector in steel production had gone

                    down Today its share is 41 per cent while that of the private sector is 59 per cent In

                    1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                    the private sector even in 1992-93 had a 67 per cent share and this has now grown

                    to 71 per cent But the public sector units are growing even if the private sector is

                    growing faster

                    During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                    going to increase its capacity from the current 13 million tonnes of hot metal to 225

                    million tonnes in just four years RINL is set to expand its capacity from three million

                    tonnes to 63 million tonnes in the next three years So that is a major expansion of

                    capacity for the PSUs

                    The public sector should be encouraged all the more Let there be a healthy

                    competition between public and private sector producers The question of exit comes

                    when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                    was at below Rs10 per share Today it is more than Rs130 and the expectations

                    are that it will go up even higher

                    When talked about the labour productivity he says Yes labour productivity is low in

                    SAIL in particular But it is improving The steel major is going to adjust much of its

                    existing manpower in the expansion phase when its capacity is going to almost

                    double The management had also undertaken a massive VRS [voluntary retirement

                    scheme] In RINL labour productivity is not all that bad

                    Besides SAIL has done very well in various other techno-economic parameters in the

                    last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                    per man per year In 2005-06 it went up to 150 tonnes per man per year an

                    improvement of 20 per cent In blast furnace productivity also there has been an

                    improvement as also in the production of high-end special steels and capacity

                    utilisation

                    With the improved turnover which comes from higher capacity use and higher

                    manpower productivity SAILs profits have surged Its gross profit more than doubled

                    between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                    was largely due to the high prices of steel An analysis has shown that as far as SAIL

                    is concerned the higher profit is 29 per cent owing to the price factor in steel and

                    other input costs and 71 per cent owing to improvement in capacity use and other

                    factors that are just mentioned

                    OBJECTIVES

                    To compare Private and Public steel sector with refrence to TATA Steel and

                    Steel Authority Of India

                    To analyse potential of both the companies ie TATA Steel and SAIL

                    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

                    Research Methodology

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

                    a) Research design-

                    In case of my research ldquoComparative analysis of Indian private and Public

                    sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                    found to be more appropriate

                    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

                    Comparison between TATA Steel and Steel Authority of India

                    The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                    significant improvements in the last two years The combined profit before tax of all 15

                    PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                    Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                    The profit before tax for all PSUs also exhibited a significant improvement of

                    around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                    Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                    comparable period of last year

                    Contribution of PSUs to public exchequer has also gone up significantly For

                    example the contribution of five leading companies namely SAIL RINL NMDC

                    KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                    duty dividend corporate tax sales tax royalty etc has gone up by more than double

                    from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                    On the other hand 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

                    During the period (April-December 2006) 205 million tonne of steel was produced by

                    Private Sector steel units out of the total production of 3315 million tonne in the

                    country The private sector units consist of major steel producers in one hand and

                    relatively smaller amp 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

                    For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                    companies on following parameters

                    Production

                    Chart showing production of both the companies

                    Quantity 000 Tonnes

                    2007-08 APR-DEC07APR-

                    DEC06 ACTUA

                    L

                    AGE OF CURRENT

                    PRODUCTION OVER

                    CAPACITY UTILISATION

                    TARGET TENTATIV

                    E

                    TARGET

                    ACTUAL

                    APR-DEC07 TARGE

                    T

                    APR-DEC06 ACTUA

                    L

                    APR-DEC 07

                    APR-DEC06

                    SAIL

                    i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                    ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                    iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                    iv)BSL43500 32630 30970 30010 949 1032 950 910

                    v)ISP5000 3760 3520 3450 936 1020 940 920

                    vi)ASP1470 1070 1140 1130 1065 1009 650 640

                    vii)VISL

                    1390 1050 1160 1190 1105 975 1300 1340

                    TATA 50000 37440 37090 37380 991 992 990 1000

                    TATA Steel

                    The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                    but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                    target of 3744 (mT) but could produce 3709 However for the same period in last

                    year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                    to 99 this year

                    Steel Authority of India

                    The company had a aggregate production target of 13739 (mT) for the year 2007-08

                    but it could produce only 126 (mT) a growth of 4 over the previous year However

                    for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                    10380 as compared to around 10 (mT) for the same period last year SAIL had a

                    capacity utilisation of 103 this year as compared to 101 last year

                    Financials

                    TATA Steel

                    The year 2006-07 has seen the highest turnover and profits continuing the trend

                    of the past four years The Company achieved the best ever sales turnover and

                    profitability during the year under review A robust Indian economy firm steel prices

                    higher volumes and several improvement initiatives contributed to the record

                    performance Finished steel sales were higher by 1133 at 451 million tonnes over

                    the previous year Export turnover was lower by about 5 due to lower volumes

                    Average price realisation improved mainly due to higher prices of hot rolled

                    coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                    (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                    Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                    due to additional borrowings for the Companyrsquos domestic expansion programs and

                    funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                    providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                    crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                    before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                    after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                    20 compared to the previous year

                    The record financial results would not have been possible without a matching

                    performance by the operating departments including the raw materials division The

                    year witnessed the best ever crude steel production by the Company at 505 million

                    tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                    first plant in India to produce more than 5 million tonnes of crude steel in a year The

                    upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                    rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                    Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                    increase in production was backed by improvements in operating practices and

                    productivity resulting in a reduction in consumption of raw materials energy

                    refractories etc

                    Steel Authority of India

                    Financial Year 2006-07 has been eventful year for the company with further

                    momentum in improving operational efficiencies laying strong foundation and building

                    road map for modernisation and expansion of SAIL Plants with several new initiatives

                    undertaken with its human resource at the core During the year the company got the

                    distinction of first metal company in the country to reach a market capitalization of Rs

                    50000 crore

                    There have been improvements in all financial parameters which are shown in

                    the table given below-

                    SAIL set new record in achieving the turnover of Rs39189 crore and profit

                    before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                    previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                    increase of 55

                    Research and Development

                    Chart showing production of both the companies

                    (Rs Crore)

                    TATA Steel

                    The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                    develop galvannealed skin panels It is the only Indian supplier of bake hardening

                    steel for body panels

                    Research is undertaken at Tata Steel in the areas of raw materials including coal

                    coke energy conservation waste utilisation sintering blast furnace productivity and

                    phosphorous reduction product development and improvement in life of plant and

                    machinery The Company spends 7 of its turnover for RampD 17 patents have been

                    sealed and over 100 are in process

                    Steel Authority of India

                    Research and Development Centre for Iron and Steel (RDCIS) has provided

                    innovative technological inputs to different units of SAIL with special emphasis on

                    cost reduction product development and application quality improvement energy

                    conservation and automation Several new products were developed and

                    commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                    Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                    specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                    micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                    Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                    Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                    strengthened its technology marketing efforts by providing consultancy services

                    organising specialised testing and transfer of technological innovations to outside

                    customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                    Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                    Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                    During the year 1998 technical papers were publishedpresented besides filing

                    of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                    awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                    achievements in New Materialsrdquo given by the Ministry of Science and Technology

                    Government of India

                    Environment

                    TATA Steel

                    Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                    Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                    has an ISO-14001 certified service providerlocations are certified to ISO-14001

                    Jamshedpur is the only town in the country which

                    Significant achievements by the Company include an improvement in

                    environment and resource conservation including a reduction in green house erosion

                    raw materials and water consumption The Company has increased waste re-use and

                    re-cycling Constant upgradation and modernisation has resulted in several state-of-

                    the-art pollution control systems being installed to prevent and control pollution The

                    Company has almost doubled its capital investment in Pollution Abatement in the last

                    five years

                    Emissions effluents and wastes

                    Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                    most relevance to the steel industry Considerable reduction has been effected by

                    Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                    granulation is taken into account Other Greenhouse Gas emissions do not result from

                    Tata Steelrsquos activities

                    Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                    tonnes in 2003-04 as against 790 tonnes used during the previous year

                    Hazardous Waste under Basel Convention The Company does not import or export

                    any waste deemed hazardous under the Basel Convention All hazardous wastes

                    generated are handled as per the requirement of the Hazardous Waste Management

                    and Handling Rules 19892000

                    Emissions

                    Tata Steel has undertaken several initiatives which have resulted in

                    considerable reduction in stack emission Emissions are well below the Indian and

                    international standards The emission load including particulate matter Sulphur

                    Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                    undertaken at the Steel Works

                    Waste handling

                    Most of the solid waste generated from Steel Works is recycled or reused 18

                    of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                    was used to fill low-lying areas and for peripheral road construction around

                    Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                    power plants was dumped in a designated dump area

                    Effluent Management

                    Waste water from the steel making process is being treated with best available

                    physio-chemical methods as well as being recycled Waste water from the coke plant

                    is treated biologically where organic pollutants are oxidised and decomposed by micro

                    organisms The Company has reduced the levels of total pollutant discharge in waste

                    water streams from 0211 in 1999-2000 to 0178 in 2003-04

                    Steel Authority of India

                    Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                    environmentally responsible manner to comply with applicable regulations and striving

                    to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                    efficiency and optimize resource consumption through various measures viz

                    improvement in process technology in the areas of raw materials coke iron and steel

                    making reuserecycle of the by-products generated and conservation of energy and

                    water

                    Solid Waste Management

                    During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                    and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                    Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                    these wastes are being made through internal recycling and selling to outside

                    agencies The wastes generated in the steel plants are being utilized mainly through

                    their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                    during April-September 2006

                    Environmental Plantation

                    Trees have a significant role in protection of environment and ecological balance

                    Extensive afforestation programme are being followed in all the plants and mines The

                    basis of choosing the species of plants mainly depends on local soil characteristics

                    and prevailing meteorological conditions The green belt developed by afforestation

                    adds to the aesthetic environment which becomes dust and noise barriers

                    A total number of 145521 saplings have been planted covering an area of 637

                    hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                    hectare in 2004-05 in and around the steel plants of SAIL

                    Environmental Recognitions

                    SAIL plants have been awarded various prizes for environmental management in

                    their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                    the Confederation of Indian Industries (CII) for exemplary performance in the

                    environmental economic andsocial dimensions of sustainable development and the

                    Greentech Environment Excellence Gold AwardGolden Peacock Environment

                    Excellence Award in the metal sector 2005 instuted by the World Environment

                    Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                    for 2005 from International Greenland Society

                    Workforce and Welfare of Society

                    TATA steel

                    Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                    and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                    enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                    provide a work environment that will ensure a sense of purpose and personal growth

                    for each individual The wish of the company is to see the smile on every face

                    everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                    people and enriched empowered and enhanced their lives

                    Even in its nascent years social scientists Sidney and Beatrice Webb were

                    brought in to work on welfare schemes In fact some of the initiatives introduced by

                    Tata Steel were the first of their kind in India and some even in the western countries

                    at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                    source of its competitiveness It focuses on constantly updating and challenging

                    intellectual capabilities to enable them to excel in performance Special efforts are

                    made for enhancing strategic thinking skills and analytical abilities of its managers and

                    workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                    available with its people through Knowledge Management and sharing of best

                    practices

                    In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                    mutual co-operation coordination and understanding between the Management and

                    the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                    among many other prestigious awards and recognition Tata Steel aims at ensuring

                    transparency fairness and equity in all its interactions with its employees to create an

                    enthused and happy workforce

                    In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                    assistance in the fields of education vocational training self-employment and

                    family welfare

                    Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                    12 times This facility provides on-the-spot diagnostic medical and advanced

                    surgical treatment for preventive and curative interventions to people in

                    inaccessible rural areas

                    Sir Dorab Tata personally financed four athletes and two wrestlers from India

                    for the 1920 Antwerp Olympics

                    The JRD Sports Complex an international stadium with an 8-lane polyurethane

                    track was inaugurated in 1991 The complex also houses facilities for handball

                    tennis volleyball hockey basketball boxing table tennis and a modern

                    gymnasium

                    The Tata Steel Family Initiatives Foundation is engaged in off ering health

                    services for the betterment of the people in and around Jamshedpur

                    At times of natural calamities the company has rushe immediate relief and off

                    ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                    fl ood ravaged Orissa and other such aff ected areas

                    Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                    er a unique environment for the children of Jamshedpur to grow up in

                    In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                    Jamshedpur has emerged as the one of the best cities in India

                    Steel Authority of India

                    The manpower strength as on 31st March 2006 was 138211 comprising 15206

                    executives and 123005 non-executives The total reduction in manpower achieved

                    during the year stood at 4864 which included separation of 881 employees through

                    voluntary retirement The labour productivity improved by around 12 over previous

                    year to 150 tonne crude steelmanyear

                    Some of the areas of assistance which are available to the weaker sections are the

                    following

                    The company has provided land for construction of school buildings in some of

                    the steel townships as well as in other places for spreading education among

                    the masses

                    The company has constructed roads in remote areas around the steel plants

                    and also where the captive mines are located to improve communication and

                    also increase activities such as organisation of health camps school facilities

                    drinking water etc under the peripheral development schemes

                    Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                    Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                    providing them with education boarding and lodging facilities

                    Construction of bridges by-pass roads metal-morum path waterways

                    levellingdressing area around township pre-mixed roads Installation of hand-

                    pumps tube wells and wells for villagers

                    Construction of school buildings (including for mentally retarded deaf and

                    dumb children) madarsas providing school furniture therein and construction

                    of hostels womenrsquos college building etc

                    Fourteen scholarships are awarded to deserving SCST undergraduate

                    engineering students in various disciplines to encourage technical education

                    among them

                    In many cases tuition fee in company run schools is exempt for SCST

                    students Steps are taken to provide education to more and more tribal children

                    in company schools

                    The unemployed SCST youth are given specialized training in various

                    technical trades to develop skill and knowledge Such training is provided free

                    of cost

                    Adult literacy campaign is carried out in most of the steel townships Every year

                    more and more men and women are being covered in this campaign

                    Development of fishery and cottage industry providing sewing machines to

                    village mahila mandals and promoting other self-employment generation

                    schemes

                    SAIL has established a hockey academy with stadium and hostel facilities at

                    Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                    academy was successful in spotting a number of young talented tribal players

                    and grooms them under expertise of ex-Olympian

                    Technology

                    The biggest boost to efficiency in the steel industry has come from the increased

                    use of continuous casting ndash an indicator of the modernity of the production process Its

                    share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                    now India is thus well on its way to joining the ranks of the leading steelmakers

                    among the industrial nations (share in EU-25 96) However in India some 6 of

                    crude steel is still made using the outdated open-hearth process (EU-25 03) which

                    suggests there is restructuring potential

                    TATA Steel

                    Tata Steels stall at the International Trade Fair was adjudged the best along

                    with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                    international companies also took part in the exhibition Participating companies from

                    countries all over the world exhibited latest technologies and know-how List of

                    participating companies included Baosteel SAIL Heavy Engineering Corporation

                    Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                    companies of national and international repute China was the partner country for the

                    International Trade Fair this year

                    In the award winning exhibition Tata Steel showcased its best coal mining practices

                    cutting-edge technology used in iron ore mining pioneering human resource

                    practices 78 years of industrial harmony and various other aspects of the worlds best

                    steel company

                    The 6th International Trade Fair and Conference an institutionalised global

                    event is considered to be one of the most prestigious forums for national as well

                    international participants It is a conclave of the finest minds concerned with the future

                    direction and growth of these sectors The forum provided the worlds most eminent

                    metallurgists manufacturers of metallurgical and mining machinery and related

                    sectors professionals analysts and experts with the opportunity to exchange views on

                    emerging technologies synergy and strengths and open up wider horizons for

                    sectorial development

                    Tata Steel to adopt Corus technology

                    Tata Steel plans to implement alternate technology used by the British steel

                    maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                    production according to Mr B Muthuraman Managing Director Tata Steel

                    ldquoWe are looking at alternate technology Corus has developed an alternate

                    technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                    newspersons on the sidelines of the 34th National Management Convention organised

                    by the All-India Management Association However he declined to give further details

                    on the type of technology the Indian steel giant plans to implement

                    Steel Authority of India

                    Modernisation holds the key to SAILs fortunes in the near future The objective

                    of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                    and productive capacity and in the process become more energy-efficient and

                    improve quality The key component of the ongoing modernisation drive - already

                    completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                    ingot casting facilities with basic oxygen furnaces for steel-making and employing

                    continuous casting techniques A senior SAIL official says Continuous casting and

                    basic oxygen furnaces ensure better quality steel through processes more easily

                    monitored for quality control The basic oxygen surfaces method is significantly faster

                    more automated and permits greater flexibility Continuous casting is more efficient

                    than the traditional ingot casting methods and gives increased yields while enabling

                    better quality standards SAIL is also modernising its finishing mills and is adding

                    secondary refining facilities to improve quality

                    Safety measures

                    A unique feature of safety management in steel industry is that a bipartite forum

                    named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                    was formed in 1973 at national level having representatives from steel plants in SAIL

                    RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                    Committee With a view to inculcate safety consciousness JCSSI organises seminars

                    workshops training programme safety competitions for member organisations JCSSI

                    with the co-operation and support of Trade Union representatives formulates policies

                    and guidelines for its member plants and monitors the implementation

                    Tata Steel

                    Safety has always been a prime focus at Tata Steel A Safety Committee a

                    Safety department and a Safety Trophy helped spread the message all across the

                    company

                    TATA reaffirms its commitment to provide safe working place and clean

                    environment to its employees and other stakeholders as an integral part of its

                    business philosophy and values We will continually enhance our Environmental

                    Occupational Health amp Safety (EHS) performance in our activities products and

                    services through a structured EHS management framework Towards this

                    commitment we shall

                    Establish and achieve EHS objectives and targets

                    Ensure compliance with applicable EHS legislation and other requirement and

                    go beyond

                    Conserve natural resources and energy by constantly seeking to reduce

                    consumption and promoting waste avoidance and recycling measures

                    Eliminate minimize andor control adverse environmental impacts and

                    occupational health and safety risks by adopting appropriate state-of-the-art

                    technology and best EHS management practices at all levels sand functions

                    Enhance awareness skill and competence of our employees and contractors

                    so as to enable them to demonstrate their involvement responsibility and

                    accountability for sound EHS performance

                    Steel Authority of India

                    SAIL has a separate corporate unit called the SAIL Safety Organisation to

                    monitor safety system amp activities- SAIL also has a comprehensive safety policy

                    Annual Performance Plans (APP) for the areas of safety and fire services are

                    formulated and review of implementation of APP is done during Heads of

                    Safety meeting

                    Internal and external safety audits of major departments particularly hazardous

                    areas are conducted every year and points arising from these audits are

                    liquidated Safety aspects have been incorporated in standard operating

                    practices (SOP) and standard maintenance practices (SMP)

                    All major capital repairsshut downs are closely monitored round the clock

                    Periodic drives are conducted to inculcate safety awarenessculture up to

                    grass-root level apart from regular inspections as per checklists to identify

                    unsafe conditionsacts

                    Safety training is imparted to target group employees at various levels HRD

                    intervention in the area of safety covers Heads of Departments Line Managers

                    amp Departmental Safety Officers Besides area specific workshops are

                    conducted at different locations on important topics like gas safety railroad

                    safety safety in iron steel amp coke making etc

                    Consistent efforts were made by SAIL Safety Organisation for improving safety

                    standards in the company by taking measures like intensive safety drives in works

                    area and conducting safety audits in hazardous departments of different plants and

                    mines In addition specific workshops on safety aspects were organised in various

                    SAIL steel plants

                    Measures taken by Indian government to improve the industry

                    Now letrsquos 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-

                    1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                    among others was removed from the list of industries reserved for the public

                    sector and also exempted from the provisions of compulsory licensing under the

                    Industries (Development and Regulation) Act 1951

                    2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                    of `high priority industries for automatic approval for foreign equity investment up

                    to 51 This limit has been recently increased to 100

                    3 Price and distribution of steel were deregulated from January 1992 At the same

                    time it was ensured that priority continued to be accorded for meeting the

                    requirements of small scale industries exporters of engineering goods and North

                    Eastern Region of the country besides strategic sectors such as Defence and

                    Railways

                    4 The trade policy has been liberalised and import and export of iron and steel is

                    freely allowed There are no quantitative restrictions on import of iron and steel

                    items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                    regulating the imports is the tariff mechanism Tariffs on various items of iron and

                    steel have drastically come down since 1991-92 levels and the government is

                    committed to bring them down to the international levels In Chapter 72 there are

                    two items viz 72042110 and 72042910 which fall in the restricted list of imports

                    5 Iron amp Steel are freely importable as per the Extant Policy

                    6 Iron amp Steel are freely exportable

                    7 Advance Licensing Scheme allows duty free import of raw materials for exports

                    8 The floor price for seconds and defectives continues till date

                    9 Imports of seconds and defectives of steel are allowed only through three

                    designated ports of Mumbai Calcutta and Chennai

                    10Mandatory pre inspection certificate by a reputed international agency for every

                    import consignment of seconds and defectives

                    11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                    10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                    the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                    per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                    15 per cent to 5 per cent

                    12Further customs duty on several raw materials used by the steel sector like

                    noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                    coking coal to zero

                    13To bring down the prices of steel the excise duty on steel products was reduced

                    from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                    that the duty regime will be reviewed Budget 2004-05 revised this partially by

                    increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                    cut on moderating prices was not achieved

                    14The union Budget 2007-08 the import duty on seconds and defective has been

                    further reduced from 20 to 10

                    Special assistance being provided by Ministry of Steel to Private Sector

                    1 Ministry of Steel is extending all possible support as detailed below for the

                    development of Iron and Steel Sector in the country

                    2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                    new plants and expansion of existing ones wherever applied for

                    3 To ensure an un-interrupted supply of raw materials to the producers

                    4 The Ministry has been interacting with All India Financial institutions to expedite

                    clearance of projects

                    5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                    Plants are held at the level of Secretary

                    6 Ministry of Steel identifies infra-structural and related facilities required by steel

                    industry so that their absence does not lead to bottlenecks in the future growth of

                    the Iron and Steel Sector and takes up these issues with the concerned ministries

                    7 The Ministry has encouraged the setting up of Institute for Steel Development and

                    Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                    country are members of this Institute which has been set up with the objective of

                    promoting developing and propagating the proper and effective use of steel

                    8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                    major steel plants being implemented Govt has setup a Project Coordination

                    Group under the Chairmanship of Steel Minister

                    NATIONAL STEEL POLICY 2005

                    The progress of the steel industry has a critical influence on the pace of Indiarsquos

                    development and as such great importance is attached to capacity expansion in line

                    with expected demand at cost and prices which make Indian steel internationally

                    competitive The existing regime of liberalization decontrol and deregulation of

                    industry in the country has opened up new opportunities for the expansion of the steel

                    industry With a view to accelerating the growth of the steel sector and attaining the

                    vision of India becoming a developed economy by 2020 the Ministry of Steel

                    formulated a National Steel Policy (NSP) in 2005

                    The following salient features can be derived after analysing the NSP 2005

                    The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                    towards reform restructuring and globalisation

                    The long-term goal of the NSP is that India should have a modern and efficient

                    steel industry of world standards catering to diversified steel demand The focus of

                    the policy is to achieve global competitiveness not only in terms of cost quality and

                    product-mix but also in terms of global benchmarks of efficiency and productivity

                    In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                    NSP seeks to remove the supply-side constraints to the growth of this industry in

                    an open globally integrated and competitive environment

                    The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                    policy goal On the demand side the strategy would be to create incremental

                    demand through promotional efforts creation of awareness and strengthening the

                    delivery chain particularly in rural areas On the supply side the strategy would be

                    to facilitate creation of additional capacity remove procedural and policy

                    bottlenecks in the availability of inputs such as iron ore and coal make higher

                    investments in RampD and encourage the creation of infrastructure such as roads

                    railways and ports

                    The NSP acknowledges the low per capita consumption of steel in the country

                    especially in the rural areas and the need to boost steel consumption to improve

                    quality of life and help in meeting the growing aspirations of masses

                    In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                    industry would need additional capital In addition funds would be required for

                    technological upgrade of existing facilities In order to mobilize such vast resources

                    NSP seeks to encourage foreign direct investment In addition the policy also

                    seeks to make the fiscal incentives available to infrastructure projects accessible

                    to the steel industry

                    The NSP seeks to support developing of risk-hedging instruments like futures and

                    derivatives to contain price volatility in the steel market

                    The NSP seeks to strengthen the existing training and research facilities available

                    to the domestic steel industry so as to provide suitable training programmes

                    especially for the secondary small-scale units and also to collect and analyse data

                    on important parameters of the industry

                    The NSP seeks to mount aggressive RampD efforts to create manufacturing

                    capability for special types of steel substitute coking coal use iron ore fines

                    develop new products suited to rural needs enhance material and energy

                    efficiency utilize waste and arrest environmental degradation

                    The NSP acknowledges the important role played by the secondary steel sector in

                    providing employment meeting local demand of steel in rural and semi-urban

                    areas and meeting the countryrsquos demand of some special products and seeks to

                    endeavour to provide the necessary feedstock to these units at reasonable prices

                    from major plants through the existing mechanism of State Small Industries

                    Corporations

                    The NSP recognizes the fact that integration of the Indian steel industry with the

                    global economy requires that the industry should be protected from unfair trade

                    practices The NSP therefore envisages institution of mechanisms for import

                    surveillance and monitoring export subsidies in other countries

                    The present per capita consumption of steel in the country is very low compared to the

                    world average As mentioned above one of the objectives of the NSP is to augment

                    the demand and consumption of steel in the country by conscious promotion of steel

                    usage With a view to create a mass awareness campaign on conscious promotion of

                    steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                    the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                    The Committee is being serviced by Institute for Steel Development and Growth

                    (INSDAG) The objective of the Committee is to promote steel usage in the country by

                    way of an awareness campaign with particular emphasis on rural sectors The

                    Committee also aims at educating the designers architects builders and planners

                    regarding the qualitative and cost effective applications of steel in various structures

                    including buildings bridges flyovers and airports

                    FUTURE OF INDIAN STEEL INDUSTRY

                    India is amongst a few countries in the world having the dual advantage of fast

                    growing domestic demand coupled with access to raw materials Further the trend

                    that is already discernible is that the axis of global steel production consumption is

                    shifting towards Asia With their large populations China and India already account for

                    35 of the total world steel production - more than double of Europe Asia is

                    expected to outpace other regions of the world to an even greater extent in the coming

                    years

                    Amongst the Asian nations China has established a huge unbridgeable lead It

                    is accepted that China will continue to be the leader However India is slated to

                    emerge as the second Asian giant in the next eight years Figuratively speaking while

                    the Dragon has reached maturity the Lotus is about to bloom in resplendent

                    splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                    China swallowed almost 32 of global steel It is unlikely that future production and

                    consumption would continue to flourish at growth rates of 8 and 18 respectively as

                    has been the case over the last few years On the other hand it is sun-rise time for

                    India where the demand has increased by 7-8 in the last couple of years In the long

                    run Indian steel is likely to be more cost-effective since unlike China India has

                    relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                    can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                    However the position with coal is not so favourable Though thermal coal

                    reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                    traditional blast furnace route would require coking coal India does not have adequate

                    reserves of coking coal nor is the meagre amount available of appropriate quality

                    Thus the steel industry always had to contend with the dual problems of inadequate

                    availability and poor quality of Indian coking coal This has been partly addressed by

                    adopting alternative iron making processes that are not dependent on coking coal it

                    can not be denied that coal is the biggest cause for concern for bulk steel production

                    in India

                    Because of the shortage of indigenous coal attempts have been made by steel

                    producers to ensure long-term supplies by tying up with global majors or by acquiring

                    mines in other countries This is the only long-term solution but with a global shortage

                    of coal it may not remain cost-effective in the long run

                    India is the seventh largest producer of steel and may further improve its position

                    going by the current trends A series of investment decisions by major domestic

                    players and international steel giants such as Steel Authority of India Ltd Tata Steel

                    POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                    The keen interest shown by various prospective investors is not only due to

                    expectations of strong growth in domestic demand but also due to indigenous

                    availability of key resources like iron ore and skilled workforce

                    After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                    steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                    finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                    2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                    consumption has accelerated to 91 per cent

                    With the likely growth of Indian economy at around 7 per cent per annum

                    demand for steel is expected to remain strong and is projected to reach a level of 90

                    million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                    demand is sustainable considering the fact that Indias per capita consumption of steel

                    is still very low at 31 kgs per head compared to the world average of 145 kgs The

                    very low level of per capita consumption of steel in India is highlighted further when

                    compared with the consumption levels of its peer group consisting of countries like

                    China Brazil Mexico and Republic of Korea as also with selected developed

                    countries

                    Though there are realistic constraints in India to achieving as rapid a growth as in

                    China there seems to be consensus among analysts that India is likely to witness a

                    growth rate in steel consumption higher than the historically observed rate of 6 to 7

                    percent If the growth rate (9 per cent) of last three years is maintained then we will

                    achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                    more conservative due to cyclicity of steel business it may be mentioned that in a

                    country like India cyclicity is more in terms of prices rather than volumes of production

                    Exports

                    Similar optimism prevails with regard to export of iron and steel Export of steel

                    starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                    2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                    rising domestic demand and low capacity additions Exports now constitute around 17

                    per cent of total production and Indias presence in the developing and developed

                    world is being increasingly felt Indian steel producers have recently been able to

                    supply specialized grades and products used for sophisticated applications like

                    automobiles On the cost front some of our producers are counted amongst the least

                    cost producers of the world For an average reference plant India is competitively

                    placed in the middle of the hierarchy of steel producing nations

                    However we have a long way to go to catch up with the leading exporters of the

                    world such as Japan the CIS countries Brazil etc It is however expected that by

                    2019-20 India will be able to export around 26 million tonnes of steel representing 24

                    per cent of total projected production The projected export ratio compares well with

                    the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                    The projected production of steel by 2019-20 to meet the domestic and export

                    demand will be around 110 million tonnes Management of resources and

                    infrastructural growth is going to be critical in achievement of the production level

                    envisaged The broad requirements of various resources will increase manifold from

                    the current level The bottlenecks in availability of critical inputs and various facilities

                    need to be removed through concerted efforts of Government and industry The broad

                    strategy to overcome these constraints as well as meet the strategic goals of the steel

                    sector has been discussed in the National Steel Policy which has been recently

                    approved by the Government

                    As stated earlier the long-term goal of the National Steel Policy is that India

                    should have a modern and efficient steel industry of world standards catering to a

                    diversified steel demand The focus of the policy is to achieve global competitiveness

                    not only in terms of cost quality and product mix but also in terms of global

                    benchmarks of efficiency and productivity The policy envisages adopting a multi-

                    pronged strategy to achieve these goals On the demand side the strategy would be

                    to create incremental demand through promotional efforts creation of awareness and

                    strengthening the delivery chain particularly in rural areas On the supply side the

                    strategy would be to facilitate creation of additional capacity remove procedural and

                    policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                    investments in RampD and HRD and encourage the creation of infrastructure such as

                    roads railways and ports

                    The production figures exports and imports of finished carbon steel and pig iron

                    and apparent consumption patterns of finished carbon steel as indicated by TATA

                    Steel and SAIL attest to the continuing growth for both the sectors

                    FINDINGS

                    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 increased its profit over the year particularly in 2006-07

                    Both the companies are planning to adopt modern technology which is going to

                    help them to compete in world market but they need to be less dependent on

                    state of art technology and coal for long term prospects

                    Public sector has undergone retrenchment for the employees and improved

                    has its lobour productivity but it is still lacking behind as compared to private

                    sector

                    SAIL has reduced the no of accidents due to improper handling of machinery

                    still no of accidents are more than that of TATA Steel

                    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

                    ie 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 have to be met

                    comprehensively if we are to take our legitimate place in the world as a developed

                    nation by 2020

                    BIBLIOGRAPHY

                    Annual report (2006-07) published by ministry of steel

                    Annual report (2006-07) published by TATA Steel

                    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                    REPORTrsquo posted by SAIL on its website

                    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                    held on 07 Nov 2006

                    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                    wwwsteelnicin (Official website of ministry of industry)

                    wwwtatasteelcom (Official website of TATA Steel)

                    wwwsailcoin (Official website of Steel Authority of India)

                    wwwworldsteelorg (official website of International Iron amp Steel Institute)

                    wwwjpcindiansteelnicin (Website of joint planning committee)

                    • DATA ANALYSIS
                    • Comparison between TATA Steel and Steel Authority of India
                    • Production
                    • Quantity 000 Tonnes
                    • Financials
                    • Research and Development
                    • (Rs Crore)
                    • TATA Steel
                    • Steel Authority of India
                    • Environment
                    • TATA Steel
                    • Emissions effluents and wastes
                    • Emissions
                    • Waste handling
                    • Effluent Management
                    • Steel Authority of India
                    • Solid Waste Management
                    • Environmental Plantation
                    • Environmental Recognitions
                    • Workforce and Welfare of Society
                    • TATA steel
                    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                    • Steel Authority of India
                    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                    • Technology
                    • Steel Authority of India
                    • Safety measures
                    • Tata Steel
                    • Steel Authority of India
                    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                    • Measures taken by Indian government to improve the industry
                    • Now letrsquos 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-
                    • Special assistance being provided by Ministry of Steel to Private Sector
                    • FUTURE OF INDIAN STEEL INDUSTRY

                      Presently Essar Steel has embarked upon a capacity expansion for

                      enhancement of its production capacity from 46 million tonne per annum to 76 million

                      tonne per annum The capacity expansion programme will consist of 2 units of Corex

                      units of 15 million tonne per annum each Further value addition will be carried out by

                      Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide Plate

                      Mill

                      Products

                      All Essar Steelrsquos products are world class meeting the highest international

                      standards supported by excellent marketing and service

                      JSW STEEL LTD

                      JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a

                      process route consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash

                      coke making ndash iron making through blast furnace as well as Corex process ndash steel

                      making through BOFndashcontinuous casting of slabs ndash hot strip rolling The production

                      facilities include 30 million tonne per annum iron ore beneficiation unit 50 million

                      tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million

                      tonne per annum coke ovens 09 + 13 million tonne per annum blast furnaces two

                      Corex units of 08 million tonne per annum each 3 X 130 t converters three slab

                      casters and a 25 million tonne per annum hot strip mill with state-of-the-art coil box

                      technology

                      JSW Steel has a distinction of being certified to ISO-90012000 Quality

                      management system ISO-140011996 environment management system and OHSAS

                      180011999 occupational health and safety management system

                      During this year JSW Steel has also been conferred with a number of awards

                      Production Performance

                      (in million tonne)

                      Items 2003-04 2004-05 2005-06 April-Dec06

                      Pellets 325 361 380 293

                      Hot Metal 163 196 240 219

                      Slabs 161 187 225 195

                      Hot Rolled Coils 154 178 210 148

                      JINDAL STEEL AND POWER LTD (JSPL)

                      Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

                      business interests in steel power generation mining iron ore coal and diamond

                      explorationmining The current turnover of the company is over Rs 3000 crore JSPL

                      is the worldrsquos largest producer of coal based sponge iron The product range

                      encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

                      rails and H beams and columns in technical collaboration with JFE Corporation

                      Japan These H-beams are the most desired option of structural engineers worldwide

                      JSPL is the largest private sector investor in the state of Chhattisgarh with a total

                      investment commitment of more than Rs 10000 crore The company is also setting

                      up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

                      5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

                      Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

                      watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

                      4500 crore JSPL has been rated as one of the best environmentally managed

                      companies in India and committed to environment protection as an integral part of

                      their business activities

                      ISPAT INDUSTRIES LTD (IIL)

                      Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

                      Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

                      rolled coils per annum The plant has got a 224 million tonne per annum sintering

                      plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

                      based sponge iron plant IIL have uniquely combined the usage of hot metal and

                      sponge iron in the electric arc furnace for production of liquid steel for the first time in

                      India IIL have also adopted the state-of-art technology called Compact Strip

                      Production (CSP) process which has been installed for the first time in India and

                      produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

                      products are accepted in the domestic and international market

                      The production performance of IIL during last three years has been as follows

                      (in million tonne)

                      Items 2003-04 2004-05 2005-062006-07

                      (Up to Dec06)

                      Hot Metal 129 140 142 114

                      Sponge Iron 106 105 089 085

                      Hot Rolled Coils 162 197 215 197

                      The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

                      with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

                      global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

                      Demag the technology supplier

                      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

                      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 SAILs equity and retains voting

                      control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

                      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 Companys iron ore limestone and dolomite

                      mines The company has the distinction of being Indiarsquos largest producer of iron ore

                      and of having the countryrsquos 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

                      SAILs 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

                      SAILs 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

                      With technical and managerial expertise and know-how in steel making gained

                      over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                      services and consultancy to clients world-wide

                      SAIL has a well-equipped Research and Development Centre for Iron and Steel

                      (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                      for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                      Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                      Ranchi Our captive mines are under the control of the Raw Materials Division in

                      Kolkata The Environment Management Division and Growth Division of SAIL operate

                      from their headquarters in Kolkata Almost all our plants and major units are ISO

                      Certified

                      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

                      Subsidiary

                      Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                      Joint Ventures

                      SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                      NTPC SAIL Power Company Pvt Ltd

                      Bokaro Power Supply Company Pvt Limited

                      Mjunction Services Limited

                      SAIL-Bansal Service Centre Ltd

                      Bhilai JP Cement Ltd

                      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

                      MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                      Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                      producer of ferro manganese and silico manganese for captive use of SAIL plants

                      The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                      crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                      paid-up capital

                      Financial Performance

                      During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                      (including conversion income of Rs 17110 crore) and made a net profit after tax of

                      Rs 2097 crore The turnover and net profit after tax of the company during April

                      2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                      (provisional) respectively

                      Production Performance

                      The production of all grades of ferro alloys during 2005-06 is as under

                      (in tonne)

                      Materials 2005-06 April- Dec 2006

                      High Carbon Ferro Manganese 51525 49493

                      Silco Manganese 46712 32921

                      Medium Carbon Ferro Manganse 2344 164

                      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 was commissioned in August

                      1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                      million tonne per annum capacity Right from the year of its integrated operation VSP

                      established its presence both in the domestic and international markets with its

                      superior quality of products VSP has been awarded all the three International

                      Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                      180011999 The company has taken significant strides in the area of Corporate

                      Social Responsibility

                      Production Performance

                      (in million tonne)

                      Items 2004-05 2005-06 2006-07 (April-Dec06)

                      Hot Metal 3920 4153 3040

                      Liquid Steel 3560 3603 2676

                      Saleable Steel 3173 3237 2419

                      NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                      Incorporated on November 15 1958 the National Mineral Development Corporation

                      Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                      developing and exploiting mineral resources of the country (other than coal oil

                      natural gas and atomic minerals) At present its activities are concentrated on mining

                      of iron ore diamonds and silica sand

                      NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                      (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                      Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                      activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                      from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                      Supreme Court of India NMDC is following up the case for early hearing

                      All the iron ore production units have been accredited with ISO 90012000 and ISO

                      140012004 certifications RampD Centre of NMDC was also accredited with ISO

                      90012000 certification

                      Iron Ore

                      NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                      December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                      (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                      MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                      exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                      Capital Structure

                      The authorised share capital of the company is Rs 150 crore The paid up equity

                      share capital was Rs 13216 crore Outstanding loans from Government of India are

                      nil

                      Financial Performance

                      The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                      Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                      SalesTurnover222655 371092 2790

                      Gross Margin128749 2889 2455

                      Profit Before Tax122365 277013 2410

                      MSTC LTD

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

                      Enterprise was set up on September 9 1964 as a canalising agency for the export of

                      scrap from the country With the passage of time the Company emerged as the

                      canalising agency for the import of scrap into the country Import of scrap was de-

                      canalised by the Government in 1991-92 and MSTC has since then moved on to

                      marketing ferrous and miscellaneous scrap arising out of steel plants and other

                      industries and importing coal coke petroleum products semi finished steel products

                      like HR coils and export of primarily iron ore The company has also established an e-

                      auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                      developed an e-procurement portal in house

                      Capital Structure

                      The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                      220 crore as on 31122006 of which approximately 90 is held by Government of

                      India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                      Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                      bonus shares issued in the year 1993-94 in the ratio 11

                      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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                      handling of BOF slag etc

                      Financial Performance

                      Particulars 2004-05 2005-06 2006-07 (Apr-

                      Dec2006)

                      Total Turnover ie Service charges realised including miscellaneous Incomeetc

                      981822 1067937 765557

                      Gross Margin before Interest amp Depreciation 167879 186514 105284

                      Interest amp Depreciation 83014 100970 84728

                      Profit before Tax 84865 85544 20556

                      MANGANESE ORE (INDIA) LTD (MOIL)

                      Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                      of manganese ore in India At the time of inception 49 of its shares were held by the

                      Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                      proportion by Government of India and the State Governments of Madhya Pradesh 17

                      and Maharashtra Subsequently in 1977 the Government of India acquired the

                      shares held by CPMO in MOIL and MOIL became a wholly owned Government

                      company with effect from October 1977 As on 30112006 Government of India held

                      8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                      holding 961 and 882 shares respectively

                      MOIL Produces and Sells following Grades of Manganese Ore

                      1048708 High grade ores for production of ferro manganese

                      1048708 Medium grade ores for production of silico manganese

                      1048708 Blast furnace grade ore required for production of hot metal

                      1048708 Dioxide ore for dry battery cells and chemical industries

                      Production and 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

                      Items 2004-05 2005-06 2006-07 (up to Dec2006)

                      1 Production

                      a) Manganese Ore (thousand tonne) 94300 86500 82533

                      b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                      c) Ferro Manganese (tonne) 1032500 617000 829400

                      2 Turnover (Rupees in crore) 37878 33409 29463

                      3 Profit before Tax (Rupees in crore) 20227 16900 12087

                      KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                      Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                      90012000 and ISO 14001 company was established in April 1976 to meet the long

                      term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                      was set up at Kudremukh This project was to be financed in full by Iran However as

                      Iran stopped further loan disbursements after paying US $ 255 million the project was

                      completed as per schedule with the funds provided by Government of India While the

                      project was commissioned on schedule consequent upon the political developments

                      in Iran they did not lift any quantity of concentrate As a diversification measure the

                      Government approved the construction of a 3 million tonne per year capacity pellet

                      plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                      million tonne with additionsmodifications The plant went into commercial production

                      in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                      units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                      Plant Mangalore

                      Production

                      A target of 31 million tonne and 305 million tonne was set for production of iron ore

                      concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                      production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                      The target set for production during the year 2006-07 is 305 million tonne of pellets

                      In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                      activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                      production of iron ore concentrate during the year 2006-07 As against a target of 188

                      million tonne of pellets fixed for the period April to November 2006 the actual

                      production was 0275 million tonne which represents 15 target fulfilment There is

                      shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                      production of pellets is on account of operational problems being encountered in the

                      pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                      There was excessive generation of su er fines (slimes) affecting filtration clogging of

                      filters overflow and contamination of process water due to filling of cooling pond

                      affecting production While efforts are continuing to rectify the problems the operation

                      of pellet plant is yet to stabilize and normal production is yet to commence

                      The sales revenue during the last five years and up to November 2006 during 2006-

                      07 is detailed below

                      (Rs in lakh)

                      Years Concentrate Pellets Total

                      2006-07 (up to December 2006) - 12427 12427

                      2005-06 12091 111137 123228

                      2004-05 16050 169327 185377

                      2003-04 20209 82729 102938

                      2002-03 21135 51579 72714

                      2001-02 21571 50598 72169

                      Financial Performance

                      An overview of the performance of KIOCL during the year 2006-07 (up to November

                      2006) together with actuals for the previous three years is indicated below

                      (Rs in lakh)

                      Particulars 2006-07(up to December 2006)

                      2005-06 2004-05 2003-04

                      Total value of Sales 12427 123228 185377 102938

                      Gross Margin 2620 68706 120863 45945

                      Profit after Tax 1029 35630 64984 30070

                      Inventories(excluding finished stock)

                      20417 15843 8720 7616

                      BIRD GROUP OF COMPANIES

                      Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                      the following seven companies came under the administrative control of the Ministry of

                      Steel Government of India

                      (a) The Orissa Minerals Development Company Limited (OMDC)

                      (b) The Bisra Stone Lime Company Limited (BSLC)

                      (c) The Karanpura Development Company Limited (KDCL)

                      (d) Scott amp Saxby Limited (SSL)

                      (e) Eastern Investments Limited (EIL)

                      (f) Burrakar Coal Company Limited (Burrakar)

                      (g) Borrea Coal Company Limited (Borrea)

                      The status of the companies is as under

                      a) Burrakar and Borrea coal companies became non-operational after nationalisation

                      of coal mines The two companies are in the process of liquidation The official

                      liquidator has already taken over the assets and liabilities of these two companies

                      b) EIL being an investment company is having a major stake in the equity shares of

                      operating companies under the Bird Group

                      c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                      Status of the Companies at the Time of Nationalisation

                      At the time when the Bird Group of Companies came under the administrative control

                      of the Ministry of Steel Government of India all of them were financially sick and

                      burdened with various problems With the financial support from the Government of

                      India problems relating mainly to excessive manpower erosion of working capital and

                      outstanding liabilities could be settled to a considerable extent

                      REVIEW OF LITERATURE

                      RS PANDEY sees a bright future for the steel industry in India provided of course

                      the iron ore mining policy to be announced by the government soon acts as a catalyst

                      for growth He discusses the industrys problems and prospects in an interview When

                      asked about the steel sectors ie private and public he expressed his expert views

                      The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                      Excerpts

                      The public sector steel companies in India are doing extremely well And therefore

                      they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                      Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                      Between 1992-93 and now the share of the public sector in steel production had gone

                      down Today its share is 41 per cent while that of the private sector is 59 per cent In

                      1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                      the private sector even in 1992-93 had a 67 per cent share and this has now grown

                      to 71 per cent But the public sector units are growing even if the private sector is

                      growing faster

                      During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                      going to increase its capacity from the current 13 million tonnes of hot metal to 225

                      million tonnes in just four years RINL is set to expand its capacity from three million

                      tonnes to 63 million tonnes in the next three years So that is a major expansion of

                      capacity for the PSUs

                      The public sector should be encouraged all the more Let there be a healthy

                      competition between public and private sector producers The question of exit comes

                      when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                      was at below Rs10 per share Today it is more than Rs130 and the expectations

                      are that it will go up even higher

                      When talked about the labour productivity he says Yes labour productivity is low in

                      SAIL in particular But it is improving The steel major is going to adjust much of its

                      existing manpower in the expansion phase when its capacity is going to almost

                      double The management had also undertaken a massive VRS [voluntary retirement

                      scheme] In RINL labour productivity is not all that bad

                      Besides SAIL has done very well in various other techno-economic parameters in the

                      last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                      per man per year In 2005-06 it went up to 150 tonnes per man per year an

                      improvement of 20 per cent In blast furnace productivity also there has been an

                      improvement as also in the production of high-end special steels and capacity

                      utilisation

                      With the improved turnover which comes from higher capacity use and higher

                      manpower productivity SAILs profits have surged Its gross profit more than doubled

                      between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                      was largely due to the high prices of steel An analysis has shown that as far as SAIL

                      is concerned the higher profit is 29 per cent owing to the price factor in steel and

                      other input costs and 71 per cent owing to improvement in capacity use and other

                      factors that are just mentioned

                      OBJECTIVES

                      To compare Private and Public steel sector with refrence to TATA Steel and

                      Steel Authority Of India

                      To analyse potential of both the companies ie TATA Steel and SAIL

                      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

                      Research Methodology

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

                      a) Research design-

                      In case of my research ldquoComparative analysis of Indian private and Public

                      sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                      found to be more appropriate

                      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

                      Comparison between TATA Steel and Steel Authority of India

                      The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                      significant improvements in the last two years The combined profit before tax of all 15

                      PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                      Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                      The profit before tax for all PSUs also exhibited a significant improvement of

                      around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                      Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                      comparable period of last year

                      Contribution of PSUs to public exchequer has also gone up significantly For

                      example the contribution of five leading companies namely SAIL RINL NMDC

                      KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                      duty dividend corporate tax sales tax royalty etc has gone up by more than double

                      from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                      On the other hand 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

                      During the period (April-December 2006) 205 million tonne of steel was produced by

                      Private Sector steel units out of the total production of 3315 million tonne in the

                      country The private sector units consist of major steel producers in one hand and

                      relatively smaller amp 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

                      For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                      companies on following parameters

                      Production

                      Chart showing production of both the companies

                      Quantity 000 Tonnes

                      2007-08 APR-DEC07APR-

                      DEC06 ACTUA

                      L

                      AGE OF CURRENT

                      PRODUCTION OVER

                      CAPACITY UTILISATION

                      TARGET TENTATIV

                      E

                      TARGET

                      ACTUAL

                      APR-DEC07 TARGE

                      T

                      APR-DEC06 ACTUA

                      L

                      APR-DEC 07

                      APR-DEC06

                      SAIL

                      i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                      ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                      iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                      iv)BSL43500 32630 30970 30010 949 1032 950 910

                      v)ISP5000 3760 3520 3450 936 1020 940 920

                      vi)ASP1470 1070 1140 1130 1065 1009 650 640

                      vii)VISL

                      1390 1050 1160 1190 1105 975 1300 1340

                      TATA 50000 37440 37090 37380 991 992 990 1000

                      TATA Steel

                      The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                      but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                      target of 3744 (mT) but could produce 3709 However for the same period in last

                      year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                      to 99 this year

                      Steel Authority of India

                      The company had a aggregate production target of 13739 (mT) for the year 2007-08

                      but it could produce only 126 (mT) a growth of 4 over the previous year However

                      for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                      10380 as compared to around 10 (mT) for the same period last year SAIL had a

                      capacity utilisation of 103 this year as compared to 101 last year

                      Financials

                      TATA Steel

                      The year 2006-07 has seen the highest turnover and profits continuing the trend

                      of the past four years The Company achieved the best ever sales turnover and

                      profitability during the year under review A robust Indian economy firm steel prices

                      higher volumes and several improvement initiatives contributed to the record

                      performance Finished steel sales were higher by 1133 at 451 million tonnes over

                      the previous year Export turnover was lower by about 5 due to lower volumes

                      Average price realisation improved mainly due to higher prices of hot rolled

                      coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                      (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                      Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                      due to additional borrowings for the Companyrsquos domestic expansion programs and

                      funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                      providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                      crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                      before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                      after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                      20 compared to the previous year

                      The record financial results would not have been possible without a matching

                      performance by the operating departments including the raw materials division The

                      year witnessed the best ever crude steel production by the Company at 505 million

                      tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                      first plant in India to produce more than 5 million tonnes of crude steel in a year The

                      upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                      rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                      Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                      increase in production was backed by improvements in operating practices and

                      productivity resulting in a reduction in consumption of raw materials energy

                      refractories etc

                      Steel Authority of India

                      Financial Year 2006-07 has been eventful year for the company with further

                      momentum in improving operational efficiencies laying strong foundation and building

                      road map for modernisation and expansion of SAIL Plants with several new initiatives

                      undertaken with its human resource at the core During the year the company got the

                      distinction of first metal company in the country to reach a market capitalization of Rs

                      50000 crore

                      There have been improvements in all financial parameters which are shown in

                      the table given below-

                      SAIL set new record in achieving the turnover of Rs39189 crore and profit

                      before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                      previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                      increase of 55

                      Research and Development

                      Chart showing production of both the companies

                      (Rs Crore)

                      TATA Steel

                      The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                      develop galvannealed skin panels It is the only Indian supplier of bake hardening

                      steel for body panels

                      Research is undertaken at Tata Steel in the areas of raw materials including coal

                      coke energy conservation waste utilisation sintering blast furnace productivity and

                      phosphorous reduction product development and improvement in life of plant and

                      machinery The Company spends 7 of its turnover for RampD 17 patents have been

                      sealed and over 100 are in process

                      Steel Authority of India

                      Research and Development Centre for Iron and Steel (RDCIS) has provided

                      innovative technological inputs to different units of SAIL with special emphasis on

                      cost reduction product development and application quality improvement energy

                      conservation and automation Several new products were developed and

                      commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                      Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                      specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                      micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                      Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                      Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                      strengthened its technology marketing efforts by providing consultancy services

                      organising specialised testing and transfer of technological innovations to outside

                      customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                      Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                      Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                      During the year 1998 technical papers were publishedpresented besides filing

                      of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                      awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                      achievements in New Materialsrdquo given by the Ministry of Science and Technology

                      Government of India

                      Environment

                      TATA Steel

                      Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                      Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                      has an ISO-14001 certified service providerlocations are certified to ISO-14001

                      Jamshedpur is the only town in the country which

                      Significant achievements by the Company include an improvement in

                      environment and resource conservation including a reduction in green house erosion

                      raw materials and water consumption The Company has increased waste re-use and

                      re-cycling Constant upgradation and modernisation has resulted in several state-of-

                      the-art pollution control systems being installed to prevent and control pollution The

                      Company has almost doubled its capital investment in Pollution Abatement in the last

                      five years

                      Emissions effluents and wastes

                      Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                      most relevance to the steel industry Considerable reduction has been effected by

                      Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                      granulation is taken into account Other Greenhouse Gas emissions do not result from

                      Tata Steelrsquos activities

                      Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                      tonnes in 2003-04 as against 790 tonnes used during the previous year

                      Hazardous Waste under Basel Convention The Company does not import or export

                      any waste deemed hazardous under the Basel Convention All hazardous wastes

                      generated are handled as per the requirement of the Hazardous Waste Management

                      and Handling Rules 19892000

                      Emissions

                      Tata Steel has undertaken several initiatives which have resulted in

                      considerable reduction in stack emission Emissions are well below the Indian and

                      international standards The emission load including particulate matter Sulphur

                      Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                      undertaken at the Steel Works

                      Waste handling

                      Most of the solid waste generated from Steel Works is recycled or reused 18

                      of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                      was used to fill low-lying areas and for peripheral road construction around

                      Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                      power plants was dumped in a designated dump area

                      Effluent Management

                      Waste water from the steel making process is being treated with best available

                      physio-chemical methods as well as being recycled Waste water from the coke plant

                      is treated biologically where organic pollutants are oxidised and decomposed by micro

                      organisms The Company has reduced the levels of total pollutant discharge in waste

                      water streams from 0211 in 1999-2000 to 0178 in 2003-04

                      Steel Authority of India

                      Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                      environmentally responsible manner to comply with applicable regulations and striving

                      to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                      efficiency and optimize resource consumption through various measures viz

                      improvement in process technology in the areas of raw materials coke iron and steel

                      making reuserecycle of the by-products generated and conservation of energy and

                      water

                      Solid Waste Management

                      During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                      and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                      Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                      these wastes are being made through internal recycling and selling to outside

                      agencies The wastes generated in the steel plants are being utilized mainly through

                      their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                      during April-September 2006

                      Environmental Plantation

                      Trees have a significant role in protection of environment and ecological balance

                      Extensive afforestation programme are being followed in all the plants and mines The

                      basis of choosing the species of plants mainly depends on local soil characteristics

                      and prevailing meteorological conditions The green belt developed by afforestation

                      adds to the aesthetic environment which becomes dust and noise barriers

                      A total number of 145521 saplings have been planted covering an area of 637

                      hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                      hectare in 2004-05 in and around the steel plants of SAIL

                      Environmental Recognitions

                      SAIL plants have been awarded various prizes for environmental management in

                      their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                      the Confederation of Indian Industries (CII) for exemplary performance in the

                      environmental economic andsocial dimensions of sustainable development and the

                      Greentech Environment Excellence Gold AwardGolden Peacock Environment

                      Excellence Award in the metal sector 2005 instuted by the World Environment

                      Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                      for 2005 from International Greenland Society

                      Workforce and Welfare of Society

                      TATA steel

                      Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                      and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                      enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                      provide a work environment that will ensure a sense of purpose and personal growth

                      for each individual The wish of the company is to see the smile on every face

                      everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                      people and enriched empowered and enhanced their lives

                      Even in its nascent years social scientists Sidney and Beatrice Webb were

                      brought in to work on welfare schemes In fact some of the initiatives introduced by

                      Tata Steel were the first of their kind in India and some even in the western countries

                      at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                      source of its competitiveness It focuses on constantly updating and challenging

                      intellectual capabilities to enable them to excel in performance Special efforts are

                      made for enhancing strategic thinking skills and analytical abilities of its managers and

                      workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                      available with its people through Knowledge Management and sharing of best

                      practices

                      In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                      mutual co-operation coordination and understanding between the Management and

                      the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                      among many other prestigious awards and recognition Tata Steel aims at ensuring

                      transparency fairness and equity in all its interactions with its employees to create an

                      enthused and happy workforce

                      In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                      assistance in the fields of education vocational training self-employment and

                      family welfare

                      Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                      12 times This facility provides on-the-spot diagnostic medical and advanced

                      surgical treatment for preventive and curative interventions to people in

                      inaccessible rural areas

                      Sir Dorab Tata personally financed four athletes and two wrestlers from India

                      for the 1920 Antwerp Olympics

                      The JRD Sports Complex an international stadium with an 8-lane polyurethane

                      track was inaugurated in 1991 The complex also houses facilities for handball

                      tennis volleyball hockey basketball boxing table tennis and a modern

                      gymnasium

                      The Tata Steel Family Initiatives Foundation is engaged in off ering health

                      services for the betterment of the people in and around Jamshedpur

                      At times of natural calamities the company has rushe immediate relief and off

                      ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                      fl ood ravaged Orissa and other such aff ected areas

                      Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                      er a unique environment for the children of Jamshedpur to grow up in

                      In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                      Jamshedpur has emerged as the one of the best cities in India

                      Steel Authority of India

                      The manpower strength as on 31st March 2006 was 138211 comprising 15206

                      executives and 123005 non-executives The total reduction in manpower achieved

                      during the year stood at 4864 which included separation of 881 employees through

                      voluntary retirement The labour productivity improved by around 12 over previous

                      year to 150 tonne crude steelmanyear

                      Some of the areas of assistance which are available to the weaker sections are the

                      following

                      The company has provided land for construction of school buildings in some of

                      the steel townships as well as in other places for spreading education among

                      the masses

                      The company has constructed roads in remote areas around the steel plants

                      and also where the captive mines are located to improve communication and

                      also increase activities such as organisation of health camps school facilities

                      drinking water etc under the peripheral development schemes

                      Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                      Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                      providing them with education boarding and lodging facilities

                      Construction of bridges by-pass roads metal-morum path waterways

                      levellingdressing area around township pre-mixed roads Installation of hand-

                      pumps tube wells and wells for villagers

                      Construction of school buildings (including for mentally retarded deaf and

                      dumb children) madarsas providing school furniture therein and construction

                      of hostels womenrsquos college building etc

                      Fourteen scholarships are awarded to deserving SCST undergraduate

                      engineering students in various disciplines to encourage technical education

                      among them

                      In many cases tuition fee in company run schools is exempt for SCST

                      students Steps are taken to provide education to more and more tribal children

                      in company schools

                      The unemployed SCST youth are given specialized training in various

                      technical trades to develop skill and knowledge Such training is provided free

                      of cost

                      Adult literacy campaign is carried out in most of the steel townships Every year

                      more and more men and women are being covered in this campaign

                      Development of fishery and cottage industry providing sewing machines to

                      village mahila mandals and promoting other self-employment generation

                      schemes

                      SAIL has established a hockey academy with stadium and hostel facilities at

                      Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                      academy was successful in spotting a number of young talented tribal players

                      and grooms them under expertise of ex-Olympian

                      Technology

                      The biggest boost to efficiency in the steel industry has come from the increased

                      use of continuous casting ndash an indicator of the modernity of the production process Its

                      share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                      now India is thus well on its way to joining the ranks of the leading steelmakers

                      among the industrial nations (share in EU-25 96) However in India some 6 of

                      crude steel is still made using the outdated open-hearth process (EU-25 03) which

                      suggests there is restructuring potential

                      TATA Steel

                      Tata Steels stall at the International Trade Fair was adjudged the best along

                      with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                      international companies also took part in the exhibition Participating companies from

                      countries all over the world exhibited latest technologies and know-how List of

                      participating companies included Baosteel SAIL Heavy Engineering Corporation

                      Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                      companies of national and international repute China was the partner country for the

                      International Trade Fair this year

                      In the award winning exhibition Tata Steel showcased its best coal mining practices

                      cutting-edge technology used in iron ore mining pioneering human resource

                      practices 78 years of industrial harmony and various other aspects of the worlds best

                      steel company

                      The 6th International Trade Fair and Conference an institutionalised global

                      event is considered to be one of the most prestigious forums for national as well

                      international participants It is a conclave of the finest minds concerned with the future

                      direction and growth of these sectors The forum provided the worlds most eminent

                      metallurgists manufacturers of metallurgical and mining machinery and related

                      sectors professionals analysts and experts with the opportunity to exchange views on

                      emerging technologies synergy and strengths and open up wider horizons for

                      sectorial development

                      Tata Steel to adopt Corus technology

                      Tata Steel plans to implement alternate technology used by the British steel

                      maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                      production according to Mr B Muthuraman Managing Director Tata Steel

                      ldquoWe are looking at alternate technology Corus has developed an alternate

                      technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                      newspersons on the sidelines of the 34th National Management Convention organised

                      by the All-India Management Association However he declined to give further details

                      on the type of technology the Indian steel giant plans to implement

                      Steel Authority of India

                      Modernisation holds the key to SAILs fortunes in the near future The objective

                      of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                      and productive capacity and in the process become more energy-efficient and

                      improve quality The key component of the ongoing modernisation drive - already

                      completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                      ingot casting facilities with basic oxygen furnaces for steel-making and employing

                      continuous casting techniques A senior SAIL official says Continuous casting and

                      basic oxygen furnaces ensure better quality steel through processes more easily

                      monitored for quality control The basic oxygen surfaces method is significantly faster

                      more automated and permits greater flexibility Continuous casting is more efficient

                      than the traditional ingot casting methods and gives increased yields while enabling

                      better quality standards SAIL is also modernising its finishing mills and is adding

                      secondary refining facilities to improve quality

                      Safety measures

                      A unique feature of safety management in steel industry is that a bipartite forum

                      named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                      was formed in 1973 at national level having representatives from steel plants in SAIL

                      RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                      Committee With a view to inculcate safety consciousness JCSSI organises seminars

                      workshops training programme safety competitions for member organisations JCSSI

                      with the co-operation and support of Trade Union representatives formulates policies

                      and guidelines for its member plants and monitors the implementation

                      Tata Steel

                      Safety has always been a prime focus at Tata Steel A Safety Committee a

                      Safety department and a Safety Trophy helped spread the message all across the

                      company

                      TATA reaffirms its commitment to provide safe working place and clean

                      environment to its employees and other stakeholders as an integral part of its

                      business philosophy and values We will continually enhance our Environmental

                      Occupational Health amp Safety (EHS) performance in our activities products and

                      services through a structured EHS management framework Towards this

                      commitment we shall

                      Establish and achieve EHS objectives and targets

                      Ensure compliance with applicable EHS legislation and other requirement and

                      go beyond

                      Conserve natural resources and energy by constantly seeking to reduce

                      consumption and promoting waste avoidance and recycling measures

                      Eliminate minimize andor control adverse environmental impacts and

                      occupational health and safety risks by adopting appropriate state-of-the-art

                      technology and best EHS management practices at all levels sand functions

                      Enhance awareness skill and competence of our employees and contractors

                      so as to enable them to demonstrate their involvement responsibility and

                      accountability for sound EHS performance

                      Steel Authority of India

                      SAIL has a separate corporate unit called the SAIL Safety Organisation to

                      monitor safety system amp activities- SAIL also has a comprehensive safety policy

                      Annual Performance Plans (APP) for the areas of safety and fire services are

                      formulated and review of implementation of APP is done during Heads of

                      Safety meeting

                      Internal and external safety audits of major departments particularly hazardous

                      areas are conducted every year and points arising from these audits are

                      liquidated Safety aspects have been incorporated in standard operating

                      practices (SOP) and standard maintenance practices (SMP)

                      All major capital repairsshut downs are closely monitored round the clock

                      Periodic drives are conducted to inculcate safety awarenessculture up to

                      grass-root level apart from regular inspections as per checklists to identify

                      unsafe conditionsacts

                      Safety training is imparted to target group employees at various levels HRD

                      intervention in the area of safety covers Heads of Departments Line Managers

                      amp Departmental Safety Officers Besides area specific workshops are

                      conducted at different locations on important topics like gas safety railroad

                      safety safety in iron steel amp coke making etc

                      Consistent efforts were made by SAIL Safety Organisation for improving safety

                      standards in the company by taking measures like intensive safety drives in works

                      area and conducting safety audits in hazardous departments of different plants and

                      mines In addition specific workshops on safety aspects were organised in various

                      SAIL steel plants

                      Measures taken by Indian government to improve the industry

                      Now letrsquos 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-

                      1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                      among others was removed from the list of industries reserved for the public

                      sector and also exempted from the provisions of compulsory licensing under the

                      Industries (Development and Regulation) Act 1951

                      2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                      of `high priority industries for automatic approval for foreign equity investment up

                      to 51 This limit has been recently increased to 100

                      3 Price and distribution of steel were deregulated from January 1992 At the same

                      time it was ensured that priority continued to be accorded for meeting the

                      requirements of small scale industries exporters of engineering goods and North

                      Eastern Region of the country besides strategic sectors such as Defence and

                      Railways

                      4 The trade policy has been liberalised and import and export of iron and steel is

                      freely allowed There are no quantitative restrictions on import of iron and steel

                      items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                      regulating the imports is the tariff mechanism Tariffs on various items of iron and

                      steel have drastically come down since 1991-92 levels and the government is

                      committed to bring them down to the international levels In Chapter 72 there are

                      two items viz 72042110 and 72042910 which fall in the restricted list of imports

                      5 Iron amp Steel are freely importable as per the Extant Policy

                      6 Iron amp Steel are freely exportable

                      7 Advance Licensing Scheme allows duty free import of raw materials for exports

                      8 The floor price for seconds and defectives continues till date

                      9 Imports of seconds and defectives of steel are allowed only through three

                      designated ports of Mumbai Calcutta and Chennai

                      10Mandatory pre inspection certificate by a reputed international agency for every

                      import consignment of seconds and defectives

                      11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                      10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                      the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                      per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                      15 per cent to 5 per cent

                      12Further customs duty on several raw materials used by the steel sector like

                      noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                      coking coal to zero

                      13To bring down the prices of steel the excise duty on steel products was reduced

                      from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                      that the duty regime will be reviewed Budget 2004-05 revised this partially by

                      increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                      cut on moderating prices was not achieved

                      14The union Budget 2007-08 the import duty on seconds and defective has been

                      further reduced from 20 to 10

                      Special assistance being provided by Ministry of Steel to Private Sector

                      1 Ministry of Steel is extending all possible support as detailed below for the

                      development of Iron and Steel Sector in the country

                      2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                      new plants and expansion of existing ones wherever applied for

                      3 To ensure an un-interrupted supply of raw materials to the producers

                      4 The Ministry has been interacting with All India Financial institutions to expedite

                      clearance of projects

                      5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                      Plants are held at the level of Secretary

                      6 Ministry of Steel identifies infra-structural and related facilities required by steel

                      industry so that their absence does not lead to bottlenecks in the future growth of

                      the Iron and Steel Sector and takes up these issues with the concerned ministries

                      7 The Ministry has encouraged the setting up of Institute for Steel Development and

                      Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                      country are members of this Institute which has been set up with the objective of

                      promoting developing and propagating the proper and effective use of steel

                      8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                      major steel plants being implemented Govt has setup a Project Coordination

                      Group under the Chairmanship of Steel Minister

                      NATIONAL STEEL POLICY 2005

                      The progress of the steel industry has a critical influence on the pace of Indiarsquos

                      development and as such great importance is attached to capacity expansion in line

                      with expected demand at cost and prices which make Indian steel internationally

                      competitive The existing regime of liberalization decontrol and deregulation of

                      industry in the country has opened up new opportunities for the expansion of the steel

                      industry With a view to accelerating the growth of the steel sector and attaining the

                      vision of India becoming a developed economy by 2020 the Ministry of Steel

                      formulated a National Steel Policy (NSP) in 2005

                      The following salient features can be derived after analysing the NSP 2005

                      The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                      towards reform restructuring and globalisation

                      The long-term goal of the NSP is that India should have a modern and efficient

                      steel industry of world standards catering to diversified steel demand The focus of

                      the policy is to achieve global competitiveness not only in terms of cost quality and

                      product-mix but also in terms of global benchmarks of efficiency and productivity

                      In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                      NSP seeks to remove the supply-side constraints to the growth of this industry in

                      an open globally integrated and competitive environment

                      The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                      policy goal On the demand side the strategy would be to create incremental

                      demand through promotional efforts creation of awareness and strengthening the

                      delivery chain particularly in rural areas On the supply side the strategy would be

                      to facilitate creation of additional capacity remove procedural and policy

                      bottlenecks in the availability of inputs such as iron ore and coal make higher

                      investments in RampD and encourage the creation of infrastructure such as roads

                      railways and ports

                      The NSP acknowledges the low per capita consumption of steel in the country

                      especially in the rural areas and the need to boost steel consumption to improve

                      quality of life and help in meeting the growing aspirations of masses

                      In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                      industry would need additional capital In addition funds would be required for

                      technological upgrade of existing facilities In order to mobilize such vast resources

                      NSP seeks to encourage foreign direct investment In addition the policy also

                      seeks to make the fiscal incentives available to infrastructure projects accessible

                      to the steel industry

                      The NSP seeks to support developing of risk-hedging instruments like futures and

                      derivatives to contain price volatility in the steel market

                      The NSP seeks to strengthen the existing training and research facilities available

                      to the domestic steel industry so as to provide suitable training programmes

                      especially for the secondary small-scale units and also to collect and analyse data

                      on important parameters of the industry

                      The NSP seeks to mount aggressive RampD efforts to create manufacturing

                      capability for special types of steel substitute coking coal use iron ore fines

                      develop new products suited to rural needs enhance material and energy

                      efficiency utilize waste and arrest environmental degradation

                      The NSP acknowledges the important role played by the secondary steel sector in

                      providing employment meeting local demand of steel in rural and semi-urban

                      areas and meeting the countryrsquos demand of some special products and seeks to

                      endeavour to provide the necessary feedstock to these units at reasonable prices

                      from major plants through the existing mechanism of State Small Industries

                      Corporations

                      The NSP recognizes the fact that integration of the Indian steel industry with the

                      global economy requires that the industry should be protected from unfair trade

                      practices The NSP therefore envisages institution of mechanisms for import

                      surveillance and monitoring export subsidies in other countries

                      The present per capita consumption of steel in the country is very low compared to the

                      world average As mentioned above one of the objectives of the NSP is to augment

                      the demand and consumption of steel in the country by conscious promotion of steel

                      usage With a view to create a mass awareness campaign on conscious promotion of

                      steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                      the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                      The Committee is being serviced by Institute for Steel Development and Growth

                      (INSDAG) The objective of the Committee is to promote steel usage in the country by

                      way of an awareness campaign with particular emphasis on rural sectors The

                      Committee also aims at educating the designers architects builders and planners

                      regarding the qualitative and cost effective applications of steel in various structures

                      including buildings bridges flyovers and airports

                      FUTURE OF INDIAN STEEL INDUSTRY

                      India is amongst a few countries in the world having the dual advantage of fast

                      growing domestic demand coupled with access to raw materials Further the trend

                      that is already discernible is that the axis of global steel production consumption is

                      shifting towards Asia With their large populations China and India already account for

                      35 of the total world steel production - more than double of Europe Asia is

                      expected to outpace other regions of the world to an even greater extent in the coming

                      years

                      Amongst the Asian nations China has established a huge unbridgeable lead It

                      is accepted that China will continue to be the leader However India is slated to

                      emerge as the second Asian giant in the next eight years Figuratively speaking while

                      the Dragon has reached maturity the Lotus is about to bloom in resplendent

                      splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                      China swallowed almost 32 of global steel It is unlikely that future production and

                      consumption would continue to flourish at growth rates of 8 and 18 respectively as

                      has been the case over the last few years On the other hand it is sun-rise time for

                      India where the demand has increased by 7-8 in the last couple of years In the long

                      run Indian steel is likely to be more cost-effective since unlike China India has

                      relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                      can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                      However the position with coal is not so favourable Though thermal coal

                      reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                      traditional blast furnace route would require coking coal India does not have adequate

                      reserves of coking coal nor is the meagre amount available of appropriate quality

                      Thus the steel industry always had to contend with the dual problems of inadequate

                      availability and poor quality of Indian coking coal This has been partly addressed by

                      adopting alternative iron making processes that are not dependent on coking coal it

                      can not be denied that coal is the biggest cause for concern for bulk steel production

                      in India

                      Because of the shortage of indigenous coal attempts have been made by steel

                      producers to ensure long-term supplies by tying up with global majors or by acquiring

                      mines in other countries This is the only long-term solution but with a global shortage

                      of coal it may not remain cost-effective in the long run

                      India is the seventh largest producer of steel and may further improve its position

                      going by the current trends A series of investment decisions by major domestic

                      players and international steel giants such as Steel Authority of India Ltd Tata Steel

                      POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                      The keen interest shown by various prospective investors is not only due to

                      expectations of strong growth in domestic demand but also due to indigenous

                      availability of key resources like iron ore and skilled workforce

                      After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                      steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                      finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                      2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                      consumption has accelerated to 91 per cent

                      With the likely growth of Indian economy at around 7 per cent per annum

                      demand for steel is expected to remain strong and is projected to reach a level of 90

                      million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                      demand is sustainable considering the fact that Indias per capita consumption of steel

                      is still very low at 31 kgs per head compared to the world average of 145 kgs The

                      very low level of per capita consumption of steel in India is highlighted further when

                      compared with the consumption levels of its peer group consisting of countries like

                      China Brazil Mexico and Republic of Korea as also with selected developed

                      countries

                      Though there are realistic constraints in India to achieving as rapid a growth as in

                      China there seems to be consensus among analysts that India is likely to witness a

                      growth rate in steel consumption higher than the historically observed rate of 6 to 7

                      percent If the growth rate (9 per cent) of last three years is maintained then we will

                      achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                      more conservative due to cyclicity of steel business it may be mentioned that in a

                      country like India cyclicity is more in terms of prices rather than volumes of production

                      Exports

                      Similar optimism prevails with regard to export of iron and steel Export of steel

                      starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                      2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                      rising domestic demand and low capacity additions Exports now constitute around 17

                      per cent of total production and Indias presence in the developing and developed

                      world is being increasingly felt Indian steel producers have recently been able to

                      supply specialized grades and products used for sophisticated applications like

                      automobiles On the cost front some of our producers are counted amongst the least

                      cost producers of the world For an average reference plant India is competitively

                      placed in the middle of the hierarchy of steel producing nations

                      However we have a long way to go to catch up with the leading exporters of the

                      world such as Japan the CIS countries Brazil etc It is however expected that by

                      2019-20 India will be able to export around 26 million tonnes of steel representing 24

                      per cent of total projected production The projected export ratio compares well with

                      the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                      The projected production of steel by 2019-20 to meet the domestic and export

                      demand will be around 110 million tonnes Management of resources and

                      infrastructural growth is going to be critical in achievement of the production level

                      envisaged The broad requirements of various resources will increase manifold from

                      the current level The bottlenecks in availability of critical inputs and various facilities

                      need to be removed through concerted efforts of Government and industry The broad

                      strategy to overcome these constraints as well as meet the strategic goals of the steel

                      sector has been discussed in the National Steel Policy which has been recently

                      approved by the Government

                      As stated earlier the long-term goal of the National Steel Policy is that India

                      should have a modern and efficient steel industry of world standards catering to a

                      diversified steel demand The focus of the policy is to achieve global competitiveness

                      not only in terms of cost quality and product mix but also in terms of global

                      benchmarks of efficiency and productivity The policy envisages adopting a multi-

                      pronged strategy to achieve these goals On the demand side the strategy would be

                      to create incremental demand through promotional efforts creation of awareness and

                      strengthening the delivery chain particularly in rural areas On the supply side the

                      strategy would be to facilitate creation of additional capacity remove procedural and

                      policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                      investments in RampD and HRD and encourage the creation of infrastructure such as

                      roads railways and ports

                      The production figures exports and imports of finished carbon steel and pig iron

                      and apparent consumption patterns of finished carbon steel as indicated by TATA

                      Steel and SAIL attest to the continuing growth for both the sectors

                      FINDINGS

                      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 increased its profit over the year particularly in 2006-07

                      Both the companies are planning to adopt modern technology which is going to

                      help them to compete in world market but they need to be less dependent on

                      state of art technology and coal for long term prospects

                      Public sector has undergone retrenchment for the employees and improved

                      has its lobour productivity but it is still lacking behind as compared to private

                      sector

                      SAIL has reduced the no of accidents due to improper handling of machinery

                      still no of accidents are more than that of TATA Steel

                      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

                      ie 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 have to be met

                      comprehensively if we are to take our legitimate place in the world as a developed

                      nation by 2020

                      BIBLIOGRAPHY

                      Annual report (2006-07) published by ministry of steel

                      Annual report (2006-07) published by TATA Steel

                      Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                      REPORTrsquo posted by SAIL on its website

                      lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                      held on 07 Nov 2006

                      Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                      wwwsteelnicin (Official website of ministry of industry)

                      wwwtatasteelcom (Official website of TATA Steel)

                      wwwsailcoin (Official website of Steel Authority of India)

                      wwwworldsteelorg (official website of International Iron amp Steel Institute)

                      wwwjpcindiansteelnicin (Website of joint planning committee)

                      • DATA ANALYSIS
                      • Comparison between TATA Steel and Steel Authority of India
                      • Production
                      • Quantity 000 Tonnes
                      • Financials
                      • Research and Development
                      • (Rs Crore)
                      • TATA Steel
                      • Steel Authority of India
                      • Environment
                      • TATA Steel
                      • Emissions effluents and wastes
                      • Emissions
                      • Waste handling
                      • Effluent Management
                      • Steel Authority of India
                      • Solid Waste Management
                      • Environmental Plantation
                      • Environmental Recognitions
                      • Workforce and Welfare of Society
                      • TATA steel
                      • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                      • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                      • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                      • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                      • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                      • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                      • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                      • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                      • Steel Authority of India
                      • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                      • Technology
                      • Steel Authority of India
                      • Safety measures
                      • Tata Steel
                      • Steel Authority of India
                      • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                      • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                      • Measures taken by Indian government to improve the industry
                      • Now letrsquos 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-
                      • Special assistance being provided by Ministry of Steel to Private Sector
                      • FUTURE OF INDIAN STEEL INDUSTRY

                        Slabs 161 187 225 195

                        Hot Rolled Coils 154 178 210 148

                        JINDAL STEEL AND POWER LTD (JSPL)

                        Jindal Steel and Power Ltd (JSPL) part of the $4 billion Jindal Organisation has

                        business interests in steel power generation mining iron ore coal and diamond

                        explorationmining The current turnover of the company is over Rs 3000 crore JSPL

                        is the worldrsquos largest producer of coal based sponge iron The product range

                        encompasses 27 steel slabs rounds blooms and beam blanks JSPL is producing

                        rails and H beams and columns in technical collaboration with JFE Corporation

                        Japan These H-beams are the most desired option of structural engineers worldwide

                        JSPL is the largest private sector investor in the state of Chhattisgarh with a total

                        investment commitment of more than Rs 10000 crore The company is also setting

                        up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a

                        5 million tonne steel plant in Jharkhand with an investment of Rs 11500 crore

                        Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega

                        watt OP Jindal super thermal power plant at Raigarh with an investment of over Rs

                        4500 crore JSPL has been rated as one of the best environmentally managed

                        companies in India and committed to environment protection as an integral part of

                        their business activities

                        ISPAT INDUSTRIES LTD (IIL)

                        Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district

                        Raigad) a backward region of Maharashtra with a capacity of 3 million tonne of hot

                        rolled coils per annum The plant has got a 224 million tonne per annum sintering

                        plant 2 million tonne per annum blast furnace and 16 million tonne per annum gas

                        based sponge iron plant IIL have uniquely combined the usage of hot metal and

                        sponge iron in the electric arc furnace for production of liquid steel for the first time in

                        India IIL have also adopted the state-of-art technology called Compact Strip

                        Production (CSP) process which has been installed for the first time in India and

                        produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos

                        products are accepted in the domestic and international market

                        The production performance of IIL during last three years has been as follows

                        (in million tonne)

                        Items 2003-04 2004-05 2005-062006-07

                        (Up to Dec06)

                        Hot Metal 129 140 142 114

                        Sponge Iron 106 105 089 085

                        Hot Rolled Coils 162 197 215 197

                        The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

                        with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

                        global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

                        Demag the technology supplier

                        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

                        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 SAILs equity and retains voting

                        control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

                        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 Companys iron ore limestone and dolomite

                        mines The company has the distinction of being Indiarsquos largest producer of iron ore

                        and of having the countryrsquos 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

                        SAILs 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

                        SAILs 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

                        With technical and managerial expertise and know-how in steel making gained

                        over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                        services and consultancy to clients world-wide

                        SAIL has a well-equipped Research and Development Centre for Iron and Steel

                        (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                        for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                        Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                        Ranchi Our captive mines are under the control of the Raw Materials Division in

                        Kolkata The Environment Management Division and Growth Division of SAIL operate

                        from their headquarters in Kolkata Almost all our plants and major units are ISO

                        Certified

                        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

                        Subsidiary

                        Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                        Joint Ventures

                        SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                        NTPC SAIL Power Company Pvt Ltd

                        Bokaro Power Supply Company Pvt Limited

                        Mjunction Services Limited

                        SAIL-Bansal Service Centre Ltd

                        Bhilai JP Cement Ltd

                        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

                        MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                        Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                        producer of ferro manganese and silico manganese for captive use of SAIL plants

                        The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                        crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                        paid-up capital

                        Financial Performance

                        During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                        (including conversion income of Rs 17110 crore) and made a net profit after tax of

                        Rs 2097 crore The turnover and net profit after tax of the company during April

                        2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                        (provisional) respectively

                        Production Performance

                        The production of all grades of ferro alloys during 2005-06 is as under

                        (in tonne)

                        Materials 2005-06 April- Dec 2006

                        High Carbon Ferro Manganese 51525 49493

                        Silco Manganese 46712 32921

                        Medium Carbon Ferro Manganse 2344 164

                        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 was commissioned in August

                        1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                        million tonne per annum capacity Right from the year of its integrated operation VSP

                        established its presence both in the domestic and international markets with its

                        superior quality of products VSP has been awarded all the three International

                        Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                        180011999 The company has taken significant strides in the area of Corporate

                        Social Responsibility

                        Production Performance

                        (in million tonne)

                        Items 2004-05 2005-06 2006-07 (April-Dec06)

                        Hot Metal 3920 4153 3040

                        Liquid Steel 3560 3603 2676

                        Saleable Steel 3173 3237 2419

                        NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                        Incorporated on November 15 1958 the National Mineral Development Corporation

                        Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                        developing and exploiting mineral resources of the country (other than coal oil

                        natural gas and atomic minerals) At present its activities are concentrated on mining

                        of iron ore diamonds and silica sand

                        NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                        (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                        Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                        activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                        from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                        Supreme Court of India NMDC is following up the case for early hearing

                        All the iron ore production units have been accredited with ISO 90012000 and ISO

                        140012004 certifications RampD Centre of NMDC was also accredited with ISO

                        90012000 certification

                        Iron Ore

                        NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                        December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                        (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                        MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                        exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                        Capital Structure

                        The authorised share capital of the company is Rs 150 crore The paid up equity

                        share capital was Rs 13216 crore Outstanding loans from Government of India are

                        nil

                        Financial Performance

                        The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                        Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                        SalesTurnover222655 371092 2790

                        Gross Margin128749 2889 2455

                        Profit Before Tax122365 277013 2410

                        MSTC LTD

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

                        Enterprise was set up on September 9 1964 as a canalising agency for the export of

                        scrap from the country With the passage of time the Company emerged as the

                        canalising agency for the import of scrap into the country Import of scrap was de-

                        canalised by the Government in 1991-92 and MSTC has since then moved on to

                        marketing ferrous and miscellaneous scrap arising out of steel plants and other

                        industries and importing coal coke petroleum products semi finished steel products

                        like HR coils and export of primarily iron ore The company has also established an e-

                        auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                        developed an e-procurement portal in house

                        Capital Structure

                        The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                        220 crore as on 31122006 of which approximately 90 is held by Government of

                        India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                        Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                        bonus shares issued in the year 1993-94 in the ratio 11

                        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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                        handling of BOF slag etc

                        Financial Performance

                        Particulars 2004-05 2005-06 2006-07 (Apr-

                        Dec2006)

                        Total Turnover ie Service charges realised including miscellaneous Incomeetc

                        981822 1067937 765557

                        Gross Margin before Interest amp Depreciation 167879 186514 105284

                        Interest amp Depreciation 83014 100970 84728

                        Profit before Tax 84865 85544 20556

                        MANGANESE ORE (INDIA) LTD (MOIL)

                        Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                        of manganese ore in India At the time of inception 49 of its shares were held by the

                        Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                        proportion by Government of India and the State Governments of Madhya Pradesh 17

                        and Maharashtra Subsequently in 1977 the Government of India acquired the

                        shares held by CPMO in MOIL and MOIL became a wholly owned Government

                        company with effect from October 1977 As on 30112006 Government of India held

                        8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                        holding 961 and 882 shares respectively

                        MOIL Produces and Sells following Grades of Manganese Ore

                        1048708 High grade ores for production of ferro manganese

                        1048708 Medium grade ores for production of silico manganese

                        1048708 Blast furnace grade ore required for production of hot metal

                        1048708 Dioxide ore for dry battery cells and chemical industries

                        Production and 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

                        Items 2004-05 2005-06 2006-07 (up to Dec2006)

                        1 Production

                        a) Manganese Ore (thousand tonne) 94300 86500 82533

                        b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                        c) Ferro Manganese (tonne) 1032500 617000 829400

                        2 Turnover (Rupees in crore) 37878 33409 29463

                        3 Profit before Tax (Rupees in crore) 20227 16900 12087

                        KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                        Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                        90012000 and ISO 14001 company was established in April 1976 to meet the long

                        term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                        was set up at Kudremukh This project was to be financed in full by Iran However as

                        Iran stopped further loan disbursements after paying US $ 255 million the project was

                        completed as per schedule with the funds provided by Government of India While the

                        project was commissioned on schedule consequent upon the political developments

                        in Iran they did not lift any quantity of concentrate As a diversification measure the

                        Government approved the construction of a 3 million tonne per year capacity pellet

                        plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                        million tonne with additionsmodifications The plant went into commercial production

                        in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                        units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                        Plant Mangalore

                        Production

                        A target of 31 million tonne and 305 million tonne was set for production of iron ore

                        concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                        production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                        The target set for production during the year 2006-07 is 305 million tonne of pellets

                        In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                        activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                        production of iron ore concentrate during the year 2006-07 As against a target of 188

                        million tonne of pellets fixed for the period April to November 2006 the actual

                        production was 0275 million tonne which represents 15 target fulfilment There is

                        shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                        production of pellets is on account of operational problems being encountered in the

                        pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                        There was excessive generation of su er fines (slimes) affecting filtration clogging of

                        filters overflow and contamination of process water due to filling of cooling pond

                        affecting production While efforts are continuing to rectify the problems the operation

                        of pellet plant is yet to stabilize and normal production is yet to commence

                        The sales revenue during the last five years and up to November 2006 during 2006-

                        07 is detailed below

                        (Rs in lakh)

                        Years Concentrate Pellets Total

                        2006-07 (up to December 2006) - 12427 12427

                        2005-06 12091 111137 123228

                        2004-05 16050 169327 185377

                        2003-04 20209 82729 102938

                        2002-03 21135 51579 72714

                        2001-02 21571 50598 72169

                        Financial Performance

                        An overview of the performance of KIOCL during the year 2006-07 (up to November

                        2006) together with actuals for the previous three years is indicated below

                        (Rs in lakh)

                        Particulars 2006-07(up to December 2006)

                        2005-06 2004-05 2003-04

                        Total value of Sales 12427 123228 185377 102938

                        Gross Margin 2620 68706 120863 45945

                        Profit after Tax 1029 35630 64984 30070

                        Inventories(excluding finished stock)

                        20417 15843 8720 7616

                        BIRD GROUP OF COMPANIES

                        Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                        the following seven companies came under the administrative control of the Ministry of

                        Steel Government of India

                        (a) The Orissa Minerals Development Company Limited (OMDC)

                        (b) The Bisra Stone Lime Company Limited (BSLC)

                        (c) The Karanpura Development Company Limited (KDCL)

                        (d) Scott amp Saxby Limited (SSL)

                        (e) Eastern Investments Limited (EIL)

                        (f) Burrakar Coal Company Limited (Burrakar)

                        (g) Borrea Coal Company Limited (Borrea)

                        The status of the companies is as under

                        a) Burrakar and Borrea coal companies became non-operational after nationalisation

                        of coal mines The two companies are in the process of liquidation The official

                        liquidator has already taken over the assets and liabilities of these two companies

                        b) EIL being an investment company is having a major stake in the equity shares of

                        operating companies under the Bird Group

                        c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                        Status of the Companies at the Time of Nationalisation

                        At the time when the Bird Group of Companies came under the administrative control

                        of the Ministry of Steel Government of India all of them were financially sick and

                        burdened with various problems With the financial support from the Government of

                        India problems relating mainly to excessive manpower erosion of working capital and

                        outstanding liabilities could be settled to a considerable extent

                        REVIEW OF LITERATURE

                        RS PANDEY sees a bright future for the steel industry in India provided of course

                        the iron ore mining policy to be announced by the government soon acts as a catalyst

                        for growth He discusses the industrys problems and prospects in an interview When

                        asked about the steel sectors ie private and public he expressed his expert views

                        The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                        Excerpts

                        The public sector steel companies in India are doing extremely well And therefore

                        they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                        Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                        Between 1992-93 and now the share of the public sector in steel production had gone

                        down Today its share is 41 per cent while that of the private sector is 59 per cent In

                        1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                        the private sector even in 1992-93 had a 67 per cent share and this has now grown

                        to 71 per cent But the public sector units are growing even if the private sector is

                        growing faster

                        During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                        going to increase its capacity from the current 13 million tonnes of hot metal to 225

                        million tonnes in just four years RINL is set to expand its capacity from three million

                        tonnes to 63 million tonnes in the next three years So that is a major expansion of

                        capacity for the PSUs

                        The public sector should be encouraged all the more Let there be a healthy

                        competition between public and private sector producers The question of exit comes

                        when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                        was at below Rs10 per share Today it is more than Rs130 and the expectations

                        are that it will go up even higher

                        When talked about the labour productivity he says Yes labour productivity is low in

                        SAIL in particular But it is improving The steel major is going to adjust much of its

                        existing manpower in the expansion phase when its capacity is going to almost

                        double The management had also undertaken a massive VRS [voluntary retirement

                        scheme] In RINL labour productivity is not all that bad

                        Besides SAIL has done very well in various other techno-economic parameters in the

                        last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                        per man per year In 2005-06 it went up to 150 tonnes per man per year an

                        improvement of 20 per cent In blast furnace productivity also there has been an

                        improvement as also in the production of high-end special steels and capacity

                        utilisation

                        With the improved turnover which comes from higher capacity use and higher

                        manpower productivity SAILs profits have surged Its gross profit more than doubled

                        between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                        was largely due to the high prices of steel An analysis has shown that as far as SAIL

                        is concerned the higher profit is 29 per cent owing to the price factor in steel and

                        other input costs and 71 per cent owing to improvement in capacity use and other

                        factors that are just mentioned

                        OBJECTIVES

                        To compare Private and Public steel sector with refrence to TATA Steel and

                        Steel Authority Of India

                        To analyse potential of both the companies ie TATA Steel and SAIL

                        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

                        Research Methodology

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

                        a) Research design-

                        In case of my research ldquoComparative analysis of Indian private and Public

                        sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                        found to be more appropriate

                        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

                        Comparison between TATA Steel and Steel Authority of India

                        The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                        significant improvements in the last two years The combined profit before tax of all 15

                        PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                        Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                        The profit before tax for all PSUs also exhibited a significant improvement of

                        around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                        Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                        comparable period of last year

                        Contribution of PSUs to public exchequer has also gone up significantly For

                        example the contribution of five leading companies namely SAIL RINL NMDC

                        KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                        duty dividend corporate tax sales tax royalty etc has gone up by more than double

                        from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                        On the other hand 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

                        During the period (April-December 2006) 205 million tonne of steel was produced by

                        Private Sector steel units out of the total production of 3315 million tonne in the

                        country The private sector units consist of major steel producers in one hand and

                        relatively smaller amp 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

                        For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                        companies on following parameters

                        Production

                        Chart showing production of both the companies

                        Quantity 000 Tonnes

                        2007-08 APR-DEC07APR-

                        DEC06 ACTUA

                        L

                        AGE OF CURRENT

                        PRODUCTION OVER

                        CAPACITY UTILISATION

                        TARGET TENTATIV

                        E

                        TARGET

                        ACTUAL

                        APR-DEC07 TARGE

                        T

                        APR-DEC06 ACTUA

                        L

                        APR-DEC 07

                        APR-DEC06

                        SAIL

                        i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                        ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                        iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                        iv)BSL43500 32630 30970 30010 949 1032 950 910

                        v)ISP5000 3760 3520 3450 936 1020 940 920

                        vi)ASP1470 1070 1140 1130 1065 1009 650 640

                        vii)VISL

                        1390 1050 1160 1190 1105 975 1300 1340

                        TATA 50000 37440 37090 37380 991 992 990 1000

                        TATA Steel

                        The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                        but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                        target of 3744 (mT) but could produce 3709 However for the same period in last

                        year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                        to 99 this year

                        Steel Authority of India

                        The company had a aggregate production target of 13739 (mT) for the year 2007-08

                        but it could produce only 126 (mT) a growth of 4 over the previous year However

                        for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                        10380 as compared to around 10 (mT) for the same period last year SAIL had a

                        capacity utilisation of 103 this year as compared to 101 last year

                        Financials

                        TATA Steel

                        The year 2006-07 has seen the highest turnover and profits continuing the trend

                        of the past four years The Company achieved the best ever sales turnover and

                        profitability during the year under review A robust Indian economy firm steel prices

                        higher volumes and several improvement initiatives contributed to the record

                        performance Finished steel sales were higher by 1133 at 451 million tonnes over

                        the previous year Export turnover was lower by about 5 due to lower volumes

                        Average price realisation improved mainly due to higher prices of hot rolled

                        coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                        (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                        Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                        due to additional borrowings for the Companyrsquos domestic expansion programs and

                        funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                        providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                        crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                        before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                        after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                        20 compared to the previous year

                        The record financial results would not have been possible without a matching

                        performance by the operating departments including the raw materials division The

                        year witnessed the best ever crude steel production by the Company at 505 million

                        tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                        first plant in India to produce more than 5 million tonnes of crude steel in a year The

                        upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                        rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                        Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                        increase in production was backed by improvements in operating practices and

                        productivity resulting in a reduction in consumption of raw materials energy

                        refractories etc

                        Steel Authority of India

                        Financial Year 2006-07 has been eventful year for the company with further

                        momentum in improving operational efficiencies laying strong foundation and building

                        road map for modernisation and expansion of SAIL Plants with several new initiatives

                        undertaken with its human resource at the core During the year the company got the

                        distinction of first metal company in the country to reach a market capitalization of Rs

                        50000 crore

                        There have been improvements in all financial parameters which are shown in

                        the table given below-

                        SAIL set new record in achieving the turnover of Rs39189 crore and profit

                        before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                        previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                        increase of 55

                        Research and Development

                        Chart showing production of both the companies

                        (Rs Crore)

                        TATA Steel

                        The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                        develop galvannealed skin panels It is the only Indian supplier of bake hardening

                        steel for body panels

                        Research is undertaken at Tata Steel in the areas of raw materials including coal

                        coke energy conservation waste utilisation sintering blast furnace productivity and

                        phosphorous reduction product development and improvement in life of plant and

                        machinery The Company spends 7 of its turnover for RampD 17 patents have been

                        sealed and over 100 are in process

                        Steel Authority of India

                        Research and Development Centre for Iron and Steel (RDCIS) has provided

                        innovative technological inputs to different units of SAIL with special emphasis on

                        cost reduction product development and application quality improvement energy

                        conservation and automation Several new products were developed and

                        commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                        Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                        specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                        micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                        Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                        Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                        strengthened its technology marketing efforts by providing consultancy services

                        organising specialised testing and transfer of technological innovations to outside

                        customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                        Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                        Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                        During the year 1998 technical papers were publishedpresented besides filing

                        of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                        awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                        achievements in New Materialsrdquo given by the Ministry of Science and Technology

                        Government of India

                        Environment

                        TATA Steel

                        Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                        Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                        has an ISO-14001 certified service providerlocations are certified to ISO-14001

                        Jamshedpur is the only town in the country which

                        Significant achievements by the Company include an improvement in

                        environment and resource conservation including a reduction in green house erosion

                        raw materials and water consumption The Company has increased waste re-use and

                        re-cycling Constant upgradation and modernisation has resulted in several state-of-

                        the-art pollution control systems being installed to prevent and control pollution The

                        Company has almost doubled its capital investment in Pollution Abatement in the last

                        five years

                        Emissions effluents and wastes

                        Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                        most relevance to the steel industry Considerable reduction has been effected by

                        Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                        granulation is taken into account Other Greenhouse Gas emissions do not result from

                        Tata Steelrsquos activities

                        Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                        tonnes in 2003-04 as against 790 tonnes used during the previous year

                        Hazardous Waste under Basel Convention The Company does not import or export

                        any waste deemed hazardous under the Basel Convention All hazardous wastes

                        generated are handled as per the requirement of the Hazardous Waste Management

                        and Handling Rules 19892000

                        Emissions

                        Tata Steel has undertaken several initiatives which have resulted in

                        considerable reduction in stack emission Emissions are well below the Indian and

                        international standards The emission load including particulate matter Sulphur

                        Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                        undertaken at the Steel Works

                        Waste handling

                        Most of the solid waste generated from Steel Works is recycled or reused 18

                        of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                        was used to fill low-lying areas and for peripheral road construction around

                        Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                        power plants was dumped in a designated dump area

                        Effluent Management

                        Waste water from the steel making process is being treated with best available

                        physio-chemical methods as well as being recycled Waste water from the coke plant

                        is treated biologically where organic pollutants are oxidised and decomposed by micro

                        organisms The Company has reduced the levels of total pollutant discharge in waste

                        water streams from 0211 in 1999-2000 to 0178 in 2003-04

                        Steel Authority of India

                        Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                        environmentally responsible manner to comply with applicable regulations and striving

                        to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                        efficiency and optimize resource consumption through various measures viz

                        improvement in process technology in the areas of raw materials coke iron and steel

                        making reuserecycle of the by-products generated and conservation of energy and

                        water

                        Solid Waste Management

                        During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                        and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                        Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                        these wastes are being made through internal recycling and selling to outside

                        agencies The wastes generated in the steel plants are being utilized mainly through

                        their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                        during April-September 2006

                        Environmental Plantation

                        Trees have a significant role in protection of environment and ecological balance

                        Extensive afforestation programme are being followed in all the plants and mines The

                        basis of choosing the species of plants mainly depends on local soil characteristics

                        and prevailing meteorological conditions The green belt developed by afforestation

                        adds to the aesthetic environment which becomes dust and noise barriers

                        A total number of 145521 saplings have been planted covering an area of 637

                        hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                        hectare in 2004-05 in and around the steel plants of SAIL

                        Environmental Recognitions

                        SAIL plants have been awarded various prizes for environmental management in

                        their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                        the Confederation of Indian Industries (CII) for exemplary performance in the

                        environmental economic andsocial dimensions of sustainable development and the

                        Greentech Environment Excellence Gold AwardGolden Peacock Environment

                        Excellence Award in the metal sector 2005 instuted by the World Environment

                        Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                        for 2005 from International Greenland Society

                        Workforce and Welfare of Society

                        TATA steel

                        Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                        and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                        enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                        provide a work environment that will ensure a sense of purpose and personal growth

                        for each individual The wish of the company is to see the smile on every face

                        everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                        people and enriched empowered and enhanced their lives

                        Even in its nascent years social scientists Sidney and Beatrice Webb were

                        brought in to work on welfare schemes In fact some of the initiatives introduced by

                        Tata Steel were the first of their kind in India and some even in the western countries

                        at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                        source of its competitiveness It focuses on constantly updating and challenging

                        intellectual capabilities to enable them to excel in performance Special efforts are

                        made for enhancing strategic thinking skills and analytical abilities of its managers and

                        workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                        available with its people through Knowledge Management and sharing of best

                        practices

                        In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                        mutual co-operation coordination and understanding between the Management and

                        the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                        among many other prestigious awards and recognition Tata Steel aims at ensuring

                        transparency fairness and equity in all its interactions with its employees to create an

                        enthused and happy workforce

                        In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                        assistance in the fields of education vocational training self-employment and

                        family welfare

                        Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                        12 times This facility provides on-the-spot diagnostic medical and advanced

                        surgical treatment for preventive and curative interventions to people in

                        inaccessible rural areas

                        Sir Dorab Tata personally financed four athletes and two wrestlers from India

                        for the 1920 Antwerp Olympics

                        The JRD Sports Complex an international stadium with an 8-lane polyurethane

                        track was inaugurated in 1991 The complex also houses facilities for handball

                        tennis volleyball hockey basketball boxing table tennis and a modern

                        gymnasium

                        The Tata Steel Family Initiatives Foundation is engaged in off ering health

                        services for the betterment of the people in and around Jamshedpur

                        At times of natural calamities the company has rushe immediate relief and off

                        ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                        fl ood ravaged Orissa and other such aff ected areas

                        Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                        er a unique environment for the children of Jamshedpur to grow up in

                        In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                        Jamshedpur has emerged as the one of the best cities in India

                        Steel Authority of India

                        The manpower strength as on 31st March 2006 was 138211 comprising 15206

                        executives and 123005 non-executives The total reduction in manpower achieved

                        during the year stood at 4864 which included separation of 881 employees through

                        voluntary retirement The labour productivity improved by around 12 over previous

                        year to 150 tonne crude steelmanyear

                        Some of the areas of assistance which are available to the weaker sections are the

                        following

                        The company has provided land for construction of school buildings in some of

                        the steel townships as well as in other places for spreading education among

                        the masses

                        The company has constructed roads in remote areas around the steel plants

                        and also where the captive mines are located to improve communication and

                        also increase activities such as organisation of health camps school facilities

                        drinking water etc under the peripheral development schemes

                        Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                        Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                        providing them with education boarding and lodging facilities

                        Construction of bridges by-pass roads metal-morum path waterways

                        levellingdressing area around township pre-mixed roads Installation of hand-

                        pumps tube wells and wells for villagers

                        Construction of school buildings (including for mentally retarded deaf and

                        dumb children) madarsas providing school furniture therein and construction

                        of hostels womenrsquos college building etc

                        Fourteen scholarships are awarded to deserving SCST undergraduate

                        engineering students in various disciplines to encourage technical education

                        among them

                        In many cases tuition fee in company run schools is exempt for SCST

                        students Steps are taken to provide education to more and more tribal children

                        in company schools

                        The unemployed SCST youth are given specialized training in various

                        technical trades to develop skill and knowledge Such training is provided free

                        of cost

                        Adult literacy campaign is carried out in most of the steel townships Every year

                        more and more men and women are being covered in this campaign

                        Development of fishery and cottage industry providing sewing machines to

                        village mahila mandals and promoting other self-employment generation

                        schemes

                        SAIL has established a hockey academy with stadium and hostel facilities at

                        Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                        academy was successful in spotting a number of young talented tribal players

                        and grooms them under expertise of ex-Olympian

                        Technology

                        The biggest boost to efficiency in the steel industry has come from the increased

                        use of continuous casting ndash an indicator of the modernity of the production process Its

                        share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                        now India is thus well on its way to joining the ranks of the leading steelmakers

                        among the industrial nations (share in EU-25 96) However in India some 6 of

                        crude steel is still made using the outdated open-hearth process (EU-25 03) which

                        suggests there is restructuring potential

                        TATA Steel

                        Tata Steels stall at the International Trade Fair was adjudged the best along

                        with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                        international companies also took part in the exhibition Participating companies from

                        countries all over the world exhibited latest technologies and know-how List of

                        participating companies included Baosteel SAIL Heavy Engineering Corporation

                        Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                        companies of national and international repute China was the partner country for the

                        International Trade Fair this year

                        In the award winning exhibition Tata Steel showcased its best coal mining practices

                        cutting-edge technology used in iron ore mining pioneering human resource

                        practices 78 years of industrial harmony and various other aspects of the worlds best

                        steel company

                        The 6th International Trade Fair and Conference an institutionalised global

                        event is considered to be one of the most prestigious forums for national as well

                        international participants It is a conclave of the finest minds concerned with the future

                        direction and growth of these sectors The forum provided the worlds most eminent

                        metallurgists manufacturers of metallurgical and mining machinery and related

                        sectors professionals analysts and experts with the opportunity to exchange views on

                        emerging technologies synergy and strengths and open up wider horizons for

                        sectorial development

                        Tata Steel to adopt Corus technology

                        Tata Steel plans to implement alternate technology used by the British steel

                        maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                        production according to Mr B Muthuraman Managing Director Tata Steel

                        ldquoWe are looking at alternate technology Corus has developed an alternate

                        technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                        newspersons on the sidelines of the 34th National Management Convention organised

                        by the All-India Management Association However he declined to give further details

                        on the type of technology the Indian steel giant plans to implement

                        Steel Authority of India

                        Modernisation holds the key to SAILs fortunes in the near future The objective

                        of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                        and productive capacity and in the process become more energy-efficient and

                        improve quality The key component of the ongoing modernisation drive - already

                        completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                        ingot casting facilities with basic oxygen furnaces for steel-making and employing

                        continuous casting techniques A senior SAIL official says Continuous casting and

                        basic oxygen furnaces ensure better quality steel through processes more easily

                        monitored for quality control The basic oxygen surfaces method is significantly faster

                        more automated and permits greater flexibility Continuous casting is more efficient

                        than the traditional ingot casting methods and gives increased yields while enabling

                        better quality standards SAIL is also modernising its finishing mills and is adding

                        secondary refining facilities to improve quality

                        Safety measures

                        A unique feature of safety management in steel industry is that a bipartite forum

                        named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                        was formed in 1973 at national level having representatives from steel plants in SAIL

                        RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                        Committee With a view to inculcate safety consciousness JCSSI organises seminars

                        workshops training programme safety competitions for member organisations JCSSI

                        with the co-operation and support of Trade Union representatives formulates policies

                        and guidelines for its member plants and monitors the implementation

                        Tata Steel

                        Safety has always been a prime focus at Tata Steel A Safety Committee a

                        Safety department and a Safety Trophy helped spread the message all across the

                        company

                        TATA reaffirms its commitment to provide safe working place and clean

                        environment to its employees and other stakeholders as an integral part of its

                        business philosophy and values We will continually enhance our Environmental

                        Occupational Health amp Safety (EHS) performance in our activities products and

                        services through a structured EHS management framework Towards this

                        commitment we shall

                        Establish and achieve EHS objectives and targets

                        Ensure compliance with applicable EHS legislation and other requirement and

                        go beyond

                        Conserve natural resources and energy by constantly seeking to reduce

                        consumption and promoting waste avoidance and recycling measures

                        Eliminate minimize andor control adverse environmental impacts and

                        occupational health and safety risks by adopting appropriate state-of-the-art

                        technology and best EHS management practices at all levels sand functions

                        Enhance awareness skill and competence of our employees and contractors

                        so as to enable them to demonstrate their involvement responsibility and

                        accountability for sound EHS performance

                        Steel Authority of India

                        SAIL has a separate corporate unit called the SAIL Safety Organisation to

                        monitor safety system amp activities- SAIL also has a comprehensive safety policy

                        Annual Performance Plans (APP) for the areas of safety and fire services are

                        formulated and review of implementation of APP is done during Heads of

                        Safety meeting

                        Internal and external safety audits of major departments particularly hazardous

                        areas are conducted every year and points arising from these audits are

                        liquidated Safety aspects have been incorporated in standard operating

                        practices (SOP) and standard maintenance practices (SMP)

                        All major capital repairsshut downs are closely monitored round the clock

                        Periodic drives are conducted to inculcate safety awarenessculture up to

                        grass-root level apart from regular inspections as per checklists to identify

                        unsafe conditionsacts

                        Safety training is imparted to target group employees at various levels HRD

                        intervention in the area of safety covers Heads of Departments Line Managers

                        amp Departmental Safety Officers Besides area specific workshops are

                        conducted at different locations on important topics like gas safety railroad

                        safety safety in iron steel amp coke making etc

                        Consistent efforts were made by SAIL Safety Organisation for improving safety

                        standards in the company by taking measures like intensive safety drives in works

                        area and conducting safety audits in hazardous departments of different plants and

                        mines In addition specific workshops on safety aspects were organised in various

                        SAIL steel plants

                        Measures taken by Indian government to improve the industry

                        Now letrsquos 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-

                        1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                        among others was removed from the list of industries reserved for the public

                        sector and also exempted from the provisions of compulsory licensing under the

                        Industries (Development and Regulation) Act 1951

                        2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                        of `high priority industries for automatic approval for foreign equity investment up

                        to 51 This limit has been recently increased to 100

                        3 Price and distribution of steel were deregulated from January 1992 At the same

                        time it was ensured that priority continued to be accorded for meeting the

                        requirements of small scale industries exporters of engineering goods and North

                        Eastern Region of the country besides strategic sectors such as Defence and

                        Railways

                        4 The trade policy has been liberalised and import and export of iron and steel is

                        freely allowed There are no quantitative restrictions on import of iron and steel

                        items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                        regulating the imports is the tariff mechanism Tariffs on various items of iron and

                        steel have drastically come down since 1991-92 levels and the government is

                        committed to bring them down to the international levels In Chapter 72 there are

                        two items viz 72042110 and 72042910 which fall in the restricted list of imports

                        5 Iron amp Steel are freely importable as per the Extant Policy

                        6 Iron amp Steel are freely exportable

                        7 Advance Licensing Scheme allows duty free import of raw materials for exports

                        8 The floor price for seconds and defectives continues till date

                        9 Imports of seconds and defectives of steel are allowed only through three

                        designated ports of Mumbai Calcutta and Chennai

                        10Mandatory pre inspection certificate by a reputed international agency for every

                        import consignment of seconds and defectives

                        11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                        10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                        the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                        per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                        15 per cent to 5 per cent

                        12Further customs duty on several raw materials used by the steel sector like

                        noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                        coking coal to zero

                        13To bring down the prices of steel the excise duty on steel products was reduced

                        from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                        that the duty regime will be reviewed Budget 2004-05 revised this partially by

                        increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                        cut on moderating prices was not achieved

                        14The union Budget 2007-08 the import duty on seconds and defective has been

                        further reduced from 20 to 10

                        Special assistance being provided by Ministry of Steel to Private Sector

                        1 Ministry of Steel is extending all possible support as detailed below for the

                        development of Iron and Steel Sector in the country

                        2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                        new plants and expansion of existing ones wherever applied for

                        3 To ensure an un-interrupted supply of raw materials to the producers

                        4 The Ministry has been interacting with All India Financial institutions to expedite

                        clearance of projects

                        5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                        Plants are held at the level of Secretary

                        6 Ministry of Steel identifies infra-structural and related facilities required by steel

                        industry so that their absence does not lead to bottlenecks in the future growth of

                        the Iron and Steel Sector and takes up these issues with the concerned ministries

                        7 The Ministry has encouraged the setting up of Institute for Steel Development and

                        Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                        country are members of this Institute which has been set up with the objective of

                        promoting developing and propagating the proper and effective use of steel

                        8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                        major steel plants being implemented Govt has setup a Project Coordination

                        Group under the Chairmanship of Steel Minister

                        NATIONAL STEEL POLICY 2005

                        The progress of the steel industry has a critical influence on the pace of Indiarsquos

                        development and as such great importance is attached to capacity expansion in line

                        with expected demand at cost and prices which make Indian steel internationally

                        competitive The existing regime of liberalization decontrol and deregulation of

                        industry in the country has opened up new opportunities for the expansion of the steel

                        industry With a view to accelerating the growth of the steel sector and attaining the

                        vision of India becoming a developed economy by 2020 the Ministry of Steel

                        formulated a National Steel Policy (NSP) in 2005

                        The following salient features can be derived after analysing the NSP 2005

                        The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                        towards reform restructuring and globalisation

                        The long-term goal of the NSP is that India should have a modern and efficient

                        steel industry of world standards catering to diversified steel demand The focus of

                        the policy is to achieve global competitiveness not only in terms of cost quality and

                        product-mix but also in terms of global benchmarks of efficiency and productivity

                        In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                        NSP seeks to remove the supply-side constraints to the growth of this industry in

                        an open globally integrated and competitive environment

                        The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                        policy goal On the demand side the strategy would be to create incremental

                        demand through promotional efforts creation of awareness and strengthening the

                        delivery chain particularly in rural areas On the supply side the strategy would be

                        to facilitate creation of additional capacity remove procedural and policy

                        bottlenecks in the availability of inputs such as iron ore and coal make higher

                        investments in RampD and encourage the creation of infrastructure such as roads

                        railways and ports

                        The NSP acknowledges the low per capita consumption of steel in the country

                        especially in the rural areas and the need to boost steel consumption to improve

                        quality of life and help in meeting the growing aspirations of masses

                        In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                        industry would need additional capital In addition funds would be required for

                        technological upgrade of existing facilities In order to mobilize such vast resources

                        NSP seeks to encourage foreign direct investment In addition the policy also

                        seeks to make the fiscal incentives available to infrastructure projects accessible

                        to the steel industry

                        The NSP seeks to support developing of risk-hedging instruments like futures and

                        derivatives to contain price volatility in the steel market

                        The NSP seeks to strengthen the existing training and research facilities available

                        to the domestic steel industry so as to provide suitable training programmes

                        especially for the secondary small-scale units and also to collect and analyse data

                        on important parameters of the industry

                        The NSP seeks to mount aggressive RampD efforts to create manufacturing

                        capability for special types of steel substitute coking coal use iron ore fines

                        develop new products suited to rural needs enhance material and energy

                        efficiency utilize waste and arrest environmental degradation

                        The NSP acknowledges the important role played by the secondary steel sector in

                        providing employment meeting local demand of steel in rural and semi-urban

                        areas and meeting the countryrsquos demand of some special products and seeks to

                        endeavour to provide the necessary feedstock to these units at reasonable prices

                        from major plants through the existing mechanism of State Small Industries

                        Corporations

                        The NSP recognizes the fact that integration of the Indian steel industry with the

                        global economy requires that the industry should be protected from unfair trade

                        practices The NSP therefore envisages institution of mechanisms for import

                        surveillance and monitoring export subsidies in other countries

                        The present per capita consumption of steel in the country is very low compared to the

                        world average As mentioned above one of the objectives of the NSP is to augment

                        the demand and consumption of steel in the country by conscious promotion of steel

                        usage With a view to create a mass awareness campaign on conscious promotion of

                        steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                        the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                        The Committee is being serviced by Institute for Steel Development and Growth

                        (INSDAG) The objective of the Committee is to promote steel usage in the country by

                        way of an awareness campaign with particular emphasis on rural sectors The

                        Committee also aims at educating the designers architects builders and planners

                        regarding the qualitative and cost effective applications of steel in various structures

                        including buildings bridges flyovers and airports

                        FUTURE OF INDIAN STEEL INDUSTRY

                        India is amongst a few countries in the world having the dual advantage of fast

                        growing domestic demand coupled with access to raw materials Further the trend

                        that is already discernible is that the axis of global steel production consumption is

                        shifting towards Asia With their large populations China and India already account for

                        35 of the total world steel production - more than double of Europe Asia is

                        expected to outpace other regions of the world to an even greater extent in the coming

                        years

                        Amongst the Asian nations China has established a huge unbridgeable lead It

                        is accepted that China will continue to be the leader However India is slated to

                        emerge as the second Asian giant in the next eight years Figuratively speaking while

                        the Dragon has reached maturity the Lotus is about to bloom in resplendent

                        splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                        China swallowed almost 32 of global steel It is unlikely that future production and

                        consumption would continue to flourish at growth rates of 8 and 18 respectively as

                        has been the case over the last few years On the other hand it is sun-rise time for

                        India where the demand has increased by 7-8 in the last couple of years In the long

                        run Indian steel is likely to be more cost-effective since unlike China India has

                        relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                        can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                        However the position with coal is not so favourable Though thermal coal

                        reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                        traditional blast furnace route would require coking coal India does not have adequate

                        reserves of coking coal nor is the meagre amount available of appropriate quality

                        Thus the steel industry always had to contend with the dual problems of inadequate

                        availability and poor quality of Indian coking coal This has been partly addressed by

                        adopting alternative iron making processes that are not dependent on coking coal it

                        can not be denied that coal is the biggest cause for concern for bulk steel production

                        in India

                        Because of the shortage of indigenous coal attempts have been made by steel

                        producers to ensure long-term supplies by tying up with global majors or by acquiring

                        mines in other countries This is the only long-term solution but with a global shortage

                        of coal it may not remain cost-effective in the long run

                        India is the seventh largest producer of steel and may further improve its position

                        going by the current trends A series of investment decisions by major domestic

                        players and international steel giants such as Steel Authority of India Ltd Tata Steel

                        POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                        The keen interest shown by various prospective investors is not only due to

                        expectations of strong growth in domestic demand but also due to indigenous

                        availability of key resources like iron ore and skilled workforce

                        After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                        steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                        finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                        2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                        consumption has accelerated to 91 per cent

                        With the likely growth of Indian economy at around 7 per cent per annum

                        demand for steel is expected to remain strong and is projected to reach a level of 90

                        million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                        demand is sustainable considering the fact that Indias per capita consumption of steel

                        is still very low at 31 kgs per head compared to the world average of 145 kgs The

                        very low level of per capita consumption of steel in India is highlighted further when

                        compared with the consumption levels of its peer group consisting of countries like

                        China Brazil Mexico and Republic of Korea as also with selected developed

                        countries

                        Though there are realistic constraints in India to achieving as rapid a growth as in

                        China there seems to be consensus among analysts that India is likely to witness a

                        growth rate in steel consumption higher than the historically observed rate of 6 to 7

                        percent If the growth rate (9 per cent) of last three years is maintained then we will

                        achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                        more conservative due to cyclicity of steel business it may be mentioned that in a

                        country like India cyclicity is more in terms of prices rather than volumes of production

                        Exports

                        Similar optimism prevails with regard to export of iron and steel Export of steel

                        starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                        2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                        rising domestic demand and low capacity additions Exports now constitute around 17

                        per cent of total production and Indias presence in the developing and developed

                        world is being increasingly felt Indian steel producers have recently been able to

                        supply specialized grades and products used for sophisticated applications like

                        automobiles On the cost front some of our producers are counted amongst the least

                        cost producers of the world For an average reference plant India is competitively

                        placed in the middle of the hierarchy of steel producing nations

                        However we have a long way to go to catch up with the leading exporters of the

                        world such as Japan the CIS countries Brazil etc It is however expected that by

                        2019-20 India will be able to export around 26 million tonnes of steel representing 24

                        per cent of total projected production The projected export ratio compares well with

                        the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                        The projected production of steel by 2019-20 to meet the domestic and export

                        demand will be around 110 million tonnes Management of resources and

                        infrastructural growth is going to be critical in achievement of the production level

                        envisaged The broad requirements of various resources will increase manifold from

                        the current level The bottlenecks in availability of critical inputs and various facilities

                        need to be removed through concerted efforts of Government and industry The broad

                        strategy to overcome these constraints as well as meet the strategic goals of the steel

                        sector has been discussed in the National Steel Policy which has been recently

                        approved by the Government

                        As stated earlier the long-term goal of the National Steel Policy is that India

                        should have a modern and efficient steel industry of world standards catering to a

                        diversified steel demand The focus of the policy is to achieve global competitiveness

                        not only in terms of cost quality and product mix but also in terms of global

                        benchmarks of efficiency and productivity The policy envisages adopting a multi-

                        pronged strategy to achieve these goals On the demand side the strategy would be

                        to create incremental demand through promotional efforts creation of awareness and

                        strengthening the delivery chain particularly in rural areas On the supply side the

                        strategy would be to facilitate creation of additional capacity remove procedural and

                        policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                        investments in RampD and HRD and encourage the creation of infrastructure such as

                        roads railways and ports

                        The production figures exports and imports of finished carbon steel and pig iron

                        and apparent consumption patterns of finished carbon steel as indicated by TATA

                        Steel and SAIL attest to the continuing growth for both the sectors

                        FINDINGS

                        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 increased its profit over the year particularly in 2006-07

                        Both the companies are planning to adopt modern technology which is going to

                        help them to compete in world market but they need to be less dependent on

                        state of art technology and coal for long term prospects

                        Public sector has undergone retrenchment for the employees and improved

                        has its lobour productivity but it is still lacking behind as compared to private

                        sector

                        SAIL has reduced the no of accidents due to improper handling of machinery

                        still no of accidents are more than that of TATA Steel

                        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

                        ie 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 have to be met

                        comprehensively if we are to take our legitimate place in the world as a developed

                        nation by 2020

                        BIBLIOGRAPHY

                        Annual report (2006-07) published by ministry of steel

                        Annual report (2006-07) published by TATA Steel

                        Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                        REPORTrsquo posted by SAIL on its website

                        lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                        held on 07 Nov 2006

                        Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                        wwwsteelnicin (Official website of ministry of industry)

                        wwwtatasteelcom (Official website of TATA Steel)

                        wwwsailcoin (Official website of Steel Authority of India)

                        wwwworldsteelorg (official website of International Iron amp Steel Institute)

                        wwwjpcindiansteelnicin (Website of joint planning committee)

                        • DATA ANALYSIS
                        • Comparison between TATA Steel and Steel Authority of India
                        • Production
                        • Quantity 000 Tonnes
                        • Financials
                        • Research and Development
                        • (Rs Crore)
                        • TATA Steel
                        • Steel Authority of India
                        • Environment
                        • TATA Steel
                        • Emissions effluents and wastes
                        • Emissions
                        • Waste handling
                        • Effluent Management
                        • Steel Authority of India
                        • Solid Waste Management
                        • Environmental Plantation
                        • Environmental Recognitions
                        • Workforce and Welfare of Society
                        • TATA steel
                        • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                        • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                        • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                        • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                        • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                        • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                        • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                        • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                        • Steel Authority of India
                        • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                        • Technology
                        • Steel Authority of India
                        • Safety measures
                        • Tata Steel
                        • Steel Authority of India
                        • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                        • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                        • Measures taken by Indian government to improve the industry
                        • Now letrsquos 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-
                        • Special assistance being provided by Ministry of Steel to Private Sector
                        • FUTURE OF INDIAN STEEL INDUSTRY

                          The production performance of IIL during last three years has been as follows

                          (in million tonne)

                          Items 2003-04 2004-05 2005-062006-07

                          (Up to Dec06)

                          Hot Metal 129 140 142 114

                          Sponge Iron 106 105 089 085

                          Hot Rolled Coils 162 197 215 197

                          The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs

                          with Iiquid Core Reduction (LCR) features available Ispatrsquos casters have achieved

                          global benchmark in annual production as confirmed by Steel Melting Shop (SMS)

                          Demag the technology supplier

                          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

                          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 SAILs equity and retains voting

                          control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

                          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 Companys iron ore limestone and dolomite

                          mines The company has the distinction of being Indiarsquos largest producer of iron ore

                          and of having the countryrsquos 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

                          SAILs 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

                          SAILs 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

                          With technical and managerial expertise and know-how in steel making gained

                          over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                          services and consultancy to clients world-wide

                          SAIL has a well-equipped Research and Development Centre for Iron and Steel

                          (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                          for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                          Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                          Ranchi Our captive mines are under the control of the Raw Materials Division in

                          Kolkata The Environment Management Division and Growth Division of SAIL operate

                          from their headquarters in Kolkata Almost all our plants and major units are ISO

                          Certified

                          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

                          Subsidiary

                          Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                          Joint Ventures

                          SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                          NTPC SAIL Power Company Pvt Ltd

                          Bokaro Power Supply Company Pvt Limited

                          Mjunction Services Limited

                          SAIL-Bansal Service Centre Ltd

                          Bhilai JP Cement Ltd

                          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

                          MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                          Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                          producer of ferro manganese and silico manganese for captive use of SAIL plants

                          The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                          crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                          paid-up capital

                          Financial Performance

                          During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                          (including conversion income of Rs 17110 crore) and made a net profit after tax of

                          Rs 2097 crore The turnover and net profit after tax of the company during April

                          2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                          (provisional) respectively

                          Production Performance

                          The production of all grades of ferro alloys during 2005-06 is as under

                          (in tonne)

                          Materials 2005-06 April- Dec 2006

                          High Carbon Ferro Manganese 51525 49493

                          Silco Manganese 46712 32921

                          Medium Carbon Ferro Manganse 2344 164

                          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 was commissioned in August

                          1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                          million tonne per annum capacity Right from the year of its integrated operation VSP

                          established its presence both in the domestic and international markets with its

                          superior quality of products VSP has been awarded all the three International

                          Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                          180011999 The company has taken significant strides in the area of Corporate

                          Social Responsibility

                          Production Performance

                          (in million tonne)

                          Items 2004-05 2005-06 2006-07 (April-Dec06)

                          Hot Metal 3920 4153 3040

                          Liquid Steel 3560 3603 2676

                          Saleable Steel 3173 3237 2419

                          NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                          Incorporated on November 15 1958 the National Mineral Development Corporation

                          Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                          developing and exploiting mineral resources of the country (other than coal oil

                          natural gas and atomic minerals) At present its activities are concentrated on mining

                          of iron ore diamonds and silica sand

                          NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                          (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                          Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                          activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                          from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                          Supreme Court of India NMDC is following up the case for early hearing

                          All the iron ore production units have been accredited with ISO 90012000 and ISO

                          140012004 certifications RampD Centre of NMDC was also accredited with ISO

                          90012000 certification

                          Iron Ore

                          NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                          December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                          (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                          MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                          exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                          Capital Structure

                          The authorised share capital of the company is Rs 150 crore The paid up equity

                          share capital was Rs 13216 crore Outstanding loans from Government of India are

                          nil

                          Financial Performance

                          The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                          Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                          SalesTurnover222655 371092 2790

                          Gross Margin128749 2889 2455

                          Profit Before Tax122365 277013 2410

                          MSTC LTD

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

                          Enterprise was set up on September 9 1964 as a canalising agency for the export of

                          scrap from the country With the passage of time the Company emerged as the

                          canalising agency for the import of scrap into the country Import of scrap was de-

                          canalised by the Government in 1991-92 and MSTC has since then moved on to

                          marketing ferrous and miscellaneous scrap arising out of steel plants and other

                          industries and importing coal coke petroleum products semi finished steel products

                          like HR coils and export of primarily iron ore The company has also established an e-

                          auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                          developed an e-procurement portal in house

                          Capital Structure

                          The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                          220 crore as on 31122006 of which approximately 90 is held by Government of

                          India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                          Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                          bonus shares issued in the year 1993-94 in the ratio 11

                          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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                          handling of BOF slag etc

                          Financial Performance

                          Particulars 2004-05 2005-06 2006-07 (Apr-

                          Dec2006)

                          Total Turnover ie Service charges realised including miscellaneous Incomeetc

                          981822 1067937 765557

                          Gross Margin before Interest amp Depreciation 167879 186514 105284

                          Interest amp Depreciation 83014 100970 84728

                          Profit before Tax 84865 85544 20556

                          MANGANESE ORE (INDIA) LTD (MOIL)

                          Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                          of manganese ore in India At the time of inception 49 of its shares were held by the

                          Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                          proportion by Government of India and the State Governments of Madhya Pradesh 17

                          and Maharashtra Subsequently in 1977 the Government of India acquired the

                          shares held by CPMO in MOIL and MOIL became a wholly owned Government

                          company with effect from October 1977 As on 30112006 Government of India held

                          8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                          holding 961 and 882 shares respectively

                          MOIL Produces and Sells following Grades of Manganese Ore

                          1048708 High grade ores for production of ferro manganese

                          1048708 Medium grade ores for production of silico manganese

                          1048708 Blast furnace grade ore required for production of hot metal

                          1048708 Dioxide ore for dry battery cells and chemical industries

                          Production and 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

                          Items 2004-05 2005-06 2006-07 (up to Dec2006)

                          1 Production

                          a) Manganese Ore (thousand tonne) 94300 86500 82533

                          b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                          c) Ferro Manganese (tonne) 1032500 617000 829400

                          2 Turnover (Rupees in crore) 37878 33409 29463

                          3 Profit before Tax (Rupees in crore) 20227 16900 12087

                          KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                          Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                          90012000 and ISO 14001 company was established in April 1976 to meet the long

                          term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                          was set up at Kudremukh This project was to be financed in full by Iran However as

                          Iran stopped further loan disbursements after paying US $ 255 million the project was

                          completed as per schedule with the funds provided by Government of India While the

                          project was commissioned on schedule consequent upon the political developments

                          in Iran they did not lift any quantity of concentrate As a diversification measure the

                          Government approved the construction of a 3 million tonne per year capacity pellet

                          plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                          million tonne with additionsmodifications The plant went into commercial production

                          in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                          units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                          Plant Mangalore

                          Production

                          A target of 31 million tonne and 305 million tonne was set for production of iron ore

                          concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                          production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                          The target set for production during the year 2006-07 is 305 million tonne of pellets

                          In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                          activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                          production of iron ore concentrate during the year 2006-07 As against a target of 188

                          million tonne of pellets fixed for the period April to November 2006 the actual

                          production was 0275 million tonne which represents 15 target fulfilment There is

                          shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                          production of pellets is on account of operational problems being encountered in the

                          pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                          There was excessive generation of su er fines (slimes) affecting filtration clogging of

                          filters overflow and contamination of process water due to filling of cooling pond

                          affecting production While efforts are continuing to rectify the problems the operation

                          of pellet plant is yet to stabilize and normal production is yet to commence

                          The sales revenue during the last five years and up to November 2006 during 2006-

                          07 is detailed below

                          (Rs in lakh)

                          Years Concentrate Pellets Total

                          2006-07 (up to December 2006) - 12427 12427

                          2005-06 12091 111137 123228

                          2004-05 16050 169327 185377

                          2003-04 20209 82729 102938

                          2002-03 21135 51579 72714

                          2001-02 21571 50598 72169

                          Financial Performance

                          An overview of the performance of KIOCL during the year 2006-07 (up to November

                          2006) together with actuals for the previous three years is indicated below

                          (Rs in lakh)

                          Particulars 2006-07(up to December 2006)

                          2005-06 2004-05 2003-04

                          Total value of Sales 12427 123228 185377 102938

                          Gross Margin 2620 68706 120863 45945

                          Profit after Tax 1029 35630 64984 30070

                          Inventories(excluding finished stock)

                          20417 15843 8720 7616

                          BIRD GROUP OF COMPANIES

                          Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                          the following seven companies came under the administrative control of the Ministry of

                          Steel Government of India

                          (a) The Orissa Minerals Development Company Limited (OMDC)

                          (b) The Bisra Stone Lime Company Limited (BSLC)

                          (c) The Karanpura Development Company Limited (KDCL)

                          (d) Scott amp Saxby Limited (SSL)

                          (e) Eastern Investments Limited (EIL)

                          (f) Burrakar Coal Company Limited (Burrakar)

                          (g) Borrea Coal Company Limited (Borrea)

                          The status of the companies is as under

                          a) Burrakar and Borrea coal companies became non-operational after nationalisation

                          of coal mines The two companies are in the process of liquidation The official

                          liquidator has already taken over the assets and liabilities of these two companies

                          b) EIL being an investment company is having a major stake in the equity shares of

                          operating companies under the Bird Group

                          c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                          Status of the Companies at the Time of Nationalisation

                          At the time when the Bird Group of Companies came under the administrative control

                          of the Ministry of Steel Government of India all of them were financially sick and

                          burdened with various problems With the financial support from the Government of

                          India problems relating mainly to excessive manpower erosion of working capital and

                          outstanding liabilities could be settled to a considerable extent

                          REVIEW OF LITERATURE

                          RS PANDEY sees a bright future for the steel industry in India provided of course

                          the iron ore mining policy to be announced by the government soon acts as a catalyst

                          for growth He discusses the industrys problems and prospects in an interview When

                          asked about the steel sectors ie private and public he expressed his expert views

                          The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                          Excerpts

                          The public sector steel companies in India are doing extremely well And therefore

                          they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                          Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                          Between 1992-93 and now the share of the public sector in steel production had gone

                          down Today its share is 41 per cent while that of the private sector is 59 per cent In

                          1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                          the private sector even in 1992-93 had a 67 per cent share and this has now grown

                          to 71 per cent But the public sector units are growing even if the private sector is

                          growing faster

                          During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                          going to increase its capacity from the current 13 million tonnes of hot metal to 225

                          million tonnes in just four years RINL is set to expand its capacity from three million

                          tonnes to 63 million tonnes in the next three years So that is a major expansion of

                          capacity for the PSUs

                          The public sector should be encouraged all the more Let there be a healthy

                          competition between public and private sector producers The question of exit comes

                          when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                          was at below Rs10 per share Today it is more than Rs130 and the expectations

                          are that it will go up even higher

                          When talked about the labour productivity he says Yes labour productivity is low in

                          SAIL in particular But it is improving The steel major is going to adjust much of its

                          existing manpower in the expansion phase when its capacity is going to almost

                          double The management had also undertaken a massive VRS [voluntary retirement

                          scheme] In RINL labour productivity is not all that bad

                          Besides SAIL has done very well in various other techno-economic parameters in the

                          last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                          per man per year In 2005-06 it went up to 150 tonnes per man per year an

                          improvement of 20 per cent In blast furnace productivity also there has been an

                          improvement as also in the production of high-end special steels and capacity

                          utilisation

                          With the improved turnover which comes from higher capacity use and higher

                          manpower productivity SAILs profits have surged Its gross profit more than doubled

                          between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                          was largely due to the high prices of steel An analysis has shown that as far as SAIL

                          is concerned the higher profit is 29 per cent owing to the price factor in steel and

                          other input costs and 71 per cent owing to improvement in capacity use and other

                          factors that are just mentioned

                          OBJECTIVES

                          To compare Private and Public steel sector with refrence to TATA Steel and

                          Steel Authority Of India

                          To analyse potential of both the companies ie TATA Steel and SAIL

                          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

                          Research Methodology

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

                          a) Research design-

                          In case of my research ldquoComparative analysis of Indian private and Public

                          sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                          found to be more appropriate

                          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

                          Comparison between TATA Steel and Steel Authority of India

                          The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                          significant improvements in the last two years The combined profit before tax of all 15

                          PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                          Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                          The profit before tax for all PSUs also exhibited a significant improvement of

                          around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                          Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                          comparable period of last year

                          Contribution of PSUs to public exchequer has also gone up significantly For

                          example the contribution of five leading companies namely SAIL RINL NMDC

                          KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                          duty dividend corporate tax sales tax royalty etc has gone up by more than double

                          from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                          On the other hand 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

                          During the period (April-December 2006) 205 million tonne of steel was produced by

                          Private Sector steel units out of the total production of 3315 million tonne in the

                          country The private sector units consist of major steel producers in one hand and

                          relatively smaller amp 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

                          For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                          companies on following parameters

                          Production

                          Chart showing production of both the companies

                          Quantity 000 Tonnes

                          2007-08 APR-DEC07APR-

                          DEC06 ACTUA

                          L

                          AGE OF CURRENT

                          PRODUCTION OVER

                          CAPACITY UTILISATION

                          TARGET TENTATIV

                          E

                          TARGET

                          ACTUAL

                          APR-DEC07 TARGE

                          T

                          APR-DEC06 ACTUA

                          L

                          APR-DEC 07

                          APR-DEC06

                          SAIL

                          i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                          ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                          iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                          iv)BSL43500 32630 30970 30010 949 1032 950 910

                          v)ISP5000 3760 3520 3450 936 1020 940 920

                          vi)ASP1470 1070 1140 1130 1065 1009 650 640

                          vii)VISL

                          1390 1050 1160 1190 1105 975 1300 1340

                          TATA 50000 37440 37090 37380 991 992 990 1000

                          TATA Steel

                          The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                          but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                          target of 3744 (mT) but could produce 3709 However for the same period in last

                          year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                          to 99 this year

                          Steel Authority of India

                          The company had a aggregate production target of 13739 (mT) for the year 2007-08

                          but it could produce only 126 (mT) a growth of 4 over the previous year However

                          for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                          10380 as compared to around 10 (mT) for the same period last year SAIL had a

                          capacity utilisation of 103 this year as compared to 101 last year

                          Financials

                          TATA Steel

                          The year 2006-07 has seen the highest turnover and profits continuing the trend

                          of the past four years The Company achieved the best ever sales turnover and

                          profitability during the year under review A robust Indian economy firm steel prices

                          higher volumes and several improvement initiatives contributed to the record

                          performance Finished steel sales were higher by 1133 at 451 million tonnes over

                          the previous year Export turnover was lower by about 5 due to lower volumes

                          Average price realisation improved mainly due to higher prices of hot rolled

                          coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                          (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                          Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                          due to additional borrowings for the Companyrsquos domestic expansion programs and

                          funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                          providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                          crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                          before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                          after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                          20 compared to the previous year

                          The record financial results would not have been possible without a matching

                          performance by the operating departments including the raw materials division The

                          year witnessed the best ever crude steel production by the Company at 505 million

                          tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                          first plant in India to produce more than 5 million tonnes of crude steel in a year The

                          upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                          rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                          Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                          increase in production was backed by improvements in operating practices and

                          productivity resulting in a reduction in consumption of raw materials energy

                          refractories etc

                          Steel Authority of India

                          Financial Year 2006-07 has been eventful year for the company with further

                          momentum in improving operational efficiencies laying strong foundation and building

                          road map for modernisation and expansion of SAIL Plants with several new initiatives

                          undertaken with its human resource at the core During the year the company got the

                          distinction of first metal company in the country to reach a market capitalization of Rs

                          50000 crore

                          There have been improvements in all financial parameters which are shown in

                          the table given below-

                          SAIL set new record in achieving the turnover of Rs39189 crore and profit

                          before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                          previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                          increase of 55

                          Research and Development

                          Chart showing production of both the companies

                          (Rs Crore)

                          TATA Steel

                          The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                          develop galvannealed skin panels It is the only Indian supplier of bake hardening

                          steel for body panels

                          Research is undertaken at Tata Steel in the areas of raw materials including coal

                          coke energy conservation waste utilisation sintering blast furnace productivity and

                          phosphorous reduction product development and improvement in life of plant and

                          machinery The Company spends 7 of its turnover for RampD 17 patents have been

                          sealed and over 100 are in process

                          Steel Authority of India

                          Research and Development Centre for Iron and Steel (RDCIS) has provided

                          innovative technological inputs to different units of SAIL with special emphasis on

                          cost reduction product development and application quality improvement energy

                          conservation and automation Several new products were developed and

                          commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                          Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                          specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                          micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                          Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                          Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                          strengthened its technology marketing efforts by providing consultancy services

                          organising specialised testing and transfer of technological innovations to outside

                          customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                          Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                          Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                          During the year 1998 technical papers were publishedpresented besides filing

                          of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                          awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                          achievements in New Materialsrdquo given by the Ministry of Science and Technology

                          Government of India

                          Environment

                          TATA Steel

                          Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                          Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                          has an ISO-14001 certified service providerlocations are certified to ISO-14001

                          Jamshedpur is the only town in the country which

                          Significant achievements by the Company include an improvement in

                          environment and resource conservation including a reduction in green house erosion

                          raw materials and water consumption The Company has increased waste re-use and

                          re-cycling Constant upgradation and modernisation has resulted in several state-of-

                          the-art pollution control systems being installed to prevent and control pollution The

                          Company has almost doubled its capital investment in Pollution Abatement in the last

                          five years

                          Emissions effluents and wastes

                          Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                          most relevance to the steel industry Considerable reduction has been effected by

                          Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                          granulation is taken into account Other Greenhouse Gas emissions do not result from

                          Tata Steelrsquos activities

                          Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                          tonnes in 2003-04 as against 790 tonnes used during the previous year

                          Hazardous Waste under Basel Convention The Company does not import or export

                          any waste deemed hazardous under the Basel Convention All hazardous wastes

                          generated are handled as per the requirement of the Hazardous Waste Management

                          and Handling Rules 19892000

                          Emissions

                          Tata Steel has undertaken several initiatives which have resulted in

                          considerable reduction in stack emission Emissions are well below the Indian and

                          international standards The emission load including particulate matter Sulphur

                          Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                          undertaken at the Steel Works

                          Waste handling

                          Most of the solid waste generated from Steel Works is recycled or reused 18

                          of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                          was used to fill low-lying areas and for peripheral road construction around

                          Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                          power plants was dumped in a designated dump area

                          Effluent Management

                          Waste water from the steel making process is being treated with best available

                          physio-chemical methods as well as being recycled Waste water from the coke plant

                          is treated biologically where organic pollutants are oxidised and decomposed by micro

                          organisms The Company has reduced the levels of total pollutant discharge in waste

                          water streams from 0211 in 1999-2000 to 0178 in 2003-04

                          Steel Authority of India

                          Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                          environmentally responsible manner to comply with applicable regulations and striving

                          to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                          efficiency and optimize resource consumption through various measures viz

                          improvement in process technology in the areas of raw materials coke iron and steel

                          making reuserecycle of the by-products generated and conservation of energy and

                          water

                          Solid Waste Management

                          During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                          and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                          Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                          these wastes are being made through internal recycling and selling to outside

                          agencies The wastes generated in the steel plants are being utilized mainly through

                          their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                          during April-September 2006

                          Environmental Plantation

                          Trees have a significant role in protection of environment and ecological balance

                          Extensive afforestation programme are being followed in all the plants and mines The

                          basis of choosing the species of plants mainly depends on local soil characteristics

                          and prevailing meteorological conditions The green belt developed by afforestation

                          adds to the aesthetic environment which becomes dust and noise barriers

                          A total number of 145521 saplings have been planted covering an area of 637

                          hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                          hectare in 2004-05 in and around the steel plants of SAIL

                          Environmental Recognitions

                          SAIL plants have been awarded various prizes for environmental management in

                          their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                          the Confederation of Indian Industries (CII) for exemplary performance in the

                          environmental economic andsocial dimensions of sustainable development and the

                          Greentech Environment Excellence Gold AwardGolden Peacock Environment

                          Excellence Award in the metal sector 2005 instuted by the World Environment

                          Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                          for 2005 from International Greenland Society

                          Workforce and Welfare of Society

                          TATA steel

                          Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                          and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                          enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                          provide a work environment that will ensure a sense of purpose and personal growth

                          for each individual The wish of the company is to see the smile on every face

                          everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                          people and enriched empowered and enhanced their lives

                          Even in its nascent years social scientists Sidney and Beatrice Webb were

                          brought in to work on welfare schemes In fact some of the initiatives introduced by

                          Tata Steel were the first of their kind in India and some even in the western countries

                          at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                          source of its competitiveness It focuses on constantly updating and challenging

                          intellectual capabilities to enable them to excel in performance Special efforts are

                          made for enhancing strategic thinking skills and analytical abilities of its managers and

                          workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                          available with its people through Knowledge Management and sharing of best

                          practices

                          In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                          mutual co-operation coordination and understanding between the Management and

                          the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                          among many other prestigious awards and recognition Tata Steel aims at ensuring

                          transparency fairness and equity in all its interactions with its employees to create an

                          enthused and happy workforce

                          In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                          assistance in the fields of education vocational training self-employment and

                          family welfare

                          Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                          12 times This facility provides on-the-spot diagnostic medical and advanced

                          surgical treatment for preventive and curative interventions to people in

                          inaccessible rural areas

                          Sir Dorab Tata personally financed four athletes and two wrestlers from India

                          for the 1920 Antwerp Olympics

                          The JRD Sports Complex an international stadium with an 8-lane polyurethane

                          track was inaugurated in 1991 The complex also houses facilities for handball

                          tennis volleyball hockey basketball boxing table tennis and a modern

                          gymnasium

                          The Tata Steel Family Initiatives Foundation is engaged in off ering health

                          services for the betterment of the people in and around Jamshedpur

                          At times of natural calamities the company has rushe immediate relief and off

                          ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                          fl ood ravaged Orissa and other such aff ected areas

                          Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                          er a unique environment for the children of Jamshedpur to grow up in

                          In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                          Jamshedpur has emerged as the one of the best cities in India

                          Steel Authority of India

                          The manpower strength as on 31st March 2006 was 138211 comprising 15206

                          executives and 123005 non-executives The total reduction in manpower achieved

                          during the year stood at 4864 which included separation of 881 employees through

                          voluntary retirement The labour productivity improved by around 12 over previous

                          year to 150 tonne crude steelmanyear

                          Some of the areas of assistance which are available to the weaker sections are the

                          following

                          The company has provided land for construction of school buildings in some of

                          the steel townships as well as in other places for spreading education among

                          the masses

                          The company has constructed roads in remote areas around the steel plants

                          and also where the captive mines are located to improve communication and

                          also increase activities such as organisation of health camps school facilities

                          drinking water etc under the peripheral development schemes

                          Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                          Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                          providing them with education boarding and lodging facilities

                          Construction of bridges by-pass roads metal-morum path waterways

                          levellingdressing area around township pre-mixed roads Installation of hand-

                          pumps tube wells and wells for villagers

                          Construction of school buildings (including for mentally retarded deaf and

                          dumb children) madarsas providing school furniture therein and construction

                          of hostels womenrsquos college building etc

                          Fourteen scholarships are awarded to deserving SCST undergraduate

                          engineering students in various disciplines to encourage technical education

                          among them

                          In many cases tuition fee in company run schools is exempt for SCST

                          students Steps are taken to provide education to more and more tribal children

                          in company schools

                          The unemployed SCST youth are given specialized training in various

                          technical trades to develop skill and knowledge Such training is provided free

                          of cost

                          Adult literacy campaign is carried out in most of the steel townships Every year

                          more and more men and women are being covered in this campaign

                          Development of fishery and cottage industry providing sewing machines to

                          village mahila mandals and promoting other self-employment generation

                          schemes

                          SAIL has established a hockey academy with stadium and hostel facilities at

                          Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                          academy was successful in spotting a number of young talented tribal players

                          and grooms them under expertise of ex-Olympian

                          Technology

                          The biggest boost to efficiency in the steel industry has come from the increased

                          use of continuous casting ndash an indicator of the modernity of the production process Its

                          share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                          now India is thus well on its way to joining the ranks of the leading steelmakers

                          among the industrial nations (share in EU-25 96) However in India some 6 of

                          crude steel is still made using the outdated open-hearth process (EU-25 03) which

                          suggests there is restructuring potential

                          TATA Steel

                          Tata Steels stall at the International Trade Fair was adjudged the best along

                          with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                          international companies also took part in the exhibition Participating companies from

                          countries all over the world exhibited latest technologies and know-how List of

                          participating companies included Baosteel SAIL Heavy Engineering Corporation

                          Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                          companies of national and international repute China was the partner country for the

                          International Trade Fair this year

                          In the award winning exhibition Tata Steel showcased its best coal mining practices

                          cutting-edge technology used in iron ore mining pioneering human resource

                          practices 78 years of industrial harmony and various other aspects of the worlds best

                          steel company

                          The 6th International Trade Fair and Conference an institutionalised global

                          event is considered to be one of the most prestigious forums for national as well

                          international participants It is a conclave of the finest minds concerned with the future

                          direction and growth of these sectors The forum provided the worlds most eminent

                          metallurgists manufacturers of metallurgical and mining machinery and related

                          sectors professionals analysts and experts with the opportunity to exchange views on

                          emerging technologies synergy and strengths and open up wider horizons for

                          sectorial development

                          Tata Steel to adopt Corus technology

                          Tata Steel plans to implement alternate technology used by the British steel

                          maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                          production according to Mr B Muthuraman Managing Director Tata Steel

                          ldquoWe are looking at alternate technology Corus has developed an alternate

                          technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                          newspersons on the sidelines of the 34th National Management Convention organised

                          by the All-India Management Association However he declined to give further details

                          on the type of technology the Indian steel giant plans to implement

                          Steel Authority of India

                          Modernisation holds the key to SAILs fortunes in the near future The objective

                          of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                          and productive capacity and in the process become more energy-efficient and

                          improve quality The key component of the ongoing modernisation drive - already

                          completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                          ingot casting facilities with basic oxygen furnaces for steel-making and employing

                          continuous casting techniques A senior SAIL official says Continuous casting and

                          basic oxygen furnaces ensure better quality steel through processes more easily

                          monitored for quality control The basic oxygen surfaces method is significantly faster

                          more automated and permits greater flexibility Continuous casting is more efficient

                          than the traditional ingot casting methods and gives increased yields while enabling

                          better quality standards SAIL is also modernising its finishing mills and is adding

                          secondary refining facilities to improve quality

                          Safety measures

                          A unique feature of safety management in steel industry is that a bipartite forum

                          named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                          was formed in 1973 at national level having representatives from steel plants in SAIL

                          RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                          Committee With a view to inculcate safety consciousness JCSSI organises seminars

                          workshops training programme safety competitions for member organisations JCSSI

                          with the co-operation and support of Trade Union representatives formulates policies

                          and guidelines for its member plants and monitors the implementation

                          Tata Steel

                          Safety has always been a prime focus at Tata Steel A Safety Committee a

                          Safety department and a Safety Trophy helped spread the message all across the

                          company

                          TATA reaffirms its commitment to provide safe working place and clean

                          environment to its employees and other stakeholders as an integral part of its

                          business philosophy and values We will continually enhance our Environmental

                          Occupational Health amp Safety (EHS) performance in our activities products and

                          services through a structured EHS management framework Towards this

                          commitment we shall

                          Establish and achieve EHS objectives and targets

                          Ensure compliance with applicable EHS legislation and other requirement and

                          go beyond

                          Conserve natural resources and energy by constantly seeking to reduce

                          consumption and promoting waste avoidance and recycling measures

                          Eliminate minimize andor control adverse environmental impacts and

                          occupational health and safety risks by adopting appropriate state-of-the-art

                          technology and best EHS management practices at all levels sand functions

                          Enhance awareness skill and competence of our employees and contractors

                          so as to enable them to demonstrate their involvement responsibility and

                          accountability for sound EHS performance

                          Steel Authority of India

                          SAIL has a separate corporate unit called the SAIL Safety Organisation to

                          monitor safety system amp activities- SAIL also has a comprehensive safety policy

                          Annual Performance Plans (APP) for the areas of safety and fire services are

                          formulated and review of implementation of APP is done during Heads of

                          Safety meeting

                          Internal and external safety audits of major departments particularly hazardous

                          areas are conducted every year and points arising from these audits are

                          liquidated Safety aspects have been incorporated in standard operating

                          practices (SOP) and standard maintenance practices (SMP)

                          All major capital repairsshut downs are closely monitored round the clock

                          Periodic drives are conducted to inculcate safety awarenessculture up to

                          grass-root level apart from regular inspections as per checklists to identify

                          unsafe conditionsacts

                          Safety training is imparted to target group employees at various levels HRD

                          intervention in the area of safety covers Heads of Departments Line Managers

                          amp Departmental Safety Officers Besides area specific workshops are

                          conducted at different locations on important topics like gas safety railroad

                          safety safety in iron steel amp coke making etc

                          Consistent efforts were made by SAIL Safety Organisation for improving safety

                          standards in the company by taking measures like intensive safety drives in works

                          area and conducting safety audits in hazardous departments of different plants and

                          mines In addition specific workshops on safety aspects were organised in various

                          SAIL steel plants

                          Measures taken by Indian government to improve the industry

                          Now letrsquos 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-

                          1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                          among others was removed from the list of industries reserved for the public

                          sector and also exempted from the provisions of compulsory licensing under the

                          Industries (Development and Regulation) Act 1951

                          2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                          of `high priority industries for automatic approval for foreign equity investment up

                          to 51 This limit has been recently increased to 100

                          3 Price and distribution of steel were deregulated from January 1992 At the same

                          time it was ensured that priority continued to be accorded for meeting the

                          requirements of small scale industries exporters of engineering goods and North

                          Eastern Region of the country besides strategic sectors such as Defence and

                          Railways

                          4 The trade policy has been liberalised and import and export of iron and steel is

                          freely allowed There are no quantitative restrictions on import of iron and steel

                          items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                          regulating the imports is the tariff mechanism Tariffs on various items of iron and

                          steel have drastically come down since 1991-92 levels and the government is

                          committed to bring them down to the international levels In Chapter 72 there are

                          two items viz 72042110 and 72042910 which fall in the restricted list of imports

                          5 Iron amp Steel are freely importable as per the Extant Policy

                          6 Iron amp Steel are freely exportable

                          7 Advance Licensing Scheme allows duty free import of raw materials for exports

                          8 The floor price for seconds and defectives continues till date

                          9 Imports of seconds and defectives of steel are allowed only through three

                          designated ports of Mumbai Calcutta and Chennai

                          10Mandatory pre inspection certificate by a reputed international agency for every

                          import consignment of seconds and defectives

                          11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                          10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                          the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                          per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                          15 per cent to 5 per cent

                          12Further customs duty on several raw materials used by the steel sector like

                          noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                          coking coal to zero

                          13To bring down the prices of steel the excise duty on steel products was reduced

                          from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                          that the duty regime will be reviewed Budget 2004-05 revised this partially by

                          increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                          cut on moderating prices was not achieved

                          14The union Budget 2007-08 the import duty on seconds and defective has been

                          further reduced from 20 to 10

                          Special assistance being provided by Ministry of Steel to Private Sector

                          1 Ministry of Steel is extending all possible support as detailed below for the

                          development of Iron and Steel Sector in the country

                          2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                          new plants and expansion of existing ones wherever applied for

                          3 To ensure an un-interrupted supply of raw materials to the producers

                          4 The Ministry has been interacting with All India Financial institutions to expedite

                          clearance of projects

                          5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                          Plants are held at the level of Secretary

                          6 Ministry of Steel identifies infra-structural and related facilities required by steel

                          industry so that their absence does not lead to bottlenecks in the future growth of

                          the Iron and Steel Sector and takes up these issues with the concerned ministries

                          7 The Ministry has encouraged the setting up of Institute for Steel Development and

                          Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                          country are members of this Institute which has been set up with the objective of

                          promoting developing and propagating the proper and effective use of steel

                          8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                          major steel plants being implemented Govt has setup a Project Coordination

                          Group under the Chairmanship of Steel Minister

                          NATIONAL STEEL POLICY 2005

                          The progress of the steel industry has a critical influence on the pace of Indiarsquos

                          development and as such great importance is attached to capacity expansion in line

                          with expected demand at cost and prices which make Indian steel internationally

                          competitive The existing regime of liberalization decontrol and deregulation of

                          industry in the country has opened up new opportunities for the expansion of the steel

                          industry With a view to accelerating the growth of the steel sector and attaining the

                          vision of India becoming a developed economy by 2020 the Ministry of Steel

                          formulated a National Steel Policy (NSP) in 2005

                          The following salient features can be derived after analysing the NSP 2005

                          The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                          towards reform restructuring and globalisation

                          The long-term goal of the NSP is that India should have a modern and efficient

                          steel industry of world standards catering to diversified steel demand The focus of

                          the policy is to achieve global competitiveness not only in terms of cost quality and

                          product-mix but also in terms of global benchmarks of efficiency and productivity

                          In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                          NSP seeks to remove the supply-side constraints to the growth of this industry in

                          an open globally integrated and competitive environment

                          The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                          policy goal On the demand side the strategy would be to create incremental

                          demand through promotional efforts creation of awareness and strengthening the

                          delivery chain particularly in rural areas On the supply side the strategy would be

                          to facilitate creation of additional capacity remove procedural and policy

                          bottlenecks in the availability of inputs such as iron ore and coal make higher

                          investments in RampD and encourage the creation of infrastructure such as roads

                          railways and ports

                          The NSP acknowledges the low per capita consumption of steel in the country

                          especially in the rural areas and the need to boost steel consumption to improve

                          quality of life and help in meeting the growing aspirations of masses

                          In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                          industry would need additional capital In addition funds would be required for

                          technological upgrade of existing facilities In order to mobilize such vast resources

                          NSP seeks to encourage foreign direct investment In addition the policy also

                          seeks to make the fiscal incentives available to infrastructure projects accessible

                          to the steel industry

                          The NSP seeks to support developing of risk-hedging instruments like futures and

                          derivatives to contain price volatility in the steel market

                          The NSP seeks to strengthen the existing training and research facilities available

                          to the domestic steel industry so as to provide suitable training programmes

                          especially for the secondary small-scale units and also to collect and analyse data

                          on important parameters of the industry

                          The NSP seeks to mount aggressive RampD efforts to create manufacturing

                          capability for special types of steel substitute coking coal use iron ore fines

                          develop new products suited to rural needs enhance material and energy

                          efficiency utilize waste and arrest environmental degradation

                          The NSP acknowledges the important role played by the secondary steel sector in

                          providing employment meeting local demand of steel in rural and semi-urban

                          areas and meeting the countryrsquos demand of some special products and seeks to

                          endeavour to provide the necessary feedstock to these units at reasonable prices

                          from major plants through the existing mechanism of State Small Industries

                          Corporations

                          The NSP recognizes the fact that integration of the Indian steel industry with the

                          global economy requires that the industry should be protected from unfair trade

                          practices The NSP therefore envisages institution of mechanisms for import

                          surveillance and monitoring export subsidies in other countries

                          The present per capita consumption of steel in the country is very low compared to the

                          world average As mentioned above one of the objectives of the NSP is to augment

                          the demand and consumption of steel in the country by conscious promotion of steel

                          usage With a view to create a mass awareness campaign on conscious promotion of

                          steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                          the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                          The Committee is being serviced by Institute for Steel Development and Growth

                          (INSDAG) The objective of the Committee is to promote steel usage in the country by

                          way of an awareness campaign with particular emphasis on rural sectors The

                          Committee also aims at educating the designers architects builders and planners

                          regarding the qualitative and cost effective applications of steel in various structures

                          including buildings bridges flyovers and airports

                          FUTURE OF INDIAN STEEL INDUSTRY

                          India is amongst a few countries in the world having the dual advantage of fast

                          growing domestic demand coupled with access to raw materials Further the trend

                          that is already discernible is that the axis of global steel production consumption is

                          shifting towards Asia With their large populations China and India already account for

                          35 of the total world steel production - more than double of Europe Asia is

                          expected to outpace other regions of the world to an even greater extent in the coming

                          years

                          Amongst the Asian nations China has established a huge unbridgeable lead It

                          is accepted that China will continue to be the leader However India is slated to

                          emerge as the second Asian giant in the next eight years Figuratively speaking while

                          the Dragon has reached maturity the Lotus is about to bloom in resplendent

                          splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                          China swallowed almost 32 of global steel It is unlikely that future production and

                          consumption would continue to flourish at growth rates of 8 and 18 respectively as

                          has been the case over the last few years On the other hand it is sun-rise time for

                          India where the demand has increased by 7-8 in the last couple of years In the long

                          run Indian steel is likely to be more cost-effective since unlike China India has

                          relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                          can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                          However the position with coal is not so favourable Though thermal coal

                          reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                          traditional blast furnace route would require coking coal India does not have adequate

                          reserves of coking coal nor is the meagre amount available of appropriate quality

                          Thus the steel industry always had to contend with the dual problems of inadequate

                          availability and poor quality of Indian coking coal This has been partly addressed by

                          adopting alternative iron making processes that are not dependent on coking coal it

                          can not be denied that coal is the biggest cause for concern for bulk steel production

                          in India

                          Because of the shortage of indigenous coal attempts have been made by steel

                          producers to ensure long-term supplies by tying up with global majors or by acquiring

                          mines in other countries This is the only long-term solution but with a global shortage

                          of coal it may not remain cost-effective in the long run

                          India is the seventh largest producer of steel and may further improve its position

                          going by the current trends A series of investment decisions by major domestic

                          players and international steel giants such as Steel Authority of India Ltd Tata Steel

                          POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                          The keen interest shown by various prospective investors is not only due to

                          expectations of strong growth in domestic demand but also due to indigenous

                          availability of key resources like iron ore and skilled workforce

                          After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                          steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                          finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                          2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                          consumption has accelerated to 91 per cent

                          With the likely growth of Indian economy at around 7 per cent per annum

                          demand for steel is expected to remain strong and is projected to reach a level of 90

                          million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                          demand is sustainable considering the fact that Indias per capita consumption of steel

                          is still very low at 31 kgs per head compared to the world average of 145 kgs The

                          very low level of per capita consumption of steel in India is highlighted further when

                          compared with the consumption levels of its peer group consisting of countries like

                          China Brazil Mexico and Republic of Korea as also with selected developed

                          countries

                          Though there are realistic constraints in India to achieving as rapid a growth as in

                          China there seems to be consensus among analysts that India is likely to witness a

                          growth rate in steel consumption higher than the historically observed rate of 6 to 7

                          percent If the growth rate (9 per cent) of last three years is maintained then we will

                          achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                          more conservative due to cyclicity of steel business it may be mentioned that in a

                          country like India cyclicity is more in terms of prices rather than volumes of production

                          Exports

                          Similar optimism prevails with regard to export of iron and steel Export of steel

                          starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                          2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                          rising domestic demand and low capacity additions Exports now constitute around 17

                          per cent of total production and Indias presence in the developing and developed

                          world is being increasingly felt Indian steel producers have recently been able to

                          supply specialized grades and products used for sophisticated applications like

                          automobiles On the cost front some of our producers are counted amongst the least

                          cost producers of the world For an average reference plant India is competitively

                          placed in the middle of the hierarchy of steel producing nations

                          However we have a long way to go to catch up with the leading exporters of the

                          world such as Japan the CIS countries Brazil etc It is however expected that by

                          2019-20 India will be able to export around 26 million tonnes of steel representing 24

                          per cent of total projected production The projected export ratio compares well with

                          the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                          The projected production of steel by 2019-20 to meet the domestic and export

                          demand will be around 110 million tonnes Management of resources and

                          infrastructural growth is going to be critical in achievement of the production level

                          envisaged The broad requirements of various resources will increase manifold from

                          the current level The bottlenecks in availability of critical inputs and various facilities

                          need to be removed through concerted efforts of Government and industry The broad

                          strategy to overcome these constraints as well as meet the strategic goals of the steel

                          sector has been discussed in the National Steel Policy which has been recently

                          approved by the Government

                          As stated earlier the long-term goal of the National Steel Policy is that India

                          should have a modern and efficient steel industry of world standards catering to a

                          diversified steel demand The focus of the policy is to achieve global competitiveness

                          not only in terms of cost quality and product mix but also in terms of global

                          benchmarks of efficiency and productivity The policy envisages adopting a multi-

                          pronged strategy to achieve these goals On the demand side the strategy would be

                          to create incremental demand through promotional efforts creation of awareness and

                          strengthening the delivery chain particularly in rural areas On the supply side the

                          strategy would be to facilitate creation of additional capacity remove procedural and

                          policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                          investments in RampD and HRD and encourage the creation of infrastructure such as

                          roads railways and ports

                          The production figures exports and imports of finished carbon steel and pig iron

                          and apparent consumption patterns of finished carbon steel as indicated by TATA

                          Steel and SAIL attest to the continuing growth for both the sectors

                          FINDINGS

                          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 increased its profit over the year particularly in 2006-07

                          Both the companies are planning to adopt modern technology which is going to

                          help them to compete in world market but they need to be less dependent on

                          state of art technology and coal for long term prospects

                          Public sector has undergone retrenchment for the employees and improved

                          has its lobour productivity but it is still lacking behind as compared to private

                          sector

                          SAIL has reduced the no of accidents due to improper handling of machinery

                          still no of accidents are more than that of TATA Steel

                          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

                          ie 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 have to be met

                          comprehensively if we are to take our legitimate place in the world as a developed

                          nation by 2020

                          BIBLIOGRAPHY

                          Annual report (2006-07) published by ministry of steel

                          Annual report (2006-07) published by TATA Steel

                          Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                          REPORTrsquo posted by SAIL on its website

                          lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                          held on 07 Nov 2006

                          Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                          wwwsteelnicin (Official website of ministry of industry)

                          wwwtatasteelcom (Official website of TATA Steel)

                          wwwsailcoin (Official website of Steel Authority of India)

                          wwwworldsteelorg (official website of International Iron amp Steel Institute)

                          wwwjpcindiansteelnicin (Website of joint planning committee)

                          • DATA ANALYSIS
                          • Comparison between TATA Steel and Steel Authority of India
                          • Production
                          • Quantity 000 Tonnes
                          • Financials
                          • Research and Development
                          • (Rs Crore)
                          • TATA Steel
                          • Steel Authority of India
                          • Environment
                          • TATA Steel
                          • Emissions effluents and wastes
                          • Emissions
                          • Waste handling
                          • Effluent Management
                          • Steel Authority of India
                          • Solid Waste Management
                          • Environmental Plantation
                          • Environmental Recognitions
                          • Workforce and Welfare of Society
                          • TATA steel
                          • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                          • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                          • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                          • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                          • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                          • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                          • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                          • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                          • Steel Authority of India
                          • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                          • Technology
                          • Steel Authority of India
                          • Safety measures
                          • Tata Steel
                          • Steel Authority of India
                          • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                          • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                          • Measures taken by Indian government to improve the industry
                          • Now letrsquos 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-
                          • Special assistance being provided by Ministry of Steel to Private Sector
                          • FUTURE OF INDIAN STEEL INDUSTRY

                            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 SAILs equity and retains voting

                            control of the Company However SAIL by virtue of its lsquoNavratnarsquo 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 structurals

                            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 Companys iron ore limestone and dolomite

                            mines The company has the distinction of being Indiarsquos largest producer of iron ore

                            and of having the countryrsquos 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

                            SAILs 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

                            SAILs 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

                            With technical and managerial expertise and know-how in steel making gained

                            over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                            services and consultancy to clients world-wide

                            SAIL has a well-equipped Research and Development Centre for Iron and Steel

                            (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                            for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                            Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                            Ranchi Our captive mines are under the control of the Raw Materials Division in

                            Kolkata The Environment Management Division and Growth Division of SAIL operate

                            from their headquarters in Kolkata Almost all our plants and major units are ISO

                            Certified

                            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

                            Subsidiary

                            Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                            Joint Ventures

                            SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                            NTPC SAIL Power Company Pvt Ltd

                            Bokaro Power Supply Company Pvt Limited

                            Mjunction Services Limited

                            SAIL-Bansal Service Centre Ltd

                            Bhilai JP Cement Ltd

                            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

                            MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                            Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                            producer of ferro manganese and silico manganese for captive use of SAIL plants

                            The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                            crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                            paid-up capital

                            Financial Performance

                            During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                            (including conversion income of Rs 17110 crore) and made a net profit after tax of

                            Rs 2097 crore The turnover and net profit after tax of the company during April

                            2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                            (provisional) respectively

                            Production Performance

                            The production of all grades of ferro alloys during 2005-06 is as under

                            (in tonne)

                            Materials 2005-06 April- Dec 2006

                            High Carbon Ferro Manganese 51525 49493

                            Silco Manganese 46712 32921

                            Medium Carbon Ferro Manganse 2344 164

                            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 was commissioned in August

                            1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                            million tonne per annum capacity Right from the year of its integrated operation VSP

                            established its presence both in the domestic and international markets with its

                            superior quality of products VSP has been awarded all the three International

                            Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                            180011999 The company has taken significant strides in the area of Corporate

                            Social Responsibility

                            Production Performance

                            (in million tonne)

                            Items 2004-05 2005-06 2006-07 (April-Dec06)

                            Hot Metal 3920 4153 3040

                            Liquid Steel 3560 3603 2676

                            Saleable Steel 3173 3237 2419

                            NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                            Incorporated on November 15 1958 the National Mineral Development Corporation

                            Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                            developing and exploiting mineral resources of the country (other than coal oil

                            natural gas and atomic minerals) At present its activities are concentrated on mining

                            of iron ore diamonds and silica sand

                            NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                            (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                            Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                            activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                            from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                            Supreme Court of India NMDC is following up the case for early hearing

                            All the iron ore production units have been accredited with ISO 90012000 and ISO

                            140012004 certifications RampD Centre of NMDC was also accredited with ISO

                            90012000 certification

                            Iron Ore

                            NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                            December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                            (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                            MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                            exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                            Capital Structure

                            The authorised share capital of the company is Rs 150 crore The paid up equity

                            share capital was Rs 13216 crore Outstanding loans from Government of India are

                            nil

                            Financial Performance

                            The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                            Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                            SalesTurnover222655 371092 2790

                            Gross Margin128749 2889 2455

                            Profit Before Tax122365 277013 2410

                            MSTC LTD

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

                            Enterprise was set up on September 9 1964 as a canalising agency for the export of

                            scrap from the country With the passage of time the Company emerged as the

                            canalising agency for the import of scrap into the country Import of scrap was de-

                            canalised by the Government in 1991-92 and MSTC has since then moved on to

                            marketing ferrous and miscellaneous scrap arising out of steel plants and other

                            industries and importing coal coke petroleum products semi finished steel products

                            like HR coils and export of primarily iron ore The company has also established an e-

                            auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                            developed an e-procurement portal in house

                            Capital Structure

                            The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                            220 crore as on 31122006 of which approximately 90 is held by Government of

                            India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                            Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                            bonus shares issued in the year 1993-94 in the ratio 11

                            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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                            handling of BOF slag etc

                            Financial Performance

                            Particulars 2004-05 2005-06 2006-07 (Apr-

                            Dec2006)

                            Total Turnover ie Service charges realised including miscellaneous Incomeetc

                            981822 1067937 765557

                            Gross Margin before Interest amp Depreciation 167879 186514 105284

                            Interest amp Depreciation 83014 100970 84728

                            Profit before Tax 84865 85544 20556

                            MANGANESE ORE (INDIA) LTD (MOIL)

                            Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                            of manganese ore in India At the time of inception 49 of its shares were held by the

                            Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                            proportion by Government of India and the State Governments of Madhya Pradesh 17

                            and Maharashtra Subsequently in 1977 the Government of India acquired the

                            shares held by CPMO in MOIL and MOIL became a wholly owned Government

                            company with effect from October 1977 As on 30112006 Government of India held

                            8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                            holding 961 and 882 shares respectively

                            MOIL Produces and Sells following Grades of Manganese Ore

                            1048708 High grade ores for production of ferro manganese

                            1048708 Medium grade ores for production of silico manganese

                            1048708 Blast furnace grade ore required for production of hot metal

                            1048708 Dioxide ore for dry battery cells and chemical industries

                            Production and 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

                            Items 2004-05 2005-06 2006-07 (up to Dec2006)

                            1 Production

                            a) Manganese Ore (thousand tonne) 94300 86500 82533

                            b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                            c) Ferro Manganese (tonne) 1032500 617000 829400

                            2 Turnover (Rupees in crore) 37878 33409 29463

                            3 Profit before Tax (Rupees in crore) 20227 16900 12087

                            KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                            Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                            90012000 and ISO 14001 company was established in April 1976 to meet the long

                            term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                            was set up at Kudremukh This project was to be financed in full by Iran However as

                            Iran stopped further loan disbursements after paying US $ 255 million the project was

                            completed as per schedule with the funds provided by Government of India While the

                            project was commissioned on schedule consequent upon the political developments

                            in Iran they did not lift any quantity of concentrate As a diversification measure the

                            Government approved the construction of a 3 million tonne per year capacity pellet

                            plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                            million tonne with additionsmodifications The plant went into commercial production

                            in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                            units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                            Plant Mangalore

                            Production

                            A target of 31 million tonne and 305 million tonne was set for production of iron ore

                            concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                            production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                            The target set for production during the year 2006-07 is 305 million tonne of pellets

                            In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                            activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                            production of iron ore concentrate during the year 2006-07 As against a target of 188

                            million tonne of pellets fixed for the period April to November 2006 the actual

                            production was 0275 million tonne which represents 15 target fulfilment There is

                            shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                            production of pellets is on account of operational problems being encountered in the

                            pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                            There was excessive generation of su er fines (slimes) affecting filtration clogging of

                            filters overflow and contamination of process water due to filling of cooling pond

                            affecting production While efforts are continuing to rectify the problems the operation

                            of pellet plant is yet to stabilize and normal production is yet to commence

                            The sales revenue during the last five years and up to November 2006 during 2006-

                            07 is detailed below

                            (Rs in lakh)

                            Years Concentrate Pellets Total

                            2006-07 (up to December 2006) - 12427 12427

                            2005-06 12091 111137 123228

                            2004-05 16050 169327 185377

                            2003-04 20209 82729 102938

                            2002-03 21135 51579 72714

                            2001-02 21571 50598 72169

                            Financial Performance

                            An overview of the performance of KIOCL during the year 2006-07 (up to November

                            2006) together with actuals for the previous three years is indicated below

                            (Rs in lakh)

                            Particulars 2006-07(up to December 2006)

                            2005-06 2004-05 2003-04

                            Total value of Sales 12427 123228 185377 102938

                            Gross Margin 2620 68706 120863 45945

                            Profit after Tax 1029 35630 64984 30070

                            Inventories(excluding finished stock)

                            20417 15843 8720 7616

                            BIRD GROUP OF COMPANIES

                            Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                            the following seven companies came under the administrative control of the Ministry of

                            Steel Government of India

                            (a) The Orissa Minerals Development Company Limited (OMDC)

                            (b) The Bisra Stone Lime Company Limited (BSLC)

                            (c) The Karanpura Development Company Limited (KDCL)

                            (d) Scott amp Saxby Limited (SSL)

                            (e) Eastern Investments Limited (EIL)

                            (f) Burrakar Coal Company Limited (Burrakar)

                            (g) Borrea Coal Company Limited (Borrea)

                            The status of the companies is as under

                            a) Burrakar and Borrea coal companies became non-operational after nationalisation

                            of coal mines The two companies are in the process of liquidation The official

                            liquidator has already taken over the assets and liabilities of these two companies

                            b) EIL being an investment company is having a major stake in the equity shares of

                            operating companies under the Bird Group

                            c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                            Status of the Companies at the Time of Nationalisation

                            At the time when the Bird Group of Companies came under the administrative control

                            of the Ministry of Steel Government of India all of them were financially sick and

                            burdened with various problems With the financial support from the Government of

                            India problems relating mainly to excessive manpower erosion of working capital and

                            outstanding liabilities could be settled to a considerable extent

                            REVIEW OF LITERATURE

                            RS PANDEY sees a bright future for the steel industry in India provided of course

                            the iron ore mining policy to be announced by the government soon acts as a catalyst

                            for growth He discusses the industrys problems and prospects in an interview When

                            asked about the steel sectors ie private and public he expressed his expert views

                            The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                            Excerpts

                            The public sector steel companies in India are doing extremely well And therefore

                            they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                            Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                            Between 1992-93 and now the share of the public sector in steel production had gone

                            down Today its share is 41 per cent while that of the private sector is 59 per cent In

                            1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                            the private sector even in 1992-93 had a 67 per cent share and this has now grown

                            to 71 per cent But the public sector units are growing even if the private sector is

                            growing faster

                            During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                            going to increase its capacity from the current 13 million tonnes of hot metal to 225

                            million tonnes in just four years RINL is set to expand its capacity from three million

                            tonnes to 63 million tonnes in the next three years So that is a major expansion of

                            capacity for the PSUs

                            The public sector should be encouraged all the more Let there be a healthy

                            competition between public and private sector producers The question of exit comes

                            when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                            was at below Rs10 per share Today it is more than Rs130 and the expectations

                            are that it will go up even higher

                            When talked about the labour productivity he says Yes labour productivity is low in

                            SAIL in particular But it is improving The steel major is going to adjust much of its

                            existing manpower in the expansion phase when its capacity is going to almost

                            double The management had also undertaken a massive VRS [voluntary retirement

                            scheme] In RINL labour productivity is not all that bad

                            Besides SAIL has done very well in various other techno-economic parameters in the

                            last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                            per man per year In 2005-06 it went up to 150 tonnes per man per year an

                            improvement of 20 per cent In blast furnace productivity also there has been an

                            improvement as also in the production of high-end special steels and capacity

                            utilisation

                            With the improved turnover which comes from higher capacity use and higher

                            manpower productivity SAILs profits have surged Its gross profit more than doubled

                            between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                            was largely due to the high prices of steel An analysis has shown that as far as SAIL

                            is concerned the higher profit is 29 per cent owing to the price factor in steel and

                            other input costs and 71 per cent owing to improvement in capacity use and other

                            factors that are just mentioned

                            OBJECTIVES

                            To compare Private and Public steel sector with refrence to TATA Steel and

                            Steel Authority Of India

                            To analyse potential of both the companies ie TATA Steel and SAIL

                            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

                            Research Methodology

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

                            a) Research design-

                            In case of my research ldquoComparative analysis of Indian private and Public

                            sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                            found to be more appropriate

                            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

                            Comparison between TATA Steel and Steel Authority of India

                            The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                            significant improvements in the last two years The combined profit before tax of all 15

                            PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                            Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                            The profit before tax for all PSUs also exhibited a significant improvement of

                            around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                            Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                            comparable period of last year

                            Contribution of PSUs to public exchequer has also gone up significantly For

                            example the contribution of five leading companies namely SAIL RINL NMDC

                            KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                            duty dividend corporate tax sales tax royalty etc has gone up by more than double

                            from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                            On the other hand 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

                            During the period (April-December 2006) 205 million tonne of steel was produced by

                            Private Sector steel units out of the total production of 3315 million tonne in the

                            country The private sector units consist of major steel producers in one hand and

                            relatively smaller amp 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

                            For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                            companies on following parameters

                            Production

                            Chart showing production of both the companies

                            Quantity 000 Tonnes

                            2007-08 APR-DEC07APR-

                            DEC06 ACTUA

                            L

                            AGE OF CURRENT

                            PRODUCTION OVER

                            CAPACITY UTILISATION

                            TARGET TENTATIV

                            E

                            TARGET

                            ACTUAL

                            APR-DEC07 TARGE

                            T

                            APR-DEC06 ACTUA

                            L

                            APR-DEC 07

                            APR-DEC06

                            SAIL

                            i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                            ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                            iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                            iv)BSL43500 32630 30970 30010 949 1032 950 910

                            v)ISP5000 3760 3520 3450 936 1020 940 920

                            vi)ASP1470 1070 1140 1130 1065 1009 650 640

                            vii)VISL

                            1390 1050 1160 1190 1105 975 1300 1340

                            TATA 50000 37440 37090 37380 991 992 990 1000

                            TATA Steel

                            The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                            but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                            target of 3744 (mT) but could produce 3709 However for the same period in last

                            year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                            to 99 this year

                            Steel Authority of India

                            The company had a aggregate production target of 13739 (mT) for the year 2007-08

                            but it could produce only 126 (mT) a growth of 4 over the previous year However

                            for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                            10380 as compared to around 10 (mT) for the same period last year SAIL had a

                            capacity utilisation of 103 this year as compared to 101 last year

                            Financials

                            TATA Steel

                            The year 2006-07 has seen the highest turnover and profits continuing the trend

                            of the past four years The Company achieved the best ever sales turnover and

                            profitability during the year under review A robust Indian economy firm steel prices

                            higher volumes and several improvement initiatives contributed to the record

                            performance Finished steel sales were higher by 1133 at 451 million tonnes over

                            the previous year Export turnover was lower by about 5 due to lower volumes

                            Average price realisation improved mainly due to higher prices of hot rolled

                            coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                            (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                            Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                            due to additional borrowings for the Companyrsquos domestic expansion programs and

                            funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                            providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                            crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                            before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                            after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                            20 compared to the previous year

                            The record financial results would not have been possible without a matching

                            performance by the operating departments including the raw materials division The

                            year witnessed the best ever crude steel production by the Company at 505 million

                            tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                            first plant in India to produce more than 5 million tonnes of crude steel in a year The

                            upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                            rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                            Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                            increase in production was backed by improvements in operating practices and

                            productivity resulting in a reduction in consumption of raw materials energy

                            refractories etc

                            Steel Authority of India

                            Financial Year 2006-07 has been eventful year for the company with further

                            momentum in improving operational efficiencies laying strong foundation and building

                            road map for modernisation and expansion of SAIL Plants with several new initiatives

                            undertaken with its human resource at the core During the year the company got the

                            distinction of first metal company in the country to reach a market capitalization of Rs

                            50000 crore

                            There have been improvements in all financial parameters which are shown in

                            the table given below-

                            SAIL set new record in achieving the turnover of Rs39189 crore and profit

                            before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                            previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                            increase of 55

                            Research and Development

                            Chart showing production of both the companies

                            (Rs Crore)

                            TATA Steel

                            The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                            develop galvannealed skin panels It is the only Indian supplier of bake hardening

                            steel for body panels

                            Research is undertaken at Tata Steel in the areas of raw materials including coal

                            coke energy conservation waste utilisation sintering blast furnace productivity and

                            phosphorous reduction product development and improvement in life of plant and

                            machinery The Company spends 7 of its turnover for RampD 17 patents have been

                            sealed and over 100 are in process

                            Steel Authority of India

                            Research and Development Centre for Iron and Steel (RDCIS) has provided

                            innovative technological inputs to different units of SAIL with special emphasis on

                            cost reduction product development and application quality improvement energy

                            conservation and automation Several new products were developed and

                            commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                            Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                            specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                            micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                            Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                            Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                            strengthened its technology marketing efforts by providing consultancy services

                            organising specialised testing and transfer of technological innovations to outside

                            customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                            Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                            Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                            During the year 1998 technical papers were publishedpresented besides filing

                            of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                            awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                            achievements in New Materialsrdquo given by the Ministry of Science and Technology

                            Government of India

                            Environment

                            TATA Steel

                            Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                            Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                            has an ISO-14001 certified service providerlocations are certified to ISO-14001

                            Jamshedpur is the only town in the country which

                            Significant achievements by the Company include an improvement in

                            environment and resource conservation including a reduction in green house erosion

                            raw materials and water consumption The Company has increased waste re-use and

                            re-cycling Constant upgradation and modernisation has resulted in several state-of-

                            the-art pollution control systems being installed to prevent and control pollution The

                            Company has almost doubled its capital investment in Pollution Abatement in the last

                            five years

                            Emissions effluents and wastes

                            Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                            most relevance to the steel industry Considerable reduction has been effected by

                            Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                            granulation is taken into account Other Greenhouse Gas emissions do not result from

                            Tata Steelrsquos activities

                            Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                            tonnes in 2003-04 as against 790 tonnes used during the previous year

                            Hazardous Waste under Basel Convention The Company does not import or export

                            any waste deemed hazardous under the Basel Convention All hazardous wastes

                            generated are handled as per the requirement of the Hazardous Waste Management

                            and Handling Rules 19892000

                            Emissions

                            Tata Steel has undertaken several initiatives which have resulted in

                            considerable reduction in stack emission Emissions are well below the Indian and

                            international standards The emission load including particulate matter Sulphur

                            Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                            undertaken at the Steel Works

                            Waste handling

                            Most of the solid waste generated from Steel Works is recycled or reused 18

                            of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                            was used to fill low-lying areas and for peripheral road construction around

                            Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                            power plants was dumped in a designated dump area

                            Effluent Management

                            Waste water from the steel making process is being treated with best available

                            physio-chemical methods as well as being recycled Waste water from the coke plant

                            is treated biologically where organic pollutants are oxidised and decomposed by micro

                            organisms The Company has reduced the levels of total pollutant discharge in waste

                            water streams from 0211 in 1999-2000 to 0178 in 2003-04

                            Steel Authority of India

                            Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                            environmentally responsible manner to comply with applicable regulations and striving

                            to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                            efficiency and optimize resource consumption through various measures viz

                            improvement in process technology in the areas of raw materials coke iron and steel

                            making reuserecycle of the by-products generated and conservation of energy and

                            water

                            Solid Waste Management

                            During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                            and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                            Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                            these wastes are being made through internal recycling and selling to outside

                            agencies The wastes generated in the steel plants are being utilized mainly through

                            their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                            during April-September 2006

                            Environmental Plantation

                            Trees have a significant role in protection of environment and ecological balance

                            Extensive afforestation programme are being followed in all the plants and mines The

                            basis of choosing the species of plants mainly depends on local soil characteristics

                            and prevailing meteorological conditions The green belt developed by afforestation

                            adds to the aesthetic environment which becomes dust and noise barriers

                            A total number of 145521 saplings have been planted covering an area of 637

                            hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                            hectare in 2004-05 in and around the steel plants of SAIL

                            Environmental Recognitions

                            SAIL plants have been awarded various prizes for environmental management in

                            their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                            the Confederation of Indian Industries (CII) for exemplary performance in the

                            environmental economic andsocial dimensions of sustainable development and the

                            Greentech Environment Excellence Gold AwardGolden Peacock Environment

                            Excellence Award in the metal sector 2005 instuted by the World Environment

                            Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                            for 2005 from International Greenland Society

                            Workforce and Welfare of Society

                            TATA steel

                            Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                            and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                            enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                            provide a work environment that will ensure a sense of purpose and personal growth

                            for each individual The wish of the company is to see the smile on every face

                            everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                            people and enriched empowered and enhanced their lives

                            Even in its nascent years social scientists Sidney and Beatrice Webb were

                            brought in to work on welfare schemes In fact some of the initiatives introduced by

                            Tata Steel were the first of their kind in India and some even in the western countries

                            at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                            source of its competitiveness It focuses on constantly updating and challenging

                            intellectual capabilities to enable them to excel in performance Special efforts are

                            made for enhancing strategic thinking skills and analytical abilities of its managers and

                            workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                            available with its people through Knowledge Management and sharing of best

                            practices

                            In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                            mutual co-operation coordination and understanding between the Management and

                            the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                            among many other prestigious awards and recognition Tata Steel aims at ensuring

                            transparency fairness and equity in all its interactions with its employees to create an

                            enthused and happy workforce

                            In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                            assistance in the fields of education vocational training self-employment and

                            family welfare

                            Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                            12 times This facility provides on-the-spot diagnostic medical and advanced

                            surgical treatment for preventive and curative interventions to people in

                            inaccessible rural areas

                            Sir Dorab Tata personally financed four athletes and two wrestlers from India

                            for the 1920 Antwerp Olympics

                            The JRD Sports Complex an international stadium with an 8-lane polyurethane

                            track was inaugurated in 1991 The complex also houses facilities for handball

                            tennis volleyball hockey basketball boxing table tennis and a modern

                            gymnasium

                            The Tata Steel Family Initiatives Foundation is engaged in off ering health

                            services for the betterment of the people in and around Jamshedpur

                            At times of natural calamities the company has rushe immediate relief and off

                            ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                            fl ood ravaged Orissa and other such aff ected areas

                            Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                            er a unique environment for the children of Jamshedpur to grow up in

                            In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                            Jamshedpur has emerged as the one of the best cities in India

                            Steel Authority of India

                            The manpower strength as on 31st March 2006 was 138211 comprising 15206

                            executives and 123005 non-executives The total reduction in manpower achieved

                            during the year stood at 4864 which included separation of 881 employees through

                            voluntary retirement The labour productivity improved by around 12 over previous

                            year to 150 tonne crude steelmanyear

                            Some of the areas of assistance which are available to the weaker sections are the

                            following

                            The company has provided land for construction of school buildings in some of

                            the steel townships as well as in other places for spreading education among

                            the masses

                            The company has constructed roads in remote areas around the steel plants

                            and also where the captive mines are located to improve communication and

                            also increase activities such as organisation of health camps school facilities

                            drinking water etc under the peripheral development schemes

                            Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                            Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                            providing them with education boarding and lodging facilities

                            Construction of bridges by-pass roads metal-morum path waterways

                            levellingdressing area around township pre-mixed roads Installation of hand-

                            pumps tube wells and wells for villagers

                            Construction of school buildings (including for mentally retarded deaf and

                            dumb children) madarsas providing school furniture therein and construction

                            of hostels womenrsquos college building etc

                            Fourteen scholarships are awarded to deserving SCST undergraduate

                            engineering students in various disciplines to encourage technical education

                            among them

                            In many cases tuition fee in company run schools is exempt for SCST

                            students Steps are taken to provide education to more and more tribal children

                            in company schools

                            The unemployed SCST youth are given specialized training in various

                            technical trades to develop skill and knowledge Such training is provided free

                            of cost

                            Adult literacy campaign is carried out in most of the steel townships Every year

                            more and more men and women are being covered in this campaign

                            Development of fishery and cottage industry providing sewing machines to

                            village mahila mandals and promoting other self-employment generation

                            schemes

                            SAIL has established a hockey academy with stadium and hostel facilities at

                            Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                            academy was successful in spotting a number of young talented tribal players

                            and grooms them under expertise of ex-Olympian

                            Technology

                            The biggest boost to efficiency in the steel industry has come from the increased

                            use of continuous casting ndash an indicator of the modernity of the production process Its

                            share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                            now India is thus well on its way to joining the ranks of the leading steelmakers

                            among the industrial nations (share in EU-25 96) However in India some 6 of

                            crude steel is still made using the outdated open-hearth process (EU-25 03) which

                            suggests there is restructuring potential

                            TATA Steel

                            Tata Steels stall at the International Trade Fair was adjudged the best along

                            with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                            international companies also took part in the exhibition Participating companies from

                            countries all over the world exhibited latest technologies and know-how List of

                            participating companies included Baosteel SAIL Heavy Engineering Corporation

                            Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                            companies of national and international repute China was the partner country for the

                            International Trade Fair this year

                            In the award winning exhibition Tata Steel showcased its best coal mining practices

                            cutting-edge technology used in iron ore mining pioneering human resource

                            practices 78 years of industrial harmony and various other aspects of the worlds best

                            steel company

                            The 6th International Trade Fair and Conference an institutionalised global

                            event is considered to be one of the most prestigious forums for national as well

                            international participants It is a conclave of the finest minds concerned with the future

                            direction and growth of these sectors The forum provided the worlds most eminent

                            metallurgists manufacturers of metallurgical and mining machinery and related

                            sectors professionals analysts and experts with the opportunity to exchange views on

                            emerging technologies synergy and strengths and open up wider horizons for

                            sectorial development

                            Tata Steel to adopt Corus technology

                            Tata Steel plans to implement alternate technology used by the British steel

                            maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                            production according to Mr B Muthuraman Managing Director Tata Steel

                            ldquoWe are looking at alternate technology Corus has developed an alternate

                            technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                            newspersons on the sidelines of the 34th National Management Convention organised

                            by the All-India Management Association However he declined to give further details

                            on the type of technology the Indian steel giant plans to implement

                            Steel Authority of India

                            Modernisation holds the key to SAILs fortunes in the near future The objective

                            of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                            and productive capacity and in the process become more energy-efficient and

                            improve quality The key component of the ongoing modernisation drive - already

                            completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                            ingot casting facilities with basic oxygen furnaces for steel-making and employing

                            continuous casting techniques A senior SAIL official says Continuous casting and

                            basic oxygen furnaces ensure better quality steel through processes more easily

                            monitored for quality control The basic oxygen surfaces method is significantly faster

                            more automated and permits greater flexibility Continuous casting is more efficient

                            than the traditional ingot casting methods and gives increased yields while enabling

                            better quality standards SAIL is also modernising its finishing mills and is adding

                            secondary refining facilities to improve quality

                            Safety measures

                            A unique feature of safety management in steel industry is that a bipartite forum

                            named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                            was formed in 1973 at national level having representatives from steel plants in SAIL

                            RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                            Committee With a view to inculcate safety consciousness JCSSI organises seminars

                            workshops training programme safety competitions for member organisations JCSSI

                            with the co-operation and support of Trade Union representatives formulates policies

                            and guidelines for its member plants and monitors the implementation

                            Tata Steel

                            Safety has always been a prime focus at Tata Steel A Safety Committee a

                            Safety department and a Safety Trophy helped spread the message all across the

                            company

                            TATA reaffirms its commitment to provide safe working place and clean

                            environment to its employees and other stakeholders as an integral part of its

                            business philosophy and values We will continually enhance our Environmental

                            Occupational Health amp Safety (EHS) performance in our activities products and

                            services through a structured EHS management framework Towards this

                            commitment we shall

                            Establish and achieve EHS objectives and targets

                            Ensure compliance with applicable EHS legislation and other requirement and

                            go beyond

                            Conserve natural resources and energy by constantly seeking to reduce

                            consumption and promoting waste avoidance and recycling measures

                            Eliminate minimize andor control adverse environmental impacts and

                            occupational health and safety risks by adopting appropriate state-of-the-art

                            technology and best EHS management practices at all levels sand functions

                            Enhance awareness skill and competence of our employees and contractors

                            so as to enable them to demonstrate their involvement responsibility and

                            accountability for sound EHS performance

                            Steel Authority of India

                            SAIL has a separate corporate unit called the SAIL Safety Organisation to

                            monitor safety system amp activities- SAIL also has a comprehensive safety policy

                            Annual Performance Plans (APP) for the areas of safety and fire services are

                            formulated and review of implementation of APP is done during Heads of

                            Safety meeting

                            Internal and external safety audits of major departments particularly hazardous

                            areas are conducted every year and points arising from these audits are

                            liquidated Safety aspects have been incorporated in standard operating

                            practices (SOP) and standard maintenance practices (SMP)

                            All major capital repairsshut downs are closely monitored round the clock

                            Periodic drives are conducted to inculcate safety awarenessculture up to

                            grass-root level apart from regular inspections as per checklists to identify

                            unsafe conditionsacts

                            Safety training is imparted to target group employees at various levels HRD

                            intervention in the area of safety covers Heads of Departments Line Managers

                            amp Departmental Safety Officers Besides area specific workshops are

                            conducted at different locations on important topics like gas safety railroad

                            safety safety in iron steel amp coke making etc

                            Consistent efforts were made by SAIL Safety Organisation for improving safety

                            standards in the company by taking measures like intensive safety drives in works

                            area and conducting safety audits in hazardous departments of different plants and

                            mines In addition specific workshops on safety aspects were organised in various

                            SAIL steel plants

                            Measures taken by Indian government to improve the industry

                            Now letrsquos 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-

                            1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                            among others was removed from the list of industries reserved for the public

                            sector and also exempted from the provisions of compulsory licensing under the

                            Industries (Development and Regulation) Act 1951

                            2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                            of `high priority industries for automatic approval for foreign equity investment up

                            to 51 This limit has been recently increased to 100

                            3 Price and distribution of steel were deregulated from January 1992 At the same

                            time it was ensured that priority continued to be accorded for meeting the

                            requirements of small scale industries exporters of engineering goods and North

                            Eastern Region of the country besides strategic sectors such as Defence and

                            Railways

                            4 The trade policy has been liberalised and import and export of iron and steel is

                            freely allowed There are no quantitative restrictions on import of iron and steel

                            items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                            regulating the imports is the tariff mechanism Tariffs on various items of iron and

                            steel have drastically come down since 1991-92 levels and the government is

                            committed to bring them down to the international levels In Chapter 72 there are

                            two items viz 72042110 and 72042910 which fall in the restricted list of imports

                            5 Iron amp Steel are freely importable as per the Extant Policy

                            6 Iron amp Steel are freely exportable

                            7 Advance Licensing Scheme allows duty free import of raw materials for exports

                            8 The floor price for seconds and defectives continues till date

                            9 Imports of seconds and defectives of steel are allowed only through three

                            designated ports of Mumbai Calcutta and Chennai

                            10Mandatory pre inspection certificate by a reputed international agency for every

                            import consignment of seconds and defectives

                            11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                            10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                            the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                            per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                            15 per cent to 5 per cent

                            12Further customs duty on several raw materials used by the steel sector like

                            noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                            coking coal to zero

                            13To bring down the prices of steel the excise duty on steel products was reduced

                            from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                            that the duty regime will be reviewed Budget 2004-05 revised this partially by

                            increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                            cut on moderating prices was not achieved

                            14The union Budget 2007-08 the import duty on seconds and defective has been

                            further reduced from 20 to 10

                            Special assistance being provided by Ministry of Steel to Private Sector

                            1 Ministry of Steel is extending all possible support as detailed below for the

                            development of Iron and Steel Sector in the country

                            2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                            new plants and expansion of existing ones wherever applied for

                            3 To ensure an un-interrupted supply of raw materials to the producers

                            4 The Ministry has been interacting with All India Financial institutions to expedite

                            clearance of projects

                            5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                            Plants are held at the level of Secretary

                            6 Ministry of Steel identifies infra-structural and related facilities required by steel

                            industry so that their absence does not lead to bottlenecks in the future growth of

                            the Iron and Steel Sector and takes up these issues with the concerned ministries

                            7 The Ministry has encouraged the setting up of Institute for Steel Development and

                            Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                            country are members of this Institute which has been set up with the objective of

                            promoting developing and propagating the proper and effective use of steel

                            8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                            major steel plants being implemented Govt has setup a Project Coordination

                            Group under the Chairmanship of Steel Minister

                            NATIONAL STEEL POLICY 2005

                            The progress of the steel industry has a critical influence on the pace of Indiarsquos

                            development and as such great importance is attached to capacity expansion in line

                            with expected demand at cost and prices which make Indian steel internationally

                            competitive The existing regime of liberalization decontrol and deregulation of

                            industry in the country has opened up new opportunities for the expansion of the steel

                            industry With a view to accelerating the growth of the steel sector and attaining the

                            vision of India becoming a developed economy by 2020 the Ministry of Steel

                            formulated a National Steel Policy (NSP) in 2005

                            The following salient features can be derived after analysing the NSP 2005

                            The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                            towards reform restructuring and globalisation

                            The long-term goal of the NSP is that India should have a modern and efficient

                            steel industry of world standards catering to diversified steel demand The focus of

                            the policy is to achieve global competitiveness not only in terms of cost quality and

                            product-mix but also in terms of global benchmarks of efficiency and productivity

                            In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                            NSP seeks to remove the supply-side constraints to the growth of this industry in

                            an open globally integrated and competitive environment

                            The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                            policy goal On the demand side the strategy would be to create incremental

                            demand through promotional efforts creation of awareness and strengthening the

                            delivery chain particularly in rural areas On the supply side the strategy would be

                            to facilitate creation of additional capacity remove procedural and policy

                            bottlenecks in the availability of inputs such as iron ore and coal make higher

                            investments in RampD and encourage the creation of infrastructure such as roads

                            railways and ports

                            The NSP acknowledges the low per capita consumption of steel in the country

                            especially in the rural areas and the need to boost steel consumption to improve

                            quality of life and help in meeting the growing aspirations of masses

                            In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                            industry would need additional capital In addition funds would be required for

                            technological upgrade of existing facilities In order to mobilize such vast resources

                            NSP seeks to encourage foreign direct investment In addition the policy also

                            seeks to make the fiscal incentives available to infrastructure projects accessible

                            to the steel industry

                            The NSP seeks to support developing of risk-hedging instruments like futures and

                            derivatives to contain price volatility in the steel market

                            The NSP seeks to strengthen the existing training and research facilities available

                            to the domestic steel industry so as to provide suitable training programmes

                            especially for the secondary small-scale units and also to collect and analyse data

                            on important parameters of the industry

                            The NSP seeks to mount aggressive RampD efforts to create manufacturing

                            capability for special types of steel substitute coking coal use iron ore fines

                            develop new products suited to rural needs enhance material and energy

                            efficiency utilize waste and arrest environmental degradation

                            The NSP acknowledges the important role played by the secondary steel sector in

                            providing employment meeting local demand of steel in rural and semi-urban

                            areas and meeting the countryrsquos demand of some special products and seeks to

                            endeavour to provide the necessary feedstock to these units at reasonable prices

                            from major plants through the existing mechanism of State Small Industries

                            Corporations

                            The NSP recognizes the fact that integration of the Indian steel industry with the

                            global economy requires that the industry should be protected from unfair trade

                            practices The NSP therefore envisages institution of mechanisms for import

                            surveillance and monitoring export subsidies in other countries

                            The present per capita consumption of steel in the country is very low compared to the

                            world average As mentioned above one of the objectives of the NSP is to augment

                            the demand and consumption of steel in the country by conscious promotion of steel

                            usage With a view to create a mass awareness campaign on conscious promotion of

                            steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                            the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                            The Committee is being serviced by Institute for Steel Development and Growth

                            (INSDAG) The objective of the Committee is to promote steel usage in the country by

                            way of an awareness campaign with particular emphasis on rural sectors The

                            Committee also aims at educating the designers architects builders and planners

                            regarding the qualitative and cost effective applications of steel in various structures

                            including buildings bridges flyovers and airports

                            FUTURE OF INDIAN STEEL INDUSTRY

                            India is amongst a few countries in the world having the dual advantage of fast

                            growing domestic demand coupled with access to raw materials Further the trend

                            that is already discernible is that the axis of global steel production consumption is

                            shifting towards Asia With their large populations China and India already account for

                            35 of the total world steel production - more than double of Europe Asia is

                            expected to outpace other regions of the world to an even greater extent in the coming

                            years

                            Amongst the Asian nations China has established a huge unbridgeable lead It

                            is accepted that China will continue to be the leader However India is slated to

                            emerge as the second Asian giant in the next eight years Figuratively speaking while

                            the Dragon has reached maturity the Lotus is about to bloom in resplendent

                            splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                            China swallowed almost 32 of global steel It is unlikely that future production and

                            consumption would continue to flourish at growth rates of 8 and 18 respectively as

                            has been the case over the last few years On the other hand it is sun-rise time for

                            India where the demand has increased by 7-8 in the last couple of years In the long

                            run Indian steel is likely to be more cost-effective since unlike China India has

                            relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                            can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                            However the position with coal is not so favourable Though thermal coal

                            reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                            traditional blast furnace route would require coking coal India does not have adequate

                            reserves of coking coal nor is the meagre amount available of appropriate quality

                            Thus the steel industry always had to contend with the dual problems of inadequate

                            availability and poor quality of Indian coking coal This has been partly addressed by

                            adopting alternative iron making processes that are not dependent on coking coal it

                            can not be denied that coal is the biggest cause for concern for bulk steel production

                            in India

                            Because of the shortage of indigenous coal attempts have been made by steel

                            producers to ensure long-term supplies by tying up with global majors or by acquiring

                            mines in other countries This is the only long-term solution but with a global shortage

                            of coal it may not remain cost-effective in the long run

                            India is the seventh largest producer of steel and may further improve its position

                            going by the current trends A series of investment decisions by major domestic

                            players and international steel giants such as Steel Authority of India Ltd Tata Steel

                            POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                            The keen interest shown by various prospective investors is not only due to

                            expectations of strong growth in domestic demand but also due to indigenous

                            availability of key resources like iron ore and skilled workforce

                            After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                            steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                            finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                            2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                            consumption has accelerated to 91 per cent

                            With the likely growth of Indian economy at around 7 per cent per annum

                            demand for steel is expected to remain strong and is projected to reach a level of 90

                            million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                            demand is sustainable considering the fact that Indias per capita consumption of steel

                            is still very low at 31 kgs per head compared to the world average of 145 kgs The

                            very low level of per capita consumption of steel in India is highlighted further when

                            compared with the consumption levels of its peer group consisting of countries like

                            China Brazil Mexico and Republic of Korea as also with selected developed

                            countries

                            Though there are realistic constraints in India to achieving as rapid a growth as in

                            China there seems to be consensus among analysts that India is likely to witness a

                            growth rate in steel consumption higher than the historically observed rate of 6 to 7

                            percent If the growth rate (9 per cent) of last three years is maintained then we will

                            achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                            more conservative due to cyclicity of steel business it may be mentioned that in a

                            country like India cyclicity is more in terms of prices rather than volumes of production

                            Exports

                            Similar optimism prevails with regard to export of iron and steel Export of steel

                            starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                            2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                            rising domestic demand and low capacity additions Exports now constitute around 17

                            per cent of total production and Indias presence in the developing and developed

                            world is being increasingly felt Indian steel producers have recently been able to

                            supply specialized grades and products used for sophisticated applications like

                            automobiles On the cost front some of our producers are counted amongst the least

                            cost producers of the world For an average reference plant India is competitively

                            placed in the middle of the hierarchy of steel producing nations

                            However we have a long way to go to catch up with the leading exporters of the

                            world such as Japan the CIS countries Brazil etc It is however expected that by

                            2019-20 India will be able to export around 26 million tonnes of steel representing 24

                            per cent of total projected production The projected export ratio compares well with

                            the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                            The projected production of steel by 2019-20 to meet the domestic and export

                            demand will be around 110 million tonnes Management of resources and

                            infrastructural growth is going to be critical in achievement of the production level

                            envisaged The broad requirements of various resources will increase manifold from

                            the current level The bottlenecks in availability of critical inputs and various facilities

                            need to be removed through concerted efforts of Government and industry The broad

                            strategy to overcome these constraints as well as meet the strategic goals of the steel

                            sector has been discussed in the National Steel Policy which has been recently

                            approved by the Government

                            As stated earlier the long-term goal of the National Steel Policy is that India

                            should have a modern and efficient steel industry of world standards catering to a

                            diversified steel demand The focus of the policy is to achieve global competitiveness

                            not only in terms of cost quality and product mix but also in terms of global

                            benchmarks of efficiency and productivity The policy envisages adopting a multi-

                            pronged strategy to achieve these goals On the demand side the strategy would be

                            to create incremental demand through promotional efforts creation of awareness and

                            strengthening the delivery chain particularly in rural areas On the supply side the

                            strategy would be to facilitate creation of additional capacity remove procedural and

                            policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                            investments in RampD and HRD and encourage the creation of infrastructure such as

                            roads railways and ports

                            The production figures exports and imports of finished carbon steel and pig iron

                            and apparent consumption patterns of finished carbon steel as indicated by TATA

                            Steel and SAIL attest to the continuing growth for both the sectors

                            FINDINGS

                            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 increased its profit over the year particularly in 2006-07

                            Both the companies are planning to adopt modern technology which is going to

                            help them to compete in world market but they need to be less dependent on

                            state of art technology and coal for long term prospects

                            Public sector has undergone retrenchment for the employees and improved

                            has its lobour productivity but it is still lacking behind as compared to private

                            sector

                            SAIL has reduced the no of accidents due to improper handling of machinery

                            still no of accidents are more than that of TATA Steel

                            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

                            ie 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 have to be met

                            comprehensively if we are to take our legitimate place in the world as a developed

                            nation by 2020

                            BIBLIOGRAPHY

                            Annual report (2006-07) published by ministry of steel

                            Annual report (2006-07) published by TATA Steel

                            Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                            REPORTrsquo posted by SAIL on its website

                            lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                            held on 07 Nov 2006

                            Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                            wwwsteelnicin (Official website of ministry of industry)

                            wwwtatasteelcom (Official website of TATA Steel)

                            wwwsailcoin (Official website of Steel Authority of India)

                            wwwworldsteelorg (official website of International Iron amp Steel Institute)

                            wwwjpcindiansteelnicin (Website of joint planning committee)

                            • DATA ANALYSIS
                            • Comparison between TATA Steel and Steel Authority of India
                            • Production
                            • Quantity 000 Tonnes
                            • Financials
                            • Research and Development
                            • (Rs Crore)
                            • TATA Steel
                            • Steel Authority of India
                            • Environment
                            • TATA Steel
                            • Emissions effluents and wastes
                            • Emissions
                            • Waste handling
                            • Effluent Management
                            • Steel Authority of India
                            • Solid Waste Management
                            • Environmental Plantation
                            • Environmental Recognitions
                            • Workforce and Welfare of Society
                            • TATA steel
                            • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                            • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                            • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                            • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                            • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                            • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                            • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                            • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                            • Steel Authority of India
                            • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                            • Technology
                            • Steel Authority of India
                            • Safety measures
                            • Tata Steel
                            • Steel Authority of India
                            • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                            • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                            • Measures taken by Indian government to improve the industry
                            • Now letrsquos 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-
                            • Special assistance being provided by Ministry of Steel to Private Sector
                            • FUTURE OF INDIAN STEEL INDUSTRY

                              With technical and managerial expertise and know-how in steel making gained

                              over four decades SAILs Consultancy Division (SAILCON) at New Delhi offers

                              services and consultancy to clients world-wide

                              SAIL has a well-equipped Research and Development Centre for Iron and Steel

                              (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies

                              for the steel industry Besides SAIL has its own in-house Centre for Engineering and

                              Technology (CET) Management Training Institute (MTI) and Safety Organisation at

                              Ranchi Our captive mines are under the control of the Raw Materials Division in

                              Kolkata The Environment Management Division and Growth Division of SAIL operate

                              from their headquarters in Kolkata Almost all our plants and major units are ISO

                              Certified

                              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

                              Subsidiary

                              Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

                              Joint Ventures

                              SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce

                              NTPC SAIL Power Company Pvt Ltd

                              Bokaro Power Supply Company Pvt Limited

                              Mjunction Services Limited

                              SAIL-Bansal Service Centre Ltd

                              Bhilai JP Cement Ltd

                              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

                              MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                              Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                              producer of ferro manganese and silico manganese for captive use of SAIL plants

                              The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                              crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                              paid-up capital

                              Financial Performance

                              During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                              (including conversion income of Rs 17110 crore) and made a net profit after tax of

                              Rs 2097 crore The turnover and net profit after tax of the company during April

                              2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                              (provisional) respectively

                              Production Performance

                              The production of all grades of ferro alloys during 2005-06 is as under

                              (in tonne)

                              Materials 2005-06 April- Dec 2006

                              High Carbon Ferro Manganese 51525 49493

                              Silco Manganese 46712 32921

                              Medium Carbon Ferro Manganse 2344 164

                              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 was commissioned in August

                              1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                              million tonne per annum capacity Right from the year of its integrated operation VSP

                              established its presence both in the domestic and international markets with its

                              superior quality of products VSP has been awarded all the three International

                              Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                              180011999 The company has taken significant strides in the area of Corporate

                              Social Responsibility

                              Production Performance

                              (in million tonne)

                              Items 2004-05 2005-06 2006-07 (April-Dec06)

                              Hot Metal 3920 4153 3040

                              Liquid Steel 3560 3603 2676

                              Saleable Steel 3173 3237 2419

                              NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                              Incorporated on November 15 1958 the National Mineral Development Corporation

                              Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                              developing and exploiting mineral resources of the country (other than coal oil

                              natural gas and atomic minerals) At present its activities are concentrated on mining

                              of iron ore diamonds and silica sand

                              NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                              (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                              Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                              activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                              from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                              Supreme Court of India NMDC is following up the case for early hearing

                              All the iron ore production units have been accredited with ISO 90012000 and ISO

                              140012004 certifications RampD Centre of NMDC was also accredited with ISO

                              90012000 certification

                              Iron Ore

                              NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                              December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                              (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                              MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                              exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                              Capital Structure

                              The authorised share capital of the company is Rs 150 crore The paid up equity

                              share capital was Rs 13216 crore Outstanding loans from Government of India are

                              nil

                              Financial Performance

                              The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                              Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                              SalesTurnover222655 371092 2790

                              Gross Margin128749 2889 2455

                              Profit Before Tax122365 277013 2410

                              MSTC LTD

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

                              Enterprise was set up on September 9 1964 as a canalising agency for the export of

                              scrap from the country With the passage of time the Company emerged as the

                              canalising agency for the import of scrap into the country Import of scrap was de-

                              canalised by the Government in 1991-92 and MSTC has since then moved on to

                              marketing ferrous and miscellaneous scrap arising out of steel plants and other

                              industries and importing coal coke petroleum products semi finished steel products

                              like HR coils and export of primarily iron ore The company has also established an e-

                              auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                              developed an e-procurement portal in house

                              Capital Structure

                              The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                              220 crore as on 31122006 of which approximately 90 is held by Government of

                              India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                              Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                              bonus shares issued in the year 1993-94 in the ratio 11

                              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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                              handling of BOF slag etc

                              Financial Performance

                              Particulars 2004-05 2005-06 2006-07 (Apr-

                              Dec2006)

                              Total Turnover ie Service charges realised including miscellaneous Incomeetc

                              981822 1067937 765557

                              Gross Margin before Interest amp Depreciation 167879 186514 105284

                              Interest amp Depreciation 83014 100970 84728

                              Profit before Tax 84865 85544 20556

                              MANGANESE ORE (INDIA) LTD (MOIL)

                              Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                              of manganese ore in India At the time of inception 49 of its shares were held by the

                              Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                              proportion by Government of India and the State Governments of Madhya Pradesh 17

                              and Maharashtra Subsequently in 1977 the Government of India acquired the

                              shares held by CPMO in MOIL and MOIL became a wholly owned Government

                              company with effect from October 1977 As on 30112006 Government of India held

                              8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                              holding 961 and 882 shares respectively

                              MOIL Produces and Sells following Grades of Manganese Ore

                              1048708 High grade ores for production of ferro manganese

                              1048708 Medium grade ores for production of silico manganese

                              1048708 Blast furnace grade ore required for production of hot metal

                              1048708 Dioxide ore for dry battery cells and chemical industries

                              Production and 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

                              Items 2004-05 2005-06 2006-07 (up to Dec2006)

                              1 Production

                              a) Manganese Ore (thousand tonne) 94300 86500 82533

                              b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                              c) Ferro Manganese (tonne) 1032500 617000 829400

                              2 Turnover (Rupees in crore) 37878 33409 29463

                              3 Profit before Tax (Rupees in crore) 20227 16900 12087

                              KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                              Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                              90012000 and ISO 14001 company was established in April 1976 to meet the long

                              term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                              was set up at Kudremukh This project was to be financed in full by Iran However as

                              Iran stopped further loan disbursements after paying US $ 255 million the project was

                              completed as per schedule with the funds provided by Government of India While the

                              project was commissioned on schedule consequent upon the political developments

                              in Iran they did not lift any quantity of concentrate As a diversification measure the

                              Government approved the construction of a 3 million tonne per year capacity pellet

                              plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                              million tonne with additionsmodifications The plant went into commercial production

                              in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                              units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                              Plant Mangalore

                              Production

                              A target of 31 million tonne and 305 million tonne was set for production of iron ore

                              concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                              production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                              The target set for production during the year 2006-07 is 305 million tonne of pellets

                              In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                              activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                              production of iron ore concentrate during the year 2006-07 As against a target of 188

                              million tonne of pellets fixed for the period April to November 2006 the actual

                              production was 0275 million tonne which represents 15 target fulfilment There is

                              shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                              production of pellets is on account of operational problems being encountered in the

                              pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                              There was excessive generation of su er fines (slimes) affecting filtration clogging of

                              filters overflow and contamination of process water due to filling of cooling pond

                              affecting production While efforts are continuing to rectify the problems the operation

                              of pellet plant is yet to stabilize and normal production is yet to commence

                              The sales revenue during the last five years and up to November 2006 during 2006-

                              07 is detailed below

                              (Rs in lakh)

                              Years Concentrate Pellets Total

                              2006-07 (up to December 2006) - 12427 12427

                              2005-06 12091 111137 123228

                              2004-05 16050 169327 185377

                              2003-04 20209 82729 102938

                              2002-03 21135 51579 72714

                              2001-02 21571 50598 72169

                              Financial Performance

                              An overview of the performance of KIOCL during the year 2006-07 (up to November

                              2006) together with actuals for the previous three years is indicated below

                              (Rs in lakh)

                              Particulars 2006-07(up to December 2006)

                              2005-06 2004-05 2003-04

                              Total value of Sales 12427 123228 185377 102938

                              Gross Margin 2620 68706 120863 45945

                              Profit after Tax 1029 35630 64984 30070

                              Inventories(excluding finished stock)

                              20417 15843 8720 7616

                              BIRD GROUP OF COMPANIES

                              Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                              the following seven companies came under the administrative control of the Ministry of

                              Steel Government of India

                              (a) The Orissa Minerals Development Company Limited (OMDC)

                              (b) The Bisra Stone Lime Company Limited (BSLC)

                              (c) The Karanpura Development Company Limited (KDCL)

                              (d) Scott amp Saxby Limited (SSL)

                              (e) Eastern Investments Limited (EIL)

                              (f) Burrakar Coal Company Limited (Burrakar)

                              (g) Borrea Coal Company Limited (Borrea)

                              The status of the companies is as under

                              a) Burrakar and Borrea coal companies became non-operational after nationalisation

                              of coal mines The two companies are in the process of liquidation The official

                              liquidator has already taken over the assets and liabilities of these two companies

                              b) EIL being an investment company is having a major stake in the equity shares of

                              operating companies under the Bird Group

                              c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                              Status of the Companies at the Time of Nationalisation

                              At the time when the Bird Group of Companies came under the administrative control

                              of the Ministry of Steel Government of India all of them were financially sick and

                              burdened with various problems With the financial support from the Government of

                              India problems relating mainly to excessive manpower erosion of working capital and

                              outstanding liabilities could be settled to a considerable extent

                              REVIEW OF LITERATURE

                              RS PANDEY sees a bright future for the steel industry in India provided of course

                              the iron ore mining policy to be announced by the government soon acts as a catalyst

                              for growth He discusses the industrys problems and prospects in an interview When

                              asked about the steel sectors ie private and public he expressed his expert views

                              The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                              Excerpts

                              The public sector steel companies in India are doing extremely well And therefore

                              they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                              Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                              Between 1992-93 and now the share of the public sector in steel production had gone

                              down Today its share is 41 per cent while that of the private sector is 59 per cent In

                              1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                              the private sector even in 1992-93 had a 67 per cent share and this has now grown

                              to 71 per cent But the public sector units are growing even if the private sector is

                              growing faster

                              During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                              going to increase its capacity from the current 13 million tonnes of hot metal to 225

                              million tonnes in just four years RINL is set to expand its capacity from three million

                              tonnes to 63 million tonnes in the next three years So that is a major expansion of

                              capacity for the PSUs

                              The public sector should be encouraged all the more Let there be a healthy

                              competition between public and private sector producers The question of exit comes

                              when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                              was at below Rs10 per share Today it is more than Rs130 and the expectations

                              are that it will go up even higher

                              When talked about the labour productivity he says Yes labour productivity is low in

                              SAIL in particular But it is improving The steel major is going to adjust much of its

                              existing manpower in the expansion phase when its capacity is going to almost

                              double The management had also undertaken a massive VRS [voluntary retirement

                              scheme] In RINL labour productivity is not all that bad

                              Besides SAIL has done very well in various other techno-economic parameters in the

                              last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                              per man per year In 2005-06 it went up to 150 tonnes per man per year an

                              improvement of 20 per cent In blast furnace productivity also there has been an

                              improvement as also in the production of high-end special steels and capacity

                              utilisation

                              With the improved turnover which comes from higher capacity use and higher

                              manpower productivity SAILs profits have surged Its gross profit more than doubled

                              between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                              was largely due to the high prices of steel An analysis has shown that as far as SAIL

                              is concerned the higher profit is 29 per cent owing to the price factor in steel and

                              other input costs and 71 per cent owing to improvement in capacity use and other

                              factors that are just mentioned

                              OBJECTIVES

                              To compare Private and Public steel sector with refrence to TATA Steel and

                              Steel Authority Of India

                              To analyse potential of both the companies ie TATA Steel and SAIL

                              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

                              Research Methodology

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

                              a) Research design-

                              In case of my research ldquoComparative analysis of Indian private and Public

                              sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                              found to be more appropriate

                              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

                              Comparison between TATA Steel and Steel Authority of India

                              The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                              significant improvements in the last two years The combined profit before tax of all 15

                              PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                              Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                              The profit before tax for all PSUs also exhibited a significant improvement of

                              around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                              Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                              comparable period of last year

                              Contribution of PSUs to public exchequer has also gone up significantly For

                              example the contribution of five leading companies namely SAIL RINL NMDC

                              KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                              duty dividend corporate tax sales tax royalty etc has gone up by more than double

                              from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                              On the other hand 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

                              During the period (April-December 2006) 205 million tonne of steel was produced by

                              Private Sector steel units out of the total production of 3315 million tonne in the

                              country The private sector units consist of major steel producers in one hand and

                              relatively smaller amp 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

                              For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                              companies on following parameters

                              Production

                              Chart showing production of both the companies

                              Quantity 000 Tonnes

                              2007-08 APR-DEC07APR-

                              DEC06 ACTUA

                              L

                              AGE OF CURRENT

                              PRODUCTION OVER

                              CAPACITY UTILISATION

                              TARGET TENTATIV

                              E

                              TARGET

                              ACTUAL

                              APR-DEC07 TARGE

                              T

                              APR-DEC06 ACTUA

                              L

                              APR-DEC 07

                              APR-DEC06

                              SAIL

                              i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                              ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                              iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                              iv)BSL43500 32630 30970 30010 949 1032 950 910

                              v)ISP5000 3760 3520 3450 936 1020 940 920

                              vi)ASP1470 1070 1140 1130 1065 1009 650 640

                              vii)VISL

                              1390 1050 1160 1190 1105 975 1300 1340

                              TATA 50000 37440 37090 37380 991 992 990 1000

                              TATA Steel

                              The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                              but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                              target of 3744 (mT) but could produce 3709 However for the same period in last

                              year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                              to 99 this year

                              Steel Authority of India

                              The company had a aggregate production target of 13739 (mT) for the year 2007-08

                              but it could produce only 126 (mT) a growth of 4 over the previous year However

                              for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                              10380 as compared to around 10 (mT) for the same period last year SAIL had a

                              capacity utilisation of 103 this year as compared to 101 last year

                              Financials

                              TATA Steel

                              The year 2006-07 has seen the highest turnover and profits continuing the trend

                              of the past four years The Company achieved the best ever sales turnover and

                              profitability during the year under review A robust Indian economy firm steel prices

                              higher volumes and several improvement initiatives contributed to the record

                              performance Finished steel sales were higher by 1133 at 451 million tonnes over

                              the previous year Export turnover was lower by about 5 due to lower volumes

                              Average price realisation improved mainly due to higher prices of hot rolled

                              coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                              (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                              Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                              due to additional borrowings for the Companyrsquos domestic expansion programs and

                              funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                              providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                              crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                              before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                              after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                              20 compared to the previous year

                              The record financial results would not have been possible without a matching

                              performance by the operating departments including the raw materials division The

                              year witnessed the best ever crude steel production by the Company at 505 million

                              tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                              first plant in India to produce more than 5 million tonnes of crude steel in a year The

                              upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                              rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                              Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                              increase in production was backed by improvements in operating practices and

                              productivity resulting in a reduction in consumption of raw materials energy

                              refractories etc

                              Steel Authority of India

                              Financial Year 2006-07 has been eventful year for the company with further

                              momentum in improving operational efficiencies laying strong foundation and building

                              road map for modernisation and expansion of SAIL Plants with several new initiatives

                              undertaken with its human resource at the core During the year the company got the

                              distinction of first metal company in the country to reach a market capitalization of Rs

                              50000 crore

                              There have been improvements in all financial parameters which are shown in

                              the table given below-

                              SAIL set new record in achieving the turnover of Rs39189 crore and profit

                              before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                              previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                              increase of 55

                              Research and Development

                              Chart showing production of both the companies

                              (Rs Crore)

                              TATA Steel

                              The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                              develop galvannealed skin panels It is the only Indian supplier of bake hardening

                              steel for body panels

                              Research is undertaken at Tata Steel in the areas of raw materials including coal

                              coke energy conservation waste utilisation sintering blast furnace productivity and

                              phosphorous reduction product development and improvement in life of plant and

                              machinery The Company spends 7 of its turnover for RampD 17 patents have been

                              sealed and over 100 are in process

                              Steel Authority of India

                              Research and Development Centre for Iron and Steel (RDCIS) has provided

                              innovative technological inputs to different units of SAIL with special emphasis on

                              cost reduction product development and application quality improvement energy

                              conservation and automation Several new products were developed and

                              commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                              Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                              specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                              micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                              Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                              Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                              strengthened its technology marketing efforts by providing consultancy services

                              organising specialised testing and transfer of technological innovations to outside

                              customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                              Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                              Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                              During the year 1998 technical papers were publishedpresented besides filing

                              of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                              awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                              achievements in New Materialsrdquo given by the Ministry of Science and Technology

                              Government of India

                              Environment

                              TATA Steel

                              Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                              Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                              has an ISO-14001 certified service providerlocations are certified to ISO-14001

                              Jamshedpur is the only town in the country which

                              Significant achievements by the Company include an improvement in

                              environment and resource conservation including a reduction in green house erosion

                              raw materials and water consumption The Company has increased waste re-use and

                              re-cycling Constant upgradation and modernisation has resulted in several state-of-

                              the-art pollution control systems being installed to prevent and control pollution The

                              Company has almost doubled its capital investment in Pollution Abatement in the last

                              five years

                              Emissions effluents and wastes

                              Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                              most relevance to the steel industry Considerable reduction has been effected by

                              Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                              granulation is taken into account Other Greenhouse Gas emissions do not result from

                              Tata Steelrsquos activities

                              Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                              tonnes in 2003-04 as against 790 tonnes used during the previous year

                              Hazardous Waste under Basel Convention The Company does not import or export

                              any waste deemed hazardous under the Basel Convention All hazardous wastes

                              generated are handled as per the requirement of the Hazardous Waste Management

                              and Handling Rules 19892000

                              Emissions

                              Tata Steel has undertaken several initiatives which have resulted in

                              considerable reduction in stack emission Emissions are well below the Indian and

                              international standards The emission load including particulate matter Sulphur

                              Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                              undertaken at the Steel Works

                              Waste handling

                              Most of the solid waste generated from Steel Works is recycled or reused 18

                              of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                              was used to fill low-lying areas and for peripheral road construction around

                              Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                              power plants was dumped in a designated dump area

                              Effluent Management

                              Waste water from the steel making process is being treated with best available

                              physio-chemical methods as well as being recycled Waste water from the coke plant

                              is treated biologically where organic pollutants are oxidised and decomposed by micro

                              organisms The Company has reduced the levels of total pollutant discharge in waste

                              water streams from 0211 in 1999-2000 to 0178 in 2003-04

                              Steel Authority of India

                              Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                              environmentally responsible manner to comply with applicable regulations and striving

                              to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                              efficiency and optimize resource consumption through various measures viz

                              improvement in process technology in the areas of raw materials coke iron and steel

                              making reuserecycle of the by-products generated and conservation of energy and

                              water

                              Solid Waste Management

                              During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                              and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                              Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                              these wastes are being made through internal recycling and selling to outside

                              agencies The wastes generated in the steel plants are being utilized mainly through

                              their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                              during April-September 2006

                              Environmental Plantation

                              Trees have a significant role in protection of environment and ecological balance

                              Extensive afforestation programme are being followed in all the plants and mines The

                              basis of choosing the species of plants mainly depends on local soil characteristics

                              and prevailing meteorological conditions The green belt developed by afforestation

                              adds to the aesthetic environment which becomes dust and noise barriers

                              A total number of 145521 saplings have been planted covering an area of 637

                              hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                              hectare in 2004-05 in and around the steel plants of SAIL

                              Environmental Recognitions

                              SAIL plants have been awarded various prizes for environmental management in

                              their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                              the Confederation of Indian Industries (CII) for exemplary performance in the

                              environmental economic andsocial dimensions of sustainable development and the

                              Greentech Environment Excellence Gold AwardGolden Peacock Environment

                              Excellence Award in the metal sector 2005 instuted by the World Environment

                              Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                              for 2005 from International Greenland Society

                              Workforce and Welfare of Society

                              TATA steel

                              Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                              and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                              enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                              provide a work environment that will ensure a sense of purpose and personal growth

                              for each individual The wish of the company is to see the smile on every face

                              everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                              people and enriched empowered and enhanced their lives

                              Even in its nascent years social scientists Sidney and Beatrice Webb were

                              brought in to work on welfare schemes In fact some of the initiatives introduced by

                              Tata Steel were the first of their kind in India and some even in the western countries

                              at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                              source of its competitiveness It focuses on constantly updating and challenging

                              intellectual capabilities to enable them to excel in performance Special efforts are

                              made for enhancing strategic thinking skills and analytical abilities of its managers and

                              workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                              available with its people through Knowledge Management and sharing of best

                              practices

                              In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                              mutual co-operation coordination and understanding between the Management and

                              the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                              among many other prestigious awards and recognition Tata Steel aims at ensuring

                              transparency fairness and equity in all its interactions with its employees to create an

                              enthused and happy workforce

                              In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                              assistance in the fields of education vocational training self-employment and

                              family welfare

                              Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                              12 times This facility provides on-the-spot diagnostic medical and advanced

                              surgical treatment for preventive and curative interventions to people in

                              inaccessible rural areas

                              Sir Dorab Tata personally financed four athletes and two wrestlers from India

                              for the 1920 Antwerp Olympics

                              The JRD Sports Complex an international stadium with an 8-lane polyurethane

                              track was inaugurated in 1991 The complex also houses facilities for handball

                              tennis volleyball hockey basketball boxing table tennis and a modern

                              gymnasium

                              The Tata Steel Family Initiatives Foundation is engaged in off ering health

                              services for the betterment of the people in and around Jamshedpur

                              At times of natural calamities the company has rushe immediate relief and off

                              ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                              fl ood ravaged Orissa and other such aff ected areas

                              Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                              er a unique environment for the children of Jamshedpur to grow up in

                              In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                              Jamshedpur has emerged as the one of the best cities in India

                              Steel Authority of India

                              The manpower strength as on 31st March 2006 was 138211 comprising 15206

                              executives and 123005 non-executives The total reduction in manpower achieved

                              during the year stood at 4864 which included separation of 881 employees through

                              voluntary retirement The labour productivity improved by around 12 over previous

                              year to 150 tonne crude steelmanyear

                              Some of the areas of assistance which are available to the weaker sections are the

                              following

                              The company has provided land for construction of school buildings in some of

                              the steel townships as well as in other places for spreading education among

                              the masses

                              The company has constructed roads in remote areas around the steel plants

                              and also where the captive mines are located to improve communication and

                              also increase activities such as organisation of health camps school facilities

                              drinking water etc under the peripheral development schemes

                              Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                              Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                              providing them with education boarding and lodging facilities

                              Construction of bridges by-pass roads metal-morum path waterways

                              levellingdressing area around township pre-mixed roads Installation of hand-

                              pumps tube wells and wells for villagers

                              Construction of school buildings (including for mentally retarded deaf and

                              dumb children) madarsas providing school furniture therein and construction

                              of hostels womenrsquos college building etc

                              Fourteen scholarships are awarded to deserving SCST undergraduate

                              engineering students in various disciplines to encourage technical education

                              among them

                              In many cases tuition fee in company run schools is exempt for SCST

                              students Steps are taken to provide education to more and more tribal children

                              in company schools

                              The unemployed SCST youth are given specialized training in various

                              technical trades to develop skill and knowledge Such training is provided free

                              of cost

                              Adult literacy campaign is carried out in most of the steel townships Every year

                              more and more men and women are being covered in this campaign

                              Development of fishery and cottage industry providing sewing machines to

                              village mahila mandals and promoting other self-employment generation

                              schemes

                              SAIL has established a hockey academy with stadium and hostel facilities at

                              Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                              academy was successful in spotting a number of young talented tribal players

                              and grooms them under expertise of ex-Olympian

                              Technology

                              The biggest boost to efficiency in the steel industry has come from the increased

                              use of continuous casting ndash an indicator of the modernity of the production process Its

                              share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                              now India is thus well on its way to joining the ranks of the leading steelmakers

                              among the industrial nations (share in EU-25 96) However in India some 6 of

                              crude steel is still made using the outdated open-hearth process (EU-25 03) which

                              suggests there is restructuring potential

                              TATA Steel

                              Tata Steels stall at the International Trade Fair was adjudged the best along

                              with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                              international companies also took part in the exhibition Participating companies from

                              countries all over the world exhibited latest technologies and know-how List of

                              participating companies included Baosteel SAIL Heavy Engineering Corporation

                              Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                              companies of national and international repute China was the partner country for the

                              International Trade Fair this year

                              In the award winning exhibition Tata Steel showcased its best coal mining practices

                              cutting-edge technology used in iron ore mining pioneering human resource

                              practices 78 years of industrial harmony and various other aspects of the worlds best

                              steel company

                              The 6th International Trade Fair and Conference an institutionalised global

                              event is considered to be one of the most prestigious forums for national as well

                              international participants It is a conclave of the finest minds concerned with the future

                              direction and growth of these sectors The forum provided the worlds most eminent

                              metallurgists manufacturers of metallurgical and mining machinery and related

                              sectors professionals analysts and experts with the opportunity to exchange views on

                              emerging technologies synergy and strengths and open up wider horizons for

                              sectorial development

                              Tata Steel to adopt Corus technology

                              Tata Steel plans to implement alternate technology used by the British steel

                              maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                              production according to Mr B Muthuraman Managing Director Tata Steel

                              ldquoWe are looking at alternate technology Corus has developed an alternate

                              technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                              newspersons on the sidelines of the 34th National Management Convention organised

                              by the All-India Management Association However he declined to give further details

                              on the type of technology the Indian steel giant plans to implement

                              Steel Authority of India

                              Modernisation holds the key to SAILs fortunes in the near future The objective

                              of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                              and productive capacity and in the process become more energy-efficient and

                              improve quality The key component of the ongoing modernisation drive - already

                              completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                              ingot casting facilities with basic oxygen furnaces for steel-making and employing

                              continuous casting techniques A senior SAIL official says Continuous casting and

                              basic oxygen furnaces ensure better quality steel through processes more easily

                              monitored for quality control The basic oxygen surfaces method is significantly faster

                              more automated and permits greater flexibility Continuous casting is more efficient

                              than the traditional ingot casting methods and gives increased yields while enabling

                              better quality standards SAIL is also modernising its finishing mills and is adding

                              secondary refining facilities to improve quality

                              Safety measures

                              A unique feature of safety management in steel industry is that a bipartite forum

                              named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                              was formed in 1973 at national level having representatives from steel plants in SAIL

                              RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                              Committee With a view to inculcate safety consciousness JCSSI organises seminars

                              workshops training programme safety competitions for member organisations JCSSI

                              with the co-operation and support of Trade Union representatives formulates policies

                              and guidelines for its member plants and monitors the implementation

                              Tata Steel

                              Safety has always been a prime focus at Tata Steel A Safety Committee a

                              Safety department and a Safety Trophy helped spread the message all across the

                              company

                              TATA reaffirms its commitment to provide safe working place and clean

                              environment to its employees and other stakeholders as an integral part of its

                              business philosophy and values We will continually enhance our Environmental

                              Occupational Health amp Safety (EHS) performance in our activities products and

                              services through a structured EHS management framework Towards this

                              commitment we shall

                              Establish and achieve EHS objectives and targets

                              Ensure compliance with applicable EHS legislation and other requirement and

                              go beyond

                              Conserve natural resources and energy by constantly seeking to reduce

                              consumption and promoting waste avoidance and recycling measures

                              Eliminate minimize andor control adverse environmental impacts and

                              occupational health and safety risks by adopting appropriate state-of-the-art

                              technology and best EHS management practices at all levels sand functions

                              Enhance awareness skill and competence of our employees and contractors

                              so as to enable them to demonstrate their involvement responsibility and

                              accountability for sound EHS performance

                              Steel Authority of India

                              SAIL has a separate corporate unit called the SAIL Safety Organisation to

                              monitor safety system amp activities- SAIL also has a comprehensive safety policy

                              Annual Performance Plans (APP) for the areas of safety and fire services are

                              formulated and review of implementation of APP is done during Heads of

                              Safety meeting

                              Internal and external safety audits of major departments particularly hazardous

                              areas are conducted every year and points arising from these audits are

                              liquidated Safety aspects have been incorporated in standard operating

                              practices (SOP) and standard maintenance practices (SMP)

                              All major capital repairsshut downs are closely monitored round the clock

                              Periodic drives are conducted to inculcate safety awarenessculture up to

                              grass-root level apart from regular inspections as per checklists to identify

                              unsafe conditionsacts

                              Safety training is imparted to target group employees at various levels HRD

                              intervention in the area of safety covers Heads of Departments Line Managers

                              amp Departmental Safety Officers Besides area specific workshops are

                              conducted at different locations on important topics like gas safety railroad

                              safety safety in iron steel amp coke making etc

                              Consistent efforts were made by SAIL Safety Organisation for improving safety

                              standards in the company by taking measures like intensive safety drives in works

                              area and conducting safety audits in hazardous departments of different plants and

                              mines In addition specific workshops on safety aspects were organised in various

                              SAIL steel plants

                              Measures taken by Indian government to improve the industry

                              Now letrsquos 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-

                              1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                              among others was removed from the list of industries reserved for the public

                              sector and also exempted from the provisions of compulsory licensing under the

                              Industries (Development and Regulation) Act 1951

                              2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                              of `high priority industries for automatic approval for foreign equity investment up

                              to 51 This limit has been recently increased to 100

                              3 Price and distribution of steel were deregulated from January 1992 At the same

                              time it was ensured that priority continued to be accorded for meeting the

                              requirements of small scale industries exporters of engineering goods and North

                              Eastern Region of the country besides strategic sectors such as Defence and

                              Railways

                              4 The trade policy has been liberalised and import and export of iron and steel is

                              freely allowed There are no quantitative restrictions on import of iron and steel

                              items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                              regulating the imports is the tariff mechanism Tariffs on various items of iron and

                              steel have drastically come down since 1991-92 levels and the government is

                              committed to bring them down to the international levels In Chapter 72 there are

                              two items viz 72042110 and 72042910 which fall in the restricted list of imports

                              5 Iron amp Steel are freely importable as per the Extant Policy

                              6 Iron amp Steel are freely exportable

                              7 Advance Licensing Scheme allows duty free import of raw materials for exports

                              8 The floor price for seconds and defectives continues till date

                              9 Imports of seconds and defectives of steel are allowed only through three

                              designated ports of Mumbai Calcutta and Chennai

                              10Mandatory pre inspection certificate by a reputed international agency for every

                              import consignment of seconds and defectives

                              11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                              10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                              the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                              per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                              15 per cent to 5 per cent

                              12Further customs duty on several raw materials used by the steel sector like

                              noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                              coking coal to zero

                              13To bring down the prices of steel the excise duty on steel products was reduced

                              from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                              that the duty regime will be reviewed Budget 2004-05 revised this partially by

                              increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                              cut on moderating prices was not achieved

                              14The union Budget 2007-08 the import duty on seconds and defective has been

                              further reduced from 20 to 10

                              Special assistance being provided by Ministry of Steel to Private Sector

                              1 Ministry of Steel is extending all possible support as detailed below for the

                              development of Iron and Steel Sector in the country

                              2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                              new plants and expansion of existing ones wherever applied for

                              3 To ensure an un-interrupted supply of raw materials to the producers

                              4 The Ministry has been interacting with All India Financial institutions to expedite

                              clearance of projects

                              5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                              Plants are held at the level of Secretary

                              6 Ministry of Steel identifies infra-structural and related facilities required by steel

                              industry so that their absence does not lead to bottlenecks in the future growth of

                              the Iron and Steel Sector and takes up these issues with the concerned ministries

                              7 The Ministry has encouraged the setting up of Institute for Steel Development and

                              Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                              country are members of this Institute which has been set up with the objective of

                              promoting developing and propagating the proper and effective use of steel

                              8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                              major steel plants being implemented Govt has setup a Project Coordination

                              Group under the Chairmanship of Steel Minister

                              NATIONAL STEEL POLICY 2005

                              The progress of the steel industry has a critical influence on the pace of Indiarsquos

                              development and as such great importance is attached to capacity expansion in line

                              with expected demand at cost and prices which make Indian steel internationally

                              competitive The existing regime of liberalization decontrol and deregulation of

                              industry in the country has opened up new opportunities for the expansion of the steel

                              industry With a view to accelerating the growth of the steel sector and attaining the

                              vision of India becoming a developed economy by 2020 the Ministry of Steel

                              formulated a National Steel Policy (NSP) in 2005

                              The following salient features can be derived after analysing the NSP 2005

                              The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                              towards reform restructuring and globalisation

                              The long-term goal of the NSP is that India should have a modern and efficient

                              steel industry of world standards catering to diversified steel demand The focus of

                              the policy is to achieve global competitiveness not only in terms of cost quality and

                              product-mix but also in terms of global benchmarks of efficiency and productivity

                              In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                              NSP seeks to remove the supply-side constraints to the growth of this industry in

                              an open globally integrated and competitive environment

                              The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                              policy goal On the demand side the strategy would be to create incremental

                              demand through promotional efforts creation of awareness and strengthening the

                              delivery chain particularly in rural areas On the supply side the strategy would be

                              to facilitate creation of additional capacity remove procedural and policy

                              bottlenecks in the availability of inputs such as iron ore and coal make higher

                              investments in RampD and encourage the creation of infrastructure such as roads

                              railways and ports

                              The NSP acknowledges the low per capita consumption of steel in the country

                              especially in the rural areas and the need to boost steel consumption to improve

                              quality of life and help in meeting the growing aspirations of masses

                              In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                              industry would need additional capital In addition funds would be required for

                              technological upgrade of existing facilities In order to mobilize such vast resources

                              NSP seeks to encourage foreign direct investment In addition the policy also

                              seeks to make the fiscal incentives available to infrastructure projects accessible

                              to the steel industry

                              The NSP seeks to support developing of risk-hedging instruments like futures and

                              derivatives to contain price volatility in the steel market

                              The NSP seeks to strengthen the existing training and research facilities available

                              to the domestic steel industry so as to provide suitable training programmes

                              especially for the secondary small-scale units and also to collect and analyse data

                              on important parameters of the industry

                              The NSP seeks to mount aggressive RampD efforts to create manufacturing

                              capability for special types of steel substitute coking coal use iron ore fines

                              develop new products suited to rural needs enhance material and energy

                              efficiency utilize waste and arrest environmental degradation

                              The NSP acknowledges the important role played by the secondary steel sector in

                              providing employment meeting local demand of steel in rural and semi-urban

                              areas and meeting the countryrsquos demand of some special products and seeks to

                              endeavour to provide the necessary feedstock to these units at reasonable prices

                              from major plants through the existing mechanism of State Small Industries

                              Corporations

                              The NSP recognizes the fact that integration of the Indian steel industry with the

                              global economy requires that the industry should be protected from unfair trade

                              practices The NSP therefore envisages institution of mechanisms for import

                              surveillance and monitoring export subsidies in other countries

                              The present per capita consumption of steel in the country is very low compared to the

                              world average As mentioned above one of the objectives of the NSP is to augment

                              the demand and consumption of steel in the country by conscious promotion of steel

                              usage With a view to create a mass awareness campaign on conscious promotion of

                              steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                              the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                              The Committee is being serviced by Institute for Steel Development and Growth

                              (INSDAG) The objective of the Committee is to promote steel usage in the country by

                              way of an awareness campaign with particular emphasis on rural sectors The

                              Committee also aims at educating the designers architects builders and planners

                              regarding the qualitative and cost effective applications of steel in various structures

                              including buildings bridges flyovers and airports

                              FUTURE OF INDIAN STEEL INDUSTRY

                              India is amongst a few countries in the world having the dual advantage of fast

                              growing domestic demand coupled with access to raw materials Further the trend

                              that is already discernible is that the axis of global steel production consumption is

                              shifting towards Asia With their large populations China and India already account for

                              35 of the total world steel production - more than double of Europe Asia is

                              expected to outpace other regions of the world to an even greater extent in the coming

                              years

                              Amongst the Asian nations China has established a huge unbridgeable lead It

                              is accepted that China will continue to be the leader However India is slated to

                              emerge as the second Asian giant in the next eight years Figuratively speaking while

                              the Dragon has reached maturity the Lotus is about to bloom in resplendent

                              splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                              China swallowed almost 32 of global steel It is unlikely that future production and

                              consumption would continue to flourish at growth rates of 8 and 18 respectively as

                              has been the case over the last few years On the other hand it is sun-rise time for

                              India where the demand has increased by 7-8 in the last couple of years In the long

                              run Indian steel is likely to be more cost-effective since unlike China India has

                              relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                              can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                              However the position with coal is not so favourable Though thermal coal

                              reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                              traditional blast furnace route would require coking coal India does not have adequate

                              reserves of coking coal nor is the meagre amount available of appropriate quality

                              Thus the steel industry always had to contend with the dual problems of inadequate

                              availability and poor quality of Indian coking coal This has been partly addressed by

                              adopting alternative iron making processes that are not dependent on coking coal it

                              can not be denied that coal is the biggest cause for concern for bulk steel production

                              in India

                              Because of the shortage of indigenous coal attempts have been made by steel

                              producers to ensure long-term supplies by tying up with global majors or by acquiring

                              mines in other countries This is the only long-term solution but with a global shortage

                              of coal it may not remain cost-effective in the long run

                              India is the seventh largest producer of steel and may further improve its position

                              going by the current trends A series of investment decisions by major domestic

                              players and international steel giants such as Steel Authority of India Ltd Tata Steel

                              POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                              The keen interest shown by various prospective investors is not only due to

                              expectations of strong growth in domestic demand but also due to indigenous

                              availability of key resources like iron ore and skilled workforce

                              After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                              steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                              finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                              2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                              consumption has accelerated to 91 per cent

                              With the likely growth of Indian economy at around 7 per cent per annum

                              demand for steel is expected to remain strong and is projected to reach a level of 90

                              million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                              demand is sustainable considering the fact that Indias per capita consumption of steel

                              is still very low at 31 kgs per head compared to the world average of 145 kgs The

                              very low level of per capita consumption of steel in India is highlighted further when

                              compared with the consumption levels of its peer group consisting of countries like

                              China Brazil Mexico and Republic of Korea as also with selected developed

                              countries

                              Though there are realistic constraints in India to achieving as rapid a growth as in

                              China there seems to be consensus among analysts that India is likely to witness a

                              growth rate in steel consumption higher than the historically observed rate of 6 to 7

                              percent If the growth rate (9 per cent) of last three years is maintained then we will

                              achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                              more conservative due to cyclicity of steel business it may be mentioned that in a

                              country like India cyclicity is more in terms of prices rather than volumes of production

                              Exports

                              Similar optimism prevails with regard to export of iron and steel Export of steel

                              starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                              2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                              rising domestic demand and low capacity additions Exports now constitute around 17

                              per cent of total production and Indias presence in the developing and developed

                              world is being increasingly felt Indian steel producers have recently been able to

                              supply specialized grades and products used for sophisticated applications like

                              automobiles On the cost front some of our producers are counted amongst the least

                              cost producers of the world For an average reference plant India is competitively

                              placed in the middle of the hierarchy of steel producing nations

                              However we have a long way to go to catch up with the leading exporters of the

                              world such as Japan the CIS countries Brazil etc It is however expected that by

                              2019-20 India will be able to export around 26 million tonnes of steel representing 24

                              per cent of total projected production The projected export ratio compares well with

                              the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                              The projected production of steel by 2019-20 to meet the domestic and export

                              demand will be around 110 million tonnes Management of resources and

                              infrastructural growth is going to be critical in achievement of the production level

                              envisaged The broad requirements of various resources will increase manifold from

                              the current level The bottlenecks in availability of critical inputs and various facilities

                              need to be removed through concerted efforts of Government and industry The broad

                              strategy to overcome these constraints as well as meet the strategic goals of the steel

                              sector has been discussed in the National Steel Policy which has been recently

                              approved by the Government

                              As stated earlier the long-term goal of the National Steel Policy is that India

                              should have a modern and efficient steel industry of world standards catering to a

                              diversified steel demand The focus of the policy is to achieve global competitiveness

                              not only in terms of cost quality and product mix but also in terms of global

                              benchmarks of efficiency and productivity The policy envisages adopting a multi-

                              pronged strategy to achieve these goals On the demand side the strategy would be

                              to create incremental demand through promotional efforts creation of awareness and

                              strengthening the delivery chain particularly in rural areas On the supply side the

                              strategy would be to facilitate creation of additional capacity remove procedural and

                              policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                              investments in RampD and HRD and encourage the creation of infrastructure such as

                              roads railways and ports

                              The production figures exports and imports of finished carbon steel and pig iron

                              and apparent consumption patterns of finished carbon steel as indicated by TATA

                              Steel and SAIL attest to the continuing growth for both the sectors

                              FINDINGS

                              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 increased its profit over the year particularly in 2006-07

                              Both the companies are planning to adopt modern technology which is going to

                              help them to compete in world market but they need to be less dependent on

                              state of art technology and coal for long term prospects

                              Public sector has undergone retrenchment for the employees and improved

                              has its lobour productivity but it is still lacking behind as compared to private

                              sector

                              SAIL has reduced the no of accidents due to improper handling of machinery

                              still no of accidents are more than that of TATA Steel

                              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

                              ie 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 have to be met

                              comprehensively if we are to take our legitimate place in the world as a developed

                              nation by 2020

                              BIBLIOGRAPHY

                              Annual report (2006-07) published by ministry of steel

                              Annual report (2006-07) published by TATA Steel

                              Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                              REPORTrsquo posted by SAIL on its website

                              lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                              held on 07 Nov 2006

                              Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                              wwwsteelnicin (Official website of ministry of industry)

                              wwwtatasteelcom (Official website of TATA Steel)

                              wwwsailcoin (Official website of Steel Authority of India)

                              wwwworldsteelorg (official website of International Iron amp Steel Institute)

                              wwwjpcindiansteelnicin (Website of joint planning committee)

                              • DATA ANALYSIS
                              • Comparison between TATA Steel and Steel Authority of India
                              • Production
                              • Quantity 000 Tonnes
                              • Financials
                              • Research and Development
                              • (Rs Crore)
                              • TATA Steel
                              • Steel Authority of India
                              • Environment
                              • TATA Steel
                              • Emissions effluents and wastes
                              • Emissions
                              • Waste handling
                              • Effluent Management
                              • Steel Authority of India
                              • Solid Waste Management
                              • Environmental Plantation
                              • Environmental Recognitions
                              • Workforce and Welfare of Society
                              • TATA steel
                              • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                              • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                              • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                              • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                              • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                              • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                              • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                              • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                              • Steel Authority of India
                              • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                              • Technology
                              • Steel Authority of India
                              • Safety measures
                              • Tata Steel
                              • Steel Authority of India
                              • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                              • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                              • Measures taken by Indian government to improve the industry
                              • Now letrsquos 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-
                              • Special assistance being provided by Ministry of Steel to Private Sector
                              • FUTURE OF INDIAN STEEL INDUSTRY

                                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

                                MAHARASHTRA ELEKTROSMELT LTD (A Subsidary of SAIL)

                                Maharashtra Electrosmelt Ltd is situated in Chandrapur Maharashtra and is a major

                                producer of ferro manganese and silico manganese for captive use of SAIL plants

                                The authorised and paid-up share capital of the company as on 3132006 was Rs 30

                                crore and Rs 24 crore respectively SAILrsquos holding is approximately 9912 of the

                                paid-up capital

                                Financial Performance

                                During the year 2005-06 the company recorded a turnover of Rs 24733 crore

                                (including conversion income of Rs 17110 crore) and made a net profit after tax of

                                Rs 2097 crore The turnover and net profit after tax of the company during April

                                2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748 crore

                                (provisional) respectively

                                Production Performance

                                The production of all grades of ferro alloys during 2005-06 is as under

                                (in tonne)

                                Materials 2005-06 April- Dec 2006

                                High Carbon Ferro Manganese 51525 49493

                                Silco Manganese 46712 32921

                                Medium Carbon Ferro Manganse 2344 164

                                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 was commissioned in August

                                1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                                million tonne per annum capacity Right from the year of its integrated operation VSP

                                established its presence both in the domestic and international markets with its

                                superior quality of products VSP has been awarded all the three International

                                Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                                180011999 The company has taken significant strides in the area of Corporate

                                Social Responsibility

                                Production Performance

                                (in million tonne)

                                Items 2004-05 2005-06 2006-07 (April-Dec06)

                                Hot Metal 3920 4153 3040

                                Liquid Steel 3560 3603 2676

                                Saleable Steel 3173 3237 2419

                                NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                                Incorporated on November 15 1958 the National Mineral Development Corporation

                                Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                                developing and exploiting mineral resources of the country (other than coal oil

                                natural gas and atomic minerals) At present its activities are concentrated on mining

                                of iron ore diamonds and silica sand

                                NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                                (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                                Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                                activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                                from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                                Supreme Court of India NMDC is following up the case for early hearing

                                All the iron ore production units have been accredited with ISO 90012000 and ISO

                                140012004 certifications RampD Centre of NMDC was also accredited with ISO

                                90012000 certification

                                Iron Ore

                                NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                                December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                                (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                                MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                                exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                                Capital Structure

                                The authorised share capital of the company is Rs 150 crore The paid up equity

                                share capital was Rs 13216 crore Outstanding loans from Government of India are

                                nil

                                Financial Performance

                                The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                                Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                                SalesTurnover222655 371092 2790

                                Gross Margin128749 2889 2455

                                Profit Before Tax122365 277013 2410

                                MSTC LTD

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

                                Enterprise was set up on September 9 1964 as a canalising agency for the export of

                                scrap from the country With the passage of time the Company emerged as the

                                canalising agency for the import of scrap into the country Import of scrap was de-

                                canalised by the Government in 1991-92 and MSTC has since then moved on to

                                marketing ferrous and miscellaneous scrap arising out of steel plants and other

                                industries and importing coal coke petroleum products semi finished steel products

                                like HR coils and export of primarily iron ore The company has also established an e-

                                auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                                developed an e-procurement portal in house

                                Capital Structure

                                The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                                220 crore as on 31122006 of which approximately 90 is held by Government of

                                India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                                Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                                bonus shares issued in the year 1993-94 in the ratio 11

                                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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                                handling of BOF slag etc

                                Financial Performance

                                Particulars 2004-05 2005-06 2006-07 (Apr-

                                Dec2006)

                                Total Turnover ie Service charges realised including miscellaneous Incomeetc

                                981822 1067937 765557

                                Gross Margin before Interest amp Depreciation 167879 186514 105284

                                Interest amp Depreciation 83014 100970 84728

                                Profit before Tax 84865 85544 20556

                                MANGANESE ORE (INDIA) LTD (MOIL)

                                Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                                of manganese ore in India At the time of inception 49 of its shares were held by the

                                Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                                proportion by Government of India and the State Governments of Madhya Pradesh 17

                                and Maharashtra Subsequently in 1977 the Government of India acquired the

                                shares held by CPMO in MOIL and MOIL became a wholly owned Government

                                company with effect from October 1977 As on 30112006 Government of India held

                                8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                                holding 961 and 882 shares respectively

                                MOIL Produces and Sells following Grades of Manganese Ore

                                1048708 High grade ores for production of ferro manganese

                                1048708 Medium grade ores for production of silico manganese

                                1048708 Blast furnace grade ore required for production of hot metal

                                1048708 Dioxide ore for dry battery cells and chemical industries

                                Production and 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

                                Items 2004-05 2005-06 2006-07 (up to Dec2006)

                                1 Production

                                a) Manganese Ore (thousand tonne) 94300 86500 82533

                                b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                                c) Ferro Manganese (tonne) 1032500 617000 829400

                                2 Turnover (Rupees in crore) 37878 33409 29463

                                3 Profit before Tax (Rupees in crore) 20227 16900 12087

                                KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                                Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                                90012000 and ISO 14001 company was established in April 1976 to meet the long

                                term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                                was set up at Kudremukh This project was to be financed in full by Iran However as

                                Iran stopped further loan disbursements after paying US $ 255 million the project was

                                completed as per schedule with the funds provided by Government of India While the

                                project was commissioned on schedule consequent upon the political developments

                                in Iran they did not lift any quantity of concentrate As a diversification measure the

                                Government approved the construction of a 3 million tonne per year capacity pellet

                                plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                                million tonne with additionsmodifications The plant went into commercial production

                                in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                                units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                                Plant Mangalore

                                Production

                                A target of 31 million tonne and 305 million tonne was set for production of iron ore

                                concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                                production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                                The target set for production during the year 2006-07 is 305 million tonne of pellets

                                In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                                activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                                production of iron ore concentrate during the year 2006-07 As against a target of 188

                                million tonne of pellets fixed for the period April to November 2006 the actual

                                production was 0275 million tonne which represents 15 target fulfilment There is

                                shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                                production of pellets is on account of operational problems being encountered in the

                                pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                                There was excessive generation of su er fines (slimes) affecting filtration clogging of

                                filters overflow and contamination of process water due to filling of cooling pond

                                affecting production While efforts are continuing to rectify the problems the operation

                                of pellet plant is yet to stabilize and normal production is yet to commence

                                The sales revenue during the last five years and up to November 2006 during 2006-

                                07 is detailed below

                                (Rs in lakh)

                                Years Concentrate Pellets Total

                                2006-07 (up to December 2006) - 12427 12427

                                2005-06 12091 111137 123228

                                2004-05 16050 169327 185377

                                2003-04 20209 82729 102938

                                2002-03 21135 51579 72714

                                2001-02 21571 50598 72169

                                Financial Performance

                                An overview of the performance of KIOCL during the year 2006-07 (up to November

                                2006) together with actuals for the previous three years is indicated below

                                (Rs in lakh)

                                Particulars 2006-07(up to December 2006)

                                2005-06 2004-05 2003-04

                                Total value of Sales 12427 123228 185377 102938

                                Gross Margin 2620 68706 120863 45945

                                Profit after Tax 1029 35630 64984 30070

                                Inventories(excluding finished stock)

                                20417 15843 8720 7616

                                BIRD GROUP OF COMPANIES

                                Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                the following seven companies came under the administrative control of the Ministry of

                                Steel Government of India

                                (a) The Orissa Minerals Development Company Limited (OMDC)

                                (b) The Bisra Stone Lime Company Limited (BSLC)

                                (c) The Karanpura Development Company Limited (KDCL)

                                (d) Scott amp Saxby Limited (SSL)

                                (e) Eastern Investments Limited (EIL)

                                (f) Burrakar Coal Company Limited (Burrakar)

                                (g) Borrea Coal Company Limited (Borrea)

                                The status of the companies is as under

                                a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                of coal mines The two companies are in the process of liquidation The official

                                liquidator has already taken over the assets and liabilities of these two companies

                                b) EIL being an investment company is having a major stake in the equity shares of

                                operating companies under the Bird Group

                                c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                Status of the Companies at the Time of Nationalisation

                                At the time when the Bird Group of Companies came under the administrative control

                                of the Ministry of Steel Government of India all of them were financially sick and

                                burdened with various problems With the financial support from the Government of

                                India problems relating mainly to excessive manpower erosion of working capital and

                                outstanding liabilities could be settled to a considerable extent

                                REVIEW OF LITERATURE

                                RS PANDEY sees a bright future for the steel industry in India provided of course

                                the iron ore mining policy to be announced by the government soon acts as a catalyst

                                for growth He discusses the industrys problems and prospects in an interview When

                                asked about the steel sectors ie private and public he expressed his expert views

                                The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                Excerpts

                                The public sector steel companies in India are doing extremely well And therefore

                                they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                Between 1992-93 and now the share of the public sector in steel production had gone

                                down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                to 71 per cent But the public sector units are growing even if the private sector is

                                growing faster

                                During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                million tonnes in just four years RINL is set to expand its capacity from three million

                                tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                capacity for the PSUs

                                The public sector should be encouraged all the more Let there be a healthy

                                competition between public and private sector producers The question of exit comes

                                when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                was at below Rs10 per share Today it is more than Rs130 and the expectations

                                are that it will go up even higher

                                When talked about the labour productivity he says Yes labour productivity is low in

                                SAIL in particular But it is improving The steel major is going to adjust much of its

                                existing manpower in the expansion phase when its capacity is going to almost

                                double The management had also undertaken a massive VRS [voluntary retirement

                                scheme] In RINL labour productivity is not all that bad

                                Besides SAIL has done very well in various other techno-economic parameters in the

                                last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                improvement of 20 per cent In blast furnace productivity also there has been an

                                improvement as also in the production of high-end special steels and capacity

                                utilisation

                                With the improved turnover which comes from higher capacity use and higher

                                manpower productivity SAILs profits have surged Its gross profit more than doubled

                                between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                other input costs and 71 per cent owing to improvement in capacity use and other

                                factors that are just mentioned

                                OBJECTIVES

                                To compare Private and Public steel sector with refrence to TATA Steel and

                                Steel Authority Of India

                                To analyse potential of both the companies ie TATA Steel and SAIL

                                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

                                Research Methodology

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

                                a) Research design-

                                In case of my research ldquoComparative analysis of Indian private and Public

                                sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                found to be more appropriate

                                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

                                Comparison between TATA Steel and Steel Authority of India

                                The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                significant improvements in the last two years The combined profit before tax of all 15

                                PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                The profit before tax for all PSUs also exhibited a significant improvement of

                                around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                comparable period of last year

                                Contribution of PSUs to public exchequer has also gone up significantly For

                                example the contribution of five leading companies namely SAIL RINL NMDC

                                KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                On the other hand 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

                                During the period (April-December 2006) 205 million tonne of steel was produced by

                                Private Sector steel units out of the total production of 3315 million tonne in the

                                country The private sector units consist of major steel producers in one hand and

                                relatively smaller amp 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

                                For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                companies on following parameters

                                Production

                                Chart showing production of both the companies

                                Quantity 000 Tonnes

                                2007-08 APR-DEC07APR-

                                DEC06 ACTUA

                                L

                                AGE OF CURRENT

                                PRODUCTION OVER

                                CAPACITY UTILISATION

                                TARGET TENTATIV

                                E

                                TARGET

                                ACTUAL

                                APR-DEC07 TARGE

                                T

                                APR-DEC06 ACTUA

                                L

                                APR-DEC 07

                                APR-DEC06

                                SAIL

                                i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                iv)BSL43500 32630 30970 30010 949 1032 950 910

                                v)ISP5000 3760 3520 3450 936 1020 940 920

                                vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                vii)VISL

                                1390 1050 1160 1190 1105 975 1300 1340

                                TATA 50000 37440 37090 37380 991 992 990 1000

                                TATA Steel

                                The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                target of 3744 (mT) but could produce 3709 However for the same period in last

                                year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                to 99 this year

                                Steel Authority of India

                                The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                but it could produce only 126 (mT) a growth of 4 over the previous year However

                                for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                capacity utilisation of 103 this year as compared to 101 last year

                                Financials

                                TATA Steel

                                The year 2006-07 has seen the highest turnover and profits continuing the trend

                                of the past four years The Company achieved the best ever sales turnover and

                                profitability during the year under review A robust Indian economy firm steel prices

                                higher volumes and several improvement initiatives contributed to the record

                                performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                the previous year Export turnover was lower by about 5 due to lower volumes

                                Average price realisation improved mainly due to higher prices of hot rolled

                                coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                due to additional borrowings for the Companyrsquos domestic expansion programs and

                                funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                20 compared to the previous year

                                The record financial results would not have been possible without a matching

                                performance by the operating departments including the raw materials division The

                                year witnessed the best ever crude steel production by the Company at 505 million

                                tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                increase in production was backed by improvements in operating practices and

                                productivity resulting in a reduction in consumption of raw materials energy

                                refractories etc

                                Steel Authority of India

                                Financial Year 2006-07 has been eventful year for the company with further

                                momentum in improving operational efficiencies laying strong foundation and building

                                road map for modernisation and expansion of SAIL Plants with several new initiatives

                                undertaken with its human resource at the core During the year the company got the

                                distinction of first metal company in the country to reach a market capitalization of Rs

                                50000 crore

                                There have been improvements in all financial parameters which are shown in

                                the table given below-

                                SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                increase of 55

                                Research and Development

                                Chart showing production of both the companies

                                (Rs Crore)

                                TATA Steel

                                The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                steel for body panels

                                Research is undertaken at Tata Steel in the areas of raw materials including coal

                                coke energy conservation waste utilisation sintering blast furnace productivity and

                                phosphorous reduction product development and improvement in life of plant and

                                machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                sealed and over 100 are in process

                                Steel Authority of India

                                Research and Development Centre for Iron and Steel (RDCIS) has provided

                                innovative technological inputs to different units of SAIL with special emphasis on

                                cost reduction product development and application quality improvement energy

                                conservation and automation Several new products were developed and

                                commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                strengthened its technology marketing efforts by providing consultancy services

                                organising specialised testing and transfer of technological innovations to outside

                                customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                During the year 1998 technical papers were publishedpresented besides filing

                                of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                Government of India

                                Environment

                                TATA Steel

                                Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                Jamshedpur is the only town in the country which

                                Significant achievements by the Company include an improvement in

                                environment and resource conservation including a reduction in green house erosion

                                raw materials and water consumption The Company has increased waste re-use and

                                re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                the-art pollution control systems being installed to prevent and control pollution The

                                Company has almost doubled its capital investment in Pollution Abatement in the last

                                five years

                                Emissions effluents and wastes

                                Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                most relevance to the steel industry Considerable reduction has been effected by

                                Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                granulation is taken into account Other Greenhouse Gas emissions do not result from

                                Tata Steelrsquos activities

                                Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                tonnes in 2003-04 as against 790 tonnes used during the previous year

                                Hazardous Waste under Basel Convention The Company does not import or export

                                any waste deemed hazardous under the Basel Convention All hazardous wastes

                                generated are handled as per the requirement of the Hazardous Waste Management

                                and Handling Rules 19892000

                                Emissions

                                Tata Steel has undertaken several initiatives which have resulted in

                                considerable reduction in stack emission Emissions are well below the Indian and

                                international standards The emission load including particulate matter Sulphur

                                Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                undertaken at the Steel Works

                                Waste handling

                                Most of the solid waste generated from Steel Works is recycled or reused 18

                                of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                was used to fill low-lying areas and for peripheral road construction around

                                Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                power plants was dumped in a designated dump area

                                Effluent Management

                                Waste water from the steel making process is being treated with best available

                                physio-chemical methods as well as being recycled Waste water from the coke plant

                                is treated biologically where organic pollutants are oxidised and decomposed by micro

                                organisms The Company has reduced the levels of total pollutant discharge in waste

                                water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                Steel Authority of India

                                Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                environmentally responsible manner to comply with applicable regulations and striving

                                to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                efficiency and optimize resource consumption through various measures viz

                                improvement in process technology in the areas of raw materials coke iron and steel

                                making reuserecycle of the by-products generated and conservation of energy and

                                water

                                Solid Waste Management

                                During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                these wastes are being made through internal recycling and selling to outside

                                agencies The wastes generated in the steel plants are being utilized mainly through

                                their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                during April-September 2006

                                Environmental Plantation

                                Trees have a significant role in protection of environment and ecological balance

                                Extensive afforestation programme are being followed in all the plants and mines The

                                basis of choosing the species of plants mainly depends on local soil characteristics

                                and prevailing meteorological conditions The green belt developed by afforestation

                                adds to the aesthetic environment which becomes dust and noise barriers

                                A total number of 145521 saplings have been planted covering an area of 637

                                hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                hectare in 2004-05 in and around the steel plants of SAIL

                                Environmental Recognitions

                                SAIL plants have been awarded various prizes for environmental management in

                                their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                the Confederation of Indian Industries (CII) for exemplary performance in the

                                environmental economic andsocial dimensions of sustainable development and the

                                Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                Excellence Award in the metal sector 2005 instuted by the World Environment

                                Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                for 2005 from International Greenland Society

                                Workforce and Welfare of Society

                                TATA steel

                                Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                provide a work environment that will ensure a sense of purpose and personal growth

                                for each individual The wish of the company is to see the smile on every face

                                everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                people and enriched empowered and enhanced their lives

                                Even in its nascent years social scientists Sidney and Beatrice Webb were

                                brought in to work on welfare schemes In fact some of the initiatives introduced by

                                Tata Steel were the first of their kind in India and some even in the western countries

                                at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                source of its competitiveness It focuses on constantly updating and challenging

                                intellectual capabilities to enable them to excel in performance Special efforts are

                                made for enhancing strategic thinking skills and analytical abilities of its managers and

                                workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                available with its people through Knowledge Management and sharing of best

                                practices

                                In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                mutual co-operation coordination and understanding between the Management and

                                the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                among many other prestigious awards and recognition Tata Steel aims at ensuring

                                transparency fairness and equity in all its interactions with its employees to create an

                                enthused and happy workforce

                                In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                assistance in the fields of education vocational training self-employment and

                                family welfare

                                Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                12 times This facility provides on-the-spot diagnostic medical and advanced

                                surgical treatment for preventive and curative interventions to people in

                                inaccessible rural areas

                                Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                for the 1920 Antwerp Olympics

                                The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                track was inaugurated in 1991 The complex also houses facilities for handball

                                tennis volleyball hockey basketball boxing table tennis and a modern

                                gymnasium

                                The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                services for the betterment of the people in and around Jamshedpur

                                At times of natural calamities the company has rushe immediate relief and off

                                ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                fl ood ravaged Orissa and other such aff ected areas

                                Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                er a unique environment for the children of Jamshedpur to grow up in

                                In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                Jamshedpur has emerged as the one of the best cities in India

                                Steel Authority of India

                                The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                executives and 123005 non-executives The total reduction in manpower achieved

                                during the year stood at 4864 which included separation of 881 employees through

                                voluntary retirement The labour productivity improved by around 12 over previous

                                year to 150 tonne crude steelmanyear

                                Some of the areas of assistance which are available to the weaker sections are the

                                following

                                The company has provided land for construction of school buildings in some of

                                the steel townships as well as in other places for spreading education among

                                the masses

                                The company has constructed roads in remote areas around the steel plants

                                and also where the captive mines are located to improve communication and

                                also increase activities such as organisation of health camps school facilities

                                drinking water etc under the peripheral development schemes

                                Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                providing them with education boarding and lodging facilities

                                Construction of bridges by-pass roads metal-morum path waterways

                                levellingdressing area around township pre-mixed roads Installation of hand-

                                pumps tube wells and wells for villagers

                                Construction of school buildings (including for mentally retarded deaf and

                                dumb children) madarsas providing school furniture therein and construction

                                of hostels womenrsquos college building etc

                                Fourteen scholarships are awarded to deserving SCST undergraduate

                                engineering students in various disciplines to encourage technical education

                                among them

                                In many cases tuition fee in company run schools is exempt for SCST

                                students Steps are taken to provide education to more and more tribal children

                                in company schools

                                The unemployed SCST youth are given specialized training in various

                                technical trades to develop skill and knowledge Such training is provided free

                                of cost

                                Adult literacy campaign is carried out in most of the steel townships Every year

                                more and more men and women are being covered in this campaign

                                Development of fishery and cottage industry providing sewing machines to

                                village mahila mandals and promoting other self-employment generation

                                schemes

                                SAIL has established a hockey academy with stadium and hostel facilities at

                                Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                academy was successful in spotting a number of young talented tribal players

                                and grooms them under expertise of ex-Olympian

                                Technology

                                The biggest boost to efficiency in the steel industry has come from the increased

                                use of continuous casting ndash an indicator of the modernity of the production process Its

                                share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                now India is thus well on its way to joining the ranks of the leading steelmakers

                                among the industrial nations (share in EU-25 96) However in India some 6 of

                                crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                suggests there is restructuring potential

                                TATA Steel

                                Tata Steels stall at the International Trade Fair was adjudged the best along

                                with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                international companies also took part in the exhibition Participating companies from

                                countries all over the world exhibited latest technologies and know-how List of

                                participating companies included Baosteel SAIL Heavy Engineering Corporation

                                Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                companies of national and international repute China was the partner country for the

                                International Trade Fair this year

                                In the award winning exhibition Tata Steel showcased its best coal mining practices

                                cutting-edge technology used in iron ore mining pioneering human resource

                                practices 78 years of industrial harmony and various other aspects of the worlds best

                                steel company

                                The 6th International Trade Fair and Conference an institutionalised global

                                event is considered to be one of the most prestigious forums for national as well

                                international participants It is a conclave of the finest minds concerned with the future

                                direction and growth of these sectors The forum provided the worlds most eminent

                                metallurgists manufacturers of metallurgical and mining machinery and related

                                sectors professionals analysts and experts with the opportunity to exchange views on

                                emerging technologies synergy and strengths and open up wider horizons for

                                sectorial development

                                Tata Steel to adopt Corus technology

                                Tata Steel plans to implement alternate technology used by the British steel

                                maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                production according to Mr B Muthuraman Managing Director Tata Steel

                                ldquoWe are looking at alternate technology Corus has developed an alternate

                                technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                newspersons on the sidelines of the 34th National Management Convention organised

                                by the All-India Management Association However he declined to give further details

                                on the type of technology the Indian steel giant plans to implement

                                Steel Authority of India

                                Modernisation holds the key to SAILs fortunes in the near future The objective

                                of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                and productive capacity and in the process become more energy-efficient and

                                improve quality The key component of the ongoing modernisation drive - already

                                completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                continuous casting techniques A senior SAIL official says Continuous casting and

                                basic oxygen furnaces ensure better quality steel through processes more easily

                                monitored for quality control The basic oxygen surfaces method is significantly faster

                                more automated and permits greater flexibility Continuous casting is more efficient

                                than the traditional ingot casting methods and gives increased yields while enabling

                                better quality standards SAIL is also modernising its finishing mills and is adding

                                secondary refining facilities to improve quality

                                Safety measures

                                A unique feature of safety management in steel industry is that a bipartite forum

                                named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                was formed in 1973 at national level having representatives from steel plants in SAIL

                                RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                workshops training programme safety competitions for member organisations JCSSI

                                with the co-operation and support of Trade Union representatives formulates policies

                                and guidelines for its member plants and monitors the implementation

                                Tata Steel

                                Safety has always been a prime focus at Tata Steel A Safety Committee a

                                Safety department and a Safety Trophy helped spread the message all across the

                                company

                                TATA reaffirms its commitment to provide safe working place and clean

                                environment to its employees and other stakeholders as an integral part of its

                                business philosophy and values We will continually enhance our Environmental

                                Occupational Health amp Safety (EHS) performance in our activities products and

                                services through a structured EHS management framework Towards this

                                commitment we shall

                                Establish and achieve EHS objectives and targets

                                Ensure compliance with applicable EHS legislation and other requirement and

                                go beyond

                                Conserve natural resources and energy by constantly seeking to reduce

                                consumption and promoting waste avoidance and recycling measures

                                Eliminate minimize andor control adverse environmental impacts and

                                occupational health and safety risks by adopting appropriate state-of-the-art

                                technology and best EHS management practices at all levels sand functions

                                Enhance awareness skill and competence of our employees and contractors

                                so as to enable them to demonstrate their involvement responsibility and

                                accountability for sound EHS performance

                                Steel Authority of India

                                SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                Annual Performance Plans (APP) for the areas of safety and fire services are

                                formulated and review of implementation of APP is done during Heads of

                                Safety meeting

                                Internal and external safety audits of major departments particularly hazardous

                                areas are conducted every year and points arising from these audits are

                                liquidated Safety aspects have been incorporated in standard operating

                                practices (SOP) and standard maintenance practices (SMP)

                                All major capital repairsshut downs are closely monitored round the clock

                                Periodic drives are conducted to inculcate safety awarenessculture up to

                                grass-root level apart from regular inspections as per checklists to identify

                                unsafe conditionsacts

                                Safety training is imparted to target group employees at various levels HRD

                                intervention in the area of safety covers Heads of Departments Line Managers

                                amp Departmental Safety Officers Besides area specific workshops are

                                conducted at different locations on important topics like gas safety railroad

                                safety safety in iron steel amp coke making etc

                                Consistent efforts were made by SAIL Safety Organisation for improving safety

                                standards in the company by taking measures like intensive safety drives in works

                                area and conducting safety audits in hazardous departments of different plants and

                                mines In addition specific workshops on safety aspects were organised in various

                                SAIL steel plants

                                Measures taken by Indian government to improve the industry

                                Now letrsquos 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-

                                1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                among others was removed from the list of industries reserved for the public

                                sector and also exempted from the provisions of compulsory licensing under the

                                Industries (Development and Regulation) Act 1951

                                2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                of `high priority industries for automatic approval for foreign equity investment up

                                to 51 This limit has been recently increased to 100

                                3 Price and distribution of steel were deregulated from January 1992 At the same

                                time it was ensured that priority continued to be accorded for meeting the

                                requirements of small scale industries exporters of engineering goods and North

                                Eastern Region of the country besides strategic sectors such as Defence and

                                Railways

                                4 The trade policy has been liberalised and import and export of iron and steel is

                                freely allowed There are no quantitative restrictions on import of iron and steel

                                items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                steel have drastically come down since 1991-92 levels and the government is

                                committed to bring them down to the international levels In Chapter 72 there are

                                two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                5 Iron amp Steel are freely importable as per the Extant Policy

                                6 Iron amp Steel are freely exportable

                                7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                8 The floor price for seconds and defectives continues till date

                                9 Imports of seconds and defectives of steel are allowed only through three

                                designated ports of Mumbai Calcutta and Chennai

                                10Mandatory pre inspection certificate by a reputed international agency for every

                                import consignment of seconds and defectives

                                11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                15 per cent to 5 per cent

                                12Further customs duty on several raw materials used by the steel sector like

                                noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                coking coal to zero

                                13To bring down the prices of steel the excise duty on steel products was reduced

                                from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                cut on moderating prices was not achieved

                                14The union Budget 2007-08 the import duty on seconds and defective has been

                                further reduced from 20 to 10

                                Special assistance being provided by Ministry of Steel to Private Sector

                                1 Ministry of Steel is extending all possible support as detailed below for the

                                development of Iron and Steel Sector in the country

                                2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                new plants and expansion of existing ones wherever applied for

                                3 To ensure an un-interrupted supply of raw materials to the producers

                                4 The Ministry has been interacting with All India Financial institutions to expedite

                                clearance of projects

                                5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                Plants are held at the level of Secretary

                                6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                industry so that their absence does not lead to bottlenecks in the future growth of

                                the Iron and Steel Sector and takes up these issues with the concerned ministries

                                7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                country are members of this Institute which has been set up with the objective of

                                promoting developing and propagating the proper and effective use of steel

                                8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                major steel plants being implemented Govt has setup a Project Coordination

                                Group under the Chairmanship of Steel Minister

                                NATIONAL STEEL POLICY 2005

                                The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                development and as such great importance is attached to capacity expansion in line

                                with expected demand at cost and prices which make Indian steel internationally

                                competitive The existing regime of liberalization decontrol and deregulation of

                                industry in the country has opened up new opportunities for the expansion of the steel

                                industry With a view to accelerating the growth of the steel sector and attaining the

                                vision of India becoming a developed economy by 2020 the Ministry of Steel

                                formulated a National Steel Policy (NSP) in 2005

                                The following salient features can be derived after analysing the NSP 2005

                                The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                towards reform restructuring and globalisation

                                The long-term goal of the NSP is that India should have a modern and efficient

                                steel industry of world standards catering to diversified steel demand The focus of

                                the policy is to achieve global competitiveness not only in terms of cost quality and

                                product-mix but also in terms of global benchmarks of efficiency and productivity

                                In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                NSP seeks to remove the supply-side constraints to the growth of this industry in

                                an open globally integrated and competitive environment

                                The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                policy goal On the demand side the strategy would be to create incremental

                                demand through promotional efforts creation of awareness and strengthening the

                                delivery chain particularly in rural areas On the supply side the strategy would be

                                to facilitate creation of additional capacity remove procedural and policy

                                bottlenecks in the availability of inputs such as iron ore and coal make higher

                                investments in RampD and encourage the creation of infrastructure such as roads

                                railways and ports

                                The NSP acknowledges the low per capita consumption of steel in the country

                                especially in the rural areas and the need to boost steel consumption to improve

                                quality of life and help in meeting the growing aspirations of masses

                                In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                industry would need additional capital In addition funds would be required for

                                technological upgrade of existing facilities In order to mobilize such vast resources

                                NSP seeks to encourage foreign direct investment In addition the policy also

                                seeks to make the fiscal incentives available to infrastructure projects accessible

                                to the steel industry

                                The NSP seeks to support developing of risk-hedging instruments like futures and

                                derivatives to contain price volatility in the steel market

                                The NSP seeks to strengthen the existing training and research facilities available

                                to the domestic steel industry so as to provide suitable training programmes

                                especially for the secondary small-scale units and also to collect and analyse data

                                on important parameters of the industry

                                The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                capability for special types of steel substitute coking coal use iron ore fines

                                develop new products suited to rural needs enhance material and energy

                                efficiency utilize waste and arrest environmental degradation

                                The NSP acknowledges the important role played by the secondary steel sector in

                                providing employment meeting local demand of steel in rural and semi-urban

                                areas and meeting the countryrsquos demand of some special products and seeks to

                                endeavour to provide the necessary feedstock to these units at reasonable prices

                                from major plants through the existing mechanism of State Small Industries

                                Corporations

                                The NSP recognizes the fact that integration of the Indian steel industry with the

                                global economy requires that the industry should be protected from unfair trade

                                practices The NSP therefore envisages institution of mechanisms for import

                                surveillance and monitoring export subsidies in other countries

                                The present per capita consumption of steel in the country is very low compared to the

                                world average As mentioned above one of the objectives of the NSP is to augment

                                the demand and consumption of steel in the country by conscious promotion of steel

                                usage With a view to create a mass awareness campaign on conscious promotion of

                                steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                The Committee is being serviced by Institute for Steel Development and Growth

                                (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                way of an awareness campaign with particular emphasis on rural sectors The

                                Committee also aims at educating the designers architects builders and planners

                                regarding the qualitative and cost effective applications of steel in various structures

                                including buildings bridges flyovers and airports

                                FUTURE OF INDIAN STEEL INDUSTRY

                                India is amongst a few countries in the world having the dual advantage of fast

                                growing domestic demand coupled with access to raw materials Further the trend

                                that is already discernible is that the axis of global steel production consumption is

                                shifting towards Asia With their large populations China and India already account for

                                35 of the total world steel production - more than double of Europe Asia is

                                expected to outpace other regions of the world to an even greater extent in the coming

                                years

                                Amongst the Asian nations China has established a huge unbridgeable lead It

                                is accepted that China will continue to be the leader However India is slated to

                                emerge as the second Asian giant in the next eight years Figuratively speaking while

                                the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                China swallowed almost 32 of global steel It is unlikely that future production and

                                consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                has been the case over the last few years On the other hand it is sun-rise time for

                                India where the demand has increased by 7-8 in the last couple of years In the long

                                run Indian steel is likely to be more cost-effective since unlike China India has

                                relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                However the position with coal is not so favourable Though thermal coal

                                reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                traditional blast furnace route would require coking coal India does not have adequate

                                reserves of coking coal nor is the meagre amount available of appropriate quality

                                Thus the steel industry always had to contend with the dual problems of inadequate

                                availability and poor quality of Indian coking coal This has been partly addressed by

                                adopting alternative iron making processes that are not dependent on coking coal it

                                can not be denied that coal is the biggest cause for concern for bulk steel production

                                in India

                                Because of the shortage of indigenous coal attempts have been made by steel

                                producers to ensure long-term supplies by tying up with global majors or by acquiring

                                mines in other countries This is the only long-term solution but with a global shortage

                                of coal it may not remain cost-effective in the long run

                                India is the seventh largest producer of steel and may further improve its position

                                going by the current trends A series of investment decisions by major domestic

                                players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                The keen interest shown by various prospective investors is not only due to

                                expectations of strong growth in domestic demand but also due to indigenous

                                availability of key resources like iron ore and skilled workforce

                                After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                consumption has accelerated to 91 per cent

                                With the likely growth of Indian economy at around 7 per cent per annum

                                demand for steel is expected to remain strong and is projected to reach a level of 90

                                million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                demand is sustainable considering the fact that Indias per capita consumption of steel

                                is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                very low level of per capita consumption of steel in India is highlighted further when

                                compared with the consumption levels of its peer group consisting of countries like

                                China Brazil Mexico and Republic of Korea as also with selected developed

                                countries

                                Though there are realistic constraints in India to achieving as rapid a growth as in

                                China there seems to be consensus among analysts that India is likely to witness a

                                growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                percent If the growth rate (9 per cent) of last three years is maintained then we will

                                achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                more conservative due to cyclicity of steel business it may be mentioned that in a

                                country like India cyclicity is more in terms of prices rather than volumes of production

                                Exports

                                Similar optimism prevails with regard to export of iron and steel Export of steel

                                starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                rising domestic demand and low capacity additions Exports now constitute around 17

                                per cent of total production and Indias presence in the developing and developed

                                world is being increasingly felt Indian steel producers have recently been able to

                                supply specialized grades and products used for sophisticated applications like

                                automobiles On the cost front some of our producers are counted amongst the least

                                cost producers of the world For an average reference plant India is competitively

                                placed in the middle of the hierarchy of steel producing nations

                                However we have a long way to go to catch up with the leading exporters of the

                                world such as Japan the CIS countries Brazil etc It is however expected that by

                                2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                per cent of total projected production The projected export ratio compares well with

                                the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                The projected production of steel by 2019-20 to meet the domestic and export

                                demand will be around 110 million tonnes Management of resources and

                                infrastructural growth is going to be critical in achievement of the production level

                                envisaged The broad requirements of various resources will increase manifold from

                                the current level The bottlenecks in availability of critical inputs and various facilities

                                need to be removed through concerted efforts of Government and industry The broad

                                strategy to overcome these constraints as well as meet the strategic goals of the steel

                                sector has been discussed in the National Steel Policy which has been recently

                                approved by the Government

                                As stated earlier the long-term goal of the National Steel Policy is that India

                                should have a modern and efficient steel industry of world standards catering to a

                                diversified steel demand The focus of the policy is to achieve global competitiveness

                                not only in terms of cost quality and product mix but also in terms of global

                                benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                pronged strategy to achieve these goals On the demand side the strategy would be

                                to create incremental demand through promotional efforts creation of awareness and

                                strengthening the delivery chain particularly in rural areas On the supply side the

                                strategy would be to facilitate creation of additional capacity remove procedural and

                                policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                investments in RampD and HRD and encourage the creation of infrastructure such as

                                roads railways and ports

                                The production figures exports and imports of finished carbon steel and pig iron

                                and apparent consumption patterns of finished carbon steel as indicated by TATA

                                Steel and SAIL attest to the continuing growth for both the sectors

                                FINDINGS

                                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 increased its profit over the year particularly in 2006-07

                                Both the companies are planning to adopt modern technology which is going to

                                help them to compete in world market but they need to be less dependent on

                                state of art technology and coal for long term prospects

                                Public sector has undergone retrenchment for the employees and improved

                                has its lobour productivity but it is still lacking behind as compared to private

                                sector

                                SAIL has reduced the no of accidents due to improper handling of machinery

                                still no of accidents are more than that of TATA Steel

                                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

                                ie 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 have to be met

                                comprehensively if we are to take our legitimate place in the world as a developed

                                nation by 2020

                                BIBLIOGRAPHY

                                Annual report (2006-07) published by ministry of steel

                                Annual report (2006-07) published by TATA Steel

                                Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                REPORTrsquo posted by SAIL on its website

                                lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                held on 07 Nov 2006

                                Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                wwwsteelnicin (Official website of ministry of industry)

                                wwwtatasteelcom (Official website of TATA Steel)

                                wwwsailcoin (Official website of Steel Authority of India)

                                wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                wwwjpcindiansteelnicin (Website of joint planning committee)

                                • DATA ANALYSIS
                                • Comparison between TATA Steel and Steel Authority of India
                                • Production
                                • Quantity 000 Tonnes
                                • Financials
                                • Research and Development
                                • (Rs Crore)
                                • TATA Steel
                                • Steel Authority of India
                                • Environment
                                • TATA Steel
                                • Emissions effluents and wastes
                                • Emissions
                                • Waste handling
                                • Effluent Management
                                • Steel Authority of India
                                • Solid Waste Management
                                • Environmental Plantation
                                • Environmental Recognitions
                                • Workforce and Welfare of Society
                                • TATA steel
                                • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                • Steel Authority of India
                                • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                • Technology
                                • Steel Authority of India
                                • Safety measures
                                • Tata Steel
                                • Steel Authority of India
                                • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                • Measures taken by Indian government to improve the industry
                                • Now letrsquos 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-
                                • Special assistance being provided by Ministry of Steel to Private Sector
                                • FUTURE OF INDIAN STEEL INDUSTRY

                                  1992 with a capacity to produce 3 million tonne per annum of liquid steel 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 VSP has an excellent layout which can be expanded to over 10

                                  million tonne per annum capacity Right from the year of its integrated operation VSP

                                  established its presence both in the domestic and international markets with its

                                  superior quality of products VSP has been awarded all the three International

                                  Standards Certificates namely ISO 90012000 ISO 140011996 and OHSAS

                                  180011999 The company has taken significant strides in the area of Corporate

                                  Social Responsibility

                                  Production Performance

                                  (in million tonne)

                                  Items 2004-05 2005-06 2006-07 (April-Dec06)

                                  Hot Metal 3920 4153 3040

                                  Liquid Steel 3560 3603 2676

                                  Saleable Steel 3173 3237 2419

                                  NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (NMDC)

                                  Incorporated on November 15 1958 the National Mineral Development Corporation

                                  Ltd (NMDC) a Government of India Enterprise is engaged in the business of

                                  developing and exploiting mineral resources of the country (other than coal oil

                                  natural gas and atomic minerals) At present its activities are concentrated on mining

                                  of iron ore diamonds and silica sand

                                  NMDC operates the largest mechanised iron ore mines in the country at Bailadila

                                  (Chhattisgarh) and Donimalai (Karnataka) The silica sand project is at Lallapur

                                  Allahabad and the diamond mine is situated at Panna (Madhya Pradesh) Mining

                                  activities at DMP Panna were stopped with effect from 22082005 on receipt of notice

                                  from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble

                                  Supreme Court of India NMDC is following up the case for early hearing

                                  All the iron ore production units have been accredited with ISO 90012000 and ISO

                                  140012004 certifications RampD Centre of NMDC was also accredited with ISO

                                  90012000 certification

                                  Iron Ore

                                  NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                                  December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                                  (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                                  MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                                  exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                                  Capital Structure

                                  The authorised share capital of the company is Rs 150 crore The paid up equity

                                  share capital was Rs 13216 crore Outstanding loans from Government of India are

                                  nil

                                  Financial Performance

                                  The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                                  Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                                  SalesTurnover222655 371092 2790

                                  Gross Margin128749 2889 2455

                                  Profit Before Tax122365 277013 2410

                                  MSTC LTD

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

                                  Enterprise was set up on September 9 1964 as a canalising agency for the export of

                                  scrap from the country With the passage of time the Company emerged as the

                                  canalising agency for the import of scrap into the country Import of scrap was de-

                                  canalised by the Government in 1991-92 and MSTC has since then moved on to

                                  marketing ferrous and miscellaneous scrap arising out of steel plants and other

                                  industries and importing coal coke petroleum products semi finished steel products

                                  like HR coils and export of primarily iron ore The company has also established an e-

                                  auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                                  developed an e-procurement portal in house

                                  Capital Structure

                                  The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                                  220 crore as on 31122006 of which approximately 90 is held by Government of

                                  India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                                  Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                                  bonus shares issued in the year 1993-94 in the ratio 11

                                  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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                                  handling of BOF slag etc

                                  Financial Performance

                                  Particulars 2004-05 2005-06 2006-07 (Apr-

                                  Dec2006)

                                  Total Turnover ie Service charges realised including miscellaneous Incomeetc

                                  981822 1067937 765557

                                  Gross Margin before Interest amp Depreciation 167879 186514 105284

                                  Interest amp Depreciation 83014 100970 84728

                                  Profit before Tax 84865 85544 20556

                                  MANGANESE ORE (INDIA) LTD (MOIL)

                                  Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                                  of manganese ore in India At the time of inception 49 of its shares were held by the

                                  Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                                  proportion by Government of India and the State Governments of Madhya Pradesh 17

                                  and Maharashtra Subsequently in 1977 the Government of India acquired the

                                  shares held by CPMO in MOIL and MOIL became a wholly owned Government

                                  company with effect from October 1977 As on 30112006 Government of India held

                                  8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                                  holding 961 and 882 shares respectively

                                  MOIL Produces and Sells following Grades of Manganese Ore

                                  1048708 High grade ores for production of ferro manganese

                                  1048708 Medium grade ores for production of silico manganese

                                  1048708 Blast furnace grade ore required for production of hot metal

                                  1048708 Dioxide ore for dry battery cells and chemical industries

                                  Production and 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

                                  Items 2004-05 2005-06 2006-07 (up to Dec2006)

                                  1 Production

                                  a) Manganese Ore (thousand tonne) 94300 86500 82533

                                  b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                                  c) Ferro Manganese (tonne) 1032500 617000 829400

                                  2 Turnover (Rupees in crore) 37878 33409 29463

                                  3 Profit before Tax (Rupees in crore) 20227 16900 12087

                                  KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                                  Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                                  90012000 and ISO 14001 company was established in April 1976 to meet the long

                                  term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                                  was set up at Kudremukh This project was to be financed in full by Iran However as

                                  Iran stopped further loan disbursements after paying US $ 255 million the project was

                                  completed as per schedule with the funds provided by Government of India While the

                                  project was commissioned on schedule consequent upon the political developments

                                  in Iran they did not lift any quantity of concentrate As a diversification measure the

                                  Government approved the construction of a 3 million tonne per year capacity pellet

                                  plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                                  million tonne with additionsmodifications The plant went into commercial production

                                  in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                                  units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                                  Plant Mangalore

                                  Production

                                  A target of 31 million tonne and 305 million tonne was set for production of iron ore

                                  concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                                  production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                                  The target set for production during the year 2006-07 is 305 million tonne of pellets

                                  In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                                  activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                                  production of iron ore concentrate during the year 2006-07 As against a target of 188

                                  million tonne of pellets fixed for the period April to November 2006 the actual

                                  production was 0275 million tonne which represents 15 target fulfilment There is

                                  shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                                  production of pellets is on account of operational problems being encountered in the

                                  pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                                  There was excessive generation of su er fines (slimes) affecting filtration clogging of

                                  filters overflow and contamination of process water due to filling of cooling pond

                                  affecting production While efforts are continuing to rectify the problems the operation

                                  of pellet plant is yet to stabilize and normal production is yet to commence

                                  The sales revenue during the last five years and up to November 2006 during 2006-

                                  07 is detailed below

                                  (Rs in lakh)

                                  Years Concentrate Pellets Total

                                  2006-07 (up to December 2006) - 12427 12427

                                  2005-06 12091 111137 123228

                                  2004-05 16050 169327 185377

                                  2003-04 20209 82729 102938

                                  2002-03 21135 51579 72714

                                  2001-02 21571 50598 72169

                                  Financial Performance

                                  An overview of the performance of KIOCL during the year 2006-07 (up to November

                                  2006) together with actuals for the previous three years is indicated below

                                  (Rs in lakh)

                                  Particulars 2006-07(up to December 2006)

                                  2005-06 2004-05 2003-04

                                  Total value of Sales 12427 123228 185377 102938

                                  Gross Margin 2620 68706 120863 45945

                                  Profit after Tax 1029 35630 64984 30070

                                  Inventories(excluding finished stock)

                                  20417 15843 8720 7616

                                  BIRD GROUP OF COMPANIES

                                  Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                  the following seven companies came under the administrative control of the Ministry of

                                  Steel Government of India

                                  (a) The Orissa Minerals Development Company Limited (OMDC)

                                  (b) The Bisra Stone Lime Company Limited (BSLC)

                                  (c) The Karanpura Development Company Limited (KDCL)

                                  (d) Scott amp Saxby Limited (SSL)

                                  (e) Eastern Investments Limited (EIL)

                                  (f) Burrakar Coal Company Limited (Burrakar)

                                  (g) Borrea Coal Company Limited (Borrea)

                                  The status of the companies is as under

                                  a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                  of coal mines The two companies are in the process of liquidation The official

                                  liquidator has already taken over the assets and liabilities of these two companies

                                  b) EIL being an investment company is having a major stake in the equity shares of

                                  operating companies under the Bird Group

                                  c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                  Status of the Companies at the Time of Nationalisation

                                  At the time when the Bird Group of Companies came under the administrative control

                                  of the Ministry of Steel Government of India all of them were financially sick and

                                  burdened with various problems With the financial support from the Government of

                                  India problems relating mainly to excessive manpower erosion of working capital and

                                  outstanding liabilities could be settled to a considerable extent

                                  REVIEW OF LITERATURE

                                  RS PANDEY sees a bright future for the steel industry in India provided of course

                                  the iron ore mining policy to be announced by the government soon acts as a catalyst

                                  for growth He discusses the industrys problems and prospects in an interview When

                                  asked about the steel sectors ie private and public he expressed his expert views

                                  The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                  Excerpts

                                  The public sector steel companies in India are doing extremely well And therefore

                                  they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                  Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                  Between 1992-93 and now the share of the public sector in steel production had gone

                                  down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                  1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                  the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                  to 71 per cent But the public sector units are growing even if the private sector is

                                  growing faster

                                  During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                  going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                  million tonnes in just four years RINL is set to expand its capacity from three million

                                  tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                  capacity for the PSUs

                                  The public sector should be encouraged all the more Let there be a healthy

                                  competition between public and private sector producers The question of exit comes

                                  when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                  was at below Rs10 per share Today it is more than Rs130 and the expectations

                                  are that it will go up even higher

                                  When talked about the labour productivity he says Yes labour productivity is low in

                                  SAIL in particular But it is improving The steel major is going to adjust much of its

                                  existing manpower in the expansion phase when its capacity is going to almost

                                  double The management had also undertaken a massive VRS [voluntary retirement

                                  scheme] In RINL labour productivity is not all that bad

                                  Besides SAIL has done very well in various other techno-economic parameters in the

                                  last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                  per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                  improvement of 20 per cent In blast furnace productivity also there has been an

                                  improvement as also in the production of high-end special steels and capacity

                                  utilisation

                                  With the improved turnover which comes from higher capacity use and higher

                                  manpower productivity SAILs profits have surged Its gross profit more than doubled

                                  between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                  was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                  is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                  other input costs and 71 per cent owing to improvement in capacity use and other

                                  factors that are just mentioned

                                  OBJECTIVES

                                  To compare Private and Public steel sector with refrence to TATA Steel and

                                  Steel Authority Of India

                                  To analyse potential of both the companies ie TATA Steel and SAIL

                                  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

                                  Research Methodology

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

                                  a) Research design-

                                  In case of my research ldquoComparative analysis of Indian private and Public

                                  sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                  found to be more appropriate

                                  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

                                  Comparison between TATA Steel and Steel Authority of India

                                  The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                  significant improvements in the last two years The combined profit before tax of all 15

                                  PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                  Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                  The profit before tax for all PSUs also exhibited a significant improvement of

                                  around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                  Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                  comparable period of last year

                                  Contribution of PSUs to public exchequer has also gone up significantly For

                                  example the contribution of five leading companies namely SAIL RINL NMDC

                                  KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                  duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                  from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                  On the other hand 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

                                  During the period (April-December 2006) 205 million tonne of steel was produced by

                                  Private Sector steel units out of the total production of 3315 million tonne in the

                                  country The private sector units consist of major steel producers in one hand and

                                  relatively smaller amp 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

                                  For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                  companies on following parameters

                                  Production

                                  Chart showing production of both the companies

                                  Quantity 000 Tonnes

                                  2007-08 APR-DEC07APR-

                                  DEC06 ACTUA

                                  L

                                  AGE OF CURRENT

                                  PRODUCTION OVER

                                  CAPACITY UTILISATION

                                  TARGET TENTATIV

                                  E

                                  TARGET

                                  ACTUAL

                                  APR-DEC07 TARGE

                                  T

                                  APR-DEC06 ACTUA

                                  L

                                  APR-DEC 07

                                  APR-DEC06

                                  SAIL

                                  i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                  ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                  iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                  iv)BSL43500 32630 30970 30010 949 1032 950 910

                                  v)ISP5000 3760 3520 3450 936 1020 940 920

                                  vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                  vii)VISL

                                  1390 1050 1160 1190 1105 975 1300 1340

                                  TATA 50000 37440 37090 37380 991 992 990 1000

                                  TATA Steel

                                  The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                  but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                  target of 3744 (mT) but could produce 3709 However for the same period in last

                                  year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                  to 99 this year

                                  Steel Authority of India

                                  The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                  but it could produce only 126 (mT) a growth of 4 over the previous year However

                                  for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                  10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                  capacity utilisation of 103 this year as compared to 101 last year

                                  Financials

                                  TATA Steel

                                  The year 2006-07 has seen the highest turnover and profits continuing the trend

                                  of the past four years The Company achieved the best ever sales turnover and

                                  profitability during the year under review A robust Indian economy firm steel prices

                                  higher volumes and several improvement initiatives contributed to the record

                                  performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                  the previous year Export turnover was lower by about 5 due to lower volumes

                                  Average price realisation improved mainly due to higher prices of hot rolled

                                  coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                  (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                  Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                  due to additional borrowings for the Companyrsquos domestic expansion programs and

                                  funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                  providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                  crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                  before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                  after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                  20 compared to the previous year

                                  The record financial results would not have been possible without a matching

                                  performance by the operating departments including the raw materials division The

                                  year witnessed the best ever crude steel production by the Company at 505 million

                                  tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                  first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                  upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                  rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                  Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                  increase in production was backed by improvements in operating practices and

                                  productivity resulting in a reduction in consumption of raw materials energy

                                  refractories etc

                                  Steel Authority of India

                                  Financial Year 2006-07 has been eventful year for the company with further

                                  momentum in improving operational efficiencies laying strong foundation and building

                                  road map for modernisation and expansion of SAIL Plants with several new initiatives

                                  undertaken with its human resource at the core During the year the company got the

                                  distinction of first metal company in the country to reach a market capitalization of Rs

                                  50000 crore

                                  There have been improvements in all financial parameters which are shown in

                                  the table given below-

                                  SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                  before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                  previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                  increase of 55

                                  Research and Development

                                  Chart showing production of both the companies

                                  (Rs Crore)

                                  TATA Steel

                                  The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                  develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                  steel for body panels

                                  Research is undertaken at Tata Steel in the areas of raw materials including coal

                                  coke energy conservation waste utilisation sintering blast furnace productivity and

                                  phosphorous reduction product development and improvement in life of plant and

                                  machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                  sealed and over 100 are in process

                                  Steel Authority of India

                                  Research and Development Centre for Iron and Steel (RDCIS) has provided

                                  innovative technological inputs to different units of SAIL with special emphasis on

                                  cost reduction product development and application quality improvement energy

                                  conservation and automation Several new products were developed and

                                  commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                  Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                  specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                  micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                  Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                  Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                  strengthened its technology marketing efforts by providing consultancy services

                                  organising specialised testing and transfer of technological innovations to outside

                                  customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                  Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                  Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                  During the year 1998 technical papers were publishedpresented besides filing

                                  of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                  awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                  achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                  Government of India

                                  Environment

                                  TATA Steel

                                  Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                  Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                  has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                  Jamshedpur is the only town in the country which

                                  Significant achievements by the Company include an improvement in

                                  environment and resource conservation including a reduction in green house erosion

                                  raw materials and water consumption The Company has increased waste re-use and

                                  re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                  the-art pollution control systems being installed to prevent and control pollution The

                                  Company has almost doubled its capital investment in Pollution Abatement in the last

                                  five years

                                  Emissions effluents and wastes

                                  Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                  most relevance to the steel industry Considerable reduction has been effected by

                                  Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                  granulation is taken into account Other Greenhouse Gas emissions do not result from

                                  Tata Steelrsquos activities

                                  Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                  tonnes in 2003-04 as against 790 tonnes used during the previous year

                                  Hazardous Waste under Basel Convention The Company does not import or export

                                  any waste deemed hazardous under the Basel Convention All hazardous wastes

                                  generated are handled as per the requirement of the Hazardous Waste Management

                                  and Handling Rules 19892000

                                  Emissions

                                  Tata Steel has undertaken several initiatives which have resulted in

                                  considerable reduction in stack emission Emissions are well below the Indian and

                                  international standards The emission load including particulate matter Sulphur

                                  Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                  undertaken at the Steel Works

                                  Waste handling

                                  Most of the solid waste generated from Steel Works is recycled or reused 18

                                  of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                  was used to fill low-lying areas and for peripheral road construction around

                                  Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                  power plants was dumped in a designated dump area

                                  Effluent Management

                                  Waste water from the steel making process is being treated with best available

                                  physio-chemical methods as well as being recycled Waste water from the coke plant

                                  is treated biologically where organic pollutants are oxidised and decomposed by micro

                                  organisms The Company has reduced the levels of total pollutant discharge in waste

                                  water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                  Steel Authority of India

                                  Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                  environmentally responsible manner to comply with applicable regulations and striving

                                  to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                  efficiency and optimize resource consumption through various measures viz

                                  improvement in process technology in the areas of raw materials coke iron and steel

                                  making reuserecycle of the by-products generated and conservation of energy and

                                  water

                                  Solid Waste Management

                                  During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                  and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                  Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                  these wastes are being made through internal recycling and selling to outside

                                  agencies The wastes generated in the steel plants are being utilized mainly through

                                  their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                  during April-September 2006

                                  Environmental Plantation

                                  Trees have a significant role in protection of environment and ecological balance

                                  Extensive afforestation programme are being followed in all the plants and mines The

                                  basis of choosing the species of plants mainly depends on local soil characteristics

                                  and prevailing meteorological conditions The green belt developed by afforestation

                                  adds to the aesthetic environment which becomes dust and noise barriers

                                  A total number of 145521 saplings have been planted covering an area of 637

                                  hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                  hectare in 2004-05 in and around the steel plants of SAIL

                                  Environmental Recognitions

                                  SAIL plants have been awarded various prizes for environmental management in

                                  their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                  the Confederation of Indian Industries (CII) for exemplary performance in the

                                  environmental economic andsocial dimensions of sustainable development and the

                                  Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                  Excellence Award in the metal sector 2005 instuted by the World Environment

                                  Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                  for 2005 from International Greenland Society

                                  Workforce and Welfare of Society

                                  TATA steel

                                  Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                  and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                  enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                  provide a work environment that will ensure a sense of purpose and personal growth

                                  for each individual The wish of the company is to see the smile on every face

                                  everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                  people and enriched empowered and enhanced their lives

                                  Even in its nascent years social scientists Sidney and Beatrice Webb were

                                  brought in to work on welfare schemes In fact some of the initiatives introduced by

                                  Tata Steel were the first of their kind in India and some even in the western countries

                                  at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                  source of its competitiveness It focuses on constantly updating and challenging

                                  intellectual capabilities to enable them to excel in performance Special efforts are

                                  made for enhancing strategic thinking skills and analytical abilities of its managers and

                                  workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                  available with its people through Knowledge Management and sharing of best

                                  practices

                                  In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                  mutual co-operation coordination and understanding between the Management and

                                  the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                  among many other prestigious awards and recognition Tata Steel aims at ensuring

                                  transparency fairness and equity in all its interactions with its employees to create an

                                  enthused and happy workforce

                                  In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                  assistance in the fields of education vocational training self-employment and

                                  family welfare

                                  Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                  12 times This facility provides on-the-spot diagnostic medical and advanced

                                  surgical treatment for preventive and curative interventions to people in

                                  inaccessible rural areas

                                  Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                  for the 1920 Antwerp Olympics

                                  The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                  track was inaugurated in 1991 The complex also houses facilities for handball

                                  tennis volleyball hockey basketball boxing table tennis and a modern

                                  gymnasium

                                  The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                  services for the betterment of the people in and around Jamshedpur

                                  At times of natural calamities the company has rushe immediate relief and off

                                  ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                  fl ood ravaged Orissa and other such aff ected areas

                                  Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                  er a unique environment for the children of Jamshedpur to grow up in

                                  In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                  Jamshedpur has emerged as the one of the best cities in India

                                  Steel Authority of India

                                  The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                  executives and 123005 non-executives The total reduction in manpower achieved

                                  during the year stood at 4864 which included separation of 881 employees through

                                  voluntary retirement The labour productivity improved by around 12 over previous

                                  year to 150 tonne crude steelmanyear

                                  Some of the areas of assistance which are available to the weaker sections are the

                                  following

                                  The company has provided land for construction of school buildings in some of

                                  the steel townships as well as in other places for spreading education among

                                  the masses

                                  The company has constructed roads in remote areas around the steel plants

                                  and also where the captive mines are located to improve communication and

                                  also increase activities such as organisation of health camps school facilities

                                  drinking water etc under the peripheral development schemes

                                  Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                  Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                  providing them with education boarding and lodging facilities

                                  Construction of bridges by-pass roads metal-morum path waterways

                                  levellingdressing area around township pre-mixed roads Installation of hand-

                                  pumps tube wells and wells for villagers

                                  Construction of school buildings (including for mentally retarded deaf and

                                  dumb children) madarsas providing school furniture therein and construction

                                  of hostels womenrsquos college building etc

                                  Fourteen scholarships are awarded to deserving SCST undergraduate

                                  engineering students in various disciplines to encourage technical education

                                  among them

                                  In many cases tuition fee in company run schools is exempt for SCST

                                  students Steps are taken to provide education to more and more tribal children

                                  in company schools

                                  The unemployed SCST youth are given specialized training in various

                                  technical trades to develop skill and knowledge Such training is provided free

                                  of cost

                                  Adult literacy campaign is carried out in most of the steel townships Every year

                                  more and more men and women are being covered in this campaign

                                  Development of fishery and cottage industry providing sewing machines to

                                  village mahila mandals and promoting other self-employment generation

                                  schemes

                                  SAIL has established a hockey academy with stadium and hostel facilities at

                                  Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                  academy was successful in spotting a number of young talented tribal players

                                  and grooms them under expertise of ex-Olympian

                                  Technology

                                  The biggest boost to efficiency in the steel industry has come from the increased

                                  use of continuous casting ndash an indicator of the modernity of the production process Its

                                  share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                  now India is thus well on its way to joining the ranks of the leading steelmakers

                                  among the industrial nations (share in EU-25 96) However in India some 6 of

                                  crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                  suggests there is restructuring potential

                                  TATA Steel

                                  Tata Steels stall at the International Trade Fair was adjudged the best along

                                  with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                  international companies also took part in the exhibition Participating companies from

                                  countries all over the world exhibited latest technologies and know-how List of

                                  participating companies included Baosteel SAIL Heavy Engineering Corporation

                                  Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                  companies of national and international repute China was the partner country for the

                                  International Trade Fair this year

                                  In the award winning exhibition Tata Steel showcased its best coal mining practices

                                  cutting-edge technology used in iron ore mining pioneering human resource

                                  practices 78 years of industrial harmony and various other aspects of the worlds best

                                  steel company

                                  The 6th International Trade Fair and Conference an institutionalised global

                                  event is considered to be one of the most prestigious forums for national as well

                                  international participants It is a conclave of the finest minds concerned with the future

                                  direction and growth of these sectors The forum provided the worlds most eminent

                                  metallurgists manufacturers of metallurgical and mining machinery and related

                                  sectors professionals analysts and experts with the opportunity to exchange views on

                                  emerging technologies synergy and strengths and open up wider horizons for

                                  sectorial development

                                  Tata Steel to adopt Corus technology

                                  Tata Steel plans to implement alternate technology used by the British steel

                                  maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                  production according to Mr B Muthuraman Managing Director Tata Steel

                                  ldquoWe are looking at alternate technology Corus has developed an alternate

                                  technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                  newspersons on the sidelines of the 34th National Management Convention organised

                                  by the All-India Management Association However he declined to give further details

                                  on the type of technology the Indian steel giant plans to implement

                                  Steel Authority of India

                                  Modernisation holds the key to SAILs fortunes in the near future The objective

                                  of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                  and productive capacity and in the process become more energy-efficient and

                                  improve quality The key component of the ongoing modernisation drive - already

                                  completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                  ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                  continuous casting techniques A senior SAIL official says Continuous casting and

                                  basic oxygen furnaces ensure better quality steel through processes more easily

                                  monitored for quality control The basic oxygen surfaces method is significantly faster

                                  more automated and permits greater flexibility Continuous casting is more efficient

                                  than the traditional ingot casting methods and gives increased yields while enabling

                                  better quality standards SAIL is also modernising its finishing mills and is adding

                                  secondary refining facilities to improve quality

                                  Safety measures

                                  A unique feature of safety management in steel industry is that a bipartite forum

                                  named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                  was formed in 1973 at national level having representatives from steel plants in SAIL

                                  RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                  Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                  workshops training programme safety competitions for member organisations JCSSI

                                  with the co-operation and support of Trade Union representatives formulates policies

                                  and guidelines for its member plants and monitors the implementation

                                  Tata Steel

                                  Safety has always been a prime focus at Tata Steel A Safety Committee a

                                  Safety department and a Safety Trophy helped spread the message all across the

                                  company

                                  TATA reaffirms its commitment to provide safe working place and clean

                                  environment to its employees and other stakeholders as an integral part of its

                                  business philosophy and values We will continually enhance our Environmental

                                  Occupational Health amp Safety (EHS) performance in our activities products and

                                  services through a structured EHS management framework Towards this

                                  commitment we shall

                                  Establish and achieve EHS objectives and targets

                                  Ensure compliance with applicable EHS legislation and other requirement and

                                  go beyond

                                  Conserve natural resources and energy by constantly seeking to reduce

                                  consumption and promoting waste avoidance and recycling measures

                                  Eliminate minimize andor control adverse environmental impacts and

                                  occupational health and safety risks by adopting appropriate state-of-the-art

                                  technology and best EHS management practices at all levels sand functions

                                  Enhance awareness skill and competence of our employees and contractors

                                  so as to enable them to demonstrate their involvement responsibility and

                                  accountability for sound EHS performance

                                  Steel Authority of India

                                  SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                  monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                  Annual Performance Plans (APP) for the areas of safety and fire services are

                                  formulated and review of implementation of APP is done during Heads of

                                  Safety meeting

                                  Internal and external safety audits of major departments particularly hazardous

                                  areas are conducted every year and points arising from these audits are

                                  liquidated Safety aspects have been incorporated in standard operating

                                  practices (SOP) and standard maintenance practices (SMP)

                                  All major capital repairsshut downs are closely monitored round the clock

                                  Periodic drives are conducted to inculcate safety awarenessculture up to

                                  grass-root level apart from regular inspections as per checklists to identify

                                  unsafe conditionsacts

                                  Safety training is imparted to target group employees at various levels HRD

                                  intervention in the area of safety covers Heads of Departments Line Managers

                                  amp Departmental Safety Officers Besides area specific workshops are

                                  conducted at different locations on important topics like gas safety railroad

                                  safety safety in iron steel amp coke making etc

                                  Consistent efforts were made by SAIL Safety Organisation for improving safety

                                  standards in the company by taking measures like intensive safety drives in works

                                  area and conducting safety audits in hazardous departments of different plants and

                                  mines In addition specific workshops on safety aspects were organised in various

                                  SAIL steel plants

                                  Measures taken by Indian government to improve the industry

                                  Now letrsquos 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-

                                  1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                  among others was removed from the list of industries reserved for the public

                                  sector and also exempted from the provisions of compulsory licensing under the

                                  Industries (Development and Regulation) Act 1951

                                  2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                  of `high priority industries for automatic approval for foreign equity investment up

                                  to 51 This limit has been recently increased to 100

                                  3 Price and distribution of steel were deregulated from January 1992 At the same

                                  time it was ensured that priority continued to be accorded for meeting the

                                  requirements of small scale industries exporters of engineering goods and North

                                  Eastern Region of the country besides strategic sectors such as Defence and

                                  Railways

                                  4 The trade policy has been liberalised and import and export of iron and steel is

                                  freely allowed There are no quantitative restrictions on import of iron and steel

                                  items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                  regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                  steel have drastically come down since 1991-92 levels and the government is

                                  committed to bring them down to the international levels In Chapter 72 there are

                                  two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                  5 Iron amp Steel are freely importable as per the Extant Policy

                                  6 Iron amp Steel are freely exportable

                                  7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                  8 The floor price for seconds and defectives continues till date

                                  9 Imports of seconds and defectives of steel are allowed only through three

                                  designated ports of Mumbai Calcutta and Chennai

                                  10Mandatory pre inspection certificate by a reputed international agency for every

                                  import consignment of seconds and defectives

                                  11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                  10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                  the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                  per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                  15 per cent to 5 per cent

                                  12Further customs duty on several raw materials used by the steel sector like

                                  noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                  coking coal to zero

                                  13To bring down the prices of steel the excise duty on steel products was reduced

                                  from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                  that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                  increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                  cut on moderating prices was not achieved

                                  14The union Budget 2007-08 the import duty on seconds and defective has been

                                  further reduced from 20 to 10

                                  Special assistance being provided by Ministry of Steel to Private Sector

                                  1 Ministry of Steel is extending all possible support as detailed below for the

                                  development of Iron and Steel Sector in the country

                                  2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                  new plants and expansion of existing ones wherever applied for

                                  3 To ensure an un-interrupted supply of raw materials to the producers

                                  4 The Ministry has been interacting with All India Financial institutions to expedite

                                  clearance of projects

                                  5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                  Plants are held at the level of Secretary

                                  6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                  industry so that their absence does not lead to bottlenecks in the future growth of

                                  the Iron and Steel Sector and takes up these issues with the concerned ministries

                                  7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                  Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                  country are members of this Institute which has been set up with the objective of

                                  promoting developing and propagating the proper and effective use of steel

                                  8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                  major steel plants being implemented Govt has setup a Project Coordination

                                  Group under the Chairmanship of Steel Minister

                                  NATIONAL STEEL POLICY 2005

                                  The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                  development and as such great importance is attached to capacity expansion in line

                                  with expected demand at cost and prices which make Indian steel internationally

                                  competitive The existing regime of liberalization decontrol and deregulation of

                                  industry in the country has opened up new opportunities for the expansion of the steel

                                  industry With a view to accelerating the growth of the steel sector and attaining the

                                  vision of India becoming a developed economy by 2020 the Ministry of Steel

                                  formulated a National Steel Policy (NSP) in 2005

                                  The following salient features can be derived after analysing the NSP 2005

                                  The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                  towards reform restructuring and globalisation

                                  The long-term goal of the NSP is that India should have a modern and efficient

                                  steel industry of world standards catering to diversified steel demand The focus of

                                  the policy is to achieve global competitiveness not only in terms of cost quality and

                                  product-mix but also in terms of global benchmarks of efficiency and productivity

                                  In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                  NSP seeks to remove the supply-side constraints to the growth of this industry in

                                  an open globally integrated and competitive environment

                                  The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                  policy goal On the demand side the strategy would be to create incremental

                                  demand through promotional efforts creation of awareness and strengthening the

                                  delivery chain particularly in rural areas On the supply side the strategy would be

                                  to facilitate creation of additional capacity remove procedural and policy

                                  bottlenecks in the availability of inputs such as iron ore and coal make higher

                                  investments in RampD and encourage the creation of infrastructure such as roads

                                  railways and ports

                                  The NSP acknowledges the low per capita consumption of steel in the country

                                  especially in the rural areas and the need to boost steel consumption to improve

                                  quality of life and help in meeting the growing aspirations of masses

                                  In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                  industry would need additional capital In addition funds would be required for

                                  technological upgrade of existing facilities In order to mobilize such vast resources

                                  NSP seeks to encourage foreign direct investment In addition the policy also

                                  seeks to make the fiscal incentives available to infrastructure projects accessible

                                  to the steel industry

                                  The NSP seeks to support developing of risk-hedging instruments like futures and

                                  derivatives to contain price volatility in the steel market

                                  The NSP seeks to strengthen the existing training and research facilities available

                                  to the domestic steel industry so as to provide suitable training programmes

                                  especially for the secondary small-scale units and also to collect and analyse data

                                  on important parameters of the industry

                                  The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                  capability for special types of steel substitute coking coal use iron ore fines

                                  develop new products suited to rural needs enhance material and energy

                                  efficiency utilize waste and arrest environmental degradation

                                  The NSP acknowledges the important role played by the secondary steel sector in

                                  providing employment meeting local demand of steel in rural and semi-urban

                                  areas and meeting the countryrsquos demand of some special products and seeks to

                                  endeavour to provide the necessary feedstock to these units at reasonable prices

                                  from major plants through the existing mechanism of State Small Industries

                                  Corporations

                                  The NSP recognizes the fact that integration of the Indian steel industry with the

                                  global economy requires that the industry should be protected from unfair trade

                                  practices The NSP therefore envisages institution of mechanisms for import

                                  surveillance and monitoring export subsidies in other countries

                                  The present per capita consumption of steel in the country is very low compared to the

                                  world average As mentioned above one of the objectives of the NSP is to augment

                                  the demand and consumption of steel in the country by conscious promotion of steel

                                  usage With a view to create a mass awareness campaign on conscious promotion of

                                  steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                  the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                  The Committee is being serviced by Institute for Steel Development and Growth

                                  (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                  way of an awareness campaign with particular emphasis on rural sectors The

                                  Committee also aims at educating the designers architects builders and planners

                                  regarding the qualitative and cost effective applications of steel in various structures

                                  including buildings bridges flyovers and airports

                                  FUTURE OF INDIAN STEEL INDUSTRY

                                  India is amongst a few countries in the world having the dual advantage of fast

                                  growing domestic demand coupled with access to raw materials Further the trend

                                  that is already discernible is that the axis of global steel production consumption is

                                  shifting towards Asia With their large populations China and India already account for

                                  35 of the total world steel production - more than double of Europe Asia is

                                  expected to outpace other regions of the world to an even greater extent in the coming

                                  years

                                  Amongst the Asian nations China has established a huge unbridgeable lead It

                                  is accepted that China will continue to be the leader However India is slated to

                                  emerge as the second Asian giant in the next eight years Figuratively speaking while

                                  the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                  splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                  China swallowed almost 32 of global steel It is unlikely that future production and

                                  consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                  has been the case over the last few years On the other hand it is sun-rise time for

                                  India where the demand has increased by 7-8 in the last couple of years In the long

                                  run Indian steel is likely to be more cost-effective since unlike China India has

                                  relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                  can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                  However the position with coal is not so favourable Though thermal coal

                                  reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                  traditional blast furnace route would require coking coal India does not have adequate

                                  reserves of coking coal nor is the meagre amount available of appropriate quality

                                  Thus the steel industry always had to contend with the dual problems of inadequate

                                  availability and poor quality of Indian coking coal This has been partly addressed by

                                  adopting alternative iron making processes that are not dependent on coking coal it

                                  can not be denied that coal is the biggest cause for concern for bulk steel production

                                  in India

                                  Because of the shortage of indigenous coal attempts have been made by steel

                                  producers to ensure long-term supplies by tying up with global majors or by acquiring

                                  mines in other countries This is the only long-term solution but with a global shortage

                                  of coal it may not remain cost-effective in the long run

                                  India is the seventh largest producer of steel and may further improve its position

                                  going by the current trends A series of investment decisions by major domestic

                                  players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                  POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                  The keen interest shown by various prospective investors is not only due to

                                  expectations of strong growth in domestic demand but also due to indigenous

                                  availability of key resources like iron ore and skilled workforce

                                  After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                  steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                  finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                  2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                  consumption has accelerated to 91 per cent

                                  With the likely growth of Indian economy at around 7 per cent per annum

                                  demand for steel is expected to remain strong and is projected to reach a level of 90

                                  million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                  demand is sustainable considering the fact that Indias per capita consumption of steel

                                  is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                  very low level of per capita consumption of steel in India is highlighted further when

                                  compared with the consumption levels of its peer group consisting of countries like

                                  China Brazil Mexico and Republic of Korea as also with selected developed

                                  countries

                                  Though there are realistic constraints in India to achieving as rapid a growth as in

                                  China there seems to be consensus among analysts that India is likely to witness a

                                  growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                  percent If the growth rate (9 per cent) of last three years is maintained then we will

                                  achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                  more conservative due to cyclicity of steel business it may be mentioned that in a

                                  country like India cyclicity is more in terms of prices rather than volumes of production

                                  Exports

                                  Similar optimism prevails with regard to export of iron and steel Export of steel

                                  starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                  2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                  rising domestic demand and low capacity additions Exports now constitute around 17

                                  per cent of total production and Indias presence in the developing and developed

                                  world is being increasingly felt Indian steel producers have recently been able to

                                  supply specialized grades and products used for sophisticated applications like

                                  automobiles On the cost front some of our producers are counted amongst the least

                                  cost producers of the world For an average reference plant India is competitively

                                  placed in the middle of the hierarchy of steel producing nations

                                  However we have a long way to go to catch up with the leading exporters of the

                                  world such as Japan the CIS countries Brazil etc It is however expected that by

                                  2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                  per cent of total projected production The projected export ratio compares well with

                                  the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                  The projected production of steel by 2019-20 to meet the domestic and export

                                  demand will be around 110 million tonnes Management of resources and

                                  infrastructural growth is going to be critical in achievement of the production level

                                  envisaged The broad requirements of various resources will increase manifold from

                                  the current level The bottlenecks in availability of critical inputs and various facilities

                                  need to be removed through concerted efforts of Government and industry The broad

                                  strategy to overcome these constraints as well as meet the strategic goals of the steel

                                  sector has been discussed in the National Steel Policy which has been recently

                                  approved by the Government

                                  As stated earlier the long-term goal of the National Steel Policy is that India

                                  should have a modern and efficient steel industry of world standards catering to a

                                  diversified steel demand The focus of the policy is to achieve global competitiveness

                                  not only in terms of cost quality and product mix but also in terms of global

                                  benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                  pronged strategy to achieve these goals On the demand side the strategy would be

                                  to create incremental demand through promotional efforts creation of awareness and

                                  strengthening the delivery chain particularly in rural areas On the supply side the

                                  strategy would be to facilitate creation of additional capacity remove procedural and

                                  policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                  investments in RampD and HRD and encourage the creation of infrastructure such as

                                  roads railways and ports

                                  The production figures exports and imports of finished carbon steel and pig iron

                                  and apparent consumption patterns of finished carbon steel as indicated by TATA

                                  Steel and SAIL attest to the continuing growth for both the sectors

                                  FINDINGS

                                  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 increased its profit over the year particularly in 2006-07

                                  Both the companies are planning to adopt modern technology which is going to

                                  help them to compete in world market but they need to be less dependent on

                                  state of art technology and coal for long term prospects

                                  Public sector has undergone retrenchment for the employees and improved

                                  has its lobour productivity but it is still lacking behind as compared to private

                                  sector

                                  SAIL has reduced the no of accidents due to improper handling of machinery

                                  still no of accidents are more than that of TATA Steel

                                  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

                                  ie 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 have to be met

                                  comprehensively if we are to take our legitimate place in the world as a developed

                                  nation by 2020

                                  BIBLIOGRAPHY

                                  Annual report (2006-07) published by ministry of steel

                                  Annual report (2006-07) published by TATA Steel

                                  Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                  REPORTrsquo posted by SAIL on its website

                                  lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                  held on 07 Nov 2006

                                  Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                  wwwsteelnicin (Official website of ministry of industry)

                                  wwwtatasteelcom (Official website of TATA Steel)

                                  wwwsailcoin (Official website of Steel Authority of India)

                                  wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                  wwwjpcindiansteelnicin (Website of joint planning committee)

                                  • DATA ANALYSIS
                                  • Comparison between TATA Steel and Steel Authority of India
                                  • Production
                                  • Quantity 000 Tonnes
                                  • Financials
                                  • Research and Development
                                  • (Rs Crore)
                                  • TATA Steel
                                  • Steel Authority of India
                                  • Environment
                                  • TATA Steel
                                  • Emissions effluents and wastes
                                  • Emissions
                                  • Waste handling
                                  • Effluent Management
                                  • Steel Authority of India
                                  • Solid Waste Management
                                  • Environmental Plantation
                                  • Environmental Recognitions
                                  • Workforce and Welfare of Society
                                  • TATA steel
                                  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                  • Steel Authority of India
                                  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                  • Technology
                                  • Steel Authority of India
                                  • Safety measures
                                  • Tata Steel
                                  • Steel Authority of India
                                  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                  • Measures taken by Indian government to improve the industry
                                  • Now letrsquos 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-
                                  • Special assistance being provided by Ministry of Steel to Private Sector
                                  • FUTURE OF INDIAN STEEL INDUSTRY

                                    All the iron ore production units have been accredited with ISO 90012000 and ISO

                                    140012004 certifications RampD Centre of NMDC was also accredited with ISO

                                    90012000 certification

                                    Iron Ore

                                    NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to

                                    December 2006) Domestic sales of iron ore was 1550 million tonne during the year

                                    (up to December 2006) Exports of iron ore produced by NMDC is canalised through

                                    MMTC Ltd Iron ore is exported to Japan South Korea and China In 2006-07 NMDC

                                    exported 178 million tonne of iron ore valued at approximately Rs 42980 crore

                                    Capital Structure

                                    The authorised share capital of the company is Rs 150 crore The paid up equity

                                    share capital was Rs 13216 crore Outstanding loans from Government of India are

                                    nil

                                    Financial Performance

                                    The financial performance of the company for the year 2005-06 and 2006-07 (April-Dec 06) are given below

                                    Particulars 2004-05 2005-06 2006-07 (April-Dec06)

                                    SalesTurnover222655 371092 2790

                                    Gross Margin128749 2889 2455

                                    Profit Before Tax122365 277013 2410

                                    MSTC LTD

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

                                    Enterprise was set up on September 9 1964 as a canalising agency for the export of

                                    scrap from the country With the passage of time the Company emerged as the

                                    canalising agency for the import of scrap into the country Import of scrap was de-

                                    canalised by the Government in 1991-92 and MSTC has since then moved on to

                                    marketing ferrous and miscellaneous scrap arising out of steel plants and other

                                    industries and importing coal coke petroleum products semi finished steel products

                                    like HR coils and export of primarily iron ore The company has also established an e-

                                    auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                                    developed an e-procurement portal in house

                                    Capital Structure

                                    The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                                    220 crore as on 31122006 of which approximately 90 is held by Government of

                                    India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                                    Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                                    bonus shares issued in the year 1993-94 in the ratio 11

                                    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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                                    handling of BOF slag etc

                                    Financial Performance

                                    Particulars 2004-05 2005-06 2006-07 (Apr-

                                    Dec2006)

                                    Total Turnover ie Service charges realised including miscellaneous Incomeetc

                                    981822 1067937 765557

                                    Gross Margin before Interest amp Depreciation 167879 186514 105284

                                    Interest amp Depreciation 83014 100970 84728

                                    Profit before Tax 84865 85544 20556

                                    MANGANESE ORE (INDIA) LTD (MOIL)

                                    Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                                    of manganese ore in India At the time of inception 49 of its shares were held by the

                                    Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                                    proportion by Government of India and the State Governments of Madhya Pradesh 17

                                    and Maharashtra Subsequently in 1977 the Government of India acquired the

                                    shares held by CPMO in MOIL and MOIL became a wholly owned Government

                                    company with effect from October 1977 As on 30112006 Government of India held

                                    8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                                    holding 961 and 882 shares respectively

                                    MOIL Produces and Sells following Grades of Manganese Ore

                                    1048708 High grade ores for production of ferro manganese

                                    1048708 Medium grade ores for production of silico manganese

                                    1048708 Blast furnace grade ore required for production of hot metal

                                    1048708 Dioxide ore for dry battery cells and chemical industries

                                    Production and 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

                                    Items 2004-05 2005-06 2006-07 (up to Dec2006)

                                    1 Production

                                    a) Manganese Ore (thousand tonne) 94300 86500 82533

                                    b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                                    c) Ferro Manganese (tonne) 1032500 617000 829400

                                    2 Turnover (Rupees in crore) 37878 33409 29463

                                    3 Profit before Tax (Rupees in crore) 20227 16900 12087

                                    KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                                    Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                                    90012000 and ISO 14001 company was established in April 1976 to meet the long

                                    term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                                    was set up at Kudremukh This project was to be financed in full by Iran However as

                                    Iran stopped further loan disbursements after paying US $ 255 million the project was

                                    completed as per schedule with the funds provided by Government of India While the

                                    project was commissioned on schedule consequent upon the political developments

                                    in Iran they did not lift any quantity of concentrate As a diversification measure the

                                    Government approved the construction of a 3 million tonne per year capacity pellet

                                    plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                                    million tonne with additionsmodifications The plant went into commercial production

                                    in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                                    units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                                    Plant Mangalore

                                    Production

                                    A target of 31 million tonne and 305 million tonne was set for production of iron ore

                                    concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                                    production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                                    The target set for production during the year 2006-07 is 305 million tonne of pellets

                                    In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                                    activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                                    production of iron ore concentrate during the year 2006-07 As against a target of 188

                                    million tonne of pellets fixed for the period April to November 2006 the actual

                                    production was 0275 million tonne which represents 15 target fulfilment There is

                                    shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                                    production of pellets is on account of operational problems being encountered in the

                                    pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                                    There was excessive generation of su er fines (slimes) affecting filtration clogging of

                                    filters overflow and contamination of process water due to filling of cooling pond

                                    affecting production While efforts are continuing to rectify the problems the operation

                                    of pellet plant is yet to stabilize and normal production is yet to commence

                                    The sales revenue during the last five years and up to November 2006 during 2006-

                                    07 is detailed below

                                    (Rs in lakh)

                                    Years Concentrate Pellets Total

                                    2006-07 (up to December 2006) - 12427 12427

                                    2005-06 12091 111137 123228

                                    2004-05 16050 169327 185377

                                    2003-04 20209 82729 102938

                                    2002-03 21135 51579 72714

                                    2001-02 21571 50598 72169

                                    Financial Performance

                                    An overview of the performance of KIOCL during the year 2006-07 (up to November

                                    2006) together with actuals for the previous three years is indicated below

                                    (Rs in lakh)

                                    Particulars 2006-07(up to December 2006)

                                    2005-06 2004-05 2003-04

                                    Total value of Sales 12427 123228 185377 102938

                                    Gross Margin 2620 68706 120863 45945

                                    Profit after Tax 1029 35630 64984 30070

                                    Inventories(excluding finished stock)

                                    20417 15843 8720 7616

                                    BIRD GROUP OF COMPANIES

                                    Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                    the following seven companies came under the administrative control of the Ministry of

                                    Steel Government of India

                                    (a) The Orissa Minerals Development Company Limited (OMDC)

                                    (b) The Bisra Stone Lime Company Limited (BSLC)

                                    (c) The Karanpura Development Company Limited (KDCL)

                                    (d) Scott amp Saxby Limited (SSL)

                                    (e) Eastern Investments Limited (EIL)

                                    (f) Burrakar Coal Company Limited (Burrakar)

                                    (g) Borrea Coal Company Limited (Borrea)

                                    The status of the companies is as under

                                    a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                    of coal mines The two companies are in the process of liquidation The official

                                    liquidator has already taken over the assets and liabilities of these two companies

                                    b) EIL being an investment company is having a major stake in the equity shares of

                                    operating companies under the Bird Group

                                    c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                    Status of the Companies at the Time of Nationalisation

                                    At the time when the Bird Group of Companies came under the administrative control

                                    of the Ministry of Steel Government of India all of them were financially sick and

                                    burdened with various problems With the financial support from the Government of

                                    India problems relating mainly to excessive manpower erosion of working capital and

                                    outstanding liabilities could be settled to a considerable extent

                                    REVIEW OF LITERATURE

                                    RS PANDEY sees a bright future for the steel industry in India provided of course

                                    the iron ore mining policy to be announced by the government soon acts as a catalyst

                                    for growth He discusses the industrys problems and prospects in an interview When

                                    asked about the steel sectors ie private and public he expressed his expert views

                                    The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                    Excerpts

                                    The public sector steel companies in India are doing extremely well And therefore

                                    they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                    Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                    Between 1992-93 and now the share of the public sector in steel production had gone

                                    down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                    1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                    the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                    to 71 per cent But the public sector units are growing even if the private sector is

                                    growing faster

                                    During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                    going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                    million tonnes in just four years RINL is set to expand its capacity from three million

                                    tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                    capacity for the PSUs

                                    The public sector should be encouraged all the more Let there be a healthy

                                    competition between public and private sector producers The question of exit comes

                                    when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                    was at below Rs10 per share Today it is more than Rs130 and the expectations

                                    are that it will go up even higher

                                    When talked about the labour productivity he says Yes labour productivity is low in

                                    SAIL in particular But it is improving The steel major is going to adjust much of its

                                    existing manpower in the expansion phase when its capacity is going to almost

                                    double The management had also undertaken a massive VRS [voluntary retirement

                                    scheme] In RINL labour productivity is not all that bad

                                    Besides SAIL has done very well in various other techno-economic parameters in the

                                    last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                    per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                    improvement of 20 per cent In blast furnace productivity also there has been an

                                    improvement as also in the production of high-end special steels and capacity

                                    utilisation

                                    With the improved turnover which comes from higher capacity use and higher

                                    manpower productivity SAILs profits have surged Its gross profit more than doubled

                                    between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                    was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                    is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                    other input costs and 71 per cent owing to improvement in capacity use and other

                                    factors that are just mentioned

                                    OBJECTIVES

                                    To compare Private and Public steel sector with refrence to TATA Steel and

                                    Steel Authority Of India

                                    To analyse potential of both the companies ie TATA Steel and SAIL

                                    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

                                    Research Methodology

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

                                    a) Research design-

                                    In case of my research ldquoComparative analysis of Indian private and Public

                                    sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                    found to be more appropriate

                                    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

                                    Comparison between TATA Steel and Steel Authority of India

                                    The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                    significant improvements in the last two years The combined profit before tax of all 15

                                    PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                    Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                    The profit before tax for all PSUs also exhibited a significant improvement of

                                    around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                    Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                    comparable period of last year

                                    Contribution of PSUs to public exchequer has also gone up significantly For

                                    example the contribution of five leading companies namely SAIL RINL NMDC

                                    KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                    duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                    from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                    On the other hand 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

                                    During the period (April-December 2006) 205 million tonne of steel was produced by

                                    Private Sector steel units out of the total production of 3315 million tonne in the

                                    country The private sector units consist of major steel producers in one hand and

                                    relatively smaller amp 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

                                    For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                    companies on following parameters

                                    Production

                                    Chart showing production of both the companies

                                    Quantity 000 Tonnes

                                    2007-08 APR-DEC07APR-

                                    DEC06 ACTUA

                                    L

                                    AGE OF CURRENT

                                    PRODUCTION OVER

                                    CAPACITY UTILISATION

                                    TARGET TENTATIV

                                    E

                                    TARGET

                                    ACTUAL

                                    APR-DEC07 TARGE

                                    T

                                    APR-DEC06 ACTUA

                                    L

                                    APR-DEC 07

                                    APR-DEC06

                                    SAIL

                                    i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                    ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                    iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                    iv)BSL43500 32630 30970 30010 949 1032 950 910

                                    v)ISP5000 3760 3520 3450 936 1020 940 920

                                    vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                    vii)VISL

                                    1390 1050 1160 1190 1105 975 1300 1340

                                    TATA 50000 37440 37090 37380 991 992 990 1000

                                    TATA Steel

                                    The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                    but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                    target of 3744 (mT) but could produce 3709 However for the same period in last

                                    year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                    to 99 this year

                                    Steel Authority of India

                                    The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                    but it could produce only 126 (mT) a growth of 4 over the previous year However

                                    for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                    10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                    capacity utilisation of 103 this year as compared to 101 last year

                                    Financials

                                    TATA Steel

                                    The year 2006-07 has seen the highest turnover and profits continuing the trend

                                    of the past four years The Company achieved the best ever sales turnover and

                                    profitability during the year under review A robust Indian economy firm steel prices

                                    higher volumes and several improvement initiatives contributed to the record

                                    performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                    the previous year Export turnover was lower by about 5 due to lower volumes

                                    Average price realisation improved mainly due to higher prices of hot rolled

                                    coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                    (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                    Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                    due to additional borrowings for the Companyrsquos domestic expansion programs and

                                    funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                    providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                    crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                    before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                    after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                    20 compared to the previous year

                                    The record financial results would not have been possible without a matching

                                    performance by the operating departments including the raw materials division The

                                    year witnessed the best ever crude steel production by the Company at 505 million

                                    tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                    first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                    upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                    rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                    Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                    increase in production was backed by improvements in operating practices and

                                    productivity resulting in a reduction in consumption of raw materials energy

                                    refractories etc

                                    Steel Authority of India

                                    Financial Year 2006-07 has been eventful year for the company with further

                                    momentum in improving operational efficiencies laying strong foundation and building

                                    road map for modernisation and expansion of SAIL Plants with several new initiatives

                                    undertaken with its human resource at the core During the year the company got the

                                    distinction of first metal company in the country to reach a market capitalization of Rs

                                    50000 crore

                                    There have been improvements in all financial parameters which are shown in

                                    the table given below-

                                    SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                    before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                    previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                    increase of 55

                                    Research and Development

                                    Chart showing production of both the companies

                                    (Rs Crore)

                                    TATA Steel

                                    The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                    develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                    steel for body panels

                                    Research is undertaken at Tata Steel in the areas of raw materials including coal

                                    coke energy conservation waste utilisation sintering blast furnace productivity and

                                    phosphorous reduction product development and improvement in life of plant and

                                    machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                    sealed and over 100 are in process

                                    Steel Authority of India

                                    Research and Development Centre for Iron and Steel (RDCIS) has provided

                                    innovative technological inputs to different units of SAIL with special emphasis on

                                    cost reduction product development and application quality improvement energy

                                    conservation and automation Several new products were developed and

                                    commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                    Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                    specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                    micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                    Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                    Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                    strengthened its technology marketing efforts by providing consultancy services

                                    organising specialised testing and transfer of technological innovations to outside

                                    customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                    Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                    Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                    During the year 1998 technical papers were publishedpresented besides filing

                                    of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                    awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                    achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                    Government of India

                                    Environment

                                    TATA Steel

                                    Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                    Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                    has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                    Jamshedpur is the only town in the country which

                                    Significant achievements by the Company include an improvement in

                                    environment and resource conservation including a reduction in green house erosion

                                    raw materials and water consumption The Company has increased waste re-use and

                                    re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                    the-art pollution control systems being installed to prevent and control pollution The

                                    Company has almost doubled its capital investment in Pollution Abatement in the last

                                    five years

                                    Emissions effluents and wastes

                                    Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                    most relevance to the steel industry Considerable reduction has been effected by

                                    Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                    granulation is taken into account Other Greenhouse Gas emissions do not result from

                                    Tata Steelrsquos activities

                                    Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                    tonnes in 2003-04 as against 790 tonnes used during the previous year

                                    Hazardous Waste under Basel Convention The Company does not import or export

                                    any waste deemed hazardous under the Basel Convention All hazardous wastes

                                    generated are handled as per the requirement of the Hazardous Waste Management

                                    and Handling Rules 19892000

                                    Emissions

                                    Tata Steel has undertaken several initiatives which have resulted in

                                    considerable reduction in stack emission Emissions are well below the Indian and

                                    international standards The emission load including particulate matter Sulphur

                                    Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                    undertaken at the Steel Works

                                    Waste handling

                                    Most of the solid waste generated from Steel Works is recycled or reused 18

                                    of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                    was used to fill low-lying areas and for peripheral road construction around

                                    Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                    power plants was dumped in a designated dump area

                                    Effluent Management

                                    Waste water from the steel making process is being treated with best available

                                    physio-chemical methods as well as being recycled Waste water from the coke plant

                                    is treated biologically where organic pollutants are oxidised and decomposed by micro

                                    organisms The Company has reduced the levels of total pollutant discharge in waste

                                    water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                    Steel Authority of India

                                    Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                    environmentally responsible manner to comply with applicable regulations and striving

                                    to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                    efficiency and optimize resource consumption through various measures viz

                                    improvement in process technology in the areas of raw materials coke iron and steel

                                    making reuserecycle of the by-products generated and conservation of energy and

                                    water

                                    Solid Waste Management

                                    During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                    and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                    Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                    these wastes are being made through internal recycling and selling to outside

                                    agencies The wastes generated in the steel plants are being utilized mainly through

                                    their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                    during April-September 2006

                                    Environmental Plantation

                                    Trees have a significant role in protection of environment and ecological balance

                                    Extensive afforestation programme are being followed in all the plants and mines The

                                    basis of choosing the species of plants mainly depends on local soil characteristics

                                    and prevailing meteorological conditions The green belt developed by afforestation

                                    adds to the aesthetic environment which becomes dust and noise barriers

                                    A total number of 145521 saplings have been planted covering an area of 637

                                    hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                    hectare in 2004-05 in and around the steel plants of SAIL

                                    Environmental Recognitions

                                    SAIL plants have been awarded various prizes for environmental management in

                                    their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                    the Confederation of Indian Industries (CII) for exemplary performance in the

                                    environmental economic andsocial dimensions of sustainable development and the

                                    Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                    Excellence Award in the metal sector 2005 instuted by the World Environment

                                    Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                    for 2005 from International Greenland Society

                                    Workforce and Welfare of Society

                                    TATA steel

                                    Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                    and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                    enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                    provide a work environment that will ensure a sense of purpose and personal growth

                                    for each individual The wish of the company is to see the smile on every face

                                    everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                    people and enriched empowered and enhanced their lives

                                    Even in its nascent years social scientists Sidney and Beatrice Webb were

                                    brought in to work on welfare schemes In fact some of the initiatives introduced by

                                    Tata Steel were the first of their kind in India and some even in the western countries

                                    at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                    source of its competitiveness It focuses on constantly updating and challenging

                                    intellectual capabilities to enable them to excel in performance Special efforts are

                                    made for enhancing strategic thinking skills and analytical abilities of its managers and

                                    workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                    available with its people through Knowledge Management and sharing of best

                                    practices

                                    In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                    mutual co-operation coordination and understanding between the Management and

                                    the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                    among many other prestigious awards and recognition Tata Steel aims at ensuring

                                    transparency fairness and equity in all its interactions with its employees to create an

                                    enthused and happy workforce

                                    In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                    assistance in the fields of education vocational training self-employment and

                                    family welfare

                                    Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                    12 times This facility provides on-the-spot diagnostic medical and advanced

                                    surgical treatment for preventive and curative interventions to people in

                                    inaccessible rural areas

                                    Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                    for the 1920 Antwerp Olympics

                                    The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                    track was inaugurated in 1991 The complex also houses facilities for handball

                                    tennis volleyball hockey basketball boxing table tennis and a modern

                                    gymnasium

                                    The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                    services for the betterment of the people in and around Jamshedpur

                                    At times of natural calamities the company has rushe immediate relief and off

                                    ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                    fl ood ravaged Orissa and other such aff ected areas

                                    Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                    er a unique environment for the children of Jamshedpur to grow up in

                                    In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                    Jamshedpur has emerged as the one of the best cities in India

                                    Steel Authority of India

                                    The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                    executives and 123005 non-executives The total reduction in manpower achieved

                                    during the year stood at 4864 which included separation of 881 employees through

                                    voluntary retirement The labour productivity improved by around 12 over previous

                                    year to 150 tonne crude steelmanyear

                                    Some of the areas of assistance which are available to the weaker sections are the

                                    following

                                    The company has provided land for construction of school buildings in some of

                                    the steel townships as well as in other places for spreading education among

                                    the masses

                                    The company has constructed roads in remote areas around the steel plants

                                    and also where the captive mines are located to improve communication and

                                    also increase activities such as organisation of health camps school facilities

                                    drinking water etc under the peripheral development schemes

                                    Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                    Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                    providing them with education boarding and lodging facilities

                                    Construction of bridges by-pass roads metal-morum path waterways

                                    levellingdressing area around township pre-mixed roads Installation of hand-

                                    pumps tube wells and wells for villagers

                                    Construction of school buildings (including for mentally retarded deaf and

                                    dumb children) madarsas providing school furniture therein and construction

                                    of hostels womenrsquos college building etc

                                    Fourteen scholarships are awarded to deserving SCST undergraduate

                                    engineering students in various disciplines to encourage technical education

                                    among them

                                    In many cases tuition fee in company run schools is exempt for SCST

                                    students Steps are taken to provide education to more and more tribal children

                                    in company schools

                                    The unemployed SCST youth are given specialized training in various

                                    technical trades to develop skill and knowledge Such training is provided free

                                    of cost

                                    Adult literacy campaign is carried out in most of the steel townships Every year

                                    more and more men and women are being covered in this campaign

                                    Development of fishery and cottage industry providing sewing machines to

                                    village mahila mandals and promoting other self-employment generation

                                    schemes

                                    SAIL has established a hockey academy with stadium and hostel facilities at

                                    Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                    academy was successful in spotting a number of young talented tribal players

                                    and grooms them under expertise of ex-Olympian

                                    Technology

                                    The biggest boost to efficiency in the steel industry has come from the increased

                                    use of continuous casting ndash an indicator of the modernity of the production process Its

                                    share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                    now India is thus well on its way to joining the ranks of the leading steelmakers

                                    among the industrial nations (share in EU-25 96) However in India some 6 of

                                    crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                    suggests there is restructuring potential

                                    TATA Steel

                                    Tata Steels stall at the International Trade Fair was adjudged the best along

                                    with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                    international companies also took part in the exhibition Participating companies from

                                    countries all over the world exhibited latest technologies and know-how List of

                                    participating companies included Baosteel SAIL Heavy Engineering Corporation

                                    Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                    companies of national and international repute China was the partner country for the

                                    International Trade Fair this year

                                    In the award winning exhibition Tata Steel showcased its best coal mining practices

                                    cutting-edge technology used in iron ore mining pioneering human resource

                                    practices 78 years of industrial harmony and various other aspects of the worlds best

                                    steel company

                                    The 6th International Trade Fair and Conference an institutionalised global

                                    event is considered to be one of the most prestigious forums for national as well

                                    international participants It is a conclave of the finest minds concerned with the future

                                    direction and growth of these sectors The forum provided the worlds most eminent

                                    metallurgists manufacturers of metallurgical and mining machinery and related

                                    sectors professionals analysts and experts with the opportunity to exchange views on

                                    emerging technologies synergy and strengths and open up wider horizons for

                                    sectorial development

                                    Tata Steel to adopt Corus technology

                                    Tata Steel plans to implement alternate technology used by the British steel

                                    maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                    production according to Mr B Muthuraman Managing Director Tata Steel

                                    ldquoWe are looking at alternate technology Corus has developed an alternate

                                    technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                    newspersons on the sidelines of the 34th National Management Convention organised

                                    by the All-India Management Association However he declined to give further details

                                    on the type of technology the Indian steel giant plans to implement

                                    Steel Authority of India

                                    Modernisation holds the key to SAILs fortunes in the near future The objective

                                    of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                    and productive capacity and in the process become more energy-efficient and

                                    improve quality The key component of the ongoing modernisation drive - already

                                    completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                    ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                    continuous casting techniques A senior SAIL official says Continuous casting and

                                    basic oxygen furnaces ensure better quality steel through processes more easily

                                    monitored for quality control The basic oxygen surfaces method is significantly faster

                                    more automated and permits greater flexibility Continuous casting is more efficient

                                    than the traditional ingot casting methods and gives increased yields while enabling

                                    better quality standards SAIL is also modernising its finishing mills and is adding

                                    secondary refining facilities to improve quality

                                    Safety measures

                                    A unique feature of safety management in steel industry is that a bipartite forum

                                    named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                    was formed in 1973 at national level having representatives from steel plants in SAIL

                                    RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                    Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                    workshops training programme safety competitions for member organisations JCSSI

                                    with the co-operation and support of Trade Union representatives formulates policies

                                    and guidelines for its member plants and monitors the implementation

                                    Tata Steel

                                    Safety has always been a prime focus at Tata Steel A Safety Committee a

                                    Safety department and a Safety Trophy helped spread the message all across the

                                    company

                                    TATA reaffirms its commitment to provide safe working place and clean

                                    environment to its employees and other stakeholders as an integral part of its

                                    business philosophy and values We will continually enhance our Environmental

                                    Occupational Health amp Safety (EHS) performance in our activities products and

                                    services through a structured EHS management framework Towards this

                                    commitment we shall

                                    Establish and achieve EHS objectives and targets

                                    Ensure compliance with applicable EHS legislation and other requirement and

                                    go beyond

                                    Conserve natural resources and energy by constantly seeking to reduce

                                    consumption and promoting waste avoidance and recycling measures

                                    Eliminate minimize andor control adverse environmental impacts and

                                    occupational health and safety risks by adopting appropriate state-of-the-art

                                    technology and best EHS management practices at all levels sand functions

                                    Enhance awareness skill and competence of our employees and contractors

                                    so as to enable them to demonstrate their involvement responsibility and

                                    accountability for sound EHS performance

                                    Steel Authority of India

                                    SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                    monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                    Annual Performance Plans (APP) for the areas of safety and fire services are

                                    formulated and review of implementation of APP is done during Heads of

                                    Safety meeting

                                    Internal and external safety audits of major departments particularly hazardous

                                    areas are conducted every year and points arising from these audits are

                                    liquidated Safety aspects have been incorporated in standard operating

                                    practices (SOP) and standard maintenance practices (SMP)

                                    All major capital repairsshut downs are closely monitored round the clock

                                    Periodic drives are conducted to inculcate safety awarenessculture up to

                                    grass-root level apart from regular inspections as per checklists to identify

                                    unsafe conditionsacts

                                    Safety training is imparted to target group employees at various levels HRD

                                    intervention in the area of safety covers Heads of Departments Line Managers

                                    amp Departmental Safety Officers Besides area specific workshops are

                                    conducted at different locations on important topics like gas safety railroad

                                    safety safety in iron steel amp coke making etc

                                    Consistent efforts were made by SAIL Safety Organisation for improving safety

                                    standards in the company by taking measures like intensive safety drives in works

                                    area and conducting safety audits in hazardous departments of different plants and

                                    mines In addition specific workshops on safety aspects were organised in various

                                    SAIL steel plants

                                    Measures taken by Indian government to improve the industry

                                    Now letrsquos 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-

                                    1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                    among others was removed from the list of industries reserved for the public

                                    sector and also exempted from the provisions of compulsory licensing under the

                                    Industries (Development and Regulation) Act 1951

                                    2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                    of `high priority industries for automatic approval for foreign equity investment up

                                    to 51 This limit has been recently increased to 100

                                    3 Price and distribution of steel were deregulated from January 1992 At the same

                                    time it was ensured that priority continued to be accorded for meeting the

                                    requirements of small scale industries exporters of engineering goods and North

                                    Eastern Region of the country besides strategic sectors such as Defence and

                                    Railways

                                    4 The trade policy has been liberalised and import and export of iron and steel is

                                    freely allowed There are no quantitative restrictions on import of iron and steel

                                    items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                    regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                    steel have drastically come down since 1991-92 levels and the government is

                                    committed to bring them down to the international levels In Chapter 72 there are

                                    two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                    5 Iron amp Steel are freely importable as per the Extant Policy

                                    6 Iron amp Steel are freely exportable

                                    7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                    8 The floor price for seconds and defectives continues till date

                                    9 Imports of seconds and defectives of steel are allowed only through three

                                    designated ports of Mumbai Calcutta and Chennai

                                    10Mandatory pre inspection certificate by a reputed international agency for every

                                    import consignment of seconds and defectives

                                    11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                    10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                    the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                    per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                    15 per cent to 5 per cent

                                    12Further customs duty on several raw materials used by the steel sector like

                                    noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                    coking coal to zero

                                    13To bring down the prices of steel the excise duty on steel products was reduced

                                    from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                    that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                    increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                    cut on moderating prices was not achieved

                                    14The union Budget 2007-08 the import duty on seconds and defective has been

                                    further reduced from 20 to 10

                                    Special assistance being provided by Ministry of Steel to Private Sector

                                    1 Ministry of Steel is extending all possible support as detailed below for the

                                    development of Iron and Steel Sector in the country

                                    2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                    new plants and expansion of existing ones wherever applied for

                                    3 To ensure an un-interrupted supply of raw materials to the producers

                                    4 The Ministry has been interacting with All India Financial institutions to expedite

                                    clearance of projects

                                    5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                    Plants are held at the level of Secretary

                                    6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                    industry so that their absence does not lead to bottlenecks in the future growth of

                                    the Iron and Steel Sector and takes up these issues with the concerned ministries

                                    7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                    Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                    country are members of this Institute which has been set up with the objective of

                                    promoting developing and propagating the proper and effective use of steel

                                    8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                    major steel plants being implemented Govt has setup a Project Coordination

                                    Group under the Chairmanship of Steel Minister

                                    NATIONAL STEEL POLICY 2005

                                    The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                    development and as such great importance is attached to capacity expansion in line

                                    with expected demand at cost and prices which make Indian steel internationally

                                    competitive The existing regime of liberalization decontrol and deregulation of

                                    industry in the country has opened up new opportunities for the expansion of the steel

                                    industry With a view to accelerating the growth of the steel sector and attaining the

                                    vision of India becoming a developed economy by 2020 the Ministry of Steel

                                    formulated a National Steel Policy (NSP) in 2005

                                    The following salient features can be derived after analysing the NSP 2005

                                    The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                    towards reform restructuring and globalisation

                                    The long-term goal of the NSP is that India should have a modern and efficient

                                    steel industry of world standards catering to diversified steel demand The focus of

                                    the policy is to achieve global competitiveness not only in terms of cost quality and

                                    product-mix but also in terms of global benchmarks of efficiency and productivity

                                    In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                    NSP seeks to remove the supply-side constraints to the growth of this industry in

                                    an open globally integrated and competitive environment

                                    The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                    policy goal On the demand side the strategy would be to create incremental

                                    demand through promotional efforts creation of awareness and strengthening the

                                    delivery chain particularly in rural areas On the supply side the strategy would be

                                    to facilitate creation of additional capacity remove procedural and policy

                                    bottlenecks in the availability of inputs such as iron ore and coal make higher

                                    investments in RampD and encourage the creation of infrastructure such as roads

                                    railways and ports

                                    The NSP acknowledges the low per capita consumption of steel in the country

                                    especially in the rural areas and the need to boost steel consumption to improve

                                    quality of life and help in meeting the growing aspirations of masses

                                    In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                    industry would need additional capital In addition funds would be required for

                                    technological upgrade of existing facilities In order to mobilize such vast resources

                                    NSP seeks to encourage foreign direct investment In addition the policy also

                                    seeks to make the fiscal incentives available to infrastructure projects accessible

                                    to the steel industry

                                    The NSP seeks to support developing of risk-hedging instruments like futures and

                                    derivatives to contain price volatility in the steel market

                                    The NSP seeks to strengthen the existing training and research facilities available

                                    to the domestic steel industry so as to provide suitable training programmes

                                    especially for the secondary small-scale units and also to collect and analyse data

                                    on important parameters of the industry

                                    The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                    capability for special types of steel substitute coking coal use iron ore fines

                                    develop new products suited to rural needs enhance material and energy

                                    efficiency utilize waste and arrest environmental degradation

                                    The NSP acknowledges the important role played by the secondary steel sector in

                                    providing employment meeting local demand of steel in rural and semi-urban

                                    areas and meeting the countryrsquos demand of some special products and seeks to

                                    endeavour to provide the necessary feedstock to these units at reasonable prices

                                    from major plants through the existing mechanism of State Small Industries

                                    Corporations

                                    The NSP recognizes the fact that integration of the Indian steel industry with the

                                    global economy requires that the industry should be protected from unfair trade

                                    practices The NSP therefore envisages institution of mechanisms for import

                                    surveillance and monitoring export subsidies in other countries

                                    The present per capita consumption of steel in the country is very low compared to the

                                    world average As mentioned above one of the objectives of the NSP is to augment

                                    the demand and consumption of steel in the country by conscious promotion of steel

                                    usage With a view to create a mass awareness campaign on conscious promotion of

                                    steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                    the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                    The Committee is being serviced by Institute for Steel Development and Growth

                                    (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                    way of an awareness campaign with particular emphasis on rural sectors The

                                    Committee also aims at educating the designers architects builders and planners

                                    regarding the qualitative and cost effective applications of steel in various structures

                                    including buildings bridges flyovers and airports

                                    FUTURE OF INDIAN STEEL INDUSTRY

                                    India is amongst a few countries in the world having the dual advantage of fast

                                    growing domestic demand coupled with access to raw materials Further the trend

                                    that is already discernible is that the axis of global steel production consumption is

                                    shifting towards Asia With their large populations China and India already account for

                                    35 of the total world steel production - more than double of Europe Asia is

                                    expected to outpace other regions of the world to an even greater extent in the coming

                                    years

                                    Amongst the Asian nations China has established a huge unbridgeable lead It

                                    is accepted that China will continue to be the leader However India is slated to

                                    emerge as the second Asian giant in the next eight years Figuratively speaking while

                                    the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                    splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                    China swallowed almost 32 of global steel It is unlikely that future production and

                                    consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                    has been the case over the last few years On the other hand it is sun-rise time for

                                    India where the demand has increased by 7-8 in the last couple of years In the long

                                    run Indian steel is likely to be more cost-effective since unlike China India has

                                    relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                    can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                    However the position with coal is not so favourable Though thermal coal

                                    reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                    traditional blast furnace route would require coking coal India does not have adequate

                                    reserves of coking coal nor is the meagre amount available of appropriate quality

                                    Thus the steel industry always had to contend with the dual problems of inadequate

                                    availability and poor quality of Indian coking coal This has been partly addressed by

                                    adopting alternative iron making processes that are not dependent on coking coal it

                                    can not be denied that coal is the biggest cause for concern for bulk steel production

                                    in India

                                    Because of the shortage of indigenous coal attempts have been made by steel

                                    producers to ensure long-term supplies by tying up with global majors or by acquiring

                                    mines in other countries This is the only long-term solution but with a global shortage

                                    of coal it may not remain cost-effective in the long run

                                    India is the seventh largest producer of steel and may further improve its position

                                    going by the current trends A series of investment decisions by major domestic

                                    players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                    POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                    The keen interest shown by various prospective investors is not only due to

                                    expectations of strong growth in domestic demand but also due to indigenous

                                    availability of key resources like iron ore and skilled workforce

                                    After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                    steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                    finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                    2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                    consumption has accelerated to 91 per cent

                                    With the likely growth of Indian economy at around 7 per cent per annum

                                    demand for steel is expected to remain strong and is projected to reach a level of 90

                                    million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                    demand is sustainable considering the fact that Indias per capita consumption of steel

                                    is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                    very low level of per capita consumption of steel in India is highlighted further when

                                    compared with the consumption levels of its peer group consisting of countries like

                                    China Brazil Mexico and Republic of Korea as also with selected developed

                                    countries

                                    Though there are realistic constraints in India to achieving as rapid a growth as in

                                    China there seems to be consensus among analysts that India is likely to witness a

                                    growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                    percent If the growth rate (9 per cent) of last three years is maintained then we will

                                    achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                    more conservative due to cyclicity of steel business it may be mentioned that in a

                                    country like India cyclicity is more in terms of prices rather than volumes of production

                                    Exports

                                    Similar optimism prevails with regard to export of iron and steel Export of steel

                                    starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                    2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                    rising domestic demand and low capacity additions Exports now constitute around 17

                                    per cent of total production and Indias presence in the developing and developed

                                    world is being increasingly felt Indian steel producers have recently been able to

                                    supply specialized grades and products used for sophisticated applications like

                                    automobiles On the cost front some of our producers are counted amongst the least

                                    cost producers of the world For an average reference plant India is competitively

                                    placed in the middle of the hierarchy of steel producing nations

                                    However we have a long way to go to catch up with the leading exporters of the

                                    world such as Japan the CIS countries Brazil etc It is however expected that by

                                    2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                    per cent of total projected production The projected export ratio compares well with

                                    the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                    The projected production of steel by 2019-20 to meet the domestic and export

                                    demand will be around 110 million tonnes Management of resources and

                                    infrastructural growth is going to be critical in achievement of the production level

                                    envisaged The broad requirements of various resources will increase manifold from

                                    the current level The bottlenecks in availability of critical inputs and various facilities

                                    need to be removed through concerted efforts of Government and industry The broad

                                    strategy to overcome these constraints as well as meet the strategic goals of the steel

                                    sector has been discussed in the National Steel Policy which has been recently

                                    approved by the Government

                                    As stated earlier the long-term goal of the National Steel Policy is that India

                                    should have a modern and efficient steel industry of world standards catering to a

                                    diversified steel demand The focus of the policy is to achieve global competitiveness

                                    not only in terms of cost quality and product mix but also in terms of global

                                    benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                    pronged strategy to achieve these goals On the demand side the strategy would be

                                    to create incremental demand through promotional efforts creation of awareness and

                                    strengthening the delivery chain particularly in rural areas On the supply side the

                                    strategy would be to facilitate creation of additional capacity remove procedural and

                                    policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                    investments in RampD and HRD and encourage the creation of infrastructure such as

                                    roads railways and ports

                                    The production figures exports and imports of finished carbon steel and pig iron

                                    and apparent consumption patterns of finished carbon steel as indicated by TATA

                                    Steel and SAIL attest to the continuing growth for both the sectors

                                    FINDINGS

                                    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 increased its profit over the year particularly in 2006-07

                                    Both the companies are planning to adopt modern technology which is going to

                                    help them to compete in world market but they need to be less dependent on

                                    state of art technology and coal for long term prospects

                                    Public sector has undergone retrenchment for the employees and improved

                                    has its lobour productivity but it is still lacking behind as compared to private

                                    sector

                                    SAIL has reduced the no of accidents due to improper handling of machinery

                                    still no of accidents are more than that of TATA Steel

                                    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

                                    ie 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 have to be met

                                    comprehensively if we are to take our legitimate place in the world as a developed

                                    nation by 2020

                                    BIBLIOGRAPHY

                                    Annual report (2006-07) published by ministry of steel

                                    Annual report (2006-07) published by TATA Steel

                                    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                    REPORTrsquo posted by SAIL on its website

                                    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                    held on 07 Nov 2006

                                    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                    wwwsteelnicin (Official website of ministry of industry)

                                    wwwtatasteelcom (Official website of TATA Steel)

                                    wwwsailcoin (Official website of Steel Authority of India)

                                    wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                    wwwjpcindiansteelnicin (Website of joint planning committee)

                                    • DATA ANALYSIS
                                    • Comparison between TATA Steel and Steel Authority of India
                                    • Production
                                    • Quantity 000 Tonnes
                                    • Financials
                                    • Research and Development
                                    • (Rs Crore)
                                    • TATA Steel
                                    • Steel Authority of India
                                    • Environment
                                    • TATA Steel
                                    • Emissions effluents and wastes
                                    • Emissions
                                    • Waste handling
                                    • Effluent Management
                                    • Steel Authority of India
                                    • Solid Waste Management
                                    • Environmental Plantation
                                    • Environmental Recognitions
                                    • Workforce and Welfare of Society
                                    • TATA steel
                                    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                    • Steel Authority of India
                                    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                    • Technology
                                    • Steel Authority of India
                                    • Safety measures
                                    • Tata Steel
                                    • Steel Authority of India
                                    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                    • Measures taken by Indian government to improve the industry
                                    • Now letrsquos 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-
                                    • Special assistance being provided by Ministry of Steel to Private Sector
                                    • FUTURE OF INDIAN STEEL INDUSTRY

                                      canalised by the Government in 1991-92 and MSTC has since then moved on to

                                      marketing ferrous and miscellaneous scrap arising out of steel plants and other

                                      industries and importing coal coke petroleum products semi finished steel products

                                      like HR coils and export of primarily iron ore The company has also established an e-

                                      auction portal and undertakes e-auction of coal diamonds and steel scrap and has

                                      developed an e-procurement portal in house

                                      Capital Structure

                                      The company has an authorised capital of Rs 5 crore and paid up capital was Rs

                                      220 crore as on 31122006 of which approximately 90 is held by Government of

                                      India and balance 10 by members of Steel Furnace Association 16 of India Iron and

                                      Steel Scrap Association of India and others Paid up capital of Rs 220 crore includes

                                      bonus shares issued in the year 1993-94 in the ratio 11

                                      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 2 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 recyclingdisposal 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 the company is also providing steel mill services such as scarfing of slabs

                                      handling of BOF slag etc

                                      Financial Performance

                                      Particulars 2004-05 2005-06 2006-07 (Apr-

                                      Dec2006)

                                      Total Turnover ie Service charges realised including miscellaneous Incomeetc

                                      981822 1067937 765557

                                      Gross Margin before Interest amp Depreciation 167879 186514 105284

                                      Interest amp Depreciation 83014 100970 84728

                                      Profit before Tax 84865 85544 20556

                                      MANGANESE ORE (INDIA) LTD (MOIL)

                                      Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                                      of manganese ore in India At the time of inception 49 of its shares were held by the

                                      Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                                      proportion by Government of India and the State Governments of Madhya Pradesh 17

                                      and Maharashtra Subsequently in 1977 the Government of India acquired the

                                      shares held by CPMO in MOIL and MOIL became a wholly owned Government

                                      company with effect from October 1977 As on 30112006 Government of India held

                                      8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                                      holding 961 and 882 shares respectively

                                      MOIL Produces and Sells following Grades of Manganese Ore

                                      1048708 High grade ores for production of ferro manganese

                                      1048708 Medium grade ores for production of silico manganese

                                      1048708 Blast furnace grade ore required for production of hot metal

                                      1048708 Dioxide ore for dry battery cells and chemical industries

                                      Production and 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

                                      Items 2004-05 2005-06 2006-07 (up to Dec2006)

                                      1 Production

                                      a) Manganese Ore (thousand tonne) 94300 86500 82533

                                      b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                                      c) Ferro Manganese (tonne) 1032500 617000 829400

                                      2 Turnover (Rupees in crore) 37878 33409 29463

                                      3 Profit before Tax (Rupees in crore) 20227 16900 12087

                                      KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                                      Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                                      90012000 and ISO 14001 company was established in April 1976 to meet the long

                                      term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                                      was set up at Kudremukh This project was to be financed in full by Iran However as

                                      Iran stopped further loan disbursements after paying US $ 255 million the project was

                                      completed as per schedule with the funds provided by Government of India While the

                                      project was commissioned on schedule consequent upon the political developments

                                      in Iran they did not lift any quantity of concentrate As a diversification measure the

                                      Government approved the construction of a 3 million tonne per year capacity pellet

                                      plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                                      million tonne with additionsmodifications The plant went into commercial production

                                      in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                                      units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                                      Plant Mangalore

                                      Production

                                      A target of 31 million tonne and 305 million tonne was set for production of iron ore

                                      concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                                      production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                                      The target set for production during the year 2006-07 is 305 million tonne of pellets

                                      In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                                      activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                                      production of iron ore concentrate during the year 2006-07 As against a target of 188

                                      million tonne of pellets fixed for the period April to November 2006 the actual

                                      production was 0275 million tonne which represents 15 target fulfilment There is

                                      shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                                      production of pellets is on account of operational problems being encountered in the

                                      pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                                      There was excessive generation of su er fines (slimes) affecting filtration clogging of

                                      filters overflow and contamination of process water due to filling of cooling pond

                                      affecting production While efforts are continuing to rectify the problems the operation

                                      of pellet plant is yet to stabilize and normal production is yet to commence

                                      The sales revenue during the last five years and up to November 2006 during 2006-

                                      07 is detailed below

                                      (Rs in lakh)

                                      Years Concentrate Pellets Total

                                      2006-07 (up to December 2006) - 12427 12427

                                      2005-06 12091 111137 123228

                                      2004-05 16050 169327 185377

                                      2003-04 20209 82729 102938

                                      2002-03 21135 51579 72714

                                      2001-02 21571 50598 72169

                                      Financial Performance

                                      An overview of the performance of KIOCL during the year 2006-07 (up to November

                                      2006) together with actuals for the previous three years is indicated below

                                      (Rs in lakh)

                                      Particulars 2006-07(up to December 2006)

                                      2005-06 2004-05 2003-04

                                      Total value of Sales 12427 123228 185377 102938

                                      Gross Margin 2620 68706 120863 45945

                                      Profit after Tax 1029 35630 64984 30070

                                      Inventories(excluding finished stock)

                                      20417 15843 8720 7616

                                      BIRD GROUP OF COMPANIES

                                      Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                      the following seven companies came under the administrative control of the Ministry of

                                      Steel Government of India

                                      (a) The Orissa Minerals Development Company Limited (OMDC)

                                      (b) The Bisra Stone Lime Company Limited (BSLC)

                                      (c) The Karanpura Development Company Limited (KDCL)

                                      (d) Scott amp Saxby Limited (SSL)

                                      (e) Eastern Investments Limited (EIL)

                                      (f) Burrakar Coal Company Limited (Burrakar)

                                      (g) Borrea Coal Company Limited (Borrea)

                                      The status of the companies is as under

                                      a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                      of coal mines The two companies are in the process of liquidation The official

                                      liquidator has already taken over the assets and liabilities of these two companies

                                      b) EIL being an investment company is having a major stake in the equity shares of

                                      operating companies under the Bird Group

                                      c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                      Status of the Companies at the Time of Nationalisation

                                      At the time when the Bird Group of Companies came under the administrative control

                                      of the Ministry of Steel Government of India all of them were financially sick and

                                      burdened with various problems With the financial support from the Government of

                                      India problems relating mainly to excessive manpower erosion of working capital and

                                      outstanding liabilities could be settled to a considerable extent

                                      REVIEW OF LITERATURE

                                      RS PANDEY sees a bright future for the steel industry in India provided of course

                                      the iron ore mining policy to be announced by the government soon acts as a catalyst

                                      for growth He discusses the industrys problems and prospects in an interview When

                                      asked about the steel sectors ie private and public he expressed his expert views

                                      The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                      Excerpts

                                      The public sector steel companies in India are doing extremely well And therefore

                                      they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                      Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                      Between 1992-93 and now the share of the public sector in steel production had gone

                                      down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                      1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                      the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                      to 71 per cent But the public sector units are growing even if the private sector is

                                      growing faster

                                      During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                      going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                      million tonnes in just four years RINL is set to expand its capacity from three million

                                      tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                      capacity for the PSUs

                                      The public sector should be encouraged all the more Let there be a healthy

                                      competition between public and private sector producers The question of exit comes

                                      when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                      was at below Rs10 per share Today it is more than Rs130 and the expectations

                                      are that it will go up even higher

                                      When talked about the labour productivity he says Yes labour productivity is low in

                                      SAIL in particular But it is improving The steel major is going to adjust much of its

                                      existing manpower in the expansion phase when its capacity is going to almost

                                      double The management had also undertaken a massive VRS [voluntary retirement

                                      scheme] In RINL labour productivity is not all that bad

                                      Besides SAIL has done very well in various other techno-economic parameters in the

                                      last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                      per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                      improvement of 20 per cent In blast furnace productivity also there has been an

                                      improvement as also in the production of high-end special steels and capacity

                                      utilisation

                                      With the improved turnover which comes from higher capacity use and higher

                                      manpower productivity SAILs profits have surged Its gross profit more than doubled

                                      between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                      was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                      is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                      other input costs and 71 per cent owing to improvement in capacity use and other

                                      factors that are just mentioned

                                      OBJECTIVES

                                      To compare Private and Public steel sector with refrence to TATA Steel and

                                      Steel Authority Of India

                                      To analyse potential of both the companies ie TATA Steel and SAIL

                                      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

                                      Research Methodology

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

                                      a) Research design-

                                      In case of my research ldquoComparative analysis of Indian private and Public

                                      sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                      found to be more appropriate

                                      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

                                      Comparison between TATA Steel and Steel Authority of India

                                      The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                      significant improvements in the last two years The combined profit before tax of all 15

                                      PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                      Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                      The profit before tax for all PSUs also exhibited a significant improvement of

                                      around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                      Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                      comparable period of last year

                                      Contribution of PSUs to public exchequer has also gone up significantly For

                                      example the contribution of five leading companies namely SAIL RINL NMDC

                                      KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                      duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                      from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                      On the other hand 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

                                      During the period (April-December 2006) 205 million tonne of steel was produced by

                                      Private Sector steel units out of the total production of 3315 million tonne in the

                                      country The private sector units consist of major steel producers in one hand and

                                      relatively smaller amp 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

                                      For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                      companies on following parameters

                                      Production

                                      Chart showing production of both the companies

                                      Quantity 000 Tonnes

                                      2007-08 APR-DEC07APR-

                                      DEC06 ACTUA

                                      L

                                      AGE OF CURRENT

                                      PRODUCTION OVER

                                      CAPACITY UTILISATION

                                      TARGET TENTATIV

                                      E

                                      TARGET

                                      ACTUAL

                                      APR-DEC07 TARGE

                                      T

                                      APR-DEC06 ACTUA

                                      L

                                      APR-DEC 07

                                      APR-DEC06

                                      SAIL

                                      i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                      ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                      iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                      iv)BSL43500 32630 30970 30010 949 1032 950 910

                                      v)ISP5000 3760 3520 3450 936 1020 940 920

                                      vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                      vii)VISL

                                      1390 1050 1160 1190 1105 975 1300 1340

                                      TATA 50000 37440 37090 37380 991 992 990 1000

                                      TATA Steel

                                      The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                      but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                      target of 3744 (mT) but could produce 3709 However for the same period in last

                                      year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                      to 99 this year

                                      Steel Authority of India

                                      The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                      but it could produce only 126 (mT) a growth of 4 over the previous year However

                                      for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                      10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                      capacity utilisation of 103 this year as compared to 101 last year

                                      Financials

                                      TATA Steel

                                      The year 2006-07 has seen the highest turnover and profits continuing the trend

                                      of the past four years The Company achieved the best ever sales turnover and

                                      profitability during the year under review A robust Indian economy firm steel prices

                                      higher volumes and several improvement initiatives contributed to the record

                                      performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                      the previous year Export turnover was lower by about 5 due to lower volumes

                                      Average price realisation improved mainly due to higher prices of hot rolled

                                      coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                      (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                      Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                      due to additional borrowings for the Companyrsquos domestic expansion programs and

                                      funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                      providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                      crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                      before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                      after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                      20 compared to the previous year

                                      The record financial results would not have been possible without a matching

                                      performance by the operating departments including the raw materials division The

                                      year witnessed the best ever crude steel production by the Company at 505 million

                                      tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                      first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                      upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                      rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                      Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                      increase in production was backed by improvements in operating practices and

                                      productivity resulting in a reduction in consumption of raw materials energy

                                      refractories etc

                                      Steel Authority of India

                                      Financial Year 2006-07 has been eventful year for the company with further

                                      momentum in improving operational efficiencies laying strong foundation and building

                                      road map for modernisation and expansion of SAIL Plants with several new initiatives

                                      undertaken with its human resource at the core During the year the company got the

                                      distinction of first metal company in the country to reach a market capitalization of Rs

                                      50000 crore

                                      There have been improvements in all financial parameters which are shown in

                                      the table given below-

                                      SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                      before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                      previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                      increase of 55

                                      Research and Development

                                      Chart showing production of both the companies

                                      (Rs Crore)

                                      TATA Steel

                                      The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                      develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                      steel for body panels

                                      Research is undertaken at Tata Steel in the areas of raw materials including coal

                                      coke energy conservation waste utilisation sintering blast furnace productivity and

                                      phosphorous reduction product development and improvement in life of plant and

                                      machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                      sealed and over 100 are in process

                                      Steel Authority of India

                                      Research and Development Centre for Iron and Steel (RDCIS) has provided

                                      innovative technological inputs to different units of SAIL with special emphasis on

                                      cost reduction product development and application quality improvement energy

                                      conservation and automation Several new products were developed and

                                      commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                      Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                      specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                      micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                      Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                      Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                      strengthened its technology marketing efforts by providing consultancy services

                                      organising specialised testing and transfer of technological innovations to outside

                                      customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                      Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                      Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                      During the year 1998 technical papers were publishedpresented besides filing

                                      of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                      awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                      achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                      Government of India

                                      Environment

                                      TATA Steel

                                      Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                      Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                      has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                      Jamshedpur is the only town in the country which

                                      Significant achievements by the Company include an improvement in

                                      environment and resource conservation including a reduction in green house erosion

                                      raw materials and water consumption The Company has increased waste re-use and

                                      re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                      the-art pollution control systems being installed to prevent and control pollution The

                                      Company has almost doubled its capital investment in Pollution Abatement in the last

                                      five years

                                      Emissions effluents and wastes

                                      Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                      most relevance to the steel industry Considerable reduction has been effected by

                                      Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                      granulation is taken into account Other Greenhouse Gas emissions do not result from

                                      Tata Steelrsquos activities

                                      Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                      tonnes in 2003-04 as against 790 tonnes used during the previous year

                                      Hazardous Waste under Basel Convention The Company does not import or export

                                      any waste deemed hazardous under the Basel Convention All hazardous wastes

                                      generated are handled as per the requirement of the Hazardous Waste Management

                                      and Handling Rules 19892000

                                      Emissions

                                      Tata Steel has undertaken several initiatives which have resulted in

                                      considerable reduction in stack emission Emissions are well below the Indian and

                                      international standards The emission load including particulate matter Sulphur

                                      Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                      undertaken at the Steel Works

                                      Waste handling

                                      Most of the solid waste generated from Steel Works is recycled or reused 18

                                      of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                      was used to fill low-lying areas and for peripheral road construction around

                                      Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                      power plants was dumped in a designated dump area

                                      Effluent Management

                                      Waste water from the steel making process is being treated with best available

                                      physio-chemical methods as well as being recycled Waste water from the coke plant

                                      is treated biologically where organic pollutants are oxidised and decomposed by micro

                                      organisms The Company has reduced the levels of total pollutant discharge in waste

                                      water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                      Steel Authority of India

                                      Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                      environmentally responsible manner to comply with applicable regulations and striving

                                      to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                      efficiency and optimize resource consumption through various measures viz

                                      improvement in process technology in the areas of raw materials coke iron and steel

                                      making reuserecycle of the by-products generated and conservation of energy and

                                      water

                                      Solid Waste Management

                                      During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                      and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                      Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                      these wastes are being made through internal recycling and selling to outside

                                      agencies The wastes generated in the steel plants are being utilized mainly through

                                      their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                      during April-September 2006

                                      Environmental Plantation

                                      Trees have a significant role in protection of environment and ecological balance

                                      Extensive afforestation programme are being followed in all the plants and mines The

                                      basis of choosing the species of plants mainly depends on local soil characteristics

                                      and prevailing meteorological conditions The green belt developed by afforestation

                                      adds to the aesthetic environment which becomes dust and noise barriers

                                      A total number of 145521 saplings have been planted covering an area of 637

                                      hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                      hectare in 2004-05 in and around the steel plants of SAIL

                                      Environmental Recognitions

                                      SAIL plants have been awarded various prizes for environmental management in

                                      their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                      the Confederation of Indian Industries (CII) for exemplary performance in the

                                      environmental economic andsocial dimensions of sustainable development and the

                                      Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                      Excellence Award in the metal sector 2005 instuted by the World Environment

                                      Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                      for 2005 from International Greenland Society

                                      Workforce and Welfare of Society

                                      TATA steel

                                      Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                      and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                      enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                      provide a work environment that will ensure a sense of purpose and personal growth

                                      for each individual The wish of the company is to see the smile on every face

                                      everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                      people and enriched empowered and enhanced their lives

                                      Even in its nascent years social scientists Sidney and Beatrice Webb were

                                      brought in to work on welfare schemes In fact some of the initiatives introduced by

                                      Tata Steel were the first of their kind in India and some even in the western countries

                                      at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                      source of its competitiveness It focuses on constantly updating and challenging

                                      intellectual capabilities to enable them to excel in performance Special efforts are

                                      made for enhancing strategic thinking skills and analytical abilities of its managers and

                                      workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                      available with its people through Knowledge Management and sharing of best

                                      practices

                                      In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                      mutual co-operation coordination and understanding between the Management and

                                      the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                      among many other prestigious awards and recognition Tata Steel aims at ensuring

                                      transparency fairness and equity in all its interactions with its employees to create an

                                      enthused and happy workforce

                                      In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                      assistance in the fields of education vocational training self-employment and

                                      family welfare

                                      Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                      12 times This facility provides on-the-spot diagnostic medical and advanced

                                      surgical treatment for preventive and curative interventions to people in

                                      inaccessible rural areas

                                      Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                      for the 1920 Antwerp Olympics

                                      The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                      track was inaugurated in 1991 The complex also houses facilities for handball

                                      tennis volleyball hockey basketball boxing table tennis and a modern

                                      gymnasium

                                      The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                      services for the betterment of the people in and around Jamshedpur

                                      At times of natural calamities the company has rushe immediate relief and off

                                      ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                      fl ood ravaged Orissa and other such aff ected areas

                                      Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                      er a unique environment for the children of Jamshedpur to grow up in

                                      In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                      Jamshedpur has emerged as the one of the best cities in India

                                      Steel Authority of India

                                      The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                      executives and 123005 non-executives The total reduction in manpower achieved

                                      during the year stood at 4864 which included separation of 881 employees through

                                      voluntary retirement The labour productivity improved by around 12 over previous

                                      year to 150 tonne crude steelmanyear

                                      Some of the areas of assistance which are available to the weaker sections are the

                                      following

                                      The company has provided land for construction of school buildings in some of

                                      the steel townships as well as in other places for spreading education among

                                      the masses

                                      The company has constructed roads in remote areas around the steel plants

                                      and also where the captive mines are located to improve communication and

                                      also increase activities such as organisation of health camps school facilities

                                      drinking water etc under the peripheral development schemes

                                      Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                      Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                      providing them with education boarding and lodging facilities

                                      Construction of bridges by-pass roads metal-morum path waterways

                                      levellingdressing area around township pre-mixed roads Installation of hand-

                                      pumps tube wells and wells for villagers

                                      Construction of school buildings (including for mentally retarded deaf and

                                      dumb children) madarsas providing school furniture therein and construction

                                      of hostels womenrsquos college building etc

                                      Fourteen scholarships are awarded to deserving SCST undergraduate

                                      engineering students in various disciplines to encourage technical education

                                      among them

                                      In many cases tuition fee in company run schools is exempt for SCST

                                      students Steps are taken to provide education to more and more tribal children

                                      in company schools

                                      The unemployed SCST youth are given specialized training in various

                                      technical trades to develop skill and knowledge Such training is provided free

                                      of cost

                                      Adult literacy campaign is carried out in most of the steel townships Every year

                                      more and more men and women are being covered in this campaign

                                      Development of fishery and cottage industry providing sewing machines to

                                      village mahila mandals and promoting other self-employment generation

                                      schemes

                                      SAIL has established a hockey academy with stadium and hostel facilities at

                                      Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                      academy was successful in spotting a number of young talented tribal players

                                      and grooms them under expertise of ex-Olympian

                                      Technology

                                      The biggest boost to efficiency in the steel industry has come from the increased

                                      use of continuous casting ndash an indicator of the modernity of the production process Its

                                      share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                      now India is thus well on its way to joining the ranks of the leading steelmakers

                                      among the industrial nations (share in EU-25 96) However in India some 6 of

                                      crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                      suggests there is restructuring potential

                                      TATA Steel

                                      Tata Steels stall at the International Trade Fair was adjudged the best along

                                      with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                      international companies also took part in the exhibition Participating companies from

                                      countries all over the world exhibited latest technologies and know-how List of

                                      participating companies included Baosteel SAIL Heavy Engineering Corporation

                                      Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                      companies of national and international repute China was the partner country for the

                                      International Trade Fair this year

                                      In the award winning exhibition Tata Steel showcased its best coal mining practices

                                      cutting-edge technology used in iron ore mining pioneering human resource

                                      practices 78 years of industrial harmony and various other aspects of the worlds best

                                      steel company

                                      The 6th International Trade Fair and Conference an institutionalised global

                                      event is considered to be one of the most prestigious forums for national as well

                                      international participants It is a conclave of the finest minds concerned with the future

                                      direction and growth of these sectors The forum provided the worlds most eminent

                                      metallurgists manufacturers of metallurgical and mining machinery and related

                                      sectors professionals analysts and experts with the opportunity to exchange views on

                                      emerging technologies synergy and strengths and open up wider horizons for

                                      sectorial development

                                      Tata Steel to adopt Corus technology

                                      Tata Steel plans to implement alternate technology used by the British steel

                                      maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                      production according to Mr B Muthuraman Managing Director Tata Steel

                                      ldquoWe are looking at alternate technology Corus has developed an alternate

                                      technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                      newspersons on the sidelines of the 34th National Management Convention organised

                                      by the All-India Management Association However he declined to give further details

                                      on the type of technology the Indian steel giant plans to implement

                                      Steel Authority of India

                                      Modernisation holds the key to SAILs fortunes in the near future The objective

                                      of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                      and productive capacity and in the process become more energy-efficient and

                                      improve quality The key component of the ongoing modernisation drive - already

                                      completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                      ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                      continuous casting techniques A senior SAIL official says Continuous casting and

                                      basic oxygen furnaces ensure better quality steel through processes more easily

                                      monitored for quality control The basic oxygen surfaces method is significantly faster

                                      more automated and permits greater flexibility Continuous casting is more efficient

                                      than the traditional ingot casting methods and gives increased yields while enabling

                                      better quality standards SAIL is also modernising its finishing mills and is adding

                                      secondary refining facilities to improve quality

                                      Safety measures

                                      A unique feature of safety management in steel industry is that a bipartite forum

                                      named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                      was formed in 1973 at national level having representatives from steel plants in SAIL

                                      RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                      Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                      workshops training programme safety competitions for member organisations JCSSI

                                      with the co-operation and support of Trade Union representatives formulates policies

                                      and guidelines for its member plants and monitors the implementation

                                      Tata Steel

                                      Safety has always been a prime focus at Tata Steel A Safety Committee a

                                      Safety department and a Safety Trophy helped spread the message all across the

                                      company

                                      TATA reaffirms its commitment to provide safe working place and clean

                                      environment to its employees and other stakeholders as an integral part of its

                                      business philosophy and values We will continually enhance our Environmental

                                      Occupational Health amp Safety (EHS) performance in our activities products and

                                      services through a structured EHS management framework Towards this

                                      commitment we shall

                                      Establish and achieve EHS objectives and targets

                                      Ensure compliance with applicable EHS legislation and other requirement and

                                      go beyond

                                      Conserve natural resources and energy by constantly seeking to reduce

                                      consumption and promoting waste avoidance and recycling measures

                                      Eliminate minimize andor control adverse environmental impacts and

                                      occupational health and safety risks by adopting appropriate state-of-the-art

                                      technology and best EHS management practices at all levels sand functions

                                      Enhance awareness skill and competence of our employees and contractors

                                      so as to enable them to demonstrate their involvement responsibility and

                                      accountability for sound EHS performance

                                      Steel Authority of India

                                      SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                      monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                      Annual Performance Plans (APP) for the areas of safety and fire services are

                                      formulated and review of implementation of APP is done during Heads of

                                      Safety meeting

                                      Internal and external safety audits of major departments particularly hazardous

                                      areas are conducted every year and points arising from these audits are

                                      liquidated Safety aspects have been incorporated in standard operating

                                      practices (SOP) and standard maintenance practices (SMP)

                                      All major capital repairsshut downs are closely monitored round the clock

                                      Periodic drives are conducted to inculcate safety awarenessculture up to

                                      grass-root level apart from regular inspections as per checklists to identify

                                      unsafe conditionsacts

                                      Safety training is imparted to target group employees at various levels HRD

                                      intervention in the area of safety covers Heads of Departments Line Managers

                                      amp Departmental Safety Officers Besides area specific workshops are

                                      conducted at different locations on important topics like gas safety railroad

                                      safety safety in iron steel amp coke making etc

                                      Consistent efforts were made by SAIL Safety Organisation for improving safety

                                      standards in the company by taking measures like intensive safety drives in works

                                      area and conducting safety audits in hazardous departments of different plants and

                                      mines In addition specific workshops on safety aspects were organised in various

                                      SAIL steel plants

                                      Measures taken by Indian government to improve the industry

                                      Now letrsquos 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-

                                      1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                      among others was removed from the list of industries reserved for the public

                                      sector and also exempted from the provisions of compulsory licensing under the

                                      Industries (Development and Regulation) Act 1951

                                      2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                      of `high priority industries for automatic approval for foreign equity investment up

                                      to 51 This limit has been recently increased to 100

                                      3 Price and distribution of steel were deregulated from January 1992 At the same

                                      time it was ensured that priority continued to be accorded for meeting the

                                      requirements of small scale industries exporters of engineering goods and North

                                      Eastern Region of the country besides strategic sectors such as Defence and

                                      Railways

                                      4 The trade policy has been liberalised and import and export of iron and steel is

                                      freely allowed There are no quantitative restrictions on import of iron and steel

                                      items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                      regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                      steel have drastically come down since 1991-92 levels and the government is

                                      committed to bring them down to the international levels In Chapter 72 there are

                                      two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                      5 Iron amp Steel are freely importable as per the Extant Policy

                                      6 Iron amp Steel are freely exportable

                                      7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                      8 The floor price for seconds and defectives continues till date

                                      9 Imports of seconds and defectives of steel are allowed only through three

                                      designated ports of Mumbai Calcutta and Chennai

                                      10Mandatory pre inspection certificate by a reputed international agency for every

                                      import consignment of seconds and defectives

                                      11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                      10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                      the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                      per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                      15 per cent to 5 per cent

                                      12Further customs duty on several raw materials used by the steel sector like

                                      noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                      coking coal to zero

                                      13To bring down the prices of steel the excise duty on steel products was reduced

                                      from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                      that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                      increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                      cut on moderating prices was not achieved

                                      14The union Budget 2007-08 the import duty on seconds and defective has been

                                      further reduced from 20 to 10

                                      Special assistance being provided by Ministry of Steel to Private Sector

                                      1 Ministry of Steel is extending all possible support as detailed below for the

                                      development of Iron and Steel Sector in the country

                                      2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                      new plants and expansion of existing ones wherever applied for

                                      3 To ensure an un-interrupted supply of raw materials to the producers

                                      4 The Ministry has been interacting with All India Financial institutions to expedite

                                      clearance of projects

                                      5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                      Plants are held at the level of Secretary

                                      6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                      industry so that their absence does not lead to bottlenecks in the future growth of

                                      the Iron and Steel Sector and takes up these issues with the concerned ministries

                                      7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                      Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                      country are members of this Institute which has been set up with the objective of

                                      promoting developing and propagating the proper and effective use of steel

                                      8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                      major steel plants being implemented Govt has setup a Project Coordination

                                      Group under the Chairmanship of Steel Minister

                                      NATIONAL STEEL POLICY 2005

                                      The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                      development and as such great importance is attached to capacity expansion in line

                                      with expected demand at cost and prices which make Indian steel internationally

                                      competitive The existing regime of liberalization decontrol and deregulation of

                                      industry in the country has opened up new opportunities for the expansion of the steel

                                      industry With a view to accelerating the growth of the steel sector and attaining the

                                      vision of India becoming a developed economy by 2020 the Ministry of Steel

                                      formulated a National Steel Policy (NSP) in 2005

                                      The following salient features can be derived after analysing the NSP 2005

                                      The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                      towards reform restructuring and globalisation

                                      The long-term goal of the NSP is that India should have a modern and efficient

                                      steel industry of world standards catering to diversified steel demand The focus of

                                      the policy is to achieve global competitiveness not only in terms of cost quality and

                                      product-mix but also in terms of global benchmarks of efficiency and productivity

                                      In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                      NSP seeks to remove the supply-side constraints to the growth of this industry in

                                      an open globally integrated and competitive environment

                                      The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                      policy goal On the demand side the strategy would be to create incremental

                                      demand through promotional efforts creation of awareness and strengthening the

                                      delivery chain particularly in rural areas On the supply side the strategy would be

                                      to facilitate creation of additional capacity remove procedural and policy

                                      bottlenecks in the availability of inputs such as iron ore and coal make higher

                                      investments in RampD and encourage the creation of infrastructure such as roads

                                      railways and ports

                                      The NSP acknowledges the low per capita consumption of steel in the country

                                      especially in the rural areas and the need to boost steel consumption to improve

                                      quality of life and help in meeting the growing aspirations of masses

                                      In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                      industry would need additional capital In addition funds would be required for

                                      technological upgrade of existing facilities In order to mobilize such vast resources

                                      NSP seeks to encourage foreign direct investment In addition the policy also

                                      seeks to make the fiscal incentives available to infrastructure projects accessible

                                      to the steel industry

                                      The NSP seeks to support developing of risk-hedging instruments like futures and

                                      derivatives to contain price volatility in the steel market

                                      The NSP seeks to strengthen the existing training and research facilities available

                                      to the domestic steel industry so as to provide suitable training programmes

                                      especially for the secondary small-scale units and also to collect and analyse data

                                      on important parameters of the industry

                                      The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                      capability for special types of steel substitute coking coal use iron ore fines

                                      develop new products suited to rural needs enhance material and energy

                                      efficiency utilize waste and arrest environmental degradation

                                      The NSP acknowledges the important role played by the secondary steel sector in

                                      providing employment meeting local demand of steel in rural and semi-urban

                                      areas and meeting the countryrsquos demand of some special products and seeks to

                                      endeavour to provide the necessary feedstock to these units at reasonable prices

                                      from major plants through the existing mechanism of State Small Industries

                                      Corporations

                                      The NSP recognizes the fact that integration of the Indian steel industry with the

                                      global economy requires that the industry should be protected from unfair trade

                                      practices The NSP therefore envisages institution of mechanisms for import

                                      surveillance and monitoring export subsidies in other countries

                                      The present per capita consumption of steel in the country is very low compared to the

                                      world average As mentioned above one of the objectives of the NSP is to augment

                                      the demand and consumption of steel in the country by conscious promotion of steel

                                      usage With a view to create a mass awareness campaign on conscious promotion of

                                      steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                      the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                      The Committee is being serviced by Institute for Steel Development and Growth

                                      (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                      way of an awareness campaign with particular emphasis on rural sectors The

                                      Committee also aims at educating the designers architects builders and planners

                                      regarding the qualitative and cost effective applications of steel in various structures

                                      including buildings bridges flyovers and airports

                                      FUTURE OF INDIAN STEEL INDUSTRY

                                      India is amongst a few countries in the world having the dual advantage of fast

                                      growing domestic demand coupled with access to raw materials Further the trend

                                      that is already discernible is that the axis of global steel production consumption is

                                      shifting towards Asia With their large populations China and India already account for

                                      35 of the total world steel production - more than double of Europe Asia is

                                      expected to outpace other regions of the world to an even greater extent in the coming

                                      years

                                      Amongst the Asian nations China has established a huge unbridgeable lead It

                                      is accepted that China will continue to be the leader However India is slated to

                                      emerge as the second Asian giant in the next eight years Figuratively speaking while

                                      the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                      splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                      China swallowed almost 32 of global steel It is unlikely that future production and

                                      consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                      has been the case over the last few years On the other hand it is sun-rise time for

                                      India where the demand has increased by 7-8 in the last couple of years In the long

                                      run Indian steel is likely to be more cost-effective since unlike China India has

                                      relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                      can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                      However the position with coal is not so favourable Though thermal coal

                                      reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                      traditional blast furnace route would require coking coal India does not have adequate

                                      reserves of coking coal nor is the meagre amount available of appropriate quality

                                      Thus the steel industry always had to contend with the dual problems of inadequate

                                      availability and poor quality of Indian coking coal This has been partly addressed by

                                      adopting alternative iron making processes that are not dependent on coking coal it

                                      can not be denied that coal is the biggest cause for concern for bulk steel production

                                      in India

                                      Because of the shortage of indigenous coal attempts have been made by steel

                                      producers to ensure long-term supplies by tying up with global majors or by acquiring

                                      mines in other countries This is the only long-term solution but with a global shortage

                                      of coal it may not remain cost-effective in the long run

                                      India is the seventh largest producer of steel and may further improve its position

                                      going by the current trends A series of investment decisions by major domestic

                                      players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                      POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                      The keen interest shown by various prospective investors is not only due to

                                      expectations of strong growth in domestic demand but also due to indigenous

                                      availability of key resources like iron ore and skilled workforce

                                      After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                      steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                      finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                      2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                      consumption has accelerated to 91 per cent

                                      With the likely growth of Indian economy at around 7 per cent per annum

                                      demand for steel is expected to remain strong and is projected to reach a level of 90

                                      million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                      demand is sustainable considering the fact that Indias per capita consumption of steel

                                      is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                      very low level of per capita consumption of steel in India is highlighted further when

                                      compared with the consumption levels of its peer group consisting of countries like

                                      China Brazil Mexico and Republic of Korea as also with selected developed

                                      countries

                                      Though there are realistic constraints in India to achieving as rapid a growth as in

                                      China there seems to be consensus among analysts that India is likely to witness a

                                      growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                      percent If the growth rate (9 per cent) of last three years is maintained then we will

                                      achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                      more conservative due to cyclicity of steel business it may be mentioned that in a

                                      country like India cyclicity is more in terms of prices rather than volumes of production

                                      Exports

                                      Similar optimism prevails with regard to export of iron and steel Export of steel

                                      starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                      2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                      rising domestic demand and low capacity additions Exports now constitute around 17

                                      per cent of total production and Indias presence in the developing and developed

                                      world is being increasingly felt Indian steel producers have recently been able to

                                      supply specialized grades and products used for sophisticated applications like

                                      automobiles On the cost front some of our producers are counted amongst the least

                                      cost producers of the world For an average reference plant India is competitively

                                      placed in the middle of the hierarchy of steel producing nations

                                      However we have a long way to go to catch up with the leading exporters of the

                                      world such as Japan the CIS countries Brazil etc It is however expected that by

                                      2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                      per cent of total projected production The projected export ratio compares well with

                                      the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                      The projected production of steel by 2019-20 to meet the domestic and export

                                      demand will be around 110 million tonnes Management of resources and

                                      infrastructural growth is going to be critical in achievement of the production level

                                      envisaged The broad requirements of various resources will increase manifold from

                                      the current level The bottlenecks in availability of critical inputs and various facilities

                                      need to be removed through concerted efforts of Government and industry The broad

                                      strategy to overcome these constraints as well as meet the strategic goals of the steel

                                      sector has been discussed in the National Steel Policy which has been recently

                                      approved by the Government

                                      As stated earlier the long-term goal of the National Steel Policy is that India

                                      should have a modern and efficient steel industry of world standards catering to a

                                      diversified steel demand The focus of the policy is to achieve global competitiveness

                                      not only in terms of cost quality and product mix but also in terms of global

                                      benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                      pronged strategy to achieve these goals On the demand side the strategy would be

                                      to create incremental demand through promotional efforts creation of awareness and

                                      strengthening the delivery chain particularly in rural areas On the supply side the

                                      strategy would be to facilitate creation of additional capacity remove procedural and

                                      policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                      investments in RampD and HRD and encourage the creation of infrastructure such as

                                      roads railways and ports

                                      The production figures exports and imports of finished carbon steel and pig iron

                                      and apparent consumption patterns of finished carbon steel as indicated by TATA

                                      Steel and SAIL attest to the continuing growth for both the sectors

                                      FINDINGS

                                      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 increased its profit over the year particularly in 2006-07

                                      Both the companies are planning to adopt modern technology which is going to

                                      help them to compete in world market but they need to be less dependent on

                                      state of art technology and coal for long term prospects

                                      Public sector has undergone retrenchment for the employees and improved

                                      has its lobour productivity but it is still lacking behind as compared to private

                                      sector

                                      SAIL has reduced the no of accidents due to improper handling of machinery

                                      still no of accidents are more than that of TATA Steel

                                      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

                                      ie 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 have to be met

                                      comprehensively if we are to take our legitimate place in the world as a developed

                                      nation by 2020

                                      BIBLIOGRAPHY

                                      Annual report (2006-07) published by ministry of steel

                                      Annual report (2006-07) published by TATA Steel

                                      Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                      REPORTrsquo posted by SAIL on its website

                                      lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                      held on 07 Nov 2006

                                      Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                      wwwsteelnicin (Official website of ministry of industry)

                                      wwwtatasteelcom (Official website of TATA Steel)

                                      wwwsailcoin (Official website of Steel Authority of India)

                                      wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                      wwwjpcindiansteelnicin (Website of joint planning committee)

                                      • DATA ANALYSIS
                                      • Comparison between TATA Steel and Steel Authority of India
                                      • Production
                                      • Quantity 000 Tonnes
                                      • Financials
                                      • Research and Development
                                      • (Rs Crore)
                                      • TATA Steel
                                      • Steel Authority of India
                                      • Environment
                                      • TATA Steel
                                      • Emissions effluents and wastes
                                      • Emissions
                                      • Waste handling
                                      • Effluent Management
                                      • Steel Authority of India
                                      • Solid Waste Management
                                      • Environmental Plantation
                                      • Environmental Recognitions
                                      • Workforce and Welfare of Society
                                      • TATA steel
                                      • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                      • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                      • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                      • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                      • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                      • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                      • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                      • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                      • Steel Authority of India
                                      • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                      • Technology
                                      • Steel Authority of India
                                      • Safety measures
                                      • Tata Steel
                                      • Steel Authority of India
                                      • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                      • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                      • Measures taken by Indian government to improve the industry
                                      • Now letrsquos 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-
                                      • Special assistance being provided by Ministry of Steel to Private Sector
                                      • FUTURE OF INDIAN STEEL INDUSTRY

                                        Total Turnover ie Service charges realised including miscellaneous Incomeetc

                                        981822 1067937 765557

                                        Gross Margin before Interest amp Depreciation 167879 186514 105284

                                        Interest amp Depreciation 83014 100970 84728

                                        Profit before Tax 84865 85544 20556

                                        MANGANESE ORE (INDIA) LTD (MOIL)

                                        Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer

                                        of manganese ore in India At the time of inception 49 of its shares were held by the

                                        Central Province Manganese Ore Co Ltd (CPMO) and the remaining 51 in equal

                                        proportion by Government of India and the State Governments of Madhya Pradesh 17

                                        and Maharashtra Subsequently in 1977 the Government of India acquired the

                                        shares held by CPMO in MOIL and MOIL became a wholly owned Government

                                        company with effect from October 1977 As on 30112006 Government of India held

                                        8157 shares in MOIL with State Governments of Maharashtra and Madhya Pradesh

                                        holding 961 and 882 shares respectively

                                        MOIL Produces and Sells following Grades of Manganese Ore

                                        1048708 High grade ores for production of ferro manganese

                                        1048708 Medium grade ores for production of silico manganese

                                        1048708 Blast furnace grade ore required for production of hot metal

                                        1048708 Dioxide ore for dry battery cells and chemical industries

                                        Production and 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

                                        Items 2004-05 2005-06 2006-07 (up to Dec2006)

                                        1 Production

                                        a) Manganese Ore (thousand tonne) 94300 86500 82533

                                        b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                                        c) Ferro Manganese (tonne) 1032500 617000 829400

                                        2 Turnover (Rupees in crore) 37878 33409 29463

                                        3 Profit before Tax (Rupees in crore) 20227 16900 12087

                                        KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                                        Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                                        90012000 and ISO 14001 company was established in April 1976 to meet the long

                                        term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                                        was set up at Kudremukh This project was to be financed in full by Iran However as

                                        Iran stopped further loan disbursements after paying US $ 255 million the project was

                                        completed as per schedule with the funds provided by Government of India While the

                                        project was commissioned on schedule consequent upon the political developments

                                        in Iran they did not lift any quantity of concentrate As a diversification measure the

                                        Government approved the construction of a 3 million tonne per year capacity pellet

                                        plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                                        million tonne with additionsmodifications The plant went into commercial production

                                        in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                                        units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                                        Plant Mangalore

                                        Production

                                        A target of 31 million tonne and 305 million tonne was set for production of iron ore

                                        concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                                        production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                                        The target set for production during the year 2006-07 is 305 million tonne of pellets

                                        In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                                        activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                                        production of iron ore concentrate during the year 2006-07 As against a target of 188

                                        million tonne of pellets fixed for the period April to November 2006 the actual

                                        production was 0275 million tonne which represents 15 target fulfilment There is

                                        shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                                        production of pellets is on account of operational problems being encountered in the

                                        pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                                        There was excessive generation of su er fines (slimes) affecting filtration clogging of

                                        filters overflow and contamination of process water due to filling of cooling pond

                                        affecting production While efforts are continuing to rectify the problems the operation

                                        of pellet plant is yet to stabilize and normal production is yet to commence

                                        The sales revenue during the last five years and up to November 2006 during 2006-

                                        07 is detailed below

                                        (Rs in lakh)

                                        Years Concentrate Pellets Total

                                        2006-07 (up to December 2006) - 12427 12427

                                        2005-06 12091 111137 123228

                                        2004-05 16050 169327 185377

                                        2003-04 20209 82729 102938

                                        2002-03 21135 51579 72714

                                        2001-02 21571 50598 72169

                                        Financial Performance

                                        An overview of the performance of KIOCL during the year 2006-07 (up to November

                                        2006) together with actuals for the previous three years is indicated below

                                        (Rs in lakh)

                                        Particulars 2006-07(up to December 2006)

                                        2005-06 2004-05 2003-04

                                        Total value of Sales 12427 123228 185377 102938

                                        Gross Margin 2620 68706 120863 45945

                                        Profit after Tax 1029 35630 64984 30070

                                        Inventories(excluding finished stock)

                                        20417 15843 8720 7616

                                        BIRD GROUP OF COMPANIES

                                        Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                        the following seven companies came under the administrative control of the Ministry of

                                        Steel Government of India

                                        (a) The Orissa Minerals Development Company Limited (OMDC)

                                        (b) The Bisra Stone Lime Company Limited (BSLC)

                                        (c) The Karanpura Development Company Limited (KDCL)

                                        (d) Scott amp Saxby Limited (SSL)

                                        (e) Eastern Investments Limited (EIL)

                                        (f) Burrakar Coal Company Limited (Burrakar)

                                        (g) Borrea Coal Company Limited (Borrea)

                                        The status of the companies is as under

                                        a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                        of coal mines The two companies are in the process of liquidation The official

                                        liquidator has already taken over the assets and liabilities of these two companies

                                        b) EIL being an investment company is having a major stake in the equity shares of

                                        operating companies under the Bird Group

                                        c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                        Status of the Companies at the Time of Nationalisation

                                        At the time when the Bird Group of Companies came under the administrative control

                                        of the Ministry of Steel Government of India all of them were financially sick and

                                        burdened with various problems With the financial support from the Government of

                                        India problems relating mainly to excessive manpower erosion of working capital and

                                        outstanding liabilities could be settled to a considerable extent

                                        REVIEW OF LITERATURE

                                        RS PANDEY sees a bright future for the steel industry in India provided of course

                                        the iron ore mining policy to be announced by the government soon acts as a catalyst

                                        for growth He discusses the industrys problems and prospects in an interview When

                                        asked about the steel sectors ie private and public he expressed his expert views

                                        The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                        Excerpts

                                        The public sector steel companies in India are doing extremely well And therefore

                                        they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                        Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                        Between 1992-93 and now the share of the public sector in steel production had gone

                                        down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                        1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                        the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                        to 71 per cent But the public sector units are growing even if the private sector is

                                        growing faster

                                        During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                        going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                        million tonnes in just four years RINL is set to expand its capacity from three million

                                        tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                        capacity for the PSUs

                                        The public sector should be encouraged all the more Let there be a healthy

                                        competition between public and private sector producers The question of exit comes

                                        when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                        was at below Rs10 per share Today it is more than Rs130 and the expectations

                                        are that it will go up even higher

                                        When talked about the labour productivity he says Yes labour productivity is low in

                                        SAIL in particular But it is improving The steel major is going to adjust much of its

                                        existing manpower in the expansion phase when its capacity is going to almost

                                        double The management had also undertaken a massive VRS [voluntary retirement

                                        scheme] In RINL labour productivity is not all that bad

                                        Besides SAIL has done very well in various other techno-economic parameters in the

                                        last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                        per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                        improvement of 20 per cent In blast furnace productivity also there has been an

                                        improvement as also in the production of high-end special steels and capacity

                                        utilisation

                                        With the improved turnover which comes from higher capacity use and higher

                                        manpower productivity SAILs profits have surged Its gross profit more than doubled

                                        between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                        was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                        is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                        other input costs and 71 per cent owing to improvement in capacity use and other

                                        factors that are just mentioned

                                        OBJECTIVES

                                        To compare Private and Public steel sector with refrence to TATA Steel and

                                        Steel Authority Of India

                                        To analyse potential of both the companies ie TATA Steel and SAIL

                                        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

                                        Research Methodology

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

                                        a) Research design-

                                        In case of my research ldquoComparative analysis of Indian private and Public

                                        sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                        found to be more appropriate

                                        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

                                        Comparison between TATA Steel and Steel Authority of India

                                        The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                        significant improvements in the last two years The combined profit before tax of all 15

                                        PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                        Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                        The profit before tax for all PSUs also exhibited a significant improvement of

                                        around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                        Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                        comparable period of last year

                                        Contribution of PSUs to public exchequer has also gone up significantly For

                                        example the contribution of five leading companies namely SAIL RINL NMDC

                                        KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                        duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                        from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                        On the other hand 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

                                        During the period (April-December 2006) 205 million tonne of steel was produced by

                                        Private Sector steel units out of the total production of 3315 million tonne in the

                                        country The private sector units consist of major steel producers in one hand and

                                        relatively smaller amp 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

                                        For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                        companies on following parameters

                                        Production

                                        Chart showing production of both the companies

                                        Quantity 000 Tonnes

                                        2007-08 APR-DEC07APR-

                                        DEC06 ACTUA

                                        L

                                        AGE OF CURRENT

                                        PRODUCTION OVER

                                        CAPACITY UTILISATION

                                        TARGET TENTATIV

                                        E

                                        TARGET

                                        ACTUAL

                                        APR-DEC07 TARGE

                                        T

                                        APR-DEC06 ACTUA

                                        L

                                        APR-DEC 07

                                        APR-DEC06

                                        SAIL

                                        i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                        ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                        iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                        iv)BSL43500 32630 30970 30010 949 1032 950 910

                                        v)ISP5000 3760 3520 3450 936 1020 940 920

                                        vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                        vii)VISL

                                        1390 1050 1160 1190 1105 975 1300 1340

                                        TATA 50000 37440 37090 37380 991 992 990 1000

                                        TATA Steel

                                        The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                        but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                        target of 3744 (mT) but could produce 3709 However for the same period in last

                                        year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                        to 99 this year

                                        Steel Authority of India

                                        The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                        but it could produce only 126 (mT) a growth of 4 over the previous year However

                                        for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                        10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                        capacity utilisation of 103 this year as compared to 101 last year

                                        Financials

                                        TATA Steel

                                        The year 2006-07 has seen the highest turnover and profits continuing the trend

                                        of the past four years The Company achieved the best ever sales turnover and

                                        profitability during the year under review A robust Indian economy firm steel prices

                                        higher volumes and several improvement initiatives contributed to the record

                                        performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                        the previous year Export turnover was lower by about 5 due to lower volumes

                                        Average price realisation improved mainly due to higher prices of hot rolled

                                        coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                        (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                        Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                        due to additional borrowings for the Companyrsquos domestic expansion programs and

                                        funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                        providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                        crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                        before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                        after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                        20 compared to the previous year

                                        The record financial results would not have been possible without a matching

                                        performance by the operating departments including the raw materials division The

                                        year witnessed the best ever crude steel production by the Company at 505 million

                                        tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                        first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                        upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                        rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                        Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                        increase in production was backed by improvements in operating practices and

                                        productivity resulting in a reduction in consumption of raw materials energy

                                        refractories etc

                                        Steel Authority of India

                                        Financial Year 2006-07 has been eventful year for the company with further

                                        momentum in improving operational efficiencies laying strong foundation and building

                                        road map for modernisation and expansion of SAIL Plants with several new initiatives

                                        undertaken with its human resource at the core During the year the company got the

                                        distinction of first metal company in the country to reach a market capitalization of Rs

                                        50000 crore

                                        There have been improvements in all financial parameters which are shown in

                                        the table given below-

                                        SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                        before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                        previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                        increase of 55

                                        Research and Development

                                        Chart showing production of both the companies

                                        (Rs Crore)

                                        TATA Steel

                                        The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                        develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                        steel for body panels

                                        Research is undertaken at Tata Steel in the areas of raw materials including coal

                                        coke energy conservation waste utilisation sintering blast furnace productivity and

                                        phosphorous reduction product development and improvement in life of plant and

                                        machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                        sealed and over 100 are in process

                                        Steel Authority of India

                                        Research and Development Centre for Iron and Steel (RDCIS) has provided

                                        innovative technological inputs to different units of SAIL with special emphasis on

                                        cost reduction product development and application quality improvement energy

                                        conservation and automation Several new products were developed and

                                        commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                        Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                        specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                        micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                        Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                        Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                        strengthened its technology marketing efforts by providing consultancy services

                                        organising specialised testing and transfer of technological innovations to outside

                                        customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                        Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                        Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                        During the year 1998 technical papers were publishedpresented besides filing

                                        of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                        awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                        achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                        Government of India

                                        Environment

                                        TATA Steel

                                        Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                        Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                        has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                        Jamshedpur is the only town in the country which

                                        Significant achievements by the Company include an improvement in

                                        environment and resource conservation including a reduction in green house erosion

                                        raw materials and water consumption The Company has increased waste re-use and

                                        re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                        the-art pollution control systems being installed to prevent and control pollution The

                                        Company has almost doubled its capital investment in Pollution Abatement in the last

                                        five years

                                        Emissions effluents and wastes

                                        Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                        most relevance to the steel industry Considerable reduction has been effected by

                                        Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                        granulation is taken into account Other Greenhouse Gas emissions do not result from

                                        Tata Steelrsquos activities

                                        Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                        tonnes in 2003-04 as against 790 tonnes used during the previous year

                                        Hazardous Waste under Basel Convention The Company does not import or export

                                        any waste deemed hazardous under the Basel Convention All hazardous wastes

                                        generated are handled as per the requirement of the Hazardous Waste Management

                                        and Handling Rules 19892000

                                        Emissions

                                        Tata Steel has undertaken several initiatives which have resulted in

                                        considerable reduction in stack emission Emissions are well below the Indian and

                                        international standards The emission load including particulate matter Sulphur

                                        Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                        undertaken at the Steel Works

                                        Waste handling

                                        Most of the solid waste generated from Steel Works is recycled or reused 18

                                        of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                        was used to fill low-lying areas and for peripheral road construction around

                                        Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                        power plants was dumped in a designated dump area

                                        Effluent Management

                                        Waste water from the steel making process is being treated with best available

                                        physio-chemical methods as well as being recycled Waste water from the coke plant

                                        is treated biologically where organic pollutants are oxidised and decomposed by micro

                                        organisms The Company has reduced the levels of total pollutant discharge in waste

                                        water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                        Steel Authority of India

                                        Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                        environmentally responsible manner to comply with applicable regulations and striving

                                        to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                        efficiency and optimize resource consumption through various measures viz

                                        improvement in process technology in the areas of raw materials coke iron and steel

                                        making reuserecycle of the by-products generated and conservation of energy and

                                        water

                                        Solid Waste Management

                                        During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                        and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                        Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                        these wastes are being made through internal recycling and selling to outside

                                        agencies The wastes generated in the steel plants are being utilized mainly through

                                        their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                        during April-September 2006

                                        Environmental Plantation

                                        Trees have a significant role in protection of environment and ecological balance

                                        Extensive afforestation programme are being followed in all the plants and mines The

                                        basis of choosing the species of plants mainly depends on local soil characteristics

                                        and prevailing meteorological conditions The green belt developed by afforestation

                                        adds to the aesthetic environment which becomes dust and noise barriers

                                        A total number of 145521 saplings have been planted covering an area of 637

                                        hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                        hectare in 2004-05 in and around the steel plants of SAIL

                                        Environmental Recognitions

                                        SAIL plants have been awarded various prizes for environmental management in

                                        their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                        the Confederation of Indian Industries (CII) for exemplary performance in the

                                        environmental economic andsocial dimensions of sustainable development and the

                                        Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                        Excellence Award in the metal sector 2005 instuted by the World Environment

                                        Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                        for 2005 from International Greenland Society

                                        Workforce and Welfare of Society

                                        TATA steel

                                        Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                        and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                        enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                        provide a work environment that will ensure a sense of purpose and personal growth

                                        for each individual The wish of the company is to see the smile on every face

                                        everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                        people and enriched empowered and enhanced their lives

                                        Even in its nascent years social scientists Sidney and Beatrice Webb were

                                        brought in to work on welfare schemes In fact some of the initiatives introduced by

                                        Tata Steel were the first of their kind in India and some even in the western countries

                                        at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                        source of its competitiveness It focuses on constantly updating and challenging

                                        intellectual capabilities to enable them to excel in performance Special efforts are

                                        made for enhancing strategic thinking skills and analytical abilities of its managers and

                                        workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                        available with its people through Knowledge Management and sharing of best

                                        practices

                                        In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                        mutual co-operation coordination and understanding between the Management and

                                        the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                        among many other prestigious awards and recognition Tata Steel aims at ensuring

                                        transparency fairness and equity in all its interactions with its employees to create an

                                        enthused and happy workforce

                                        In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                        assistance in the fields of education vocational training self-employment and

                                        family welfare

                                        Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                        12 times This facility provides on-the-spot diagnostic medical and advanced

                                        surgical treatment for preventive and curative interventions to people in

                                        inaccessible rural areas

                                        Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                        for the 1920 Antwerp Olympics

                                        The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                        track was inaugurated in 1991 The complex also houses facilities for handball

                                        tennis volleyball hockey basketball boxing table tennis and a modern

                                        gymnasium

                                        The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                        services for the betterment of the people in and around Jamshedpur

                                        At times of natural calamities the company has rushe immediate relief and off

                                        ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                        fl ood ravaged Orissa and other such aff ected areas

                                        Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                        er a unique environment for the children of Jamshedpur to grow up in

                                        In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                        Jamshedpur has emerged as the one of the best cities in India

                                        Steel Authority of India

                                        The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                        executives and 123005 non-executives The total reduction in manpower achieved

                                        during the year stood at 4864 which included separation of 881 employees through

                                        voluntary retirement The labour productivity improved by around 12 over previous

                                        year to 150 tonne crude steelmanyear

                                        Some of the areas of assistance which are available to the weaker sections are the

                                        following

                                        The company has provided land for construction of school buildings in some of

                                        the steel townships as well as in other places for spreading education among

                                        the masses

                                        The company has constructed roads in remote areas around the steel plants

                                        and also where the captive mines are located to improve communication and

                                        also increase activities such as organisation of health camps school facilities

                                        drinking water etc under the peripheral development schemes

                                        Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                        Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                        providing them with education boarding and lodging facilities

                                        Construction of bridges by-pass roads metal-morum path waterways

                                        levellingdressing area around township pre-mixed roads Installation of hand-

                                        pumps tube wells and wells for villagers

                                        Construction of school buildings (including for mentally retarded deaf and

                                        dumb children) madarsas providing school furniture therein and construction

                                        of hostels womenrsquos college building etc

                                        Fourteen scholarships are awarded to deserving SCST undergraduate

                                        engineering students in various disciplines to encourage technical education

                                        among them

                                        In many cases tuition fee in company run schools is exempt for SCST

                                        students Steps are taken to provide education to more and more tribal children

                                        in company schools

                                        The unemployed SCST youth are given specialized training in various

                                        technical trades to develop skill and knowledge Such training is provided free

                                        of cost

                                        Adult literacy campaign is carried out in most of the steel townships Every year

                                        more and more men and women are being covered in this campaign

                                        Development of fishery and cottage industry providing sewing machines to

                                        village mahila mandals and promoting other self-employment generation

                                        schemes

                                        SAIL has established a hockey academy with stadium and hostel facilities at

                                        Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                        academy was successful in spotting a number of young talented tribal players

                                        and grooms them under expertise of ex-Olympian

                                        Technology

                                        The biggest boost to efficiency in the steel industry has come from the increased

                                        use of continuous casting ndash an indicator of the modernity of the production process Its

                                        share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                        now India is thus well on its way to joining the ranks of the leading steelmakers

                                        among the industrial nations (share in EU-25 96) However in India some 6 of

                                        crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                        suggests there is restructuring potential

                                        TATA Steel

                                        Tata Steels stall at the International Trade Fair was adjudged the best along

                                        with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                        international companies also took part in the exhibition Participating companies from

                                        countries all over the world exhibited latest technologies and know-how List of

                                        participating companies included Baosteel SAIL Heavy Engineering Corporation

                                        Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                        companies of national and international repute China was the partner country for the

                                        International Trade Fair this year

                                        In the award winning exhibition Tata Steel showcased its best coal mining practices

                                        cutting-edge technology used in iron ore mining pioneering human resource

                                        practices 78 years of industrial harmony and various other aspects of the worlds best

                                        steel company

                                        The 6th International Trade Fair and Conference an institutionalised global

                                        event is considered to be one of the most prestigious forums for national as well

                                        international participants It is a conclave of the finest minds concerned with the future

                                        direction and growth of these sectors The forum provided the worlds most eminent

                                        metallurgists manufacturers of metallurgical and mining machinery and related

                                        sectors professionals analysts and experts with the opportunity to exchange views on

                                        emerging technologies synergy and strengths and open up wider horizons for

                                        sectorial development

                                        Tata Steel to adopt Corus technology

                                        Tata Steel plans to implement alternate technology used by the British steel

                                        maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                        production according to Mr B Muthuraman Managing Director Tata Steel

                                        ldquoWe are looking at alternate technology Corus has developed an alternate

                                        technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                        newspersons on the sidelines of the 34th National Management Convention organised

                                        by the All-India Management Association However he declined to give further details

                                        on the type of technology the Indian steel giant plans to implement

                                        Steel Authority of India

                                        Modernisation holds the key to SAILs fortunes in the near future The objective

                                        of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                        and productive capacity and in the process become more energy-efficient and

                                        improve quality The key component of the ongoing modernisation drive - already

                                        completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                        ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                        continuous casting techniques A senior SAIL official says Continuous casting and

                                        basic oxygen furnaces ensure better quality steel through processes more easily

                                        monitored for quality control The basic oxygen surfaces method is significantly faster

                                        more automated and permits greater flexibility Continuous casting is more efficient

                                        than the traditional ingot casting methods and gives increased yields while enabling

                                        better quality standards SAIL is also modernising its finishing mills and is adding

                                        secondary refining facilities to improve quality

                                        Safety measures

                                        A unique feature of safety management in steel industry is that a bipartite forum

                                        named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                        was formed in 1973 at national level having representatives from steel plants in SAIL

                                        RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                        Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                        workshops training programme safety competitions for member organisations JCSSI

                                        with the co-operation and support of Trade Union representatives formulates policies

                                        and guidelines for its member plants and monitors the implementation

                                        Tata Steel

                                        Safety has always been a prime focus at Tata Steel A Safety Committee a

                                        Safety department and a Safety Trophy helped spread the message all across the

                                        company

                                        TATA reaffirms its commitment to provide safe working place and clean

                                        environment to its employees and other stakeholders as an integral part of its

                                        business philosophy and values We will continually enhance our Environmental

                                        Occupational Health amp Safety (EHS) performance in our activities products and

                                        services through a structured EHS management framework Towards this

                                        commitment we shall

                                        Establish and achieve EHS objectives and targets

                                        Ensure compliance with applicable EHS legislation and other requirement and

                                        go beyond

                                        Conserve natural resources and energy by constantly seeking to reduce

                                        consumption and promoting waste avoidance and recycling measures

                                        Eliminate minimize andor control adverse environmental impacts and

                                        occupational health and safety risks by adopting appropriate state-of-the-art

                                        technology and best EHS management practices at all levels sand functions

                                        Enhance awareness skill and competence of our employees and contractors

                                        so as to enable them to demonstrate their involvement responsibility and

                                        accountability for sound EHS performance

                                        Steel Authority of India

                                        SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                        monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                        Annual Performance Plans (APP) for the areas of safety and fire services are

                                        formulated and review of implementation of APP is done during Heads of

                                        Safety meeting

                                        Internal and external safety audits of major departments particularly hazardous

                                        areas are conducted every year and points arising from these audits are

                                        liquidated Safety aspects have been incorporated in standard operating

                                        practices (SOP) and standard maintenance practices (SMP)

                                        All major capital repairsshut downs are closely monitored round the clock

                                        Periodic drives are conducted to inculcate safety awarenessculture up to

                                        grass-root level apart from regular inspections as per checklists to identify

                                        unsafe conditionsacts

                                        Safety training is imparted to target group employees at various levels HRD

                                        intervention in the area of safety covers Heads of Departments Line Managers

                                        amp Departmental Safety Officers Besides area specific workshops are

                                        conducted at different locations on important topics like gas safety railroad

                                        safety safety in iron steel amp coke making etc

                                        Consistent efforts were made by SAIL Safety Organisation for improving safety

                                        standards in the company by taking measures like intensive safety drives in works

                                        area and conducting safety audits in hazardous departments of different plants and

                                        mines In addition specific workshops on safety aspects were organised in various

                                        SAIL steel plants

                                        Measures taken by Indian government to improve the industry

                                        Now letrsquos 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-

                                        1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                        among others was removed from the list of industries reserved for the public

                                        sector and also exempted from the provisions of compulsory licensing under the

                                        Industries (Development and Regulation) Act 1951

                                        2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                        of `high priority industries for automatic approval for foreign equity investment up

                                        to 51 This limit has been recently increased to 100

                                        3 Price and distribution of steel were deregulated from January 1992 At the same

                                        time it was ensured that priority continued to be accorded for meeting the

                                        requirements of small scale industries exporters of engineering goods and North

                                        Eastern Region of the country besides strategic sectors such as Defence and

                                        Railways

                                        4 The trade policy has been liberalised and import and export of iron and steel is

                                        freely allowed There are no quantitative restrictions on import of iron and steel

                                        items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                        regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                        steel have drastically come down since 1991-92 levels and the government is

                                        committed to bring them down to the international levels In Chapter 72 there are

                                        two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                        5 Iron amp Steel are freely importable as per the Extant Policy

                                        6 Iron amp Steel are freely exportable

                                        7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                        8 The floor price for seconds and defectives continues till date

                                        9 Imports of seconds and defectives of steel are allowed only through three

                                        designated ports of Mumbai Calcutta and Chennai

                                        10Mandatory pre inspection certificate by a reputed international agency for every

                                        import consignment of seconds and defectives

                                        11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                        10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                        the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                        per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                        15 per cent to 5 per cent

                                        12Further customs duty on several raw materials used by the steel sector like

                                        noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                        coking coal to zero

                                        13To bring down the prices of steel the excise duty on steel products was reduced

                                        from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                        that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                        increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                        cut on moderating prices was not achieved

                                        14The union Budget 2007-08 the import duty on seconds and defective has been

                                        further reduced from 20 to 10

                                        Special assistance being provided by Ministry of Steel to Private Sector

                                        1 Ministry of Steel is extending all possible support as detailed below for the

                                        development of Iron and Steel Sector in the country

                                        2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                        new plants and expansion of existing ones wherever applied for

                                        3 To ensure an un-interrupted supply of raw materials to the producers

                                        4 The Ministry has been interacting with All India Financial institutions to expedite

                                        clearance of projects

                                        5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                        Plants are held at the level of Secretary

                                        6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                        industry so that their absence does not lead to bottlenecks in the future growth of

                                        the Iron and Steel Sector and takes up these issues with the concerned ministries

                                        7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                        Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                        country are members of this Institute which has been set up with the objective of

                                        promoting developing and propagating the proper and effective use of steel

                                        8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                        major steel plants being implemented Govt has setup a Project Coordination

                                        Group under the Chairmanship of Steel Minister

                                        NATIONAL STEEL POLICY 2005

                                        The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                        development and as such great importance is attached to capacity expansion in line

                                        with expected demand at cost and prices which make Indian steel internationally

                                        competitive The existing regime of liberalization decontrol and deregulation of

                                        industry in the country has opened up new opportunities for the expansion of the steel

                                        industry With a view to accelerating the growth of the steel sector and attaining the

                                        vision of India becoming a developed economy by 2020 the Ministry of Steel

                                        formulated a National Steel Policy (NSP) in 2005

                                        The following salient features can be derived after analysing the NSP 2005

                                        The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                        towards reform restructuring and globalisation

                                        The long-term goal of the NSP is that India should have a modern and efficient

                                        steel industry of world standards catering to diversified steel demand The focus of

                                        the policy is to achieve global competitiveness not only in terms of cost quality and

                                        product-mix but also in terms of global benchmarks of efficiency and productivity

                                        In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                        NSP seeks to remove the supply-side constraints to the growth of this industry in

                                        an open globally integrated and competitive environment

                                        The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                        policy goal On the demand side the strategy would be to create incremental

                                        demand through promotional efforts creation of awareness and strengthening the

                                        delivery chain particularly in rural areas On the supply side the strategy would be

                                        to facilitate creation of additional capacity remove procedural and policy

                                        bottlenecks in the availability of inputs such as iron ore and coal make higher

                                        investments in RampD and encourage the creation of infrastructure such as roads

                                        railways and ports

                                        The NSP acknowledges the low per capita consumption of steel in the country

                                        especially in the rural areas and the need to boost steel consumption to improve

                                        quality of life and help in meeting the growing aspirations of masses

                                        In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                        industry would need additional capital In addition funds would be required for

                                        technological upgrade of existing facilities In order to mobilize such vast resources

                                        NSP seeks to encourage foreign direct investment In addition the policy also

                                        seeks to make the fiscal incentives available to infrastructure projects accessible

                                        to the steel industry

                                        The NSP seeks to support developing of risk-hedging instruments like futures and

                                        derivatives to contain price volatility in the steel market

                                        The NSP seeks to strengthen the existing training and research facilities available

                                        to the domestic steel industry so as to provide suitable training programmes

                                        especially for the secondary small-scale units and also to collect and analyse data

                                        on important parameters of the industry

                                        The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                        capability for special types of steel substitute coking coal use iron ore fines

                                        develop new products suited to rural needs enhance material and energy

                                        efficiency utilize waste and arrest environmental degradation

                                        The NSP acknowledges the important role played by the secondary steel sector in

                                        providing employment meeting local demand of steel in rural and semi-urban

                                        areas and meeting the countryrsquos demand of some special products and seeks to

                                        endeavour to provide the necessary feedstock to these units at reasonable prices

                                        from major plants through the existing mechanism of State Small Industries

                                        Corporations

                                        The NSP recognizes the fact that integration of the Indian steel industry with the

                                        global economy requires that the industry should be protected from unfair trade

                                        practices The NSP therefore envisages institution of mechanisms for import

                                        surveillance and monitoring export subsidies in other countries

                                        The present per capita consumption of steel in the country is very low compared to the

                                        world average As mentioned above one of the objectives of the NSP is to augment

                                        the demand and consumption of steel in the country by conscious promotion of steel

                                        usage With a view to create a mass awareness campaign on conscious promotion of

                                        steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                        the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                        The Committee is being serviced by Institute for Steel Development and Growth

                                        (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                        way of an awareness campaign with particular emphasis on rural sectors The

                                        Committee also aims at educating the designers architects builders and planners

                                        regarding the qualitative and cost effective applications of steel in various structures

                                        including buildings bridges flyovers and airports

                                        FUTURE OF INDIAN STEEL INDUSTRY

                                        India is amongst a few countries in the world having the dual advantage of fast

                                        growing domestic demand coupled with access to raw materials Further the trend

                                        that is already discernible is that the axis of global steel production consumption is

                                        shifting towards Asia With their large populations China and India already account for

                                        35 of the total world steel production - more than double of Europe Asia is

                                        expected to outpace other regions of the world to an even greater extent in the coming

                                        years

                                        Amongst the Asian nations China has established a huge unbridgeable lead It

                                        is accepted that China will continue to be the leader However India is slated to

                                        emerge as the second Asian giant in the next eight years Figuratively speaking while

                                        the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                        splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                        China swallowed almost 32 of global steel It is unlikely that future production and

                                        consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                        has been the case over the last few years On the other hand it is sun-rise time for

                                        India where the demand has increased by 7-8 in the last couple of years In the long

                                        run Indian steel is likely to be more cost-effective since unlike China India has

                                        relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                        can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                        However the position with coal is not so favourable Though thermal coal

                                        reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                        traditional blast furnace route would require coking coal India does not have adequate

                                        reserves of coking coal nor is the meagre amount available of appropriate quality

                                        Thus the steel industry always had to contend with the dual problems of inadequate

                                        availability and poor quality of Indian coking coal This has been partly addressed by

                                        adopting alternative iron making processes that are not dependent on coking coal it

                                        can not be denied that coal is the biggest cause for concern for bulk steel production

                                        in India

                                        Because of the shortage of indigenous coal attempts have been made by steel

                                        producers to ensure long-term supplies by tying up with global majors or by acquiring

                                        mines in other countries This is the only long-term solution but with a global shortage

                                        of coal it may not remain cost-effective in the long run

                                        India is the seventh largest producer of steel and may further improve its position

                                        going by the current trends A series of investment decisions by major domestic

                                        players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                        POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                        The keen interest shown by various prospective investors is not only due to

                                        expectations of strong growth in domestic demand but also due to indigenous

                                        availability of key resources like iron ore and skilled workforce

                                        After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                        steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                        finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                        2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                        consumption has accelerated to 91 per cent

                                        With the likely growth of Indian economy at around 7 per cent per annum

                                        demand for steel is expected to remain strong and is projected to reach a level of 90

                                        million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                        demand is sustainable considering the fact that Indias per capita consumption of steel

                                        is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                        very low level of per capita consumption of steel in India is highlighted further when

                                        compared with the consumption levels of its peer group consisting of countries like

                                        China Brazil Mexico and Republic of Korea as also with selected developed

                                        countries

                                        Though there are realistic constraints in India to achieving as rapid a growth as in

                                        China there seems to be consensus among analysts that India is likely to witness a

                                        growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                        percent If the growth rate (9 per cent) of last three years is maintained then we will

                                        achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                        more conservative due to cyclicity of steel business it may be mentioned that in a

                                        country like India cyclicity is more in terms of prices rather than volumes of production

                                        Exports

                                        Similar optimism prevails with regard to export of iron and steel Export of steel

                                        starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                        2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                        rising domestic demand and low capacity additions Exports now constitute around 17

                                        per cent of total production and Indias presence in the developing and developed

                                        world is being increasingly felt Indian steel producers have recently been able to

                                        supply specialized grades and products used for sophisticated applications like

                                        automobiles On the cost front some of our producers are counted amongst the least

                                        cost producers of the world For an average reference plant India is competitively

                                        placed in the middle of the hierarchy of steel producing nations

                                        However we have a long way to go to catch up with the leading exporters of the

                                        world such as Japan the CIS countries Brazil etc It is however expected that by

                                        2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                        per cent of total projected production The projected export ratio compares well with

                                        the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                        The projected production of steel by 2019-20 to meet the domestic and export

                                        demand will be around 110 million tonnes Management of resources and

                                        infrastructural growth is going to be critical in achievement of the production level

                                        envisaged The broad requirements of various resources will increase manifold from

                                        the current level The bottlenecks in availability of critical inputs and various facilities

                                        need to be removed through concerted efforts of Government and industry The broad

                                        strategy to overcome these constraints as well as meet the strategic goals of the steel

                                        sector has been discussed in the National Steel Policy which has been recently

                                        approved by the Government

                                        As stated earlier the long-term goal of the National Steel Policy is that India

                                        should have a modern and efficient steel industry of world standards catering to a

                                        diversified steel demand The focus of the policy is to achieve global competitiveness

                                        not only in terms of cost quality and product mix but also in terms of global

                                        benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                        pronged strategy to achieve these goals On the demand side the strategy would be

                                        to create incremental demand through promotional efforts creation of awareness and

                                        strengthening the delivery chain particularly in rural areas On the supply side the

                                        strategy would be to facilitate creation of additional capacity remove procedural and

                                        policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                        investments in RampD and HRD and encourage the creation of infrastructure such as

                                        roads railways and ports

                                        The production figures exports and imports of finished carbon steel and pig iron

                                        and apparent consumption patterns of finished carbon steel as indicated by TATA

                                        Steel and SAIL attest to the continuing growth for both the sectors

                                        FINDINGS

                                        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 increased its profit over the year particularly in 2006-07

                                        Both the companies are planning to adopt modern technology which is going to

                                        help them to compete in world market but they need to be less dependent on

                                        state of art technology and coal for long term prospects

                                        Public sector has undergone retrenchment for the employees and improved

                                        has its lobour productivity but it is still lacking behind as compared to private

                                        sector

                                        SAIL has reduced the no of accidents due to improper handling of machinery

                                        still no of accidents are more than that of TATA Steel

                                        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

                                        ie 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 have to be met

                                        comprehensively if we are to take our legitimate place in the world as a developed

                                        nation by 2020

                                        BIBLIOGRAPHY

                                        Annual report (2006-07) published by ministry of steel

                                        Annual report (2006-07) published by TATA Steel

                                        Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                        REPORTrsquo posted by SAIL on its website

                                        lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                        held on 07 Nov 2006

                                        Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                        wwwsteelnicin (Official website of ministry of industry)

                                        wwwtatasteelcom (Official website of TATA Steel)

                                        wwwsailcoin (Official website of Steel Authority of India)

                                        wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                        wwwjpcindiansteelnicin (Website of joint planning committee)

                                        • DATA ANALYSIS
                                        • Comparison between TATA Steel and Steel Authority of India
                                        • Production
                                        • Quantity 000 Tonnes
                                        • Financials
                                        • Research and Development
                                        • (Rs Crore)
                                        • TATA Steel
                                        • Steel Authority of India
                                        • Environment
                                        • TATA Steel
                                        • Emissions effluents and wastes
                                        • Emissions
                                        • Waste handling
                                        • Effluent Management
                                        • Steel Authority of India
                                        • Solid Waste Management
                                        • Environmental Plantation
                                        • Environmental Recognitions
                                        • Workforce and Welfare of Society
                                        • TATA steel
                                        • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                        • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                        • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                        • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                        • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                        • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                        • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                        • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                        • Steel Authority of India
                                        • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                        • Technology
                                        • Steel Authority of India
                                        • Safety measures
                                        • Tata Steel
                                        • Steel Authority of India
                                        • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                        • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                        • Measures taken by Indian government to improve the industry
                                        • Now letrsquos 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-
                                        • Special assistance being provided by Ministry of Steel to Private Sector
                                        • FUTURE OF INDIAN STEEL INDUSTRY

                                          Items 2004-05 2005-06 2006-07 (up to Dec2006)

                                          1 Production

                                          a) Manganese Ore (thousand tonne) 94300 86500 82533

                                          b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000

                                          c) Ferro Manganese (tonne) 1032500 617000 829400

                                          2 Turnover (Rupees in crore) 37878 33409 29463

                                          3 Profit before Tax (Rupees in crore) 20227 16900 12087

                                          KUDREMUKH IRON ORE COMPANY LTD (KIOCL)

                                          Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO

                                          90012000 and ISO 14001 company was established in April 1976 to meet the long

                                          term requirements of Iran An iron ore concentrate plant of 75 million tonne capacity

                                          was set up at Kudremukh This project was to be financed in full by Iran However as

                                          Iran stopped further loan disbursements after paying US $ 255 million the project was

                                          completed as per schedule with the funds provided by Government of India While the

                                          project was commissioned on schedule consequent upon the political developments

                                          in Iran they did not lift any quantity of concentrate As a diversification measure the

                                          Government approved the construction of a 3 million tonne per year capacity pellet

                                          plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                                          million tonne with additionsmodifications The plant went into commercial production

                                          in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                                          units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                                          Plant Mangalore

                                          Production

                                          A target of 31 million tonne and 305 million tonne was set for production of iron ore

                                          concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                                          production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                                          The target set for production during the year 2006-07 is 305 million tonne of pellets

                                          In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                                          activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                                          production of iron ore concentrate during the year 2006-07 As against a target of 188

                                          million tonne of pellets fixed for the period April to November 2006 the actual

                                          production was 0275 million tonne which represents 15 target fulfilment There is

                                          shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                                          production of pellets is on account of operational problems being encountered in the

                                          pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                                          There was excessive generation of su er fines (slimes) affecting filtration clogging of

                                          filters overflow and contamination of process water due to filling of cooling pond

                                          affecting production While efforts are continuing to rectify the problems the operation

                                          of pellet plant is yet to stabilize and normal production is yet to commence

                                          The sales revenue during the last five years and up to November 2006 during 2006-

                                          07 is detailed below

                                          (Rs in lakh)

                                          Years Concentrate Pellets Total

                                          2006-07 (up to December 2006) - 12427 12427

                                          2005-06 12091 111137 123228

                                          2004-05 16050 169327 185377

                                          2003-04 20209 82729 102938

                                          2002-03 21135 51579 72714

                                          2001-02 21571 50598 72169

                                          Financial Performance

                                          An overview of the performance of KIOCL during the year 2006-07 (up to November

                                          2006) together with actuals for the previous three years is indicated below

                                          (Rs in lakh)

                                          Particulars 2006-07(up to December 2006)

                                          2005-06 2004-05 2003-04

                                          Total value of Sales 12427 123228 185377 102938

                                          Gross Margin 2620 68706 120863 45945

                                          Profit after Tax 1029 35630 64984 30070

                                          Inventories(excluding finished stock)

                                          20417 15843 8720 7616

                                          BIRD GROUP OF COMPANIES

                                          Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                          the following seven companies came under the administrative control of the Ministry of

                                          Steel Government of India

                                          (a) The Orissa Minerals Development Company Limited (OMDC)

                                          (b) The Bisra Stone Lime Company Limited (BSLC)

                                          (c) The Karanpura Development Company Limited (KDCL)

                                          (d) Scott amp Saxby Limited (SSL)

                                          (e) Eastern Investments Limited (EIL)

                                          (f) Burrakar Coal Company Limited (Burrakar)

                                          (g) Borrea Coal Company Limited (Borrea)

                                          The status of the companies is as under

                                          a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                          of coal mines The two companies are in the process of liquidation The official

                                          liquidator has already taken over the assets and liabilities of these two companies

                                          b) EIL being an investment company is having a major stake in the equity shares of

                                          operating companies under the Bird Group

                                          c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                          Status of the Companies at the Time of Nationalisation

                                          At the time when the Bird Group of Companies came under the administrative control

                                          of the Ministry of Steel Government of India all of them were financially sick and

                                          burdened with various problems With the financial support from the Government of

                                          India problems relating mainly to excessive manpower erosion of working capital and

                                          outstanding liabilities could be settled to a considerable extent

                                          REVIEW OF LITERATURE

                                          RS PANDEY sees a bright future for the steel industry in India provided of course

                                          the iron ore mining policy to be announced by the government soon acts as a catalyst

                                          for growth He discusses the industrys problems and prospects in an interview When

                                          asked about the steel sectors ie private and public he expressed his expert views

                                          The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                          Excerpts

                                          The public sector steel companies in India are doing extremely well And therefore

                                          they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                          Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                          Between 1992-93 and now the share of the public sector in steel production had gone

                                          down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                          1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                          the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                          to 71 per cent But the public sector units are growing even if the private sector is

                                          growing faster

                                          During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                          going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                          million tonnes in just four years RINL is set to expand its capacity from three million

                                          tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                          capacity for the PSUs

                                          The public sector should be encouraged all the more Let there be a healthy

                                          competition between public and private sector producers The question of exit comes

                                          when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                          was at below Rs10 per share Today it is more than Rs130 and the expectations

                                          are that it will go up even higher

                                          When talked about the labour productivity he says Yes labour productivity is low in

                                          SAIL in particular But it is improving The steel major is going to adjust much of its

                                          existing manpower in the expansion phase when its capacity is going to almost

                                          double The management had also undertaken a massive VRS [voluntary retirement

                                          scheme] In RINL labour productivity is not all that bad

                                          Besides SAIL has done very well in various other techno-economic parameters in the

                                          last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                          per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                          improvement of 20 per cent In blast furnace productivity also there has been an

                                          improvement as also in the production of high-end special steels and capacity

                                          utilisation

                                          With the improved turnover which comes from higher capacity use and higher

                                          manpower productivity SAILs profits have surged Its gross profit more than doubled

                                          between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                          was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                          is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                          other input costs and 71 per cent owing to improvement in capacity use and other

                                          factors that are just mentioned

                                          OBJECTIVES

                                          To compare Private and Public steel sector with refrence to TATA Steel and

                                          Steel Authority Of India

                                          To analyse potential of both the companies ie TATA Steel and SAIL

                                          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

                                          Research Methodology

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

                                          a) Research design-

                                          In case of my research ldquoComparative analysis of Indian private and Public

                                          sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                          found to be more appropriate

                                          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

                                          Comparison between TATA Steel and Steel Authority of India

                                          The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                          significant improvements in the last two years The combined profit before tax of all 15

                                          PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                          Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                          The profit before tax for all PSUs also exhibited a significant improvement of

                                          around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                          Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                          comparable period of last year

                                          Contribution of PSUs to public exchequer has also gone up significantly For

                                          example the contribution of five leading companies namely SAIL RINL NMDC

                                          KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                          duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                          from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                          On the other hand 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

                                          During the period (April-December 2006) 205 million tonne of steel was produced by

                                          Private Sector steel units out of the total production of 3315 million tonne in the

                                          country The private sector units consist of major steel producers in one hand and

                                          relatively smaller amp 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

                                          For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                          companies on following parameters

                                          Production

                                          Chart showing production of both the companies

                                          Quantity 000 Tonnes

                                          2007-08 APR-DEC07APR-

                                          DEC06 ACTUA

                                          L

                                          AGE OF CURRENT

                                          PRODUCTION OVER

                                          CAPACITY UTILISATION

                                          TARGET TENTATIV

                                          E

                                          TARGET

                                          ACTUAL

                                          APR-DEC07 TARGE

                                          T

                                          APR-DEC06 ACTUA

                                          L

                                          APR-DEC 07

                                          APR-DEC06

                                          SAIL

                                          i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                          ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                          iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                          iv)BSL43500 32630 30970 30010 949 1032 950 910

                                          v)ISP5000 3760 3520 3450 936 1020 940 920

                                          vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                          vii)VISL

                                          1390 1050 1160 1190 1105 975 1300 1340

                                          TATA 50000 37440 37090 37380 991 992 990 1000

                                          TATA Steel

                                          The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                          but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                          target of 3744 (mT) but could produce 3709 However for the same period in last

                                          year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                          to 99 this year

                                          Steel Authority of India

                                          The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                          but it could produce only 126 (mT) a growth of 4 over the previous year However

                                          for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                          10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                          capacity utilisation of 103 this year as compared to 101 last year

                                          Financials

                                          TATA Steel

                                          The year 2006-07 has seen the highest turnover and profits continuing the trend

                                          of the past four years The Company achieved the best ever sales turnover and

                                          profitability during the year under review A robust Indian economy firm steel prices

                                          higher volumes and several improvement initiatives contributed to the record

                                          performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                          the previous year Export turnover was lower by about 5 due to lower volumes

                                          Average price realisation improved mainly due to higher prices of hot rolled

                                          coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                          (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                          Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                          due to additional borrowings for the Companyrsquos domestic expansion programs and

                                          funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                          providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                          crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                          before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                          after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                          20 compared to the previous year

                                          The record financial results would not have been possible without a matching

                                          performance by the operating departments including the raw materials division The

                                          year witnessed the best ever crude steel production by the Company at 505 million

                                          tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                          first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                          upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                          rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                          Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                          increase in production was backed by improvements in operating practices and

                                          productivity resulting in a reduction in consumption of raw materials energy

                                          refractories etc

                                          Steel Authority of India

                                          Financial Year 2006-07 has been eventful year for the company with further

                                          momentum in improving operational efficiencies laying strong foundation and building

                                          road map for modernisation and expansion of SAIL Plants with several new initiatives

                                          undertaken with its human resource at the core During the year the company got the

                                          distinction of first metal company in the country to reach a market capitalization of Rs

                                          50000 crore

                                          There have been improvements in all financial parameters which are shown in

                                          the table given below-

                                          SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                          before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                          previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                          increase of 55

                                          Research and Development

                                          Chart showing production of both the companies

                                          (Rs Crore)

                                          TATA Steel

                                          The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                          develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                          steel for body panels

                                          Research is undertaken at Tata Steel in the areas of raw materials including coal

                                          coke energy conservation waste utilisation sintering blast furnace productivity and

                                          phosphorous reduction product development and improvement in life of plant and

                                          machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                          sealed and over 100 are in process

                                          Steel Authority of India

                                          Research and Development Centre for Iron and Steel (RDCIS) has provided

                                          innovative technological inputs to different units of SAIL with special emphasis on

                                          cost reduction product development and application quality improvement energy

                                          conservation and automation Several new products were developed and

                                          commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                          Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                          specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                          micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                          Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                          Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                          strengthened its technology marketing efforts by providing consultancy services

                                          organising specialised testing and transfer of technological innovations to outside

                                          customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                          Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                          Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                          During the year 1998 technical papers were publishedpresented besides filing

                                          of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                          awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                          achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                          Government of India

                                          Environment

                                          TATA Steel

                                          Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                          Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                          has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                          Jamshedpur is the only town in the country which

                                          Significant achievements by the Company include an improvement in

                                          environment and resource conservation including a reduction in green house erosion

                                          raw materials and water consumption The Company has increased waste re-use and

                                          re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                          the-art pollution control systems being installed to prevent and control pollution The

                                          Company has almost doubled its capital investment in Pollution Abatement in the last

                                          five years

                                          Emissions effluents and wastes

                                          Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                          most relevance to the steel industry Considerable reduction has been effected by

                                          Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                          granulation is taken into account Other Greenhouse Gas emissions do not result from

                                          Tata Steelrsquos activities

                                          Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                          tonnes in 2003-04 as against 790 tonnes used during the previous year

                                          Hazardous Waste under Basel Convention The Company does not import or export

                                          any waste deemed hazardous under the Basel Convention All hazardous wastes

                                          generated are handled as per the requirement of the Hazardous Waste Management

                                          and Handling Rules 19892000

                                          Emissions

                                          Tata Steel has undertaken several initiatives which have resulted in

                                          considerable reduction in stack emission Emissions are well below the Indian and

                                          international standards The emission load including particulate matter Sulphur

                                          Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                          undertaken at the Steel Works

                                          Waste handling

                                          Most of the solid waste generated from Steel Works is recycled or reused 18

                                          of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                          was used to fill low-lying areas and for peripheral road construction around

                                          Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                          power plants was dumped in a designated dump area

                                          Effluent Management

                                          Waste water from the steel making process is being treated with best available

                                          physio-chemical methods as well as being recycled Waste water from the coke plant

                                          is treated biologically where organic pollutants are oxidised and decomposed by micro

                                          organisms The Company has reduced the levels of total pollutant discharge in waste

                                          water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                          Steel Authority of India

                                          Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                          environmentally responsible manner to comply with applicable regulations and striving

                                          to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                          efficiency and optimize resource consumption through various measures viz

                                          improvement in process technology in the areas of raw materials coke iron and steel

                                          making reuserecycle of the by-products generated and conservation of energy and

                                          water

                                          Solid Waste Management

                                          During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                          and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                          Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                          these wastes are being made through internal recycling and selling to outside

                                          agencies The wastes generated in the steel plants are being utilized mainly through

                                          their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                          during April-September 2006

                                          Environmental Plantation

                                          Trees have a significant role in protection of environment and ecological balance

                                          Extensive afforestation programme are being followed in all the plants and mines The

                                          basis of choosing the species of plants mainly depends on local soil characteristics

                                          and prevailing meteorological conditions The green belt developed by afforestation

                                          adds to the aesthetic environment which becomes dust and noise barriers

                                          A total number of 145521 saplings have been planted covering an area of 637

                                          hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                          hectare in 2004-05 in and around the steel plants of SAIL

                                          Environmental Recognitions

                                          SAIL plants have been awarded various prizes for environmental management in

                                          their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                          the Confederation of Indian Industries (CII) for exemplary performance in the

                                          environmental economic andsocial dimensions of sustainable development and the

                                          Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                          Excellence Award in the metal sector 2005 instuted by the World Environment

                                          Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                          for 2005 from International Greenland Society

                                          Workforce and Welfare of Society

                                          TATA steel

                                          Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                          and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                          enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                          provide a work environment that will ensure a sense of purpose and personal growth

                                          for each individual The wish of the company is to see the smile on every face

                                          everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                          people and enriched empowered and enhanced their lives

                                          Even in its nascent years social scientists Sidney and Beatrice Webb were

                                          brought in to work on welfare schemes In fact some of the initiatives introduced by

                                          Tata Steel were the first of their kind in India and some even in the western countries

                                          at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                          source of its competitiveness It focuses on constantly updating and challenging

                                          intellectual capabilities to enable them to excel in performance Special efforts are

                                          made for enhancing strategic thinking skills and analytical abilities of its managers and

                                          workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                          available with its people through Knowledge Management and sharing of best

                                          practices

                                          In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                          mutual co-operation coordination and understanding between the Management and

                                          the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                          among many other prestigious awards and recognition Tata Steel aims at ensuring

                                          transparency fairness and equity in all its interactions with its employees to create an

                                          enthused and happy workforce

                                          In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                          assistance in the fields of education vocational training self-employment and

                                          family welfare

                                          Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                          12 times This facility provides on-the-spot diagnostic medical and advanced

                                          surgical treatment for preventive and curative interventions to people in

                                          inaccessible rural areas

                                          Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                          for the 1920 Antwerp Olympics

                                          The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                          track was inaugurated in 1991 The complex also houses facilities for handball

                                          tennis volleyball hockey basketball boxing table tennis and a modern

                                          gymnasium

                                          The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                          services for the betterment of the people in and around Jamshedpur

                                          At times of natural calamities the company has rushe immediate relief and off

                                          ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                          fl ood ravaged Orissa and other such aff ected areas

                                          Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                          er a unique environment for the children of Jamshedpur to grow up in

                                          In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                          Jamshedpur has emerged as the one of the best cities in India

                                          Steel Authority of India

                                          The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                          executives and 123005 non-executives The total reduction in manpower achieved

                                          during the year stood at 4864 which included separation of 881 employees through

                                          voluntary retirement The labour productivity improved by around 12 over previous

                                          year to 150 tonne crude steelmanyear

                                          Some of the areas of assistance which are available to the weaker sections are the

                                          following

                                          The company has provided land for construction of school buildings in some of

                                          the steel townships as well as in other places for spreading education among

                                          the masses

                                          The company has constructed roads in remote areas around the steel plants

                                          and also where the captive mines are located to improve communication and

                                          also increase activities such as organisation of health camps school facilities

                                          drinking water etc under the peripheral development schemes

                                          Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                          Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                          providing them with education boarding and lodging facilities

                                          Construction of bridges by-pass roads metal-morum path waterways

                                          levellingdressing area around township pre-mixed roads Installation of hand-

                                          pumps tube wells and wells for villagers

                                          Construction of school buildings (including for mentally retarded deaf and

                                          dumb children) madarsas providing school furniture therein and construction

                                          of hostels womenrsquos college building etc

                                          Fourteen scholarships are awarded to deserving SCST undergraduate

                                          engineering students in various disciplines to encourage technical education

                                          among them

                                          In many cases tuition fee in company run schools is exempt for SCST

                                          students Steps are taken to provide education to more and more tribal children

                                          in company schools

                                          The unemployed SCST youth are given specialized training in various

                                          technical trades to develop skill and knowledge Such training is provided free

                                          of cost

                                          Adult literacy campaign is carried out in most of the steel townships Every year

                                          more and more men and women are being covered in this campaign

                                          Development of fishery and cottage industry providing sewing machines to

                                          village mahila mandals and promoting other self-employment generation

                                          schemes

                                          SAIL has established a hockey academy with stadium and hostel facilities at

                                          Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                          academy was successful in spotting a number of young talented tribal players

                                          and grooms them under expertise of ex-Olympian

                                          Technology

                                          The biggest boost to efficiency in the steel industry has come from the increased

                                          use of continuous casting ndash an indicator of the modernity of the production process Its

                                          share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                          now India is thus well on its way to joining the ranks of the leading steelmakers

                                          among the industrial nations (share in EU-25 96) However in India some 6 of

                                          crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                          suggests there is restructuring potential

                                          TATA Steel

                                          Tata Steels stall at the International Trade Fair was adjudged the best along

                                          with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                          international companies also took part in the exhibition Participating companies from

                                          countries all over the world exhibited latest technologies and know-how List of

                                          participating companies included Baosteel SAIL Heavy Engineering Corporation

                                          Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                          companies of national and international repute China was the partner country for the

                                          International Trade Fair this year

                                          In the award winning exhibition Tata Steel showcased its best coal mining practices

                                          cutting-edge technology used in iron ore mining pioneering human resource

                                          practices 78 years of industrial harmony and various other aspects of the worlds best

                                          steel company

                                          The 6th International Trade Fair and Conference an institutionalised global

                                          event is considered to be one of the most prestigious forums for national as well

                                          international participants It is a conclave of the finest minds concerned with the future

                                          direction and growth of these sectors The forum provided the worlds most eminent

                                          metallurgists manufacturers of metallurgical and mining machinery and related

                                          sectors professionals analysts and experts with the opportunity to exchange views on

                                          emerging technologies synergy and strengths and open up wider horizons for

                                          sectorial development

                                          Tata Steel to adopt Corus technology

                                          Tata Steel plans to implement alternate technology used by the British steel

                                          maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                          production according to Mr B Muthuraman Managing Director Tata Steel

                                          ldquoWe are looking at alternate technology Corus has developed an alternate

                                          technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                          newspersons on the sidelines of the 34th National Management Convention organised

                                          by the All-India Management Association However he declined to give further details

                                          on the type of technology the Indian steel giant plans to implement

                                          Steel Authority of India

                                          Modernisation holds the key to SAILs fortunes in the near future The objective

                                          of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                          and productive capacity and in the process become more energy-efficient and

                                          improve quality The key component of the ongoing modernisation drive - already

                                          completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                          ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                          continuous casting techniques A senior SAIL official says Continuous casting and

                                          basic oxygen furnaces ensure better quality steel through processes more easily

                                          monitored for quality control The basic oxygen surfaces method is significantly faster

                                          more automated and permits greater flexibility Continuous casting is more efficient

                                          than the traditional ingot casting methods and gives increased yields while enabling

                                          better quality standards SAIL is also modernising its finishing mills and is adding

                                          secondary refining facilities to improve quality

                                          Safety measures

                                          A unique feature of safety management in steel industry is that a bipartite forum

                                          named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                          was formed in 1973 at national level having representatives from steel plants in SAIL

                                          RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                          Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                          workshops training programme safety competitions for member organisations JCSSI

                                          with the co-operation and support of Trade Union representatives formulates policies

                                          and guidelines for its member plants and monitors the implementation

                                          Tata Steel

                                          Safety has always been a prime focus at Tata Steel A Safety Committee a

                                          Safety department and a Safety Trophy helped spread the message all across the

                                          company

                                          TATA reaffirms its commitment to provide safe working place and clean

                                          environment to its employees and other stakeholders as an integral part of its

                                          business philosophy and values We will continually enhance our Environmental

                                          Occupational Health amp Safety (EHS) performance in our activities products and

                                          services through a structured EHS management framework Towards this

                                          commitment we shall

                                          Establish and achieve EHS objectives and targets

                                          Ensure compliance with applicable EHS legislation and other requirement and

                                          go beyond

                                          Conserve natural resources and energy by constantly seeking to reduce

                                          consumption and promoting waste avoidance and recycling measures

                                          Eliminate minimize andor control adverse environmental impacts and

                                          occupational health and safety risks by adopting appropriate state-of-the-art

                                          technology and best EHS management practices at all levels sand functions

                                          Enhance awareness skill and competence of our employees and contractors

                                          so as to enable them to demonstrate their involvement responsibility and

                                          accountability for sound EHS performance

                                          Steel Authority of India

                                          SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                          monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                          Annual Performance Plans (APP) for the areas of safety and fire services are

                                          formulated and review of implementation of APP is done during Heads of

                                          Safety meeting

                                          Internal and external safety audits of major departments particularly hazardous

                                          areas are conducted every year and points arising from these audits are

                                          liquidated Safety aspects have been incorporated in standard operating

                                          practices (SOP) and standard maintenance practices (SMP)

                                          All major capital repairsshut downs are closely monitored round the clock

                                          Periodic drives are conducted to inculcate safety awarenessculture up to

                                          grass-root level apart from regular inspections as per checklists to identify

                                          unsafe conditionsacts

                                          Safety training is imparted to target group employees at various levels HRD

                                          intervention in the area of safety covers Heads of Departments Line Managers

                                          amp Departmental Safety Officers Besides area specific workshops are

                                          conducted at different locations on important topics like gas safety railroad

                                          safety safety in iron steel amp coke making etc

                                          Consistent efforts were made by SAIL Safety Organisation for improving safety

                                          standards in the company by taking measures like intensive safety drives in works

                                          area and conducting safety audits in hazardous departments of different plants and

                                          mines In addition specific workshops on safety aspects were organised in various

                                          SAIL steel plants

                                          Measures taken by Indian government to improve the industry

                                          Now letrsquos 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-

                                          1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                          among others was removed from the list of industries reserved for the public

                                          sector and also exempted from the provisions of compulsory licensing under the

                                          Industries (Development and Regulation) Act 1951

                                          2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                          of `high priority industries for automatic approval for foreign equity investment up

                                          to 51 This limit has been recently increased to 100

                                          3 Price and distribution of steel were deregulated from January 1992 At the same

                                          time it was ensured that priority continued to be accorded for meeting the

                                          requirements of small scale industries exporters of engineering goods and North

                                          Eastern Region of the country besides strategic sectors such as Defence and

                                          Railways

                                          4 The trade policy has been liberalised and import and export of iron and steel is

                                          freely allowed There are no quantitative restrictions on import of iron and steel

                                          items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                          regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                          steel have drastically come down since 1991-92 levels and the government is

                                          committed to bring them down to the international levels In Chapter 72 there are

                                          two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                          5 Iron amp Steel are freely importable as per the Extant Policy

                                          6 Iron amp Steel are freely exportable

                                          7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                          8 The floor price for seconds and defectives continues till date

                                          9 Imports of seconds and defectives of steel are allowed only through three

                                          designated ports of Mumbai Calcutta and Chennai

                                          10Mandatory pre inspection certificate by a reputed international agency for every

                                          import consignment of seconds and defectives

                                          11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                          10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                          the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                          per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                          15 per cent to 5 per cent

                                          12Further customs duty on several raw materials used by the steel sector like

                                          noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                          coking coal to zero

                                          13To bring down the prices of steel the excise duty on steel products was reduced

                                          from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                          that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                          increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                          cut on moderating prices was not achieved

                                          14The union Budget 2007-08 the import duty on seconds and defective has been

                                          further reduced from 20 to 10

                                          Special assistance being provided by Ministry of Steel to Private Sector

                                          1 Ministry of Steel is extending all possible support as detailed below for the

                                          development of Iron and Steel Sector in the country

                                          2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                          new plants and expansion of existing ones wherever applied for

                                          3 To ensure an un-interrupted supply of raw materials to the producers

                                          4 The Ministry has been interacting with All India Financial institutions to expedite

                                          clearance of projects

                                          5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                          Plants are held at the level of Secretary

                                          6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                          industry so that their absence does not lead to bottlenecks in the future growth of

                                          the Iron and Steel Sector and takes up these issues with the concerned ministries

                                          7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                          Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                          country are members of this Institute which has been set up with the objective of

                                          promoting developing and propagating the proper and effective use of steel

                                          8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                          major steel plants being implemented Govt has setup a Project Coordination

                                          Group under the Chairmanship of Steel Minister

                                          NATIONAL STEEL POLICY 2005

                                          The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                          development and as such great importance is attached to capacity expansion in line

                                          with expected demand at cost and prices which make Indian steel internationally

                                          competitive The existing regime of liberalization decontrol and deregulation of

                                          industry in the country has opened up new opportunities for the expansion of the steel

                                          industry With a view to accelerating the growth of the steel sector and attaining the

                                          vision of India becoming a developed economy by 2020 the Ministry of Steel

                                          formulated a National Steel Policy (NSP) in 2005

                                          The following salient features can be derived after analysing the NSP 2005

                                          The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                          towards reform restructuring and globalisation

                                          The long-term goal of the NSP is that India should have a modern and efficient

                                          steel industry of world standards catering to diversified steel demand The focus of

                                          the policy is to achieve global competitiveness not only in terms of cost quality and

                                          product-mix but also in terms of global benchmarks of efficiency and productivity

                                          In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                          NSP seeks to remove the supply-side constraints to the growth of this industry in

                                          an open globally integrated and competitive environment

                                          The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                          policy goal On the demand side the strategy would be to create incremental

                                          demand through promotional efforts creation of awareness and strengthening the

                                          delivery chain particularly in rural areas On the supply side the strategy would be

                                          to facilitate creation of additional capacity remove procedural and policy

                                          bottlenecks in the availability of inputs such as iron ore and coal make higher

                                          investments in RampD and encourage the creation of infrastructure such as roads

                                          railways and ports

                                          The NSP acknowledges the low per capita consumption of steel in the country

                                          especially in the rural areas and the need to boost steel consumption to improve

                                          quality of life and help in meeting the growing aspirations of masses

                                          In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                          industry would need additional capital In addition funds would be required for

                                          technological upgrade of existing facilities In order to mobilize such vast resources

                                          NSP seeks to encourage foreign direct investment In addition the policy also

                                          seeks to make the fiscal incentives available to infrastructure projects accessible

                                          to the steel industry

                                          The NSP seeks to support developing of risk-hedging instruments like futures and

                                          derivatives to contain price volatility in the steel market

                                          The NSP seeks to strengthen the existing training and research facilities available

                                          to the domestic steel industry so as to provide suitable training programmes

                                          especially for the secondary small-scale units and also to collect and analyse data

                                          on important parameters of the industry

                                          The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                          capability for special types of steel substitute coking coal use iron ore fines

                                          develop new products suited to rural needs enhance material and energy

                                          efficiency utilize waste and arrest environmental degradation

                                          The NSP acknowledges the important role played by the secondary steel sector in

                                          providing employment meeting local demand of steel in rural and semi-urban

                                          areas and meeting the countryrsquos demand of some special products and seeks to

                                          endeavour to provide the necessary feedstock to these units at reasonable prices

                                          from major plants through the existing mechanism of State Small Industries

                                          Corporations

                                          The NSP recognizes the fact that integration of the Indian steel industry with the

                                          global economy requires that the industry should be protected from unfair trade

                                          practices The NSP therefore envisages institution of mechanisms for import

                                          surveillance and monitoring export subsidies in other countries

                                          The present per capita consumption of steel in the country is very low compared to the

                                          world average As mentioned above one of the objectives of the NSP is to augment

                                          the demand and consumption of steel in the country by conscious promotion of steel

                                          usage With a view to create a mass awareness campaign on conscious promotion of

                                          steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                          the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                          The Committee is being serviced by Institute for Steel Development and Growth

                                          (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                          way of an awareness campaign with particular emphasis on rural sectors The

                                          Committee also aims at educating the designers architects builders and planners

                                          regarding the qualitative and cost effective applications of steel in various structures

                                          including buildings bridges flyovers and airports

                                          FUTURE OF INDIAN STEEL INDUSTRY

                                          India is amongst a few countries in the world having the dual advantage of fast

                                          growing domestic demand coupled with access to raw materials Further the trend

                                          that is already discernible is that the axis of global steel production consumption is

                                          shifting towards Asia With their large populations China and India already account for

                                          35 of the total world steel production - more than double of Europe Asia is

                                          expected to outpace other regions of the world to an even greater extent in the coming

                                          years

                                          Amongst the Asian nations China has established a huge unbridgeable lead It

                                          is accepted that China will continue to be the leader However India is slated to

                                          emerge as the second Asian giant in the next eight years Figuratively speaking while

                                          the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                          splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                          China swallowed almost 32 of global steel It is unlikely that future production and

                                          consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                          has been the case over the last few years On the other hand it is sun-rise time for

                                          India where the demand has increased by 7-8 in the last couple of years In the long

                                          run Indian steel is likely to be more cost-effective since unlike China India has

                                          relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                          can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                          However the position with coal is not so favourable Though thermal coal

                                          reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                          traditional blast furnace route would require coking coal India does not have adequate

                                          reserves of coking coal nor is the meagre amount available of appropriate quality

                                          Thus the steel industry always had to contend with the dual problems of inadequate

                                          availability and poor quality of Indian coking coal This has been partly addressed by

                                          adopting alternative iron making processes that are not dependent on coking coal it

                                          can not be denied that coal is the biggest cause for concern for bulk steel production

                                          in India

                                          Because of the shortage of indigenous coal attempts have been made by steel

                                          producers to ensure long-term supplies by tying up with global majors or by acquiring

                                          mines in other countries This is the only long-term solution but with a global shortage

                                          of coal it may not remain cost-effective in the long run

                                          India is the seventh largest producer of steel and may further improve its position

                                          going by the current trends A series of investment decisions by major domestic

                                          players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                          POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                          The keen interest shown by various prospective investors is not only due to

                                          expectations of strong growth in domestic demand but also due to indigenous

                                          availability of key resources like iron ore and skilled workforce

                                          After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                          steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                          finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                          2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                          consumption has accelerated to 91 per cent

                                          With the likely growth of Indian economy at around 7 per cent per annum

                                          demand for steel is expected to remain strong and is projected to reach a level of 90

                                          million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                          demand is sustainable considering the fact that Indias per capita consumption of steel

                                          is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                          very low level of per capita consumption of steel in India is highlighted further when

                                          compared with the consumption levels of its peer group consisting of countries like

                                          China Brazil Mexico and Republic of Korea as also with selected developed

                                          countries

                                          Though there are realistic constraints in India to achieving as rapid a growth as in

                                          China there seems to be consensus among analysts that India is likely to witness a

                                          growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                          percent If the growth rate (9 per cent) of last three years is maintained then we will

                                          achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                          more conservative due to cyclicity of steel business it may be mentioned that in a

                                          country like India cyclicity is more in terms of prices rather than volumes of production

                                          Exports

                                          Similar optimism prevails with regard to export of iron and steel Export of steel

                                          starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                          2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                          rising domestic demand and low capacity additions Exports now constitute around 17

                                          per cent of total production and Indias presence in the developing and developed

                                          world is being increasingly felt Indian steel producers have recently been able to

                                          supply specialized grades and products used for sophisticated applications like

                                          automobiles On the cost front some of our producers are counted amongst the least

                                          cost producers of the world For an average reference plant India is competitively

                                          placed in the middle of the hierarchy of steel producing nations

                                          However we have a long way to go to catch up with the leading exporters of the

                                          world such as Japan the CIS countries Brazil etc It is however expected that by

                                          2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                          per cent of total projected production The projected export ratio compares well with

                                          the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                          The projected production of steel by 2019-20 to meet the domestic and export

                                          demand will be around 110 million tonnes Management of resources and

                                          infrastructural growth is going to be critical in achievement of the production level

                                          envisaged The broad requirements of various resources will increase manifold from

                                          the current level The bottlenecks in availability of critical inputs and various facilities

                                          need to be removed through concerted efforts of Government and industry The broad

                                          strategy to overcome these constraints as well as meet the strategic goals of the steel

                                          sector has been discussed in the National Steel Policy which has been recently

                                          approved by the Government

                                          As stated earlier the long-term goal of the National Steel Policy is that India

                                          should have a modern and efficient steel industry of world standards catering to a

                                          diversified steel demand The focus of the policy is to achieve global competitiveness

                                          not only in terms of cost quality and product mix but also in terms of global

                                          benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                          pronged strategy to achieve these goals On the demand side the strategy would be

                                          to create incremental demand through promotional efforts creation of awareness and

                                          strengthening the delivery chain particularly in rural areas On the supply side the

                                          strategy would be to facilitate creation of additional capacity remove procedural and

                                          policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                          investments in RampD and HRD and encourage the creation of infrastructure such as

                                          roads railways and ports

                                          The production figures exports and imports of finished carbon steel and pig iron

                                          and apparent consumption patterns of finished carbon steel as indicated by TATA

                                          Steel and SAIL attest to the continuing growth for both the sectors

                                          FINDINGS

                                          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 increased its profit over the year particularly in 2006-07

                                          Both the companies are planning to adopt modern technology which is going to

                                          help them to compete in world market but they need to be less dependent on

                                          state of art technology and coal for long term prospects

                                          Public sector has undergone retrenchment for the employees and improved

                                          has its lobour productivity but it is still lacking behind as compared to private

                                          sector

                                          SAIL has reduced the no of accidents due to improper handling of machinery

                                          still no of accidents are more than that of TATA Steel

                                          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

                                          ie 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 have to be met

                                          comprehensively if we are to take our legitimate place in the world as a developed

                                          nation by 2020

                                          BIBLIOGRAPHY

                                          Annual report (2006-07) published by ministry of steel

                                          Annual report (2006-07) published by TATA Steel

                                          Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                          REPORTrsquo posted by SAIL on its website

                                          lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                          held on 07 Nov 2006

                                          Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                          wwwsteelnicin (Official website of ministry of industry)

                                          wwwtatasteelcom (Official website of TATA Steel)

                                          wwwsailcoin (Official website of Steel Authority of India)

                                          wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                          wwwjpcindiansteelnicin (Website of joint planning committee)

                                          • DATA ANALYSIS
                                          • Comparison between TATA Steel and Steel Authority of India
                                          • Production
                                          • Quantity 000 Tonnes
                                          • Financials
                                          • Research and Development
                                          • (Rs Crore)
                                          • TATA Steel
                                          • Steel Authority of India
                                          • Environment
                                          • TATA Steel
                                          • Emissions effluents and wastes
                                          • Emissions
                                          • Waste handling
                                          • Effluent Management
                                          • Steel Authority of India
                                          • Solid Waste Management
                                          • Environmental Plantation
                                          • Environmental Recognitions
                                          • Workforce and Welfare of Society
                                          • TATA steel
                                          • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                          • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                          • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                          • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                          • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                          • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                          • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                          • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                          • Steel Authority of India
                                          • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                          • Technology
                                          • Steel Authority of India
                                          • Safety measures
                                          • Tata Steel
                                          • Steel Authority of India
                                          • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                          • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                          • Measures taken by Indian government to improve the industry
                                          • Now letrsquos 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-
                                          • Special assistance being provided by Ministry of Steel to Private Sector
                                          • FUTURE OF INDIAN STEEL INDUSTRY

                                            plant in Mangalore in May 1981 The capacity of the pellet plant was increased to 35

                                            million tonne with additionsmodifications The plant went into commercial production

                                            in 1987 and is now exporting blast furnace grade pellets to China and also to domestic

                                            units such as Ispat Industries Ltd and Rastriya Ispat Nigam Ltd Aerial view of Pellet

                                            Plant Mangalore

                                            Production

                                            A target of 31 million tonne and 305 million tonne was set for production of iron ore

                                            concentrate and iron oxide pellets respectively during the year 2005-06 Actual

                                            production was 2922 million tonne of concentrate and 2834 million tonne of pellets

                                            The target set for production during the year 2006-07 is 305 million tonne of pellets

                                            In pursuance of directive of Honrsquoble Supreme Court dated 30-09-2005 the mining

                                            activities at Kudremukh were stopped on 31-12-2005 Therefore there is no

                                            production of iron ore concentrate during the year 2006-07 As against a target of 188

                                            million tonne of pellets fixed for the period April to November 2006 the actual

                                            production was 0275 million tonne which represents 15 target fulfilment There is

                                            shortfall in production of pellets up to November 2006 during 2006-07 The shortfall in

                                            production of pellets is on account of operational problems being encountered in the

                                            pellet plant after switching over to usage of 100 hematite ore from magnetite ore

                                            There was excessive generation of su er fines (slimes) affecting filtration clogging of

                                            filters overflow and contamination of process water due to filling of cooling pond

                                            affecting production While efforts are continuing to rectify the problems the operation

                                            of pellet plant is yet to stabilize and normal production is yet to commence

                                            The sales revenue during the last five years and up to November 2006 during 2006-

                                            07 is detailed below

                                            (Rs in lakh)

                                            Years Concentrate Pellets Total

                                            2006-07 (up to December 2006) - 12427 12427

                                            2005-06 12091 111137 123228

                                            2004-05 16050 169327 185377

                                            2003-04 20209 82729 102938

                                            2002-03 21135 51579 72714

                                            2001-02 21571 50598 72169

                                            Financial Performance

                                            An overview of the performance of KIOCL during the year 2006-07 (up to November

                                            2006) together with actuals for the previous three years is indicated below

                                            (Rs in lakh)

                                            Particulars 2006-07(up to December 2006)

                                            2005-06 2004-05 2003-04

                                            Total value of Sales 12427 123228 185377 102938

                                            Gross Margin 2620 68706 120863 45945

                                            Profit after Tax 1029 35630 64984 30070

                                            Inventories(excluding finished stock)

                                            20417 15843 8720 7616

                                            BIRD GROUP OF COMPANIES

                                            Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                            the following seven companies came under the administrative control of the Ministry of

                                            Steel Government of India

                                            (a) The Orissa Minerals Development Company Limited (OMDC)

                                            (b) The Bisra Stone Lime Company Limited (BSLC)

                                            (c) The Karanpura Development Company Limited (KDCL)

                                            (d) Scott amp Saxby Limited (SSL)

                                            (e) Eastern Investments Limited (EIL)

                                            (f) Burrakar Coal Company Limited (Burrakar)

                                            (g) Borrea Coal Company Limited (Borrea)

                                            The status of the companies is as under

                                            a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                            of coal mines The two companies are in the process of liquidation The official

                                            liquidator has already taken over the assets and liabilities of these two companies

                                            b) EIL being an investment company is having a major stake in the equity shares of

                                            operating companies under the Bird Group

                                            c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                            Status of the Companies at the Time of Nationalisation

                                            At the time when the Bird Group of Companies came under the administrative control

                                            of the Ministry of Steel Government of India all of them were financially sick and

                                            burdened with various problems With the financial support from the Government of

                                            India problems relating mainly to excessive manpower erosion of working capital and

                                            outstanding liabilities could be settled to a considerable extent

                                            REVIEW OF LITERATURE

                                            RS PANDEY sees a bright future for the steel industry in India provided of course

                                            the iron ore mining policy to be announced by the government soon acts as a catalyst

                                            for growth He discusses the industrys problems and prospects in an interview When

                                            asked about the steel sectors ie private and public he expressed his expert views

                                            The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                            Excerpts

                                            The public sector steel companies in India are doing extremely well And therefore

                                            they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                            Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                            Between 1992-93 and now the share of the public sector in steel production had gone

                                            down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                            1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                            the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                            to 71 per cent But the public sector units are growing even if the private sector is

                                            growing faster

                                            During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                            going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                            million tonnes in just four years RINL is set to expand its capacity from three million

                                            tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                            capacity for the PSUs

                                            The public sector should be encouraged all the more Let there be a healthy

                                            competition between public and private sector producers The question of exit comes

                                            when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                            was at below Rs10 per share Today it is more than Rs130 and the expectations

                                            are that it will go up even higher

                                            When talked about the labour productivity he says Yes labour productivity is low in

                                            SAIL in particular But it is improving The steel major is going to adjust much of its

                                            existing manpower in the expansion phase when its capacity is going to almost

                                            double The management had also undertaken a massive VRS [voluntary retirement

                                            scheme] In RINL labour productivity is not all that bad

                                            Besides SAIL has done very well in various other techno-economic parameters in the

                                            last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                            per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                            improvement of 20 per cent In blast furnace productivity also there has been an

                                            improvement as also in the production of high-end special steels and capacity

                                            utilisation

                                            With the improved turnover which comes from higher capacity use and higher

                                            manpower productivity SAILs profits have surged Its gross profit more than doubled

                                            between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                            was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                            is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                            other input costs and 71 per cent owing to improvement in capacity use and other

                                            factors that are just mentioned

                                            OBJECTIVES

                                            To compare Private and Public steel sector with refrence to TATA Steel and

                                            Steel Authority Of India

                                            To analyse potential of both the companies ie TATA Steel and SAIL

                                            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

                                            Research Methodology

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

                                            a) Research design-

                                            In case of my research ldquoComparative analysis of Indian private and Public

                                            sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                            found to be more appropriate

                                            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

                                            Comparison between TATA Steel and Steel Authority of India

                                            The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                            significant improvements in the last two years The combined profit before tax of all 15

                                            PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                            Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                            The profit before tax for all PSUs also exhibited a significant improvement of

                                            around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                            Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                            comparable period of last year

                                            Contribution of PSUs to public exchequer has also gone up significantly For

                                            example the contribution of five leading companies namely SAIL RINL NMDC

                                            KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                            duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                            from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                            On the other hand 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

                                            During the period (April-December 2006) 205 million tonne of steel was produced by

                                            Private Sector steel units out of the total production of 3315 million tonne in the

                                            country The private sector units consist of major steel producers in one hand and

                                            relatively smaller amp 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

                                            For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                            companies on following parameters

                                            Production

                                            Chart showing production of both the companies

                                            Quantity 000 Tonnes

                                            2007-08 APR-DEC07APR-

                                            DEC06 ACTUA

                                            L

                                            AGE OF CURRENT

                                            PRODUCTION OVER

                                            CAPACITY UTILISATION

                                            TARGET TENTATIV

                                            E

                                            TARGET

                                            ACTUAL

                                            APR-DEC07 TARGE

                                            T

                                            APR-DEC06 ACTUA

                                            L

                                            APR-DEC 07

                                            APR-DEC06

                                            SAIL

                                            i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                            ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                            iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                            iv)BSL43500 32630 30970 30010 949 1032 950 910

                                            v)ISP5000 3760 3520 3450 936 1020 940 920

                                            vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                            vii)VISL

                                            1390 1050 1160 1190 1105 975 1300 1340

                                            TATA 50000 37440 37090 37380 991 992 990 1000

                                            TATA Steel

                                            The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                            but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                            target of 3744 (mT) but could produce 3709 However for the same period in last

                                            year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                            to 99 this year

                                            Steel Authority of India

                                            The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                            but it could produce only 126 (mT) a growth of 4 over the previous year However

                                            for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                            10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                            capacity utilisation of 103 this year as compared to 101 last year

                                            Financials

                                            TATA Steel

                                            The year 2006-07 has seen the highest turnover and profits continuing the trend

                                            of the past four years The Company achieved the best ever sales turnover and

                                            profitability during the year under review A robust Indian economy firm steel prices

                                            higher volumes and several improvement initiatives contributed to the record

                                            performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                            the previous year Export turnover was lower by about 5 due to lower volumes

                                            Average price realisation improved mainly due to higher prices of hot rolled

                                            coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                            (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                            Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                            due to additional borrowings for the Companyrsquos domestic expansion programs and

                                            funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                            providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                            crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                            before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                            after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                            20 compared to the previous year

                                            The record financial results would not have been possible without a matching

                                            performance by the operating departments including the raw materials division The

                                            year witnessed the best ever crude steel production by the Company at 505 million

                                            tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                            first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                            upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                            rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                            Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                            increase in production was backed by improvements in operating practices and

                                            productivity resulting in a reduction in consumption of raw materials energy

                                            refractories etc

                                            Steel Authority of India

                                            Financial Year 2006-07 has been eventful year for the company with further

                                            momentum in improving operational efficiencies laying strong foundation and building

                                            road map for modernisation and expansion of SAIL Plants with several new initiatives

                                            undertaken with its human resource at the core During the year the company got the

                                            distinction of first metal company in the country to reach a market capitalization of Rs

                                            50000 crore

                                            There have been improvements in all financial parameters which are shown in

                                            the table given below-

                                            SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                            before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                            previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                            increase of 55

                                            Research and Development

                                            Chart showing production of both the companies

                                            (Rs Crore)

                                            TATA Steel

                                            The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                            develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                            steel for body panels

                                            Research is undertaken at Tata Steel in the areas of raw materials including coal

                                            coke energy conservation waste utilisation sintering blast furnace productivity and

                                            phosphorous reduction product development and improvement in life of plant and

                                            machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                            sealed and over 100 are in process

                                            Steel Authority of India

                                            Research and Development Centre for Iron and Steel (RDCIS) has provided

                                            innovative technological inputs to different units of SAIL with special emphasis on

                                            cost reduction product development and application quality improvement energy

                                            conservation and automation Several new products were developed and

                                            commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                            Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                            specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                            micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                            Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                            Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                            strengthened its technology marketing efforts by providing consultancy services

                                            organising specialised testing and transfer of technological innovations to outside

                                            customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                            Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                            Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                            During the year 1998 technical papers were publishedpresented besides filing

                                            of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                            awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                            achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                            Government of India

                                            Environment

                                            TATA Steel

                                            Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                            Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                            has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                            Jamshedpur is the only town in the country which

                                            Significant achievements by the Company include an improvement in

                                            environment and resource conservation including a reduction in green house erosion

                                            raw materials and water consumption The Company has increased waste re-use and

                                            re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                            the-art pollution control systems being installed to prevent and control pollution The

                                            Company has almost doubled its capital investment in Pollution Abatement in the last

                                            five years

                                            Emissions effluents and wastes

                                            Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                            most relevance to the steel industry Considerable reduction has been effected by

                                            Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                            granulation is taken into account Other Greenhouse Gas emissions do not result from

                                            Tata Steelrsquos activities

                                            Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                            tonnes in 2003-04 as against 790 tonnes used during the previous year

                                            Hazardous Waste under Basel Convention The Company does not import or export

                                            any waste deemed hazardous under the Basel Convention All hazardous wastes

                                            generated are handled as per the requirement of the Hazardous Waste Management

                                            and Handling Rules 19892000

                                            Emissions

                                            Tata Steel has undertaken several initiatives which have resulted in

                                            considerable reduction in stack emission Emissions are well below the Indian and

                                            international standards The emission load including particulate matter Sulphur

                                            Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                            undertaken at the Steel Works

                                            Waste handling

                                            Most of the solid waste generated from Steel Works is recycled or reused 18

                                            of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                            was used to fill low-lying areas and for peripheral road construction around

                                            Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                            power plants was dumped in a designated dump area

                                            Effluent Management

                                            Waste water from the steel making process is being treated with best available

                                            physio-chemical methods as well as being recycled Waste water from the coke plant

                                            is treated biologically where organic pollutants are oxidised and decomposed by micro

                                            organisms The Company has reduced the levels of total pollutant discharge in waste

                                            water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                            Steel Authority of India

                                            Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                            environmentally responsible manner to comply with applicable regulations and striving

                                            to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                            efficiency and optimize resource consumption through various measures viz

                                            improvement in process technology in the areas of raw materials coke iron and steel

                                            making reuserecycle of the by-products generated and conservation of energy and

                                            water

                                            Solid Waste Management

                                            During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                            and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                            Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                            these wastes are being made through internal recycling and selling to outside

                                            agencies The wastes generated in the steel plants are being utilized mainly through

                                            their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                            during April-September 2006

                                            Environmental Plantation

                                            Trees have a significant role in protection of environment and ecological balance

                                            Extensive afforestation programme are being followed in all the plants and mines The

                                            basis of choosing the species of plants mainly depends on local soil characteristics

                                            and prevailing meteorological conditions The green belt developed by afforestation

                                            adds to the aesthetic environment which becomes dust and noise barriers

                                            A total number of 145521 saplings have been planted covering an area of 637

                                            hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                            hectare in 2004-05 in and around the steel plants of SAIL

                                            Environmental Recognitions

                                            SAIL plants have been awarded various prizes for environmental management in

                                            their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                            the Confederation of Indian Industries (CII) for exemplary performance in the

                                            environmental economic andsocial dimensions of sustainable development and the

                                            Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                            Excellence Award in the metal sector 2005 instuted by the World Environment

                                            Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                            for 2005 from International Greenland Society

                                            Workforce and Welfare of Society

                                            TATA steel

                                            Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                            and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                            enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                            provide a work environment that will ensure a sense of purpose and personal growth

                                            for each individual The wish of the company is to see the smile on every face

                                            everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                            people and enriched empowered and enhanced their lives

                                            Even in its nascent years social scientists Sidney and Beatrice Webb were

                                            brought in to work on welfare schemes In fact some of the initiatives introduced by

                                            Tata Steel were the first of their kind in India and some even in the western countries

                                            at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                            source of its competitiveness It focuses on constantly updating and challenging

                                            intellectual capabilities to enable them to excel in performance Special efforts are

                                            made for enhancing strategic thinking skills and analytical abilities of its managers and

                                            workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                            available with its people through Knowledge Management and sharing of best

                                            practices

                                            In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                            mutual co-operation coordination and understanding between the Management and

                                            the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                            among many other prestigious awards and recognition Tata Steel aims at ensuring

                                            transparency fairness and equity in all its interactions with its employees to create an

                                            enthused and happy workforce

                                            In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                            assistance in the fields of education vocational training self-employment and

                                            family welfare

                                            Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                            12 times This facility provides on-the-spot diagnostic medical and advanced

                                            surgical treatment for preventive and curative interventions to people in

                                            inaccessible rural areas

                                            Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                            for the 1920 Antwerp Olympics

                                            The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                            track was inaugurated in 1991 The complex also houses facilities for handball

                                            tennis volleyball hockey basketball boxing table tennis and a modern

                                            gymnasium

                                            The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                            services for the betterment of the people in and around Jamshedpur

                                            At times of natural calamities the company has rushe immediate relief and off

                                            ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                            fl ood ravaged Orissa and other such aff ected areas

                                            Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                            er a unique environment for the children of Jamshedpur to grow up in

                                            In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                            Jamshedpur has emerged as the one of the best cities in India

                                            Steel Authority of India

                                            The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                            executives and 123005 non-executives The total reduction in manpower achieved

                                            during the year stood at 4864 which included separation of 881 employees through

                                            voluntary retirement The labour productivity improved by around 12 over previous

                                            year to 150 tonne crude steelmanyear

                                            Some of the areas of assistance which are available to the weaker sections are the

                                            following

                                            The company has provided land for construction of school buildings in some of

                                            the steel townships as well as in other places for spreading education among

                                            the masses

                                            The company has constructed roads in remote areas around the steel plants

                                            and also where the captive mines are located to improve communication and

                                            also increase activities such as organisation of health camps school facilities

                                            drinking water etc under the peripheral development schemes

                                            Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                            Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                            providing them with education boarding and lodging facilities

                                            Construction of bridges by-pass roads metal-morum path waterways

                                            levellingdressing area around township pre-mixed roads Installation of hand-

                                            pumps tube wells and wells for villagers

                                            Construction of school buildings (including for mentally retarded deaf and

                                            dumb children) madarsas providing school furniture therein and construction

                                            of hostels womenrsquos college building etc

                                            Fourteen scholarships are awarded to deserving SCST undergraduate

                                            engineering students in various disciplines to encourage technical education

                                            among them

                                            In many cases tuition fee in company run schools is exempt for SCST

                                            students Steps are taken to provide education to more and more tribal children

                                            in company schools

                                            The unemployed SCST youth are given specialized training in various

                                            technical trades to develop skill and knowledge Such training is provided free

                                            of cost

                                            Adult literacy campaign is carried out in most of the steel townships Every year

                                            more and more men and women are being covered in this campaign

                                            Development of fishery and cottage industry providing sewing machines to

                                            village mahila mandals and promoting other self-employment generation

                                            schemes

                                            SAIL has established a hockey academy with stadium and hostel facilities at

                                            Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                            academy was successful in spotting a number of young talented tribal players

                                            and grooms them under expertise of ex-Olympian

                                            Technology

                                            The biggest boost to efficiency in the steel industry has come from the increased

                                            use of continuous casting ndash an indicator of the modernity of the production process Its

                                            share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                            now India is thus well on its way to joining the ranks of the leading steelmakers

                                            among the industrial nations (share in EU-25 96) However in India some 6 of

                                            crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                            suggests there is restructuring potential

                                            TATA Steel

                                            Tata Steels stall at the International Trade Fair was adjudged the best along

                                            with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                            international companies also took part in the exhibition Participating companies from

                                            countries all over the world exhibited latest technologies and know-how List of

                                            participating companies included Baosteel SAIL Heavy Engineering Corporation

                                            Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                            companies of national and international repute China was the partner country for the

                                            International Trade Fair this year

                                            In the award winning exhibition Tata Steel showcased its best coal mining practices

                                            cutting-edge technology used in iron ore mining pioneering human resource

                                            practices 78 years of industrial harmony and various other aspects of the worlds best

                                            steel company

                                            The 6th International Trade Fair and Conference an institutionalised global

                                            event is considered to be one of the most prestigious forums for national as well

                                            international participants It is a conclave of the finest minds concerned with the future

                                            direction and growth of these sectors The forum provided the worlds most eminent

                                            metallurgists manufacturers of metallurgical and mining machinery and related

                                            sectors professionals analysts and experts with the opportunity to exchange views on

                                            emerging technologies synergy and strengths and open up wider horizons for

                                            sectorial development

                                            Tata Steel to adopt Corus technology

                                            Tata Steel plans to implement alternate technology used by the British steel

                                            maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                            production according to Mr B Muthuraman Managing Director Tata Steel

                                            ldquoWe are looking at alternate technology Corus has developed an alternate

                                            technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                            newspersons on the sidelines of the 34th National Management Convention organised

                                            by the All-India Management Association However he declined to give further details

                                            on the type of technology the Indian steel giant plans to implement

                                            Steel Authority of India

                                            Modernisation holds the key to SAILs fortunes in the near future The objective

                                            of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                            and productive capacity and in the process become more energy-efficient and

                                            improve quality The key component of the ongoing modernisation drive - already

                                            completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                            ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                            continuous casting techniques A senior SAIL official says Continuous casting and

                                            basic oxygen furnaces ensure better quality steel through processes more easily

                                            monitored for quality control The basic oxygen surfaces method is significantly faster

                                            more automated and permits greater flexibility Continuous casting is more efficient

                                            than the traditional ingot casting methods and gives increased yields while enabling

                                            better quality standards SAIL is also modernising its finishing mills and is adding

                                            secondary refining facilities to improve quality

                                            Safety measures

                                            A unique feature of safety management in steel industry is that a bipartite forum

                                            named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                            was formed in 1973 at national level having representatives from steel plants in SAIL

                                            RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                            Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                            workshops training programme safety competitions for member organisations JCSSI

                                            with the co-operation and support of Trade Union representatives formulates policies

                                            and guidelines for its member plants and monitors the implementation

                                            Tata Steel

                                            Safety has always been a prime focus at Tata Steel A Safety Committee a

                                            Safety department and a Safety Trophy helped spread the message all across the

                                            company

                                            TATA reaffirms its commitment to provide safe working place and clean

                                            environment to its employees and other stakeholders as an integral part of its

                                            business philosophy and values We will continually enhance our Environmental

                                            Occupational Health amp Safety (EHS) performance in our activities products and

                                            services through a structured EHS management framework Towards this

                                            commitment we shall

                                            Establish and achieve EHS objectives and targets

                                            Ensure compliance with applicable EHS legislation and other requirement and

                                            go beyond

                                            Conserve natural resources and energy by constantly seeking to reduce

                                            consumption and promoting waste avoidance and recycling measures

                                            Eliminate minimize andor control adverse environmental impacts and

                                            occupational health and safety risks by adopting appropriate state-of-the-art

                                            technology and best EHS management practices at all levels sand functions

                                            Enhance awareness skill and competence of our employees and contractors

                                            so as to enable them to demonstrate their involvement responsibility and

                                            accountability for sound EHS performance

                                            Steel Authority of India

                                            SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                            monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                            Annual Performance Plans (APP) for the areas of safety and fire services are

                                            formulated and review of implementation of APP is done during Heads of

                                            Safety meeting

                                            Internal and external safety audits of major departments particularly hazardous

                                            areas are conducted every year and points arising from these audits are

                                            liquidated Safety aspects have been incorporated in standard operating

                                            practices (SOP) and standard maintenance practices (SMP)

                                            All major capital repairsshut downs are closely monitored round the clock

                                            Periodic drives are conducted to inculcate safety awarenessculture up to

                                            grass-root level apart from regular inspections as per checklists to identify

                                            unsafe conditionsacts

                                            Safety training is imparted to target group employees at various levels HRD

                                            intervention in the area of safety covers Heads of Departments Line Managers

                                            amp Departmental Safety Officers Besides area specific workshops are

                                            conducted at different locations on important topics like gas safety railroad

                                            safety safety in iron steel amp coke making etc

                                            Consistent efforts were made by SAIL Safety Organisation for improving safety

                                            standards in the company by taking measures like intensive safety drives in works

                                            area and conducting safety audits in hazardous departments of different plants and

                                            mines In addition specific workshops on safety aspects were organised in various

                                            SAIL steel plants

                                            Measures taken by Indian government to improve the industry

                                            Now letrsquos 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-

                                            1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                            among others was removed from the list of industries reserved for the public

                                            sector and also exempted from the provisions of compulsory licensing under the

                                            Industries (Development and Regulation) Act 1951

                                            2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                            of `high priority industries for automatic approval for foreign equity investment up

                                            to 51 This limit has been recently increased to 100

                                            3 Price and distribution of steel were deregulated from January 1992 At the same

                                            time it was ensured that priority continued to be accorded for meeting the

                                            requirements of small scale industries exporters of engineering goods and North

                                            Eastern Region of the country besides strategic sectors such as Defence and

                                            Railways

                                            4 The trade policy has been liberalised and import and export of iron and steel is

                                            freely allowed There are no quantitative restrictions on import of iron and steel

                                            items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                            regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                            steel have drastically come down since 1991-92 levels and the government is

                                            committed to bring them down to the international levels In Chapter 72 there are

                                            two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                            5 Iron amp Steel are freely importable as per the Extant Policy

                                            6 Iron amp Steel are freely exportable

                                            7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                            8 The floor price for seconds and defectives continues till date

                                            9 Imports of seconds and defectives of steel are allowed only through three

                                            designated ports of Mumbai Calcutta and Chennai

                                            10Mandatory pre inspection certificate by a reputed international agency for every

                                            import consignment of seconds and defectives

                                            11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                            10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                            the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                            per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                            15 per cent to 5 per cent

                                            12Further customs duty on several raw materials used by the steel sector like

                                            noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                            coking coal to zero

                                            13To bring down the prices of steel the excise duty on steel products was reduced

                                            from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                            that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                            increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                            cut on moderating prices was not achieved

                                            14The union Budget 2007-08 the import duty on seconds and defective has been

                                            further reduced from 20 to 10

                                            Special assistance being provided by Ministry of Steel to Private Sector

                                            1 Ministry of Steel is extending all possible support as detailed below for the

                                            development of Iron and Steel Sector in the country

                                            2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                            new plants and expansion of existing ones wherever applied for

                                            3 To ensure an un-interrupted supply of raw materials to the producers

                                            4 The Ministry has been interacting with All India Financial institutions to expedite

                                            clearance of projects

                                            5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                            Plants are held at the level of Secretary

                                            6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                            industry so that their absence does not lead to bottlenecks in the future growth of

                                            the Iron and Steel Sector and takes up these issues with the concerned ministries

                                            7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                            Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                            country are members of this Institute which has been set up with the objective of

                                            promoting developing and propagating the proper and effective use of steel

                                            8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                            major steel plants being implemented Govt has setup a Project Coordination

                                            Group under the Chairmanship of Steel Minister

                                            NATIONAL STEEL POLICY 2005

                                            The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                            development and as such great importance is attached to capacity expansion in line

                                            with expected demand at cost and prices which make Indian steel internationally

                                            competitive The existing regime of liberalization decontrol and deregulation of

                                            industry in the country has opened up new opportunities for the expansion of the steel

                                            industry With a view to accelerating the growth of the steel sector and attaining the

                                            vision of India becoming a developed economy by 2020 the Ministry of Steel

                                            formulated a National Steel Policy (NSP) in 2005

                                            The following salient features can be derived after analysing the NSP 2005

                                            The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                            towards reform restructuring and globalisation

                                            The long-term goal of the NSP is that India should have a modern and efficient

                                            steel industry of world standards catering to diversified steel demand The focus of

                                            the policy is to achieve global competitiveness not only in terms of cost quality and

                                            product-mix but also in terms of global benchmarks of efficiency and productivity

                                            In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                            NSP seeks to remove the supply-side constraints to the growth of this industry in

                                            an open globally integrated and competitive environment

                                            The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                            policy goal On the demand side the strategy would be to create incremental

                                            demand through promotional efforts creation of awareness and strengthening the

                                            delivery chain particularly in rural areas On the supply side the strategy would be

                                            to facilitate creation of additional capacity remove procedural and policy

                                            bottlenecks in the availability of inputs such as iron ore and coal make higher

                                            investments in RampD and encourage the creation of infrastructure such as roads

                                            railways and ports

                                            The NSP acknowledges the low per capita consumption of steel in the country

                                            especially in the rural areas and the need to boost steel consumption to improve

                                            quality of life and help in meeting the growing aspirations of masses

                                            In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                            industry would need additional capital In addition funds would be required for

                                            technological upgrade of existing facilities In order to mobilize such vast resources

                                            NSP seeks to encourage foreign direct investment In addition the policy also

                                            seeks to make the fiscal incentives available to infrastructure projects accessible

                                            to the steel industry

                                            The NSP seeks to support developing of risk-hedging instruments like futures and

                                            derivatives to contain price volatility in the steel market

                                            The NSP seeks to strengthen the existing training and research facilities available

                                            to the domestic steel industry so as to provide suitable training programmes

                                            especially for the secondary small-scale units and also to collect and analyse data

                                            on important parameters of the industry

                                            The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                            capability for special types of steel substitute coking coal use iron ore fines

                                            develop new products suited to rural needs enhance material and energy

                                            efficiency utilize waste and arrest environmental degradation

                                            The NSP acknowledges the important role played by the secondary steel sector in

                                            providing employment meeting local demand of steel in rural and semi-urban

                                            areas and meeting the countryrsquos demand of some special products and seeks to

                                            endeavour to provide the necessary feedstock to these units at reasonable prices

                                            from major plants through the existing mechanism of State Small Industries

                                            Corporations

                                            The NSP recognizes the fact that integration of the Indian steel industry with the

                                            global economy requires that the industry should be protected from unfair trade

                                            practices The NSP therefore envisages institution of mechanisms for import

                                            surveillance and monitoring export subsidies in other countries

                                            The present per capita consumption of steel in the country is very low compared to the

                                            world average As mentioned above one of the objectives of the NSP is to augment

                                            the demand and consumption of steel in the country by conscious promotion of steel

                                            usage With a view to create a mass awareness campaign on conscious promotion of

                                            steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                            the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                            The Committee is being serviced by Institute for Steel Development and Growth

                                            (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                            way of an awareness campaign with particular emphasis on rural sectors The

                                            Committee also aims at educating the designers architects builders and planners

                                            regarding the qualitative and cost effective applications of steel in various structures

                                            including buildings bridges flyovers and airports

                                            FUTURE OF INDIAN STEEL INDUSTRY

                                            India is amongst a few countries in the world having the dual advantage of fast

                                            growing domestic demand coupled with access to raw materials Further the trend

                                            that is already discernible is that the axis of global steel production consumption is

                                            shifting towards Asia With their large populations China and India already account for

                                            35 of the total world steel production - more than double of Europe Asia is

                                            expected to outpace other regions of the world to an even greater extent in the coming

                                            years

                                            Amongst the Asian nations China has established a huge unbridgeable lead It

                                            is accepted that China will continue to be the leader However India is slated to

                                            emerge as the second Asian giant in the next eight years Figuratively speaking while

                                            the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                            splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                            China swallowed almost 32 of global steel It is unlikely that future production and

                                            consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                            has been the case over the last few years On the other hand it is sun-rise time for

                                            India where the demand has increased by 7-8 in the last couple of years In the long

                                            run Indian steel is likely to be more cost-effective since unlike China India has

                                            relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                            can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                            However the position with coal is not so favourable Though thermal coal

                                            reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                            traditional blast furnace route would require coking coal India does not have adequate

                                            reserves of coking coal nor is the meagre amount available of appropriate quality

                                            Thus the steel industry always had to contend with the dual problems of inadequate

                                            availability and poor quality of Indian coking coal This has been partly addressed by

                                            adopting alternative iron making processes that are not dependent on coking coal it

                                            can not be denied that coal is the biggest cause for concern for bulk steel production

                                            in India

                                            Because of the shortage of indigenous coal attempts have been made by steel

                                            producers to ensure long-term supplies by tying up with global majors or by acquiring

                                            mines in other countries This is the only long-term solution but with a global shortage

                                            of coal it may not remain cost-effective in the long run

                                            India is the seventh largest producer of steel and may further improve its position

                                            going by the current trends A series of investment decisions by major domestic

                                            players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                            POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                            The keen interest shown by various prospective investors is not only due to

                                            expectations of strong growth in domestic demand but also due to indigenous

                                            availability of key resources like iron ore and skilled workforce

                                            After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                            steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                            finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                            2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                            consumption has accelerated to 91 per cent

                                            With the likely growth of Indian economy at around 7 per cent per annum

                                            demand for steel is expected to remain strong and is projected to reach a level of 90

                                            million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                            demand is sustainable considering the fact that Indias per capita consumption of steel

                                            is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                            very low level of per capita consumption of steel in India is highlighted further when

                                            compared with the consumption levels of its peer group consisting of countries like

                                            China Brazil Mexico and Republic of Korea as also with selected developed

                                            countries

                                            Though there are realistic constraints in India to achieving as rapid a growth as in

                                            China there seems to be consensus among analysts that India is likely to witness a

                                            growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                            percent If the growth rate (9 per cent) of last three years is maintained then we will

                                            achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                            more conservative due to cyclicity of steel business it may be mentioned that in a

                                            country like India cyclicity is more in terms of prices rather than volumes of production

                                            Exports

                                            Similar optimism prevails with regard to export of iron and steel Export of steel

                                            starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                            2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                            rising domestic demand and low capacity additions Exports now constitute around 17

                                            per cent of total production and Indias presence in the developing and developed

                                            world is being increasingly felt Indian steel producers have recently been able to

                                            supply specialized grades and products used for sophisticated applications like

                                            automobiles On the cost front some of our producers are counted amongst the least

                                            cost producers of the world For an average reference plant India is competitively

                                            placed in the middle of the hierarchy of steel producing nations

                                            However we have a long way to go to catch up with the leading exporters of the

                                            world such as Japan the CIS countries Brazil etc It is however expected that by

                                            2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                            per cent of total projected production The projected export ratio compares well with

                                            the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                            The projected production of steel by 2019-20 to meet the domestic and export

                                            demand will be around 110 million tonnes Management of resources and

                                            infrastructural growth is going to be critical in achievement of the production level

                                            envisaged The broad requirements of various resources will increase manifold from

                                            the current level The bottlenecks in availability of critical inputs and various facilities

                                            need to be removed through concerted efforts of Government and industry The broad

                                            strategy to overcome these constraints as well as meet the strategic goals of the steel

                                            sector has been discussed in the National Steel Policy which has been recently

                                            approved by the Government

                                            As stated earlier the long-term goal of the National Steel Policy is that India

                                            should have a modern and efficient steel industry of world standards catering to a

                                            diversified steel demand The focus of the policy is to achieve global competitiveness

                                            not only in terms of cost quality and product mix but also in terms of global

                                            benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                            pronged strategy to achieve these goals On the demand side the strategy would be

                                            to create incremental demand through promotional efforts creation of awareness and

                                            strengthening the delivery chain particularly in rural areas On the supply side the

                                            strategy would be to facilitate creation of additional capacity remove procedural and

                                            policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                            investments in RampD and HRD and encourage the creation of infrastructure such as

                                            roads railways and ports

                                            The production figures exports and imports of finished carbon steel and pig iron

                                            and apparent consumption patterns of finished carbon steel as indicated by TATA

                                            Steel and SAIL attest to the continuing growth for both the sectors

                                            FINDINGS

                                            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 increased its profit over the year particularly in 2006-07

                                            Both the companies are planning to adopt modern technology which is going to

                                            help them to compete in world market but they need to be less dependent on

                                            state of art technology and coal for long term prospects

                                            Public sector has undergone retrenchment for the employees and improved

                                            has its lobour productivity but it is still lacking behind as compared to private

                                            sector

                                            SAIL has reduced the no of accidents due to improper handling of machinery

                                            still no of accidents are more than that of TATA Steel

                                            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

                                            ie 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 have to be met

                                            comprehensively if we are to take our legitimate place in the world as a developed

                                            nation by 2020

                                            BIBLIOGRAPHY

                                            Annual report (2006-07) published by ministry of steel

                                            Annual report (2006-07) published by TATA Steel

                                            Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                            REPORTrsquo posted by SAIL on its website

                                            lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                            held on 07 Nov 2006

                                            Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                            wwwsteelnicin (Official website of ministry of industry)

                                            wwwtatasteelcom (Official website of TATA Steel)

                                            wwwsailcoin (Official website of Steel Authority of India)

                                            wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                            wwwjpcindiansteelnicin (Website of joint planning committee)

                                            • DATA ANALYSIS
                                            • Comparison between TATA Steel and Steel Authority of India
                                            • Production
                                            • Quantity 000 Tonnes
                                            • Financials
                                            • Research and Development
                                            • (Rs Crore)
                                            • TATA Steel
                                            • Steel Authority of India
                                            • Environment
                                            • TATA Steel
                                            • Emissions effluents and wastes
                                            • Emissions
                                            • Waste handling
                                            • Effluent Management
                                            • Steel Authority of India
                                            • Solid Waste Management
                                            • Environmental Plantation
                                            • Environmental Recognitions
                                            • Workforce and Welfare of Society
                                            • TATA steel
                                            • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                            • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                            • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                            • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                            • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                            • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                            • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                            • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                            • Steel Authority of India
                                            • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                            • Technology
                                            • Steel Authority of India
                                            • Safety measures
                                            • Tata Steel
                                            • Steel Authority of India
                                            • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                            • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                            • Measures taken by Indian government to improve the industry
                                            • Now letrsquos 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-
                                            • Special assistance being provided by Ministry of Steel to Private Sector
                                            • FUTURE OF INDIAN STEEL INDUSTRY

                                              2005-06 12091 111137 123228

                                              2004-05 16050 169327 185377

                                              2003-04 20209 82729 102938

                                              2002-03 21135 51579 72714

                                              2001-02 21571 50598 72169

                                              Financial Performance

                                              An overview of the performance of KIOCL during the year 2006-07 (up to November

                                              2006) together with actuals for the previous three years is indicated below

                                              (Rs in lakh)

                                              Particulars 2006-07(up to December 2006)

                                              2005-06 2004-05 2003-04

                                              Total value of Sales 12427 123228 185377 102938

                                              Gross Margin 2620 68706 120863 45945

                                              Profit after Tax 1029 35630 64984 30070

                                              Inventories(excluding finished stock)

                                              20417 15843 8720 7616

                                              BIRD GROUP OF COMPANIES

                                              Consequent upon nationalisation of the undertaking of Bird and Company Ltd in 1980

                                              the following seven companies came under the administrative control of the Ministry of

                                              Steel Government of India

                                              (a) The Orissa Minerals Development Company Limited (OMDC)

                                              (b) The Bisra Stone Lime Company Limited (BSLC)

                                              (c) The Karanpura Development Company Limited (KDCL)

                                              (d) Scott amp Saxby Limited (SSL)

                                              (e) Eastern Investments Limited (EIL)

                                              (f) Burrakar Coal Company Limited (Burrakar)

                                              (g) Borrea Coal Company Limited (Borrea)

                                              The status of the companies is as under

                                              a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                              of coal mines The two companies are in the process of liquidation The official

                                              liquidator has already taken over the assets and liabilities of these two companies

                                              b) EIL being an investment company is having a major stake in the equity shares of

                                              operating companies under the Bird Group

                                              c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                              Status of the Companies at the Time of Nationalisation

                                              At the time when the Bird Group of Companies came under the administrative control

                                              of the Ministry of Steel Government of India all of them were financially sick and

                                              burdened with various problems With the financial support from the Government of

                                              India problems relating mainly to excessive manpower erosion of working capital and

                                              outstanding liabilities could be settled to a considerable extent

                                              REVIEW OF LITERATURE

                                              RS PANDEY sees a bright future for the steel industry in India provided of course

                                              the iron ore mining policy to be announced by the government soon acts as a catalyst

                                              for growth He discusses the industrys problems and prospects in an interview When

                                              asked about the steel sectors ie private and public he expressed his expert views

                                              The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                              Excerpts

                                              The public sector steel companies in India are doing extremely well And therefore

                                              they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                              Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                              Between 1992-93 and now the share of the public sector in steel production had gone

                                              down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                              1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                              the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                              to 71 per cent But the public sector units are growing even if the private sector is

                                              growing faster

                                              During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                              going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                              million tonnes in just four years RINL is set to expand its capacity from three million

                                              tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                              capacity for the PSUs

                                              The public sector should be encouraged all the more Let there be a healthy

                                              competition between public and private sector producers The question of exit comes

                                              when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                              was at below Rs10 per share Today it is more than Rs130 and the expectations

                                              are that it will go up even higher

                                              When talked about the labour productivity he says Yes labour productivity is low in

                                              SAIL in particular But it is improving The steel major is going to adjust much of its

                                              existing manpower in the expansion phase when its capacity is going to almost

                                              double The management had also undertaken a massive VRS [voluntary retirement

                                              scheme] In RINL labour productivity is not all that bad

                                              Besides SAIL has done very well in various other techno-economic parameters in the

                                              last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                              per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                              improvement of 20 per cent In blast furnace productivity also there has been an

                                              improvement as also in the production of high-end special steels and capacity

                                              utilisation

                                              With the improved turnover which comes from higher capacity use and higher

                                              manpower productivity SAILs profits have surged Its gross profit more than doubled

                                              between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                              was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                              is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                              other input costs and 71 per cent owing to improvement in capacity use and other

                                              factors that are just mentioned

                                              OBJECTIVES

                                              To compare Private and Public steel sector with refrence to TATA Steel and

                                              Steel Authority Of India

                                              To analyse potential of both the companies ie TATA Steel and SAIL

                                              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

                                              Research Methodology

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

                                              a) Research design-

                                              In case of my research ldquoComparative analysis of Indian private and Public

                                              sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                              found to be more appropriate

                                              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

                                              Comparison between TATA Steel and Steel Authority of India

                                              The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                              significant improvements in the last two years The combined profit before tax of all 15

                                              PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                              Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                              The profit before tax for all PSUs also exhibited a significant improvement of

                                              around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                              Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                              comparable period of last year

                                              Contribution of PSUs to public exchequer has also gone up significantly For

                                              example the contribution of five leading companies namely SAIL RINL NMDC

                                              KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                              duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                              from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                              On the other hand 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

                                              During the period (April-December 2006) 205 million tonne of steel was produced by

                                              Private Sector steel units out of the total production of 3315 million tonne in the

                                              country The private sector units consist of major steel producers in one hand and

                                              relatively smaller amp 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

                                              For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                              companies on following parameters

                                              Production

                                              Chart showing production of both the companies

                                              Quantity 000 Tonnes

                                              2007-08 APR-DEC07APR-

                                              DEC06 ACTUA

                                              L

                                              AGE OF CURRENT

                                              PRODUCTION OVER

                                              CAPACITY UTILISATION

                                              TARGET TENTATIV

                                              E

                                              TARGET

                                              ACTUAL

                                              APR-DEC07 TARGE

                                              T

                                              APR-DEC06 ACTUA

                                              L

                                              APR-DEC 07

                                              APR-DEC06

                                              SAIL

                                              i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                              ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                              iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                              iv)BSL43500 32630 30970 30010 949 1032 950 910

                                              v)ISP5000 3760 3520 3450 936 1020 940 920

                                              vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                              vii)VISL

                                              1390 1050 1160 1190 1105 975 1300 1340

                                              TATA 50000 37440 37090 37380 991 992 990 1000

                                              TATA Steel

                                              The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                              but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                              target of 3744 (mT) but could produce 3709 However for the same period in last

                                              year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                              to 99 this year

                                              Steel Authority of India

                                              The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                              but it could produce only 126 (mT) a growth of 4 over the previous year However

                                              for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                              10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                              capacity utilisation of 103 this year as compared to 101 last year

                                              Financials

                                              TATA Steel

                                              The year 2006-07 has seen the highest turnover and profits continuing the trend

                                              of the past four years The Company achieved the best ever sales turnover and

                                              profitability during the year under review A robust Indian economy firm steel prices

                                              higher volumes and several improvement initiatives contributed to the record

                                              performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                              the previous year Export turnover was lower by about 5 due to lower volumes

                                              Average price realisation improved mainly due to higher prices of hot rolled

                                              coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                              (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                              Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                              due to additional borrowings for the Companyrsquos domestic expansion programs and

                                              funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                              providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                              crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                              before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                              after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                              20 compared to the previous year

                                              The record financial results would not have been possible without a matching

                                              performance by the operating departments including the raw materials division The

                                              year witnessed the best ever crude steel production by the Company at 505 million

                                              tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                              first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                              upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                              rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                              Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                              increase in production was backed by improvements in operating practices and

                                              productivity resulting in a reduction in consumption of raw materials energy

                                              refractories etc

                                              Steel Authority of India

                                              Financial Year 2006-07 has been eventful year for the company with further

                                              momentum in improving operational efficiencies laying strong foundation and building

                                              road map for modernisation and expansion of SAIL Plants with several new initiatives

                                              undertaken with its human resource at the core During the year the company got the

                                              distinction of first metal company in the country to reach a market capitalization of Rs

                                              50000 crore

                                              There have been improvements in all financial parameters which are shown in

                                              the table given below-

                                              SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                              before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                              previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                              increase of 55

                                              Research and Development

                                              Chart showing production of both the companies

                                              (Rs Crore)

                                              TATA Steel

                                              The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                              develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                              steel for body panels

                                              Research is undertaken at Tata Steel in the areas of raw materials including coal

                                              coke energy conservation waste utilisation sintering blast furnace productivity and

                                              phosphorous reduction product development and improvement in life of plant and

                                              machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                              sealed and over 100 are in process

                                              Steel Authority of India

                                              Research and Development Centre for Iron and Steel (RDCIS) has provided

                                              innovative technological inputs to different units of SAIL with special emphasis on

                                              cost reduction product development and application quality improvement energy

                                              conservation and automation Several new products were developed and

                                              commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                              Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                              specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                              micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                              Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                              Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                              strengthened its technology marketing efforts by providing consultancy services

                                              organising specialised testing and transfer of technological innovations to outside

                                              customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                              Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                              Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                              During the year 1998 technical papers were publishedpresented besides filing

                                              of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                              awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                              achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                              Government of India

                                              Environment

                                              TATA Steel

                                              Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                              Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                              has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                              Jamshedpur is the only town in the country which

                                              Significant achievements by the Company include an improvement in

                                              environment and resource conservation including a reduction in green house erosion

                                              raw materials and water consumption The Company has increased waste re-use and

                                              re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                              the-art pollution control systems being installed to prevent and control pollution The

                                              Company has almost doubled its capital investment in Pollution Abatement in the last

                                              five years

                                              Emissions effluents and wastes

                                              Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                              most relevance to the steel industry Considerable reduction has been effected by

                                              Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                              granulation is taken into account Other Greenhouse Gas emissions do not result from

                                              Tata Steelrsquos activities

                                              Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                              tonnes in 2003-04 as against 790 tonnes used during the previous year

                                              Hazardous Waste under Basel Convention The Company does not import or export

                                              any waste deemed hazardous under the Basel Convention All hazardous wastes

                                              generated are handled as per the requirement of the Hazardous Waste Management

                                              and Handling Rules 19892000

                                              Emissions

                                              Tata Steel has undertaken several initiatives which have resulted in

                                              considerable reduction in stack emission Emissions are well below the Indian and

                                              international standards The emission load including particulate matter Sulphur

                                              Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                              undertaken at the Steel Works

                                              Waste handling

                                              Most of the solid waste generated from Steel Works is recycled or reused 18

                                              of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                              was used to fill low-lying areas and for peripheral road construction around

                                              Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                              power plants was dumped in a designated dump area

                                              Effluent Management

                                              Waste water from the steel making process is being treated with best available

                                              physio-chemical methods as well as being recycled Waste water from the coke plant

                                              is treated biologically where organic pollutants are oxidised and decomposed by micro

                                              organisms The Company has reduced the levels of total pollutant discharge in waste

                                              water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                              Steel Authority of India

                                              Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                              environmentally responsible manner to comply with applicable regulations and striving

                                              to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                              efficiency and optimize resource consumption through various measures viz

                                              improvement in process technology in the areas of raw materials coke iron and steel

                                              making reuserecycle of the by-products generated and conservation of energy and

                                              water

                                              Solid Waste Management

                                              During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                              and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                              Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                              these wastes are being made through internal recycling and selling to outside

                                              agencies The wastes generated in the steel plants are being utilized mainly through

                                              their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                              during April-September 2006

                                              Environmental Plantation

                                              Trees have a significant role in protection of environment and ecological balance

                                              Extensive afforestation programme are being followed in all the plants and mines The

                                              basis of choosing the species of plants mainly depends on local soil characteristics

                                              and prevailing meteorological conditions The green belt developed by afforestation

                                              adds to the aesthetic environment which becomes dust and noise barriers

                                              A total number of 145521 saplings have been planted covering an area of 637

                                              hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                              hectare in 2004-05 in and around the steel plants of SAIL

                                              Environmental Recognitions

                                              SAIL plants have been awarded various prizes for environmental management in

                                              their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                              the Confederation of Indian Industries (CII) for exemplary performance in the

                                              environmental economic andsocial dimensions of sustainable development and the

                                              Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                              Excellence Award in the metal sector 2005 instuted by the World Environment

                                              Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                              for 2005 from International Greenland Society

                                              Workforce and Welfare of Society

                                              TATA steel

                                              Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                              and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                              enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                              provide a work environment that will ensure a sense of purpose and personal growth

                                              for each individual The wish of the company is to see the smile on every face

                                              everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                              people and enriched empowered and enhanced their lives

                                              Even in its nascent years social scientists Sidney and Beatrice Webb were

                                              brought in to work on welfare schemes In fact some of the initiatives introduced by

                                              Tata Steel were the first of their kind in India and some even in the western countries

                                              at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                              source of its competitiveness It focuses on constantly updating and challenging

                                              intellectual capabilities to enable them to excel in performance Special efforts are

                                              made for enhancing strategic thinking skills and analytical abilities of its managers and

                                              workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                              available with its people through Knowledge Management and sharing of best

                                              practices

                                              In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                              mutual co-operation coordination and understanding between the Management and

                                              the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                              among many other prestigious awards and recognition Tata Steel aims at ensuring

                                              transparency fairness and equity in all its interactions with its employees to create an

                                              enthused and happy workforce

                                              In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                              assistance in the fields of education vocational training self-employment and

                                              family welfare

                                              Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                              12 times This facility provides on-the-spot diagnostic medical and advanced

                                              surgical treatment for preventive and curative interventions to people in

                                              inaccessible rural areas

                                              Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                              for the 1920 Antwerp Olympics

                                              The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                              track was inaugurated in 1991 The complex also houses facilities for handball

                                              tennis volleyball hockey basketball boxing table tennis and a modern

                                              gymnasium

                                              The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                              services for the betterment of the people in and around Jamshedpur

                                              At times of natural calamities the company has rushe immediate relief and off

                                              ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                              fl ood ravaged Orissa and other such aff ected areas

                                              Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                              er a unique environment for the children of Jamshedpur to grow up in

                                              In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                              Jamshedpur has emerged as the one of the best cities in India

                                              Steel Authority of India

                                              The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                              executives and 123005 non-executives The total reduction in manpower achieved

                                              during the year stood at 4864 which included separation of 881 employees through

                                              voluntary retirement The labour productivity improved by around 12 over previous

                                              year to 150 tonne crude steelmanyear

                                              Some of the areas of assistance which are available to the weaker sections are the

                                              following

                                              The company has provided land for construction of school buildings in some of

                                              the steel townships as well as in other places for spreading education among

                                              the masses

                                              The company has constructed roads in remote areas around the steel plants

                                              and also where the captive mines are located to improve communication and

                                              also increase activities such as organisation of health camps school facilities

                                              drinking water etc under the peripheral development schemes

                                              Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                              Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                              providing them with education boarding and lodging facilities

                                              Construction of bridges by-pass roads metal-morum path waterways

                                              levellingdressing area around township pre-mixed roads Installation of hand-

                                              pumps tube wells and wells for villagers

                                              Construction of school buildings (including for mentally retarded deaf and

                                              dumb children) madarsas providing school furniture therein and construction

                                              of hostels womenrsquos college building etc

                                              Fourteen scholarships are awarded to deserving SCST undergraduate

                                              engineering students in various disciplines to encourage technical education

                                              among them

                                              In many cases tuition fee in company run schools is exempt for SCST

                                              students Steps are taken to provide education to more and more tribal children

                                              in company schools

                                              The unemployed SCST youth are given specialized training in various

                                              technical trades to develop skill and knowledge Such training is provided free

                                              of cost

                                              Adult literacy campaign is carried out in most of the steel townships Every year

                                              more and more men and women are being covered in this campaign

                                              Development of fishery and cottage industry providing sewing machines to

                                              village mahila mandals and promoting other self-employment generation

                                              schemes

                                              SAIL has established a hockey academy with stadium and hostel facilities at

                                              Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                              academy was successful in spotting a number of young talented tribal players

                                              and grooms them under expertise of ex-Olympian

                                              Technology

                                              The biggest boost to efficiency in the steel industry has come from the increased

                                              use of continuous casting ndash an indicator of the modernity of the production process Its

                                              share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                              now India is thus well on its way to joining the ranks of the leading steelmakers

                                              among the industrial nations (share in EU-25 96) However in India some 6 of

                                              crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                              suggests there is restructuring potential

                                              TATA Steel

                                              Tata Steels stall at the International Trade Fair was adjudged the best along

                                              with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                              international companies also took part in the exhibition Participating companies from

                                              countries all over the world exhibited latest technologies and know-how List of

                                              participating companies included Baosteel SAIL Heavy Engineering Corporation

                                              Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                              companies of national and international repute China was the partner country for the

                                              International Trade Fair this year

                                              In the award winning exhibition Tata Steel showcased its best coal mining practices

                                              cutting-edge technology used in iron ore mining pioneering human resource

                                              practices 78 years of industrial harmony and various other aspects of the worlds best

                                              steel company

                                              The 6th International Trade Fair and Conference an institutionalised global

                                              event is considered to be one of the most prestigious forums for national as well

                                              international participants It is a conclave of the finest minds concerned with the future

                                              direction and growth of these sectors The forum provided the worlds most eminent

                                              metallurgists manufacturers of metallurgical and mining machinery and related

                                              sectors professionals analysts and experts with the opportunity to exchange views on

                                              emerging technologies synergy and strengths and open up wider horizons for

                                              sectorial development

                                              Tata Steel to adopt Corus technology

                                              Tata Steel plans to implement alternate technology used by the British steel

                                              maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                              production according to Mr B Muthuraman Managing Director Tata Steel

                                              ldquoWe are looking at alternate technology Corus has developed an alternate

                                              technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                              newspersons on the sidelines of the 34th National Management Convention organised

                                              by the All-India Management Association However he declined to give further details

                                              on the type of technology the Indian steel giant plans to implement

                                              Steel Authority of India

                                              Modernisation holds the key to SAILs fortunes in the near future The objective

                                              of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                              and productive capacity and in the process become more energy-efficient and

                                              improve quality The key component of the ongoing modernisation drive - already

                                              completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                              ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                              continuous casting techniques A senior SAIL official says Continuous casting and

                                              basic oxygen furnaces ensure better quality steel through processes more easily

                                              monitored for quality control The basic oxygen surfaces method is significantly faster

                                              more automated and permits greater flexibility Continuous casting is more efficient

                                              than the traditional ingot casting methods and gives increased yields while enabling

                                              better quality standards SAIL is also modernising its finishing mills and is adding

                                              secondary refining facilities to improve quality

                                              Safety measures

                                              A unique feature of safety management in steel industry is that a bipartite forum

                                              named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                              was formed in 1973 at national level having representatives from steel plants in SAIL

                                              RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                              Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                              workshops training programme safety competitions for member organisations JCSSI

                                              with the co-operation and support of Trade Union representatives formulates policies

                                              and guidelines for its member plants and monitors the implementation

                                              Tata Steel

                                              Safety has always been a prime focus at Tata Steel A Safety Committee a

                                              Safety department and a Safety Trophy helped spread the message all across the

                                              company

                                              TATA reaffirms its commitment to provide safe working place and clean

                                              environment to its employees and other stakeholders as an integral part of its

                                              business philosophy and values We will continually enhance our Environmental

                                              Occupational Health amp Safety (EHS) performance in our activities products and

                                              services through a structured EHS management framework Towards this

                                              commitment we shall

                                              Establish and achieve EHS objectives and targets

                                              Ensure compliance with applicable EHS legislation and other requirement and

                                              go beyond

                                              Conserve natural resources and energy by constantly seeking to reduce

                                              consumption and promoting waste avoidance and recycling measures

                                              Eliminate minimize andor control adverse environmental impacts and

                                              occupational health and safety risks by adopting appropriate state-of-the-art

                                              technology and best EHS management practices at all levels sand functions

                                              Enhance awareness skill and competence of our employees and contractors

                                              so as to enable them to demonstrate their involvement responsibility and

                                              accountability for sound EHS performance

                                              Steel Authority of India

                                              SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                              monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                              Annual Performance Plans (APP) for the areas of safety and fire services are

                                              formulated and review of implementation of APP is done during Heads of

                                              Safety meeting

                                              Internal and external safety audits of major departments particularly hazardous

                                              areas are conducted every year and points arising from these audits are

                                              liquidated Safety aspects have been incorporated in standard operating

                                              practices (SOP) and standard maintenance practices (SMP)

                                              All major capital repairsshut downs are closely monitored round the clock

                                              Periodic drives are conducted to inculcate safety awarenessculture up to

                                              grass-root level apart from regular inspections as per checklists to identify

                                              unsafe conditionsacts

                                              Safety training is imparted to target group employees at various levels HRD

                                              intervention in the area of safety covers Heads of Departments Line Managers

                                              amp Departmental Safety Officers Besides area specific workshops are

                                              conducted at different locations on important topics like gas safety railroad

                                              safety safety in iron steel amp coke making etc

                                              Consistent efforts were made by SAIL Safety Organisation for improving safety

                                              standards in the company by taking measures like intensive safety drives in works

                                              area and conducting safety audits in hazardous departments of different plants and

                                              mines In addition specific workshops on safety aspects were organised in various

                                              SAIL steel plants

                                              Measures taken by Indian government to improve the industry

                                              Now letrsquos 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-

                                              1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                              among others was removed from the list of industries reserved for the public

                                              sector and also exempted from the provisions of compulsory licensing under the

                                              Industries (Development and Regulation) Act 1951

                                              2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                              of `high priority industries for automatic approval for foreign equity investment up

                                              to 51 This limit has been recently increased to 100

                                              3 Price and distribution of steel were deregulated from January 1992 At the same

                                              time it was ensured that priority continued to be accorded for meeting the

                                              requirements of small scale industries exporters of engineering goods and North

                                              Eastern Region of the country besides strategic sectors such as Defence and

                                              Railways

                                              4 The trade policy has been liberalised and import and export of iron and steel is

                                              freely allowed There are no quantitative restrictions on import of iron and steel

                                              items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                              regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                              steel have drastically come down since 1991-92 levels and the government is

                                              committed to bring them down to the international levels In Chapter 72 there are

                                              two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                              5 Iron amp Steel are freely importable as per the Extant Policy

                                              6 Iron amp Steel are freely exportable

                                              7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                              8 The floor price for seconds and defectives continues till date

                                              9 Imports of seconds and defectives of steel are allowed only through three

                                              designated ports of Mumbai Calcutta and Chennai

                                              10Mandatory pre inspection certificate by a reputed international agency for every

                                              import consignment of seconds and defectives

                                              11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                              10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                              the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                              per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                              15 per cent to 5 per cent

                                              12Further customs duty on several raw materials used by the steel sector like

                                              noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                              coking coal to zero

                                              13To bring down the prices of steel the excise duty on steel products was reduced

                                              from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                              that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                              increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                              cut on moderating prices was not achieved

                                              14The union Budget 2007-08 the import duty on seconds and defective has been

                                              further reduced from 20 to 10

                                              Special assistance being provided by Ministry of Steel to Private Sector

                                              1 Ministry of Steel is extending all possible support as detailed below for the

                                              development of Iron and Steel Sector in the country

                                              2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                              new plants and expansion of existing ones wherever applied for

                                              3 To ensure an un-interrupted supply of raw materials to the producers

                                              4 The Ministry has been interacting with All India Financial institutions to expedite

                                              clearance of projects

                                              5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                              Plants are held at the level of Secretary

                                              6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                              industry so that their absence does not lead to bottlenecks in the future growth of

                                              the Iron and Steel Sector and takes up these issues with the concerned ministries

                                              7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                              Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                              country are members of this Institute which has been set up with the objective of

                                              promoting developing and propagating the proper and effective use of steel

                                              8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                              major steel plants being implemented Govt has setup a Project Coordination

                                              Group under the Chairmanship of Steel Minister

                                              NATIONAL STEEL POLICY 2005

                                              The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                              development and as such great importance is attached to capacity expansion in line

                                              with expected demand at cost and prices which make Indian steel internationally

                                              competitive The existing regime of liberalization decontrol and deregulation of

                                              industry in the country has opened up new opportunities for the expansion of the steel

                                              industry With a view to accelerating the growth of the steel sector and attaining the

                                              vision of India becoming a developed economy by 2020 the Ministry of Steel

                                              formulated a National Steel Policy (NSP) in 2005

                                              The following salient features can be derived after analysing the NSP 2005

                                              The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                              towards reform restructuring and globalisation

                                              The long-term goal of the NSP is that India should have a modern and efficient

                                              steel industry of world standards catering to diversified steel demand The focus of

                                              the policy is to achieve global competitiveness not only in terms of cost quality and

                                              product-mix but also in terms of global benchmarks of efficiency and productivity

                                              In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                              NSP seeks to remove the supply-side constraints to the growth of this industry in

                                              an open globally integrated and competitive environment

                                              The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                              policy goal On the demand side the strategy would be to create incremental

                                              demand through promotional efforts creation of awareness and strengthening the

                                              delivery chain particularly in rural areas On the supply side the strategy would be

                                              to facilitate creation of additional capacity remove procedural and policy

                                              bottlenecks in the availability of inputs such as iron ore and coal make higher

                                              investments in RampD and encourage the creation of infrastructure such as roads

                                              railways and ports

                                              The NSP acknowledges the low per capita consumption of steel in the country

                                              especially in the rural areas and the need to boost steel consumption to improve

                                              quality of life and help in meeting the growing aspirations of masses

                                              In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                              industry would need additional capital In addition funds would be required for

                                              technological upgrade of existing facilities In order to mobilize such vast resources

                                              NSP seeks to encourage foreign direct investment In addition the policy also

                                              seeks to make the fiscal incentives available to infrastructure projects accessible

                                              to the steel industry

                                              The NSP seeks to support developing of risk-hedging instruments like futures and

                                              derivatives to contain price volatility in the steel market

                                              The NSP seeks to strengthen the existing training and research facilities available

                                              to the domestic steel industry so as to provide suitable training programmes

                                              especially for the secondary small-scale units and also to collect and analyse data

                                              on important parameters of the industry

                                              The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                              capability for special types of steel substitute coking coal use iron ore fines

                                              develop new products suited to rural needs enhance material and energy

                                              efficiency utilize waste and arrest environmental degradation

                                              The NSP acknowledges the important role played by the secondary steel sector in

                                              providing employment meeting local demand of steel in rural and semi-urban

                                              areas and meeting the countryrsquos demand of some special products and seeks to

                                              endeavour to provide the necessary feedstock to these units at reasonable prices

                                              from major plants through the existing mechanism of State Small Industries

                                              Corporations

                                              The NSP recognizes the fact that integration of the Indian steel industry with the

                                              global economy requires that the industry should be protected from unfair trade

                                              practices The NSP therefore envisages institution of mechanisms for import

                                              surveillance and monitoring export subsidies in other countries

                                              The present per capita consumption of steel in the country is very low compared to the

                                              world average As mentioned above one of the objectives of the NSP is to augment

                                              the demand and consumption of steel in the country by conscious promotion of steel

                                              usage With a view to create a mass awareness campaign on conscious promotion of

                                              steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                              the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                              The Committee is being serviced by Institute for Steel Development and Growth

                                              (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                              way of an awareness campaign with particular emphasis on rural sectors The

                                              Committee also aims at educating the designers architects builders and planners

                                              regarding the qualitative and cost effective applications of steel in various structures

                                              including buildings bridges flyovers and airports

                                              FUTURE OF INDIAN STEEL INDUSTRY

                                              India is amongst a few countries in the world having the dual advantage of fast

                                              growing domestic demand coupled with access to raw materials Further the trend

                                              that is already discernible is that the axis of global steel production consumption is

                                              shifting towards Asia With their large populations China and India already account for

                                              35 of the total world steel production - more than double of Europe Asia is

                                              expected to outpace other regions of the world to an even greater extent in the coming

                                              years

                                              Amongst the Asian nations China has established a huge unbridgeable lead It

                                              is accepted that China will continue to be the leader However India is slated to

                                              emerge as the second Asian giant in the next eight years Figuratively speaking while

                                              the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                              splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                              China swallowed almost 32 of global steel It is unlikely that future production and

                                              consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                              has been the case over the last few years On the other hand it is sun-rise time for

                                              India where the demand has increased by 7-8 in the last couple of years In the long

                                              run Indian steel is likely to be more cost-effective since unlike China India has

                                              relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                              can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                              However the position with coal is not so favourable Though thermal coal

                                              reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                              traditional blast furnace route would require coking coal India does not have adequate

                                              reserves of coking coal nor is the meagre amount available of appropriate quality

                                              Thus the steel industry always had to contend with the dual problems of inadequate

                                              availability and poor quality of Indian coking coal This has been partly addressed by

                                              adopting alternative iron making processes that are not dependent on coking coal it

                                              can not be denied that coal is the biggest cause for concern for bulk steel production

                                              in India

                                              Because of the shortage of indigenous coal attempts have been made by steel

                                              producers to ensure long-term supplies by tying up with global majors or by acquiring

                                              mines in other countries This is the only long-term solution but with a global shortage

                                              of coal it may not remain cost-effective in the long run

                                              India is the seventh largest producer of steel and may further improve its position

                                              going by the current trends A series of investment decisions by major domestic

                                              players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                              POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                              The keen interest shown by various prospective investors is not only due to

                                              expectations of strong growth in domestic demand but also due to indigenous

                                              availability of key resources like iron ore and skilled workforce

                                              After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                              steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                              finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                              2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                              consumption has accelerated to 91 per cent

                                              With the likely growth of Indian economy at around 7 per cent per annum

                                              demand for steel is expected to remain strong and is projected to reach a level of 90

                                              million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                              demand is sustainable considering the fact that Indias per capita consumption of steel

                                              is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                              very low level of per capita consumption of steel in India is highlighted further when

                                              compared with the consumption levels of its peer group consisting of countries like

                                              China Brazil Mexico and Republic of Korea as also with selected developed

                                              countries

                                              Though there are realistic constraints in India to achieving as rapid a growth as in

                                              China there seems to be consensus among analysts that India is likely to witness a

                                              growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                              percent If the growth rate (9 per cent) of last three years is maintained then we will

                                              achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                              more conservative due to cyclicity of steel business it may be mentioned that in a

                                              country like India cyclicity is more in terms of prices rather than volumes of production

                                              Exports

                                              Similar optimism prevails with regard to export of iron and steel Export of steel

                                              starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                              2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                              rising domestic demand and low capacity additions Exports now constitute around 17

                                              per cent of total production and Indias presence in the developing and developed

                                              world is being increasingly felt Indian steel producers have recently been able to

                                              supply specialized grades and products used for sophisticated applications like

                                              automobiles On the cost front some of our producers are counted amongst the least

                                              cost producers of the world For an average reference plant India is competitively

                                              placed in the middle of the hierarchy of steel producing nations

                                              However we have a long way to go to catch up with the leading exporters of the

                                              world such as Japan the CIS countries Brazil etc It is however expected that by

                                              2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                              per cent of total projected production The projected export ratio compares well with

                                              the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                              The projected production of steel by 2019-20 to meet the domestic and export

                                              demand will be around 110 million tonnes Management of resources and

                                              infrastructural growth is going to be critical in achievement of the production level

                                              envisaged The broad requirements of various resources will increase manifold from

                                              the current level The bottlenecks in availability of critical inputs and various facilities

                                              need to be removed through concerted efforts of Government and industry The broad

                                              strategy to overcome these constraints as well as meet the strategic goals of the steel

                                              sector has been discussed in the National Steel Policy which has been recently

                                              approved by the Government

                                              As stated earlier the long-term goal of the National Steel Policy is that India

                                              should have a modern and efficient steel industry of world standards catering to a

                                              diversified steel demand The focus of the policy is to achieve global competitiveness

                                              not only in terms of cost quality and product mix but also in terms of global

                                              benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                              pronged strategy to achieve these goals On the demand side the strategy would be

                                              to create incremental demand through promotional efforts creation of awareness and

                                              strengthening the delivery chain particularly in rural areas On the supply side the

                                              strategy would be to facilitate creation of additional capacity remove procedural and

                                              policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                              investments in RampD and HRD and encourage the creation of infrastructure such as

                                              roads railways and ports

                                              The production figures exports and imports of finished carbon steel and pig iron

                                              and apparent consumption patterns of finished carbon steel as indicated by TATA

                                              Steel and SAIL attest to the continuing growth for both the sectors

                                              FINDINGS

                                              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 increased its profit over the year particularly in 2006-07

                                              Both the companies are planning to adopt modern technology which is going to

                                              help them to compete in world market but they need to be less dependent on

                                              state of art technology and coal for long term prospects

                                              Public sector has undergone retrenchment for the employees and improved

                                              has its lobour productivity but it is still lacking behind as compared to private

                                              sector

                                              SAIL has reduced the no of accidents due to improper handling of machinery

                                              still no of accidents are more than that of TATA Steel

                                              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

                                              ie 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 have to be met

                                              comprehensively if we are to take our legitimate place in the world as a developed

                                              nation by 2020

                                              BIBLIOGRAPHY

                                              Annual report (2006-07) published by ministry of steel

                                              Annual report (2006-07) published by TATA Steel

                                              Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                              REPORTrsquo posted by SAIL on its website

                                              lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                              held on 07 Nov 2006

                                              Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                              wwwsteelnicin (Official website of ministry of industry)

                                              wwwtatasteelcom (Official website of TATA Steel)

                                              wwwsailcoin (Official website of Steel Authority of India)

                                              wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                              wwwjpcindiansteelnicin (Website of joint planning committee)

                                              • DATA ANALYSIS
                                              • Comparison between TATA Steel and Steel Authority of India
                                              • Production
                                              • Quantity 000 Tonnes
                                              • Financials
                                              • Research and Development
                                              • (Rs Crore)
                                              • TATA Steel
                                              • Steel Authority of India
                                              • Environment
                                              • TATA Steel
                                              • Emissions effluents and wastes
                                              • Emissions
                                              • Waste handling
                                              • Effluent Management
                                              • Steel Authority of India
                                              • Solid Waste Management
                                              • Environmental Plantation
                                              • Environmental Recognitions
                                              • Workforce and Welfare of Society
                                              • TATA steel
                                              • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                              • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                              • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                              • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                              • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                              • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                              • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                              • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                              • Steel Authority of India
                                              • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                              • Technology
                                              • Steel Authority of India
                                              • Safety measures
                                              • Tata Steel
                                              • Steel Authority of India
                                              • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                              • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                              • Measures taken by Indian government to improve the industry
                                              • Now letrsquos 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-
                                              • Special assistance being provided by Ministry of Steel to Private Sector
                                              • FUTURE OF INDIAN STEEL INDUSTRY

                                                (a) The Orissa Minerals Development Company Limited (OMDC)

                                                (b) The Bisra Stone Lime Company Limited (BSLC)

                                                (c) The Karanpura Development Company Limited (KDCL)

                                                (d) Scott amp Saxby Limited (SSL)

                                                (e) Eastern Investments Limited (EIL)

                                                (f) Burrakar Coal Company Limited (Burrakar)

                                                (g) Borrea Coal Company Limited (Borrea)

                                                The status of the companies is as under

                                                a) Burrakar and Borrea coal companies became non-operational after nationalisation

                                                of coal mines The two companies are in the process of liquidation The official

                                                liquidator has already taken over the assets and liabilities of these two companies

                                                b) EIL being an investment company is having a major stake in the equity shares of

                                                operating companies under the Bird Group

                                                c) OMDC BSLC KDCL amp SSL are operating companies under the Group

                                                Status of the Companies at the Time of Nationalisation

                                                At the time when the Bird Group of Companies came under the administrative control

                                                of the Ministry of Steel Government of India all of them were financially sick and

                                                burdened with various problems With the financial support from the Government of

                                                India problems relating mainly to excessive manpower erosion of working capital and

                                                outstanding liabilities could be settled to a considerable extent

                                                REVIEW OF LITERATURE

                                                RS PANDEY sees a bright future for the steel industry in India provided of course

                                                the iron ore mining policy to be announced by the government soon acts as a catalyst

                                                for growth He discusses the industrys problems and prospects in an interview When

                                                asked about the steel sectors ie private and public he expressed his expert views

                                                The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                                Excerpts

                                                The public sector steel companies in India are doing extremely well And therefore

                                                they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                                Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                                Between 1992-93 and now the share of the public sector in steel production had gone

                                                down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                                1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                                the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                                to 71 per cent But the public sector units are growing even if the private sector is

                                                growing faster

                                                During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                                going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                                million tonnes in just four years RINL is set to expand its capacity from three million

                                                tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                                capacity for the PSUs

                                                The public sector should be encouraged all the more Let there be a healthy

                                                competition between public and private sector producers The question of exit comes

                                                when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                                was at below Rs10 per share Today it is more than Rs130 and the expectations

                                                are that it will go up even higher

                                                When talked about the labour productivity he says Yes labour productivity is low in

                                                SAIL in particular But it is improving The steel major is going to adjust much of its

                                                existing manpower in the expansion phase when its capacity is going to almost

                                                double The management had also undertaken a massive VRS [voluntary retirement

                                                scheme] In RINL labour productivity is not all that bad

                                                Besides SAIL has done very well in various other techno-economic parameters in the

                                                last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                                per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                                improvement of 20 per cent In blast furnace productivity also there has been an

                                                improvement as also in the production of high-end special steels and capacity

                                                utilisation

                                                With the improved turnover which comes from higher capacity use and higher

                                                manpower productivity SAILs profits have surged Its gross profit more than doubled

                                                between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                                was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                                is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                                other input costs and 71 per cent owing to improvement in capacity use and other

                                                factors that are just mentioned

                                                OBJECTIVES

                                                To compare Private and Public steel sector with refrence to TATA Steel and

                                                Steel Authority Of India

                                                To analyse potential of both the companies ie TATA Steel and SAIL

                                                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

                                                Research Methodology

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

                                                a) Research design-

                                                In case of my research ldquoComparative analysis of Indian private and Public

                                                sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                                found to be more appropriate

                                                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

                                                Comparison between TATA Steel and Steel Authority of India

                                                The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                                significant improvements in the last two years The combined profit before tax of all 15

                                                PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                                Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                                The profit before tax for all PSUs also exhibited a significant improvement of

                                                around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                                Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                                comparable period of last year

                                                Contribution of PSUs to public exchequer has also gone up significantly For

                                                example the contribution of five leading companies namely SAIL RINL NMDC

                                                KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                                duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                                from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                                On the other hand 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

                                                During the period (April-December 2006) 205 million tonne of steel was produced by

                                                Private Sector steel units out of the total production of 3315 million tonne in the

                                                country The private sector units consist of major steel producers in one hand and

                                                relatively smaller amp 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

                                                For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                                companies on following parameters

                                                Production

                                                Chart showing production of both the companies

                                                Quantity 000 Tonnes

                                                2007-08 APR-DEC07APR-

                                                DEC06 ACTUA

                                                L

                                                AGE OF CURRENT

                                                PRODUCTION OVER

                                                CAPACITY UTILISATION

                                                TARGET TENTATIV

                                                E

                                                TARGET

                                                ACTUAL

                                                APR-DEC07 TARGE

                                                T

                                                APR-DEC06 ACTUA

                                                L

                                                APR-DEC 07

                                                APR-DEC06

                                                SAIL

                                                i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                                ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                                iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                                iv)BSL43500 32630 30970 30010 949 1032 950 910

                                                v)ISP5000 3760 3520 3450 936 1020 940 920

                                                vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                                vii)VISL

                                                1390 1050 1160 1190 1105 975 1300 1340

                                                TATA 50000 37440 37090 37380 991 992 990 1000

                                                TATA Steel

                                                The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                target of 3744 (mT) but could produce 3709 However for the same period in last

                                                year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                to 99 this year

                                                Steel Authority of India

                                                The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                capacity utilisation of 103 this year as compared to 101 last year

                                                Financials

                                                TATA Steel

                                                The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                of the past four years The Company achieved the best ever sales turnover and

                                                profitability during the year under review A robust Indian economy firm steel prices

                                                higher volumes and several improvement initiatives contributed to the record

                                                performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                the previous year Export turnover was lower by about 5 due to lower volumes

                                                Average price realisation improved mainly due to higher prices of hot rolled

                                                coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                20 compared to the previous year

                                                The record financial results would not have been possible without a matching

                                                performance by the operating departments including the raw materials division The

                                                year witnessed the best ever crude steel production by the Company at 505 million

                                                tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                increase in production was backed by improvements in operating practices and

                                                productivity resulting in a reduction in consumption of raw materials energy

                                                refractories etc

                                                Steel Authority of India

                                                Financial Year 2006-07 has been eventful year for the company with further

                                                momentum in improving operational efficiencies laying strong foundation and building

                                                road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                undertaken with its human resource at the core During the year the company got the

                                                distinction of first metal company in the country to reach a market capitalization of Rs

                                                50000 crore

                                                There have been improvements in all financial parameters which are shown in

                                                the table given below-

                                                SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                increase of 55

                                                Research and Development

                                                Chart showing production of both the companies

                                                (Rs Crore)

                                                TATA Steel

                                                The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                steel for body panels

                                                Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                coke energy conservation waste utilisation sintering blast furnace productivity and

                                                phosphorous reduction product development and improvement in life of plant and

                                                machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                sealed and over 100 are in process

                                                Steel Authority of India

                                                Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                innovative technological inputs to different units of SAIL with special emphasis on

                                                cost reduction product development and application quality improvement energy

                                                conservation and automation Several new products were developed and

                                                commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                strengthened its technology marketing efforts by providing consultancy services

                                                organising specialised testing and transfer of technological innovations to outside

                                                customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                During the year 1998 technical papers were publishedpresented besides filing

                                                of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                Government of India

                                                Environment

                                                TATA Steel

                                                Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                Jamshedpur is the only town in the country which

                                                Significant achievements by the Company include an improvement in

                                                environment and resource conservation including a reduction in green house erosion

                                                raw materials and water consumption The Company has increased waste re-use and

                                                re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                the-art pollution control systems being installed to prevent and control pollution The

                                                Company has almost doubled its capital investment in Pollution Abatement in the last

                                                five years

                                                Emissions effluents and wastes

                                                Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                most relevance to the steel industry Considerable reduction has been effected by

                                                Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                Tata Steelrsquos activities

                                                Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                Hazardous Waste under Basel Convention The Company does not import or export

                                                any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                generated are handled as per the requirement of the Hazardous Waste Management

                                                and Handling Rules 19892000

                                                Emissions

                                                Tata Steel has undertaken several initiatives which have resulted in

                                                considerable reduction in stack emission Emissions are well below the Indian and

                                                international standards The emission load including particulate matter Sulphur

                                                Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                undertaken at the Steel Works

                                                Waste handling

                                                Most of the solid waste generated from Steel Works is recycled or reused 18

                                                of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                was used to fill low-lying areas and for peripheral road construction around

                                                Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                power plants was dumped in a designated dump area

                                                Effluent Management

                                                Waste water from the steel making process is being treated with best available

                                                physio-chemical methods as well as being recycled Waste water from the coke plant

                                                is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                organisms The Company has reduced the levels of total pollutant discharge in waste

                                                water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                Steel Authority of India

                                                Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                environmentally responsible manner to comply with applicable regulations and striving

                                                to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                efficiency and optimize resource consumption through various measures viz

                                                improvement in process technology in the areas of raw materials coke iron and steel

                                                making reuserecycle of the by-products generated and conservation of energy and

                                                water

                                                Solid Waste Management

                                                During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                these wastes are being made through internal recycling and selling to outside

                                                agencies The wastes generated in the steel plants are being utilized mainly through

                                                their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                during April-September 2006

                                                Environmental Plantation

                                                Trees have a significant role in protection of environment and ecological balance

                                                Extensive afforestation programme are being followed in all the plants and mines The

                                                basis of choosing the species of plants mainly depends on local soil characteristics

                                                and prevailing meteorological conditions The green belt developed by afforestation

                                                adds to the aesthetic environment which becomes dust and noise barriers

                                                A total number of 145521 saplings have been planted covering an area of 637

                                                hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                hectare in 2004-05 in and around the steel plants of SAIL

                                                Environmental Recognitions

                                                SAIL plants have been awarded various prizes for environmental management in

                                                their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                the Confederation of Indian Industries (CII) for exemplary performance in the

                                                environmental economic andsocial dimensions of sustainable development and the

                                                Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                Excellence Award in the metal sector 2005 instuted by the World Environment

                                                Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                for 2005 from International Greenland Society

                                                Workforce and Welfare of Society

                                                TATA steel

                                                Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                provide a work environment that will ensure a sense of purpose and personal growth

                                                for each individual The wish of the company is to see the smile on every face

                                                everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                people and enriched empowered and enhanced their lives

                                                Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                Tata Steel were the first of their kind in India and some even in the western countries

                                                at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                source of its competitiveness It focuses on constantly updating and challenging

                                                intellectual capabilities to enable them to excel in performance Special efforts are

                                                made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                available with its people through Knowledge Management and sharing of best

                                                practices

                                                In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                mutual co-operation coordination and understanding between the Management and

                                                the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                transparency fairness and equity in all its interactions with its employees to create an

                                                enthused and happy workforce

                                                In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                assistance in the fields of education vocational training self-employment and

                                                family welfare

                                                Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                12 times This facility provides on-the-spot diagnostic medical and advanced

                                                surgical treatment for preventive and curative interventions to people in

                                                inaccessible rural areas

                                                Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                for the 1920 Antwerp Olympics

                                                The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                track was inaugurated in 1991 The complex also houses facilities for handball

                                                tennis volleyball hockey basketball boxing table tennis and a modern

                                                gymnasium

                                                The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                services for the betterment of the people in and around Jamshedpur

                                                At times of natural calamities the company has rushe immediate relief and off

                                                ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                fl ood ravaged Orissa and other such aff ected areas

                                                Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                er a unique environment for the children of Jamshedpur to grow up in

                                                In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                Jamshedpur has emerged as the one of the best cities in India

                                                Steel Authority of India

                                                The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                executives and 123005 non-executives The total reduction in manpower achieved

                                                during the year stood at 4864 which included separation of 881 employees through

                                                voluntary retirement The labour productivity improved by around 12 over previous

                                                year to 150 tonne crude steelmanyear

                                                Some of the areas of assistance which are available to the weaker sections are the

                                                following

                                                The company has provided land for construction of school buildings in some of

                                                the steel townships as well as in other places for spreading education among

                                                the masses

                                                The company has constructed roads in remote areas around the steel plants

                                                and also where the captive mines are located to improve communication and

                                                also increase activities such as organisation of health camps school facilities

                                                drinking water etc under the peripheral development schemes

                                                Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                providing them with education boarding and lodging facilities

                                                Construction of bridges by-pass roads metal-morum path waterways

                                                levellingdressing area around township pre-mixed roads Installation of hand-

                                                pumps tube wells and wells for villagers

                                                Construction of school buildings (including for mentally retarded deaf and

                                                dumb children) madarsas providing school furniture therein and construction

                                                of hostels womenrsquos college building etc

                                                Fourteen scholarships are awarded to deserving SCST undergraduate

                                                engineering students in various disciplines to encourage technical education

                                                among them

                                                In many cases tuition fee in company run schools is exempt for SCST

                                                students Steps are taken to provide education to more and more tribal children

                                                in company schools

                                                The unemployed SCST youth are given specialized training in various

                                                technical trades to develop skill and knowledge Such training is provided free

                                                of cost

                                                Adult literacy campaign is carried out in most of the steel townships Every year

                                                more and more men and women are being covered in this campaign

                                                Development of fishery and cottage industry providing sewing machines to

                                                village mahila mandals and promoting other self-employment generation

                                                schemes

                                                SAIL has established a hockey academy with stadium and hostel facilities at

                                                Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                academy was successful in spotting a number of young talented tribal players

                                                and grooms them under expertise of ex-Olympian

                                                Technology

                                                The biggest boost to efficiency in the steel industry has come from the increased

                                                use of continuous casting ndash an indicator of the modernity of the production process Its

                                                share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                now India is thus well on its way to joining the ranks of the leading steelmakers

                                                among the industrial nations (share in EU-25 96) However in India some 6 of

                                                crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                suggests there is restructuring potential

                                                TATA Steel

                                                Tata Steels stall at the International Trade Fair was adjudged the best along

                                                with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                international companies also took part in the exhibition Participating companies from

                                                countries all over the world exhibited latest technologies and know-how List of

                                                participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                companies of national and international repute China was the partner country for the

                                                International Trade Fair this year

                                                In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                cutting-edge technology used in iron ore mining pioneering human resource

                                                practices 78 years of industrial harmony and various other aspects of the worlds best

                                                steel company

                                                The 6th International Trade Fair and Conference an institutionalised global

                                                event is considered to be one of the most prestigious forums for national as well

                                                international participants It is a conclave of the finest minds concerned with the future

                                                direction and growth of these sectors The forum provided the worlds most eminent

                                                metallurgists manufacturers of metallurgical and mining machinery and related

                                                sectors professionals analysts and experts with the opportunity to exchange views on

                                                emerging technologies synergy and strengths and open up wider horizons for

                                                sectorial development

                                                Tata Steel to adopt Corus technology

                                                Tata Steel plans to implement alternate technology used by the British steel

                                                maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                production according to Mr B Muthuraman Managing Director Tata Steel

                                                ldquoWe are looking at alternate technology Corus has developed an alternate

                                                technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                newspersons on the sidelines of the 34th National Management Convention organised

                                                by the All-India Management Association However he declined to give further details

                                                on the type of technology the Indian steel giant plans to implement

                                                Steel Authority of India

                                                Modernisation holds the key to SAILs fortunes in the near future The objective

                                                of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                and productive capacity and in the process become more energy-efficient and

                                                improve quality The key component of the ongoing modernisation drive - already

                                                completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                continuous casting techniques A senior SAIL official says Continuous casting and

                                                basic oxygen furnaces ensure better quality steel through processes more easily

                                                monitored for quality control The basic oxygen surfaces method is significantly faster

                                                more automated and permits greater flexibility Continuous casting is more efficient

                                                than the traditional ingot casting methods and gives increased yields while enabling

                                                better quality standards SAIL is also modernising its finishing mills and is adding

                                                secondary refining facilities to improve quality

                                                Safety measures

                                                A unique feature of safety management in steel industry is that a bipartite forum

                                                named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                was formed in 1973 at national level having representatives from steel plants in SAIL

                                                RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                workshops training programme safety competitions for member organisations JCSSI

                                                with the co-operation and support of Trade Union representatives formulates policies

                                                and guidelines for its member plants and monitors the implementation

                                                Tata Steel

                                                Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                Safety department and a Safety Trophy helped spread the message all across the

                                                company

                                                TATA reaffirms its commitment to provide safe working place and clean

                                                environment to its employees and other stakeholders as an integral part of its

                                                business philosophy and values We will continually enhance our Environmental

                                                Occupational Health amp Safety (EHS) performance in our activities products and

                                                services through a structured EHS management framework Towards this

                                                commitment we shall

                                                Establish and achieve EHS objectives and targets

                                                Ensure compliance with applicable EHS legislation and other requirement and

                                                go beyond

                                                Conserve natural resources and energy by constantly seeking to reduce

                                                consumption and promoting waste avoidance and recycling measures

                                                Eliminate minimize andor control adverse environmental impacts and

                                                occupational health and safety risks by adopting appropriate state-of-the-art

                                                technology and best EHS management practices at all levels sand functions

                                                Enhance awareness skill and competence of our employees and contractors

                                                so as to enable them to demonstrate their involvement responsibility and

                                                accountability for sound EHS performance

                                                Steel Authority of India

                                                SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                Annual Performance Plans (APP) for the areas of safety and fire services are

                                                formulated and review of implementation of APP is done during Heads of

                                                Safety meeting

                                                Internal and external safety audits of major departments particularly hazardous

                                                areas are conducted every year and points arising from these audits are

                                                liquidated Safety aspects have been incorporated in standard operating

                                                practices (SOP) and standard maintenance practices (SMP)

                                                All major capital repairsshut downs are closely monitored round the clock

                                                Periodic drives are conducted to inculcate safety awarenessculture up to

                                                grass-root level apart from regular inspections as per checklists to identify

                                                unsafe conditionsacts

                                                Safety training is imparted to target group employees at various levels HRD

                                                intervention in the area of safety covers Heads of Departments Line Managers

                                                amp Departmental Safety Officers Besides area specific workshops are

                                                conducted at different locations on important topics like gas safety railroad

                                                safety safety in iron steel amp coke making etc

                                                Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                standards in the company by taking measures like intensive safety drives in works

                                                area and conducting safety audits in hazardous departments of different plants and

                                                mines In addition specific workshops on safety aspects were organised in various

                                                SAIL steel plants

                                                Measures taken by Indian government to improve the industry

                                                Now letrsquos 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-

                                                1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                among others was removed from the list of industries reserved for the public

                                                sector and also exempted from the provisions of compulsory licensing under the

                                                Industries (Development and Regulation) Act 1951

                                                2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                of `high priority industries for automatic approval for foreign equity investment up

                                                to 51 This limit has been recently increased to 100

                                                3 Price and distribution of steel were deregulated from January 1992 At the same

                                                time it was ensured that priority continued to be accorded for meeting the

                                                requirements of small scale industries exporters of engineering goods and North

                                                Eastern Region of the country besides strategic sectors such as Defence and

                                                Railways

                                                4 The trade policy has been liberalised and import and export of iron and steel is

                                                freely allowed There are no quantitative restrictions on import of iron and steel

                                                items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                steel have drastically come down since 1991-92 levels and the government is

                                                committed to bring them down to the international levels In Chapter 72 there are

                                                two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                5 Iron amp Steel are freely importable as per the Extant Policy

                                                6 Iron amp Steel are freely exportable

                                                7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                8 The floor price for seconds and defectives continues till date

                                                9 Imports of seconds and defectives of steel are allowed only through three

                                                designated ports of Mumbai Calcutta and Chennai

                                                10Mandatory pre inspection certificate by a reputed international agency for every

                                                import consignment of seconds and defectives

                                                11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                15 per cent to 5 per cent

                                                12Further customs duty on several raw materials used by the steel sector like

                                                noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                coking coal to zero

                                                13To bring down the prices of steel the excise duty on steel products was reduced

                                                from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                cut on moderating prices was not achieved

                                                14The union Budget 2007-08 the import duty on seconds and defective has been

                                                further reduced from 20 to 10

                                                Special assistance being provided by Ministry of Steel to Private Sector

                                                1 Ministry of Steel is extending all possible support as detailed below for the

                                                development of Iron and Steel Sector in the country

                                                2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                new plants and expansion of existing ones wherever applied for

                                                3 To ensure an un-interrupted supply of raw materials to the producers

                                                4 The Ministry has been interacting with All India Financial institutions to expedite

                                                clearance of projects

                                                5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                Plants are held at the level of Secretary

                                                6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                industry so that their absence does not lead to bottlenecks in the future growth of

                                                the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                country are members of this Institute which has been set up with the objective of

                                                promoting developing and propagating the proper and effective use of steel

                                                8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                major steel plants being implemented Govt has setup a Project Coordination

                                                Group under the Chairmanship of Steel Minister

                                                NATIONAL STEEL POLICY 2005

                                                The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                development and as such great importance is attached to capacity expansion in line

                                                with expected demand at cost and prices which make Indian steel internationally

                                                competitive The existing regime of liberalization decontrol and deregulation of

                                                industry in the country has opened up new opportunities for the expansion of the steel

                                                industry With a view to accelerating the growth of the steel sector and attaining the

                                                vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                formulated a National Steel Policy (NSP) in 2005

                                                The following salient features can be derived after analysing the NSP 2005

                                                The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                towards reform restructuring and globalisation

                                                The long-term goal of the NSP is that India should have a modern and efficient

                                                steel industry of world standards catering to diversified steel demand The focus of

                                                the policy is to achieve global competitiveness not only in terms of cost quality and

                                                product-mix but also in terms of global benchmarks of efficiency and productivity

                                                In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                an open globally integrated and competitive environment

                                                The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                policy goal On the demand side the strategy would be to create incremental

                                                demand through promotional efforts creation of awareness and strengthening the

                                                delivery chain particularly in rural areas On the supply side the strategy would be

                                                to facilitate creation of additional capacity remove procedural and policy

                                                bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                investments in RampD and encourage the creation of infrastructure such as roads

                                                railways and ports

                                                The NSP acknowledges the low per capita consumption of steel in the country

                                                especially in the rural areas and the need to boost steel consumption to improve

                                                quality of life and help in meeting the growing aspirations of masses

                                                In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                industry would need additional capital In addition funds would be required for

                                                technological upgrade of existing facilities In order to mobilize such vast resources

                                                NSP seeks to encourage foreign direct investment In addition the policy also

                                                seeks to make the fiscal incentives available to infrastructure projects accessible

                                                to the steel industry

                                                The NSP seeks to support developing of risk-hedging instruments like futures and

                                                derivatives to contain price volatility in the steel market

                                                The NSP seeks to strengthen the existing training and research facilities available

                                                to the domestic steel industry so as to provide suitable training programmes

                                                especially for the secondary small-scale units and also to collect and analyse data

                                                on important parameters of the industry

                                                The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                capability for special types of steel substitute coking coal use iron ore fines

                                                develop new products suited to rural needs enhance material and energy

                                                efficiency utilize waste and arrest environmental degradation

                                                The NSP acknowledges the important role played by the secondary steel sector in

                                                providing employment meeting local demand of steel in rural and semi-urban

                                                areas and meeting the countryrsquos demand of some special products and seeks to

                                                endeavour to provide the necessary feedstock to these units at reasonable prices

                                                from major plants through the existing mechanism of State Small Industries

                                                Corporations

                                                The NSP recognizes the fact that integration of the Indian steel industry with the

                                                global economy requires that the industry should be protected from unfair trade

                                                practices The NSP therefore envisages institution of mechanisms for import

                                                surveillance and monitoring export subsidies in other countries

                                                The present per capita consumption of steel in the country is very low compared to the

                                                world average As mentioned above one of the objectives of the NSP is to augment

                                                the demand and consumption of steel in the country by conscious promotion of steel

                                                usage With a view to create a mass awareness campaign on conscious promotion of

                                                steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                The Committee is being serviced by Institute for Steel Development and Growth

                                                (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                way of an awareness campaign with particular emphasis on rural sectors The

                                                Committee also aims at educating the designers architects builders and planners

                                                regarding the qualitative and cost effective applications of steel in various structures

                                                including buildings bridges flyovers and airports

                                                FUTURE OF INDIAN STEEL INDUSTRY

                                                India is amongst a few countries in the world having the dual advantage of fast

                                                growing domestic demand coupled with access to raw materials Further the trend

                                                that is already discernible is that the axis of global steel production consumption is

                                                shifting towards Asia With their large populations China and India already account for

                                                35 of the total world steel production - more than double of Europe Asia is

                                                expected to outpace other regions of the world to an even greater extent in the coming

                                                years

                                                Amongst the Asian nations China has established a huge unbridgeable lead It

                                                is accepted that China will continue to be the leader However India is slated to

                                                emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                China swallowed almost 32 of global steel It is unlikely that future production and

                                                consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                has been the case over the last few years On the other hand it is sun-rise time for

                                                India where the demand has increased by 7-8 in the last couple of years In the long

                                                run Indian steel is likely to be more cost-effective since unlike China India has

                                                relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                However the position with coal is not so favourable Though thermal coal

                                                reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                traditional blast furnace route would require coking coal India does not have adequate

                                                reserves of coking coal nor is the meagre amount available of appropriate quality

                                                Thus the steel industry always had to contend with the dual problems of inadequate

                                                availability and poor quality of Indian coking coal This has been partly addressed by

                                                adopting alternative iron making processes that are not dependent on coking coal it

                                                can not be denied that coal is the biggest cause for concern for bulk steel production

                                                in India

                                                Because of the shortage of indigenous coal attempts have been made by steel

                                                producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                mines in other countries This is the only long-term solution but with a global shortage

                                                of coal it may not remain cost-effective in the long run

                                                India is the seventh largest producer of steel and may further improve its position

                                                going by the current trends A series of investment decisions by major domestic

                                                players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                The keen interest shown by various prospective investors is not only due to

                                                expectations of strong growth in domestic demand but also due to indigenous

                                                availability of key resources like iron ore and skilled workforce

                                                After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                consumption has accelerated to 91 per cent

                                                With the likely growth of Indian economy at around 7 per cent per annum

                                                demand for steel is expected to remain strong and is projected to reach a level of 90

                                                million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                demand is sustainable considering the fact that Indias per capita consumption of steel

                                                is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                very low level of per capita consumption of steel in India is highlighted further when

                                                compared with the consumption levels of its peer group consisting of countries like

                                                China Brazil Mexico and Republic of Korea as also with selected developed

                                                countries

                                                Though there are realistic constraints in India to achieving as rapid a growth as in

                                                China there seems to be consensus among analysts that India is likely to witness a

                                                growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                more conservative due to cyclicity of steel business it may be mentioned that in a

                                                country like India cyclicity is more in terms of prices rather than volumes of production

                                                Exports

                                                Similar optimism prevails with regard to export of iron and steel Export of steel

                                                starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                rising domestic demand and low capacity additions Exports now constitute around 17

                                                per cent of total production and Indias presence in the developing and developed

                                                world is being increasingly felt Indian steel producers have recently been able to

                                                supply specialized grades and products used for sophisticated applications like

                                                automobiles On the cost front some of our producers are counted amongst the least

                                                cost producers of the world For an average reference plant India is competitively

                                                placed in the middle of the hierarchy of steel producing nations

                                                However we have a long way to go to catch up with the leading exporters of the

                                                world such as Japan the CIS countries Brazil etc It is however expected that by

                                                2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                per cent of total projected production The projected export ratio compares well with

                                                the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                The projected production of steel by 2019-20 to meet the domestic and export

                                                demand will be around 110 million tonnes Management of resources and

                                                infrastructural growth is going to be critical in achievement of the production level

                                                envisaged The broad requirements of various resources will increase manifold from

                                                the current level The bottlenecks in availability of critical inputs and various facilities

                                                need to be removed through concerted efforts of Government and industry The broad

                                                strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                sector has been discussed in the National Steel Policy which has been recently

                                                approved by the Government

                                                As stated earlier the long-term goal of the National Steel Policy is that India

                                                should have a modern and efficient steel industry of world standards catering to a

                                                diversified steel demand The focus of the policy is to achieve global competitiveness

                                                not only in terms of cost quality and product mix but also in terms of global

                                                benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                pronged strategy to achieve these goals On the demand side the strategy would be

                                                to create incremental demand through promotional efforts creation of awareness and

                                                strengthening the delivery chain particularly in rural areas On the supply side the

                                                strategy would be to facilitate creation of additional capacity remove procedural and

                                                policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                investments in RampD and HRD and encourage the creation of infrastructure such as

                                                roads railways and ports

                                                The production figures exports and imports of finished carbon steel and pig iron

                                                and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                Steel and SAIL attest to the continuing growth for both the sectors

                                                FINDINGS

                                                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 increased its profit over the year particularly in 2006-07

                                                Both the companies are planning to adopt modern technology which is going to

                                                help them to compete in world market but they need to be less dependent on

                                                state of art technology and coal for long term prospects

                                                Public sector has undergone retrenchment for the employees and improved

                                                has its lobour productivity but it is still lacking behind as compared to private

                                                sector

                                                SAIL has reduced the no of accidents due to improper handling of machinery

                                                still no of accidents are more than that of TATA Steel

                                                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

                                                ie 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 have to be met

                                                comprehensively if we are to take our legitimate place in the world as a developed

                                                nation by 2020

                                                BIBLIOGRAPHY

                                                Annual report (2006-07) published by ministry of steel

                                                Annual report (2006-07) published by TATA Steel

                                                Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                REPORTrsquo posted by SAIL on its website

                                                lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                held on 07 Nov 2006

                                                Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                wwwsteelnicin (Official website of ministry of industry)

                                                wwwtatasteelcom (Official website of TATA Steel)

                                                wwwsailcoin (Official website of Steel Authority of India)

                                                wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                wwwjpcindiansteelnicin (Website of joint planning committee)

                                                • DATA ANALYSIS
                                                • Comparison between TATA Steel and Steel Authority of India
                                                • Production
                                                • Quantity 000 Tonnes
                                                • Financials
                                                • Research and Development
                                                • (Rs Crore)
                                                • TATA Steel
                                                • Steel Authority of India
                                                • Environment
                                                • TATA Steel
                                                • Emissions effluents and wastes
                                                • Emissions
                                                • Waste handling
                                                • Effluent Management
                                                • Steel Authority of India
                                                • Solid Waste Management
                                                • Environmental Plantation
                                                • Environmental Recognitions
                                                • Workforce and Welfare of Society
                                                • TATA steel
                                                • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                • Steel Authority of India
                                                • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                • Technology
                                                • Steel Authority of India
                                                • Safety measures
                                                • Tata Steel
                                                • Steel Authority of India
                                                • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                • Measures taken by Indian government to improve the industry
                                                • Now letrsquos 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-
                                                • Special assistance being provided by Ministry of Steel to Private Sector
                                                • FUTURE OF INDIAN STEEL INDUSTRY

                                                  REVIEW OF LITERATURE

                                                  RS PANDEY sees a bright future for the steel industry in India provided of course

                                                  the iron ore mining policy to be announced by the government soon acts as a catalyst

                                                  for growth He discusses the industrys problems and prospects in an interview When

                                                  asked about the steel sectors ie private and public he expressed his expert views

                                                  The interview was published in a magazine lsquoFRONTLINErsquo in the December 2006

                                                  Excerpts

                                                  The public sector steel companies in India are doing extremely well And therefore

                                                  they will have a decisive role to play In fact SAIL and RINL [Rashtriya Ispat Nigam

                                                  Ltd] which has the Vizag steel plant have undertaken massive expansion plans

                                                  Between 1992-93 and now the share of the public sector in steel production had gone

                                                  down Today its share is 41 per cent while that of the private sector is 59 per cent In

                                                  1992-93 the private sector had a share of only 37 per cent In terms of finished steel

                                                  the private sector even in 1992-93 had a 67 per cent share and this has now grown

                                                  to 71 per cent But the public sector units are growing even if the private sector is

                                                  growing faster

                                                  During 2006 SAIL and RINL decided on major capacity expansion plans SAIL is

                                                  going to increase its capacity from the current 13 million tonnes of hot metal to 225

                                                  million tonnes in just four years RINL is set to expand its capacity from three million

                                                  tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                                  capacity for the PSUs

                                                  The public sector should be encouraged all the more Let there be a healthy

                                                  competition between public and private sector producers The question of exit comes

                                                  when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                                  was at below Rs10 per share Today it is more than Rs130 and the expectations

                                                  are that it will go up even higher

                                                  When talked about the labour productivity he says Yes labour productivity is low in

                                                  SAIL in particular But it is improving The steel major is going to adjust much of its

                                                  existing manpower in the expansion phase when its capacity is going to almost

                                                  double The management had also undertaken a massive VRS [voluntary retirement

                                                  scheme] In RINL labour productivity is not all that bad

                                                  Besides SAIL has done very well in various other techno-economic parameters in the

                                                  last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                                  per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                                  improvement of 20 per cent In blast furnace productivity also there has been an

                                                  improvement as also in the production of high-end special steels and capacity

                                                  utilisation

                                                  With the improved turnover which comes from higher capacity use and higher

                                                  manpower productivity SAILs profits have surged Its gross profit more than doubled

                                                  between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                                  was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                                  is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                                  other input costs and 71 per cent owing to improvement in capacity use and other

                                                  factors that are just mentioned

                                                  OBJECTIVES

                                                  To compare Private and Public steel sector with refrence to TATA Steel and

                                                  Steel Authority Of India

                                                  To analyse potential of both the companies ie TATA Steel and SAIL

                                                  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

                                                  Research Methodology

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

                                                  a) Research design-

                                                  In case of my research ldquoComparative analysis of Indian private and Public

                                                  sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                                  found to be more appropriate

                                                  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

                                                  Comparison between TATA Steel and Steel Authority of India

                                                  The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                                  significant improvements in the last two years The combined profit before tax of all 15

                                                  PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                                  Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                                  The profit before tax for all PSUs also exhibited a significant improvement of

                                                  around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                                  Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                                  comparable period of last year

                                                  Contribution of PSUs to public exchequer has also gone up significantly For

                                                  example the contribution of five leading companies namely SAIL RINL NMDC

                                                  KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                                  duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                                  from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                                  On the other hand 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

                                                  During the period (April-December 2006) 205 million tonne of steel was produced by

                                                  Private Sector steel units out of the total production of 3315 million tonne in the

                                                  country The private sector units consist of major steel producers in one hand and

                                                  relatively smaller amp 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

                                                  For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                                  companies on following parameters

                                                  Production

                                                  Chart showing production of both the companies

                                                  Quantity 000 Tonnes

                                                  2007-08 APR-DEC07APR-

                                                  DEC06 ACTUA

                                                  L

                                                  AGE OF CURRENT

                                                  PRODUCTION OVER

                                                  CAPACITY UTILISATION

                                                  TARGET TENTATIV

                                                  E

                                                  TARGET

                                                  ACTUAL

                                                  APR-DEC07 TARGE

                                                  T

                                                  APR-DEC06 ACTUA

                                                  L

                                                  APR-DEC 07

                                                  APR-DEC06

                                                  SAIL

                                                  i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                                  ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                                  iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                                  iv)BSL43500 32630 30970 30010 949 1032 950 910

                                                  v)ISP5000 3760 3520 3450 936 1020 940 920

                                                  vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                                  vii)VISL

                                                  1390 1050 1160 1190 1105 975 1300 1340

                                                  TATA 50000 37440 37090 37380 991 992 990 1000

                                                  TATA Steel

                                                  The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                  but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                  target of 3744 (mT) but could produce 3709 However for the same period in last

                                                  year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                  to 99 this year

                                                  Steel Authority of India

                                                  The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                  but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                  for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                  10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                  capacity utilisation of 103 this year as compared to 101 last year

                                                  Financials

                                                  TATA Steel

                                                  The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                  of the past four years The Company achieved the best ever sales turnover and

                                                  profitability during the year under review A robust Indian economy firm steel prices

                                                  higher volumes and several improvement initiatives contributed to the record

                                                  performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                  the previous year Export turnover was lower by about 5 due to lower volumes

                                                  Average price realisation improved mainly due to higher prices of hot rolled

                                                  coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                  (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                  Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                  due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                  funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                  providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                  crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                  before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                  after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                  20 compared to the previous year

                                                  The record financial results would not have been possible without a matching

                                                  performance by the operating departments including the raw materials division The

                                                  year witnessed the best ever crude steel production by the Company at 505 million

                                                  tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                  first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                  upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                  rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                  Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                  increase in production was backed by improvements in operating practices and

                                                  productivity resulting in a reduction in consumption of raw materials energy

                                                  refractories etc

                                                  Steel Authority of India

                                                  Financial Year 2006-07 has been eventful year for the company with further

                                                  momentum in improving operational efficiencies laying strong foundation and building

                                                  road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                  undertaken with its human resource at the core During the year the company got the

                                                  distinction of first metal company in the country to reach a market capitalization of Rs

                                                  50000 crore

                                                  There have been improvements in all financial parameters which are shown in

                                                  the table given below-

                                                  SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                  before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                  previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                  increase of 55

                                                  Research and Development

                                                  Chart showing production of both the companies

                                                  (Rs Crore)

                                                  TATA Steel

                                                  The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                  develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                  steel for body panels

                                                  Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                  coke energy conservation waste utilisation sintering blast furnace productivity and

                                                  phosphorous reduction product development and improvement in life of plant and

                                                  machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                  sealed and over 100 are in process

                                                  Steel Authority of India

                                                  Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                  innovative technological inputs to different units of SAIL with special emphasis on

                                                  cost reduction product development and application quality improvement energy

                                                  conservation and automation Several new products were developed and

                                                  commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                  Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                  specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                  micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                  Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                  Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                  strengthened its technology marketing efforts by providing consultancy services

                                                  organising specialised testing and transfer of technological innovations to outside

                                                  customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                  Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                  Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                  During the year 1998 technical papers were publishedpresented besides filing

                                                  of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                  awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                  achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                  Government of India

                                                  Environment

                                                  TATA Steel

                                                  Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                  Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                  has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                  Jamshedpur is the only town in the country which

                                                  Significant achievements by the Company include an improvement in

                                                  environment and resource conservation including a reduction in green house erosion

                                                  raw materials and water consumption The Company has increased waste re-use and

                                                  re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                  the-art pollution control systems being installed to prevent and control pollution The

                                                  Company has almost doubled its capital investment in Pollution Abatement in the last

                                                  five years

                                                  Emissions effluents and wastes

                                                  Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                  most relevance to the steel industry Considerable reduction has been effected by

                                                  Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                  granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                  Tata Steelrsquos activities

                                                  Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                  tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                  Hazardous Waste under Basel Convention The Company does not import or export

                                                  any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                  generated are handled as per the requirement of the Hazardous Waste Management

                                                  and Handling Rules 19892000

                                                  Emissions

                                                  Tata Steel has undertaken several initiatives which have resulted in

                                                  considerable reduction in stack emission Emissions are well below the Indian and

                                                  international standards The emission load including particulate matter Sulphur

                                                  Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                  undertaken at the Steel Works

                                                  Waste handling

                                                  Most of the solid waste generated from Steel Works is recycled or reused 18

                                                  of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                  was used to fill low-lying areas and for peripheral road construction around

                                                  Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                  power plants was dumped in a designated dump area

                                                  Effluent Management

                                                  Waste water from the steel making process is being treated with best available

                                                  physio-chemical methods as well as being recycled Waste water from the coke plant

                                                  is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                  organisms The Company has reduced the levels of total pollutant discharge in waste

                                                  water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                  Steel Authority of India

                                                  Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                  environmentally responsible manner to comply with applicable regulations and striving

                                                  to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                  efficiency and optimize resource consumption through various measures viz

                                                  improvement in process technology in the areas of raw materials coke iron and steel

                                                  making reuserecycle of the by-products generated and conservation of energy and

                                                  water

                                                  Solid Waste Management

                                                  During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                  and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                  Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                  these wastes are being made through internal recycling and selling to outside

                                                  agencies The wastes generated in the steel plants are being utilized mainly through

                                                  their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                  during April-September 2006

                                                  Environmental Plantation

                                                  Trees have a significant role in protection of environment and ecological balance

                                                  Extensive afforestation programme are being followed in all the plants and mines The

                                                  basis of choosing the species of plants mainly depends on local soil characteristics

                                                  and prevailing meteorological conditions The green belt developed by afforestation

                                                  adds to the aesthetic environment which becomes dust and noise barriers

                                                  A total number of 145521 saplings have been planted covering an area of 637

                                                  hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                  hectare in 2004-05 in and around the steel plants of SAIL

                                                  Environmental Recognitions

                                                  SAIL plants have been awarded various prizes for environmental management in

                                                  their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                  the Confederation of Indian Industries (CII) for exemplary performance in the

                                                  environmental economic andsocial dimensions of sustainable development and the

                                                  Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                  Excellence Award in the metal sector 2005 instuted by the World Environment

                                                  Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                  for 2005 from International Greenland Society

                                                  Workforce and Welfare of Society

                                                  TATA steel

                                                  Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                  and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                  enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                  provide a work environment that will ensure a sense of purpose and personal growth

                                                  for each individual The wish of the company is to see the smile on every face

                                                  everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                  people and enriched empowered and enhanced their lives

                                                  Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                  brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                  Tata Steel were the first of their kind in India and some even in the western countries

                                                  at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                  source of its competitiveness It focuses on constantly updating and challenging

                                                  intellectual capabilities to enable them to excel in performance Special efforts are

                                                  made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                  workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                  available with its people through Knowledge Management and sharing of best

                                                  practices

                                                  In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                  mutual co-operation coordination and understanding between the Management and

                                                  the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                  among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                  transparency fairness and equity in all its interactions with its employees to create an

                                                  enthused and happy workforce

                                                  In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                  assistance in the fields of education vocational training self-employment and

                                                  family welfare

                                                  Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                  12 times This facility provides on-the-spot diagnostic medical and advanced

                                                  surgical treatment for preventive and curative interventions to people in

                                                  inaccessible rural areas

                                                  Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                  for the 1920 Antwerp Olympics

                                                  The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                  track was inaugurated in 1991 The complex also houses facilities for handball

                                                  tennis volleyball hockey basketball boxing table tennis and a modern

                                                  gymnasium

                                                  The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                  services for the betterment of the people in and around Jamshedpur

                                                  At times of natural calamities the company has rushe immediate relief and off

                                                  ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                  fl ood ravaged Orissa and other such aff ected areas

                                                  Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                  er a unique environment for the children of Jamshedpur to grow up in

                                                  In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                  Jamshedpur has emerged as the one of the best cities in India

                                                  Steel Authority of India

                                                  The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                  executives and 123005 non-executives The total reduction in manpower achieved

                                                  during the year stood at 4864 which included separation of 881 employees through

                                                  voluntary retirement The labour productivity improved by around 12 over previous

                                                  year to 150 tonne crude steelmanyear

                                                  Some of the areas of assistance which are available to the weaker sections are the

                                                  following

                                                  The company has provided land for construction of school buildings in some of

                                                  the steel townships as well as in other places for spreading education among

                                                  the masses

                                                  The company has constructed roads in remote areas around the steel plants

                                                  and also where the captive mines are located to improve communication and

                                                  also increase activities such as organisation of health camps school facilities

                                                  drinking water etc under the peripheral development schemes

                                                  Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                  Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                  providing them with education boarding and lodging facilities

                                                  Construction of bridges by-pass roads metal-morum path waterways

                                                  levellingdressing area around township pre-mixed roads Installation of hand-

                                                  pumps tube wells and wells for villagers

                                                  Construction of school buildings (including for mentally retarded deaf and

                                                  dumb children) madarsas providing school furniture therein and construction

                                                  of hostels womenrsquos college building etc

                                                  Fourteen scholarships are awarded to deserving SCST undergraduate

                                                  engineering students in various disciplines to encourage technical education

                                                  among them

                                                  In many cases tuition fee in company run schools is exempt for SCST

                                                  students Steps are taken to provide education to more and more tribal children

                                                  in company schools

                                                  The unemployed SCST youth are given specialized training in various

                                                  technical trades to develop skill and knowledge Such training is provided free

                                                  of cost

                                                  Adult literacy campaign is carried out in most of the steel townships Every year

                                                  more and more men and women are being covered in this campaign

                                                  Development of fishery and cottage industry providing sewing machines to

                                                  village mahila mandals and promoting other self-employment generation

                                                  schemes

                                                  SAIL has established a hockey academy with stadium and hostel facilities at

                                                  Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                  academy was successful in spotting a number of young talented tribal players

                                                  and grooms them under expertise of ex-Olympian

                                                  Technology

                                                  The biggest boost to efficiency in the steel industry has come from the increased

                                                  use of continuous casting ndash an indicator of the modernity of the production process Its

                                                  share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                  now India is thus well on its way to joining the ranks of the leading steelmakers

                                                  among the industrial nations (share in EU-25 96) However in India some 6 of

                                                  crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                  suggests there is restructuring potential

                                                  TATA Steel

                                                  Tata Steels stall at the International Trade Fair was adjudged the best along

                                                  with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                  international companies also took part in the exhibition Participating companies from

                                                  countries all over the world exhibited latest technologies and know-how List of

                                                  participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                  Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                  companies of national and international repute China was the partner country for the

                                                  International Trade Fair this year

                                                  In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                  cutting-edge technology used in iron ore mining pioneering human resource

                                                  practices 78 years of industrial harmony and various other aspects of the worlds best

                                                  steel company

                                                  The 6th International Trade Fair and Conference an institutionalised global

                                                  event is considered to be one of the most prestigious forums for national as well

                                                  international participants It is a conclave of the finest minds concerned with the future

                                                  direction and growth of these sectors The forum provided the worlds most eminent

                                                  metallurgists manufacturers of metallurgical and mining machinery and related

                                                  sectors professionals analysts and experts with the opportunity to exchange views on

                                                  emerging technologies synergy and strengths and open up wider horizons for

                                                  sectorial development

                                                  Tata Steel to adopt Corus technology

                                                  Tata Steel plans to implement alternate technology used by the British steel

                                                  maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                  production according to Mr B Muthuraman Managing Director Tata Steel

                                                  ldquoWe are looking at alternate technology Corus has developed an alternate

                                                  technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                  newspersons on the sidelines of the 34th National Management Convention organised

                                                  by the All-India Management Association However he declined to give further details

                                                  on the type of technology the Indian steel giant plans to implement

                                                  Steel Authority of India

                                                  Modernisation holds the key to SAILs fortunes in the near future The objective

                                                  of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                  and productive capacity and in the process become more energy-efficient and

                                                  improve quality The key component of the ongoing modernisation drive - already

                                                  completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                  ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                  continuous casting techniques A senior SAIL official says Continuous casting and

                                                  basic oxygen furnaces ensure better quality steel through processes more easily

                                                  monitored for quality control The basic oxygen surfaces method is significantly faster

                                                  more automated and permits greater flexibility Continuous casting is more efficient

                                                  than the traditional ingot casting methods and gives increased yields while enabling

                                                  better quality standards SAIL is also modernising its finishing mills and is adding

                                                  secondary refining facilities to improve quality

                                                  Safety measures

                                                  A unique feature of safety management in steel industry is that a bipartite forum

                                                  named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                  was formed in 1973 at national level having representatives from steel plants in SAIL

                                                  RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                  Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                  workshops training programme safety competitions for member organisations JCSSI

                                                  with the co-operation and support of Trade Union representatives formulates policies

                                                  and guidelines for its member plants and monitors the implementation

                                                  Tata Steel

                                                  Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                  Safety department and a Safety Trophy helped spread the message all across the

                                                  company

                                                  TATA reaffirms its commitment to provide safe working place and clean

                                                  environment to its employees and other stakeholders as an integral part of its

                                                  business philosophy and values We will continually enhance our Environmental

                                                  Occupational Health amp Safety (EHS) performance in our activities products and

                                                  services through a structured EHS management framework Towards this

                                                  commitment we shall

                                                  Establish and achieve EHS objectives and targets

                                                  Ensure compliance with applicable EHS legislation and other requirement and

                                                  go beyond

                                                  Conserve natural resources and energy by constantly seeking to reduce

                                                  consumption and promoting waste avoidance and recycling measures

                                                  Eliminate minimize andor control adverse environmental impacts and

                                                  occupational health and safety risks by adopting appropriate state-of-the-art

                                                  technology and best EHS management practices at all levels sand functions

                                                  Enhance awareness skill and competence of our employees and contractors

                                                  so as to enable them to demonstrate their involvement responsibility and

                                                  accountability for sound EHS performance

                                                  Steel Authority of India

                                                  SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                  monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                  Annual Performance Plans (APP) for the areas of safety and fire services are

                                                  formulated and review of implementation of APP is done during Heads of

                                                  Safety meeting

                                                  Internal and external safety audits of major departments particularly hazardous

                                                  areas are conducted every year and points arising from these audits are

                                                  liquidated Safety aspects have been incorporated in standard operating

                                                  practices (SOP) and standard maintenance practices (SMP)

                                                  All major capital repairsshut downs are closely monitored round the clock

                                                  Periodic drives are conducted to inculcate safety awarenessculture up to

                                                  grass-root level apart from regular inspections as per checklists to identify

                                                  unsafe conditionsacts

                                                  Safety training is imparted to target group employees at various levels HRD

                                                  intervention in the area of safety covers Heads of Departments Line Managers

                                                  amp Departmental Safety Officers Besides area specific workshops are

                                                  conducted at different locations on important topics like gas safety railroad

                                                  safety safety in iron steel amp coke making etc

                                                  Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                  standards in the company by taking measures like intensive safety drives in works

                                                  area and conducting safety audits in hazardous departments of different plants and

                                                  mines In addition specific workshops on safety aspects were organised in various

                                                  SAIL steel plants

                                                  Measures taken by Indian government to improve the industry

                                                  Now letrsquos 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-

                                                  1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                  among others was removed from the list of industries reserved for the public

                                                  sector and also exempted from the provisions of compulsory licensing under the

                                                  Industries (Development and Regulation) Act 1951

                                                  2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                  of `high priority industries for automatic approval for foreign equity investment up

                                                  to 51 This limit has been recently increased to 100

                                                  3 Price and distribution of steel were deregulated from January 1992 At the same

                                                  time it was ensured that priority continued to be accorded for meeting the

                                                  requirements of small scale industries exporters of engineering goods and North

                                                  Eastern Region of the country besides strategic sectors such as Defence and

                                                  Railways

                                                  4 The trade policy has been liberalised and import and export of iron and steel is

                                                  freely allowed There are no quantitative restrictions on import of iron and steel

                                                  items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                  regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                  steel have drastically come down since 1991-92 levels and the government is

                                                  committed to bring them down to the international levels In Chapter 72 there are

                                                  two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                  5 Iron amp Steel are freely importable as per the Extant Policy

                                                  6 Iron amp Steel are freely exportable

                                                  7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                  8 The floor price for seconds and defectives continues till date

                                                  9 Imports of seconds and defectives of steel are allowed only through three

                                                  designated ports of Mumbai Calcutta and Chennai

                                                  10Mandatory pre inspection certificate by a reputed international agency for every

                                                  import consignment of seconds and defectives

                                                  11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                  10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                  the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                  per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                  15 per cent to 5 per cent

                                                  12Further customs duty on several raw materials used by the steel sector like

                                                  noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                  coking coal to zero

                                                  13To bring down the prices of steel the excise duty on steel products was reduced

                                                  from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                  that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                  increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                  cut on moderating prices was not achieved

                                                  14The union Budget 2007-08 the import duty on seconds and defective has been

                                                  further reduced from 20 to 10

                                                  Special assistance being provided by Ministry of Steel to Private Sector

                                                  1 Ministry of Steel is extending all possible support as detailed below for the

                                                  development of Iron and Steel Sector in the country

                                                  2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                  new plants and expansion of existing ones wherever applied for

                                                  3 To ensure an un-interrupted supply of raw materials to the producers

                                                  4 The Ministry has been interacting with All India Financial institutions to expedite

                                                  clearance of projects

                                                  5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                  Plants are held at the level of Secretary

                                                  6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                  industry so that their absence does not lead to bottlenecks in the future growth of

                                                  the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                  7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                  Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                  country are members of this Institute which has been set up with the objective of

                                                  promoting developing and propagating the proper and effective use of steel

                                                  8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                  major steel plants being implemented Govt has setup a Project Coordination

                                                  Group under the Chairmanship of Steel Minister

                                                  NATIONAL STEEL POLICY 2005

                                                  The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                  development and as such great importance is attached to capacity expansion in line

                                                  with expected demand at cost and prices which make Indian steel internationally

                                                  competitive The existing regime of liberalization decontrol and deregulation of

                                                  industry in the country has opened up new opportunities for the expansion of the steel

                                                  industry With a view to accelerating the growth of the steel sector and attaining the

                                                  vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                  formulated a National Steel Policy (NSP) in 2005

                                                  The following salient features can be derived after analysing the NSP 2005

                                                  The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                  towards reform restructuring and globalisation

                                                  The long-term goal of the NSP is that India should have a modern and efficient

                                                  steel industry of world standards catering to diversified steel demand The focus of

                                                  the policy is to achieve global competitiveness not only in terms of cost quality and

                                                  product-mix but also in terms of global benchmarks of efficiency and productivity

                                                  In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                  NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                  an open globally integrated and competitive environment

                                                  The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                  policy goal On the demand side the strategy would be to create incremental

                                                  demand through promotional efforts creation of awareness and strengthening the

                                                  delivery chain particularly in rural areas On the supply side the strategy would be

                                                  to facilitate creation of additional capacity remove procedural and policy

                                                  bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                  investments in RampD and encourage the creation of infrastructure such as roads

                                                  railways and ports

                                                  The NSP acknowledges the low per capita consumption of steel in the country

                                                  especially in the rural areas and the need to boost steel consumption to improve

                                                  quality of life and help in meeting the growing aspirations of masses

                                                  In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                  industry would need additional capital In addition funds would be required for

                                                  technological upgrade of existing facilities In order to mobilize such vast resources

                                                  NSP seeks to encourage foreign direct investment In addition the policy also

                                                  seeks to make the fiscal incentives available to infrastructure projects accessible

                                                  to the steel industry

                                                  The NSP seeks to support developing of risk-hedging instruments like futures and

                                                  derivatives to contain price volatility in the steel market

                                                  The NSP seeks to strengthen the existing training and research facilities available

                                                  to the domestic steel industry so as to provide suitable training programmes

                                                  especially for the secondary small-scale units and also to collect and analyse data

                                                  on important parameters of the industry

                                                  The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                  capability for special types of steel substitute coking coal use iron ore fines

                                                  develop new products suited to rural needs enhance material and energy

                                                  efficiency utilize waste and arrest environmental degradation

                                                  The NSP acknowledges the important role played by the secondary steel sector in

                                                  providing employment meeting local demand of steel in rural and semi-urban

                                                  areas and meeting the countryrsquos demand of some special products and seeks to

                                                  endeavour to provide the necessary feedstock to these units at reasonable prices

                                                  from major plants through the existing mechanism of State Small Industries

                                                  Corporations

                                                  The NSP recognizes the fact that integration of the Indian steel industry with the

                                                  global economy requires that the industry should be protected from unfair trade

                                                  practices The NSP therefore envisages institution of mechanisms for import

                                                  surveillance and monitoring export subsidies in other countries

                                                  The present per capita consumption of steel in the country is very low compared to the

                                                  world average As mentioned above one of the objectives of the NSP is to augment

                                                  the demand and consumption of steel in the country by conscious promotion of steel

                                                  usage With a view to create a mass awareness campaign on conscious promotion of

                                                  steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                  the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                  The Committee is being serviced by Institute for Steel Development and Growth

                                                  (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                  way of an awareness campaign with particular emphasis on rural sectors The

                                                  Committee also aims at educating the designers architects builders and planners

                                                  regarding the qualitative and cost effective applications of steel in various structures

                                                  including buildings bridges flyovers and airports

                                                  FUTURE OF INDIAN STEEL INDUSTRY

                                                  India is amongst a few countries in the world having the dual advantage of fast

                                                  growing domestic demand coupled with access to raw materials Further the trend

                                                  that is already discernible is that the axis of global steel production consumption is

                                                  shifting towards Asia With their large populations China and India already account for

                                                  35 of the total world steel production - more than double of Europe Asia is

                                                  expected to outpace other regions of the world to an even greater extent in the coming

                                                  years

                                                  Amongst the Asian nations China has established a huge unbridgeable lead It

                                                  is accepted that China will continue to be the leader However India is slated to

                                                  emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                  the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                  splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                  China swallowed almost 32 of global steel It is unlikely that future production and

                                                  consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                  has been the case over the last few years On the other hand it is sun-rise time for

                                                  India where the demand has increased by 7-8 in the last couple of years In the long

                                                  run Indian steel is likely to be more cost-effective since unlike China India has

                                                  relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                  can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                  However the position with coal is not so favourable Though thermal coal

                                                  reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                  traditional blast furnace route would require coking coal India does not have adequate

                                                  reserves of coking coal nor is the meagre amount available of appropriate quality

                                                  Thus the steel industry always had to contend with the dual problems of inadequate

                                                  availability and poor quality of Indian coking coal This has been partly addressed by

                                                  adopting alternative iron making processes that are not dependent on coking coal it

                                                  can not be denied that coal is the biggest cause for concern for bulk steel production

                                                  in India

                                                  Because of the shortage of indigenous coal attempts have been made by steel

                                                  producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                  mines in other countries This is the only long-term solution but with a global shortage

                                                  of coal it may not remain cost-effective in the long run

                                                  India is the seventh largest producer of steel and may further improve its position

                                                  going by the current trends A series of investment decisions by major domestic

                                                  players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                  POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                  The keen interest shown by various prospective investors is not only due to

                                                  expectations of strong growth in domestic demand but also due to indigenous

                                                  availability of key resources like iron ore and skilled workforce

                                                  After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                  steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                  finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                  2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                  consumption has accelerated to 91 per cent

                                                  With the likely growth of Indian economy at around 7 per cent per annum

                                                  demand for steel is expected to remain strong and is projected to reach a level of 90

                                                  million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                  demand is sustainable considering the fact that Indias per capita consumption of steel

                                                  is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                  very low level of per capita consumption of steel in India is highlighted further when

                                                  compared with the consumption levels of its peer group consisting of countries like

                                                  China Brazil Mexico and Republic of Korea as also with selected developed

                                                  countries

                                                  Though there are realistic constraints in India to achieving as rapid a growth as in

                                                  China there seems to be consensus among analysts that India is likely to witness a

                                                  growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                  percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                  achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                  more conservative due to cyclicity of steel business it may be mentioned that in a

                                                  country like India cyclicity is more in terms of prices rather than volumes of production

                                                  Exports

                                                  Similar optimism prevails with regard to export of iron and steel Export of steel

                                                  starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                  2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                  rising domestic demand and low capacity additions Exports now constitute around 17

                                                  per cent of total production and Indias presence in the developing and developed

                                                  world is being increasingly felt Indian steel producers have recently been able to

                                                  supply specialized grades and products used for sophisticated applications like

                                                  automobiles On the cost front some of our producers are counted amongst the least

                                                  cost producers of the world For an average reference plant India is competitively

                                                  placed in the middle of the hierarchy of steel producing nations

                                                  However we have a long way to go to catch up with the leading exporters of the

                                                  world such as Japan the CIS countries Brazil etc It is however expected that by

                                                  2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                  per cent of total projected production The projected export ratio compares well with

                                                  the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                  The projected production of steel by 2019-20 to meet the domestic and export

                                                  demand will be around 110 million tonnes Management of resources and

                                                  infrastructural growth is going to be critical in achievement of the production level

                                                  envisaged The broad requirements of various resources will increase manifold from

                                                  the current level The bottlenecks in availability of critical inputs and various facilities

                                                  need to be removed through concerted efforts of Government and industry The broad

                                                  strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                  sector has been discussed in the National Steel Policy which has been recently

                                                  approved by the Government

                                                  As stated earlier the long-term goal of the National Steel Policy is that India

                                                  should have a modern and efficient steel industry of world standards catering to a

                                                  diversified steel demand The focus of the policy is to achieve global competitiveness

                                                  not only in terms of cost quality and product mix but also in terms of global

                                                  benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                  pronged strategy to achieve these goals On the demand side the strategy would be

                                                  to create incremental demand through promotional efforts creation of awareness and

                                                  strengthening the delivery chain particularly in rural areas On the supply side the

                                                  strategy would be to facilitate creation of additional capacity remove procedural and

                                                  policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                  investments in RampD and HRD and encourage the creation of infrastructure such as

                                                  roads railways and ports

                                                  The production figures exports and imports of finished carbon steel and pig iron

                                                  and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                  Steel and SAIL attest to the continuing growth for both the sectors

                                                  FINDINGS

                                                  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 increased its profit over the year particularly in 2006-07

                                                  Both the companies are planning to adopt modern technology which is going to

                                                  help them to compete in world market but they need to be less dependent on

                                                  state of art technology and coal for long term prospects

                                                  Public sector has undergone retrenchment for the employees and improved

                                                  has its lobour productivity but it is still lacking behind as compared to private

                                                  sector

                                                  SAIL has reduced the no of accidents due to improper handling of machinery

                                                  still no of accidents are more than that of TATA Steel

                                                  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

                                                  ie 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 have to be met

                                                  comprehensively if we are to take our legitimate place in the world as a developed

                                                  nation by 2020

                                                  BIBLIOGRAPHY

                                                  Annual report (2006-07) published by ministry of steel

                                                  Annual report (2006-07) published by TATA Steel

                                                  Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                  REPORTrsquo posted by SAIL on its website

                                                  lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                  held on 07 Nov 2006

                                                  Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                  wwwsteelnicin (Official website of ministry of industry)

                                                  wwwtatasteelcom (Official website of TATA Steel)

                                                  wwwsailcoin (Official website of Steel Authority of India)

                                                  wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                  wwwjpcindiansteelnicin (Website of joint planning committee)

                                                  • DATA ANALYSIS
                                                  • Comparison between TATA Steel and Steel Authority of India
                                                  • Production
                                                  • Quantity 000 Tonnes
                                                  • Financials
                                                  • Research and Development
                                                  • (Rs Crore)
                                                  • TATA Steel
                                                  • Steel Authority of India
                                                  • Environment
                                                  • TATA Steel
                                                  • Emissions effluents and wastes
                                                  • Emissions
                                                  • Waste handling
                                                  • Effluent Management
                                                  • Steel Authority of India
                                                  • Solid Waste Management
                                                  • Environmental Plantation
                                                  • Environmental Recognitions
                                                  • Workforce and Welfare of Society
                                                  • TATA steel
                                                  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                  • Steel Authority of India
                                                  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                  • Technology
                                                  • Steel Authority of India
                                                  • Safety measures
                                                  • Tata Steel
                                                  • Steel Authority of India
                                                  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                  • Measures taken by Indian government to improve the industry
                                                  • Now letrsquos 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-
                                                  • Special assistance being provided by Ministry of Steel to Private Sector
                                                  • FUTURE OF INDIAN STEEL INDUSTRY

                                                    million tonnes in just four years RINL is set to expand its capacity from three million

                                                    tonnes to 63 million tonnes in the next three years So that is a major expansion of

                                                    capacity for the PSUs

                                                    The public sector should be encouraged all the more Let there be a healthy

                                                    competition between public and private sector producers The question of exit comes

                                                    when they do not perform Look at the stock prices of SAIL A few years ago the scrip

                                                    was at below Rs10 per share Today it is more than Rs130 and the expectations

                                                    are that it will go up even higher

                                                    When talked about the labour productivity he says Yes labour productivity is low in

                                                    SAIL in particular But it is improving The steel major is going to adjust much of its

                                                    existing manpower in the expansion phase when its capacity is going to almost

                                                    double The management had also undertaken a massive VRS [voluntary retirement

                                                    scheme] In RINL labour productivity is not all that bad

                                                    Besides SAIL has done very well in various other techno-economic parameters in the

                                                    last two and a half years In 2003-04 SAILs manpower productivity was 127 tonnes

                                                    per man per year In 2005-06 it went up to 150 tonnes per man per year an

                                                    improvement of 20 per cent In blast furnace productivity also there has been an

                                                    improvement as also in the production of high-end special steels and capacity

                                                    utilisation

                                                    With the improved turnover which comes from higher capacity use and higher

                                                    manpower productivity SAILs profits have surged Its gross profit more than doubled

                                                    between 2003-04 and 2005-06 The general presumption was that the spurt in profits

                                                    was largely due to the high prices of steel An analysis has shown that as far as SAIL

                                                    is concerned the higher profit is 29 per cent owing to the price factor in steel and

                                                    other input costs and 71 per cent owing to improvement in capacity use and other

                                                    factors that are just mentioned

                                                    OBJECTIVES

                                                    To compare Private and Public steel sector with refrence to TATA Steel and

                                                    Steel Authority Of India

                                                    To analyse potential of both the companies ie TATA Steel and SAIL

                                                    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

                                                    Research Methodology

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

                                                    a) Research design-

                                                    In case of my research ldquoComparative analysis of Indian private and Public

                                                    sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                                    found to be more appropriate

                                                    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

                                                    Comparison between TATA Steel and Steel Authority of India

                                                    The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                                    significant improvements in the last two years The combined profit before tax of all 15

                                                    PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                                    Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                                    The profit before tax for all PSUs also exhibited a significant improvement of

                                                    around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                                    Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                                    comparable period of last year

                                                    Contribution of PSUs to public exchequer has also gone up significantly For

                                                    example the contribution of five leading companies namely SAIL RINL NMDC

                                                    KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                                    duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                                    from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                                    On the other hand 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

                                                    During the period (April-December 2006) 205 million tonne of steel was produced by

                                                    Private Sector steel units out of the total production of 3315 million tonne in the

                                                    country The private sector units consist of major steel producers in one hand and

                                                    relatively smaller amp 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

                                                    For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                                    companies on following parameters

                                                    Production

                                                    Chart showing production of both the companies

                                                    Quantity 000 Tonnes

                                                    2007-08 APR-DEC07APR-

                                                    DEC06 ACTUA

                                                    L

                                                    AGE OF CURRENT

                                                    PRODUCTION OVER

                                                    CAPACITY UTILISATION

                                                    TARGET TENTATIV

                                                    E

                                                    TARGET

                                                    ACTUAL

                                                    APR-DEC07 TARGE

                                                    T

                                                    APR-DEC06 ACTUA

                                                    L

                                                    APR-DEC 07

                                                    APR-DEC06

                                                    SAIL

                                                    i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                                    ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                                    iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                                    iv)BSL43500 32630 30970 30010 949 1032 950 910

                                                    v)ISP5000 3760 3520 3450 936 1020 940 920

                                                    vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                                    vii)VISL

                                                    1390 1050 1160 1190 1105 975 1300 1340

                                                    TATA 50000 37440 37090 37380 991 992 990 1000

                                                    TATA Steel

                                                    The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                    but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                    target of 3744 (mT) but could produce 3709 However for the same period in last

                                                    year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                    to 99 this year

                                                    Steel Authority of India

                                                    The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                    but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                    for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                    10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                    capacity utilisation of 103 this year as compared to 101 last year

                                                    Financials

                                                    TATA Steel

                                                    The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                    of the past four years The Company achieved the best ever sales turnover and

                                                    profitability during the year under review A robust Indian economy firm steel prices

                                                    higher volumes and several improvement initiatives contributed to the record

                                                    performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                    the previous year Export turnover was lower by about 5 due to lower volumes

                                                    Average price realisation improved mainly due to higher prices of hot rolled

                                                    coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                    (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                    Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                    due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                    funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                    providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                    crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                    before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                    after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                    20 compared to the previous year

                                                    The record financial results would not have been possible without a matching

                                                    performance by the operating departments including the raw materials division The

                                                    year witnessed the best ever crude steel production by the Company at 505 million

                                                    tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                    first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                    upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                    rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                    Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                    increase in production was backed by improvements in operating practices and

                                                    productivity resulting in a reduction in consumption of raw materials energy

                                                    refractories etc

                                                    Steel Authority of India

                                                    Financial Year 2006-07 has been eventful year for the company with further

                                                    momentum in improving operational efficiencies laying strong foundation and building

                                                    road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                    undertaken with its human resource at the core During the year the company got the

                                                    distinction of first metal company in the country to reach a market capitalization of Rs

                                                    50000 crore

                                                    There have been improvements in all financial parameters which are shown in

                                                    the table given below-

                                                    SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                    before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                    previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                    increase of 55

                                                    Research and Development

                                                    Chart showing production of both the companies

                                                    (Rs Crore)

                                                    TATA Steel

                                                    The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                    develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                    steel for body panels

                                                    Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                    coke energy conservation waste utilisation sintering blast furnace productivity and

                                                    phosphorous reduction product development and improvement in life of plant and

                                                    machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                    sealed and over 100 are in process

                                                    Steel Authority of India

                                                    Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                    innovative technological inputs to different units of SAIL with special emphasis on

                                                    cost reduction product development and application quality improvement energy

                                                    conservation and automation Several new products were developed and

                                                    commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                    Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                    specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                    micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                    Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                    Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                    strengthened its technology marketing efforts by providing consultancy services

                                                    organising specialised testing and transfer of technological innovations to outside

                                                    customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                    Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                    Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                    During the year 1998 technical papers were publishedpresented besides filing

                                                    of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                    awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                    achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                    Government of India

                                                    Environment

                                                    TATA Steel

                                                    Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                    Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                    has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                    Jamshedpur is the only town in the country which

                                                    Significant achievements by the Company include an improvement in

                                                    environment and resource conservation including a reduction in green house erosion

                                                    raw materials and water consumption The Company has increased waste re-use and

                                                    re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                    the-art pollution control systems being installed to prevent and control pollution The

                                                    Company has almost doubled its capital investment in Pollution Abatement in the last

                                                    five years

                                                    Emissions effluents and wastes

                                                    Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                    most relevance to the steel industry Considerable reduction has been effected by

                                                    Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                    granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                    Tata Steelrsquos activities

                                                    Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                    tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                    Hazardous Waste under Basel Convention The Company does not import or export

                                                    any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                    generated are handled as per the requirement of the Hazardous Waste Management

                                                    and Handling Rules 19892000

                                                    Emissions

                                                    Tata Steel has undertaken several initiatives which have resulted in

                                                    considerable reduction in stack emission Emissions are well below the Indian and

                                                    international standards The emission load including particulate matter Sulphur

                                                    Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                    undertaken at the Steel Works

                                                    Waste handling

                                                    Most of the solid waste generated from Steel Works is recycled or reused 18

                                                    of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                    was used to fill low-lying areas and for peripheral road construction around

                                                    Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                    power plants was dumped in a designated dump area

                                                    Effluent Management

                                                    Waste water from the steel making process is being treated with best available

                                                    physio-chemical methods as well as being recycled Waste water from the coke plant

                                                    is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                    organisms The Company has reduced the levels of total pollutant discharge in waste

                                                    water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                    Steel Authority of India

                                                    Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                    environmentally responsible manner to comply with applicable regulations and striving

                                                    to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                    efficiency and optimize resource consumption through various measures viz

                                                    improvement in process technology in the areas of raw materials coke iron and steel

                                                    making reuserecycle of the by-products generated and conservation of energy and

                                                    water

                                                    Solid Waste Management

                                                    During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                    and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                    Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                    these wastes are being made through internal recycling and selling to outside

                                                    agencies The wastes generated in the steel plants are being utilized mainly through

                                                    their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                    during April-September 2006

                                                    Environmental Plantation

                                                    Trees have a significant role in protection of environment and ecological balance

                                                    Extensive afforestation programme are being followed in all the plants and mines The

                                                    basis of choosing the species of plants mainly depends on local soil characteristics

                                                    and prevailing meteorological conditions The green belt developed by afforestation

                                                    adds to the aesthetic environment which becomes dust and noise barriers

                                                    A total number of 145521 saplings have been planted covering an area of 637

                                                    hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                    hectare in 2004-05 in and around the steel plants of SAIL

                                                    Environmental Recognitions

                                                    SAIL plants have been awarded various prizes for environmental management in

                                                    their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                    the Confederation of Indian Industries (CII) for exemplary performance in the

                                                    environmental economic andsocial dimensions of sustainable development and the

                                                    Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                    Excellence Award in the metal sector 2005 instuted by the World Environment

                                                    Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                    for 2005 from International Greenland Society

                                                    Workforce and Welfare of Society

                                                    TATA steel

                                                    Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                    and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                    enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                    provide a work environment that will ensure a sense of purpose and personal growth

                                                    for each individual The wish of the company is to see the smile on every face

                                                    everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                    people and enriched empowered and enhanced their lives

                                                    Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                    brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                    Tata Steel were the first of their kind in India and some even in the western countries

                                                    at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                    source of its competitiveness It focuses on constantly updating and challenging

                                                    intellectual capabilities to enable them to excel in performance Special efforts are

                                                    made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                    workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                    available with its people through Knowledge Management and sharing of best

                                                    practices

                                                    In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                    mutual co-operation coordination and understanding between the Management and

                                                    the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                    among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                    transparency fairness and equity in all its interactions with its employees to create an

                                                    enthused and happy workforce

                                                    In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                    assistance in the fields of education vocational training self-employment and

                                                    family welfare

                                                    Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                    12 times This facility provides on-the-spot diagnostic medical and advanced

                                                    surgical treatment for preventive and curative interventions to people in

                                                    inaccessible rural areas

                                                    Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                    for the 1920 Antwerp Olympics

                                                    The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                    track was inaugurated in 1991 The complex also houses facilities for handball

                                                    tennis volleyball hockey basketball boxing table tennis and a modern

                                                    gymnasium

                                                    The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                    services for the betterment of the people in and around Jamshedpur

                                                    At times of natural calamities the company has rushe immediate relief and off

                                                    ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                    fl ood ravaged Orissa and other such aff ected areas

                                                    Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                    er a unique environment for the children of Jamshedpur to grow up in

                                                    In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                    Jamshedpur has emerged as the one of the best cities in India

                                                    Steel Authority of India

                                                    The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                    executives and 123005 non-executives The total reduction in manpower achieved

                                                    during the year stood at 4864 which included separation of 881 employees through

                                                    voluntary retirement The labour productivity improved by around 12 over previous

                                                    year to 150 tonne crude steelmanyear

                                                    Some of the areas of assistance which are available to the weaker sections are the

                                                    following

                                                    The company has provided land for construction of school buildings in some of

                                                    the steel townships as well as in other places for spreading education among

                                                    the masses

                                                    The company has constructed roads in remote areas around the steel plants

                                                    and also where the captive mines are located to improve communication and

                                                    also increase activities such as organisation of health camps school facilities

                                                    drinking water etc under the peripheral development schemes

                                                    Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                    Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                    providing them with education boarding and lodging facilities

                                                    Construction of bridges by-pass roads metal-morum path waterways

                                                    levellingdressing area around township pre-mixed roads Installation of hand-

                                                    pumps tube wells and wells for villagers

                                                    Construction of school buildings (including for mentally retarded deaf and

                                                    dumb children) madarsas providing school furniture therein and construction

                                                    of hostels womenrsquos college building etc

                                                    Fourteen scholarships are awarded to deserving SCST undergraduate

                                                    engineering students in various disciplines to encourage technical education

                                                    among them

                                                    In many cases tuition fee in company run schools is exempt for SCST

                                                    students Steps are taken to provide education to more and more tribal children

                                                    in company schools

                                                    The unemployed SCST youth are given specialized training in various

                                                    technical trades to develop skill and knowledge Such training is provided free

                                                    of cost

                                                    Adult literacy campaign is carried out in most of the steel townships Every year

                                                    more and more men and women are being covered in this campaign

                                                    Development of fishery and cottage industry providing sewing machines to

                                                    village mahila mandals and promoting other self-employment generation

                                                    schemes

                                                    SAIL has established a hockey academy with stadium and hostel facilities at

                                                    Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                    academy was successful in spotting a number of young talented tribal players

                                                    and grooms them under expertise of ex-Olympian

                                                    Technology

                                                    The biggest boost to efficiency in the steel industry has come from the increased

                                                    use of continuous casting ndash an indicator of the modernity of the production process Its

                                                    share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                    now India is thus well on its way to joining the ranks of the leading steelmakers

                                                    among the industrial nations (share in EU-25 96) However in India some 6 of

                                                    crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                    suggests there is restructuring potential

                                                    TATA Steel

                                                    Tata Steels stall at the International Trade Fair was adjudged the best along

                                                    with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                    international companies also took part in the exhibition Participating companies from

                                                    countries all over the world exhibited latest technologies and know-how List of

                                                    participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                    Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                    companies of national and international repute China was the partner country for the

                                                    International Trade Fair this year

                                                    In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                    cutting-edge technology used in iron ore mining pioneering human resource

                                                    practices 78 years of industrial harmony and various other aspects of the worlds best

                                                    steel company

                                                    The 6th International Trade Fair and Conference an institutionalised global

                                                    event is considered to be one of the most prestigious forums for national as well

                                                    international participants It is a conclave of the finest minds concerned with the future

                                                    direction and growth of these sectors The forum provided the worlds most eminent

                                                    metallurgists manufacturers of metallurgical and mining machinery and related

                                                    sectors professionals analysts and experts with the opportunity to exchange views on

                                                    emerging technologies synergy and strengths and open up wider horizons for

                                                    sectorial development

                                                    Tata Steel to adopt Corus technology

                                                    Tata Steel plans to implement alternate technology used by the British steel

                                                    maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                    production according to Mr B Muthuraman Managing Director Tata Steel

                                                    ldquoWe are looking at alternate technology Corus has developed an alternate

                                                    technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                    newspersons on the sidelines of the 34th National Management Convention organised

                                                    by the All-India Management Association However he declined to give further details

                                                    on the type of technology the Indian steel giant plans to implement

                                                    Steel Authority of India

                                                    Modernisation holds the key to SAILs fortunes in the near future The objective

                                                    of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                    and productive capacity and in the process become more energy-efficient and

                                                    improve quality The key component of the ongoing modernisation drive - already

                                                    completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                    ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                    continuous casting techniques A senior SAIL official says Continuous casting and

                                                    basic oxygen furnaces ensure better quality steel through processes more easily

                                                    monitored for quality control The basic oxygen surfaces method is significantly faster

                                                    more automated and permits greater flexibility Continuous casting is more efficient

                                                    than the traditional ingot casting methods and gives increased yields while enabling

                                                    better quality standards SAIL is also modernising its finishing mills and is adding

                                                    secondary refining facilities to improve quality

                                                    Safety measures

                                                    A unique feature of safety management in steel industry is that a bipartite forum

                                                    named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                    was formed in 1973 at national level having representatives from steel plants in SAIL

                                                    RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                    Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                    workshops training programme safety competitions for member organisations JCSSI

                                                    with the co-operation and support of Trade Union representatives formulates policies

                                                    and guidelines for its member plants and monitors the implementation

                                                    Tata Steel

                                                    Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                    Safety department and a Safety Trophy helped spread the message all across the

                                                    company

                                                    TATA reaffirms its commitment to provide safe working place and clean

                                                    environment to its employees and other stakeholders as an integral part of its

                                                    business philosophy and values We will continually enhance our Environmental

                                                    Occupational Health amp Safety (EHS) performance in our activities products and

                                                    services through a structured EHS management framework Towards this

                                                    commitment we shall

                                                    Establish and achieve EHS objectives and targets

                                                    Ensure compliance with applicable EHS legislation and other requirement and

                                                    go beyond

                                                    Conserve natural resources and energy by constantly seeking to reduce

                                                    consumption and promoting waste avoidance and recycling measures

                                                    Eliminate minimize andor control adverse environmental impacts and

                                                    occupational health and safety risks by adopting appropriate state-of-the-art

                                                    technology and best EHS management practices at all levels sand functions

                                                    Enhance awareness skill and competence of our employees and contractors

                                                    so as to enable them to demonstrate their involvement responsibility and

                                                    accountability for sound EHS performance

                                                    Steel Authority of India

                                                    SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                    monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                    Annual Performance Plans (APP) for the areas of safety and fire services are

                                                    formulated and review of implementation of APP is done during Heads of

                                                    Safety meeting

                                                    Internal and external safety audits of major departments particularly hazardous

                                                    areas are conducted every year and points arising from these audits are

                                                    liquidated Safety aspects have been incorporated in standard operating

                                                    practices (SOP) and standard maintenance practices (SMP)

                                                    All major capital repairsshut downs are closely monitored round the clock

                                                    Periodic drives are conducted to inculcate safety awarenessculture up to

                                                    grass-root level apart from regular inspections as per checklists to identify

                                                    unsafe conditionsacts

                                                    Safety training is imparted to target group employees at various levels HRD

                                                    intervention in the area of safety covers Heads of Departments Line Managers

                                                    amp Departmental Safety Officers Besides area specific workshops are

                                                    conducted at different locations on important topics like gas safety railroad

                                                    safety safety in iron steel amp coke making etc

                                                    Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                    standards in the company by taking measures like intensive safety drives in works

                                                    area and conducting safety audits in hazardous departments of different plants and

                                                    mines In addition specific workshops on safety aspects were organised in various

                                                    SAIL steel plants

                                                    Measures taken by Indian government to improve the industry

                                                    Now letrsquos 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-

                                                    1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                    among others was removed from the list of industries reserved for the public

                                                    sector and also exempted from the provisions of compulsory licensing under the

                                                    Industries (Development and Regulation) Act 1951

                                                    2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                    of `high priority industries for automatic approval for foreign equity investment up

                                                    to 51 This limit has been recently increased to 100

                                                    3 Price and distribution of steel were deregulated from January 1992 At the same

                                                    time it was ensured that priority continued to be accorded for meeting the

                                                    requirements of small scale industries exporters of engineering goods and North

                                                    Eastern Region of the country besides strategic sectors such as Defence and

                                                    Railways

                                                    4 The trade policy has been liberalised and import and export of iron and steel is

                                                    freely allowed There are no quantitative restrictions on import of iron and steel

                                                    items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                    regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                    steel have drastically come down since 1991-92 levels and the government is

                                                    committed to bring them down to the international levels In Chapter 72 there are

                                                    two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                    5 Iron amp Steel are freely importable as per the Extant Policy

                                                    6 Iron amp Steel are freely exportable

                                                    7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                    8 The floor price for seconds and defectives continues till date

                                                    9 Imports of seconds and defectives of steel are allowed only through three

                                                    designated ports of Mumbai Calcutta and Chennai

                                                    10Mandatory pre inspection certificate by a reputed international agency for every

                                                    import consignment of seconds and defectives

                                                    11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                    10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                    the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                    per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                    15 per cent to 5 per cent

                                                    12Further customs duty on several raw materials used by the steel sector like

                                                    noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                    coking coal to zero

                                                    13To bring down the prices of steel the excise duty on steel products was reduced

                                                    from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                    that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                    increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                    cut on moderating prices was not achieved

                                                    14The union Budget 2007-08 the import duty on seconds and defective has been

                                                    further reduced from 20 to 10

                                                    Special assistance being provided by Ministry of Steel to Private Sector

                                                    1 Ministry of Steel is extending all possible support as detailed below for the

                                                    development of Iron and Steel Sector in the country

                                                    2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                    new plants and expansion of existing ones wherever applied for

                                                    3 To ensure an un-interrupted supply of raw materials to the producers

                                                    4 The Ministry has been interacting with All India Financial institutions to expedite

                                                    clearance of projects

                                                    5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                    Plants are held at the level of Secretary

                                                    6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                    industry so that their absence does not lead to bottlenecks in the future growth of

                                                    the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                    7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                    Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                    country are members of this Institute which has been set up with the objective of

                                                    promoting developing and propagating the proper and effective use of steel

                                                    8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                    major steel plants being implemented Govt has setup a Project Coordination

                                                    Group under the Chairmanship of Steel Minister

                                                    NATIONAL STEEL POLICY 2005

                                                    The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                    development and as such great importance is attached to capacity expansion in line

                                                    with expected demand at cost and prices which make Indian steel internationally

                                                    competitive The existing regime of liberalization decontrol and deregulation of

                                                    industry in the country has opened up new opportunities for the expansion of the steel

                                                    industry With a view to accelerating the growth of the steel sector and attaining the

                                                    vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                    formulated a National Steel Policy (NSP) in 2005

                                                    The following salient features can be derived after analysing the NSP 2005

                                                    The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                    towards reform restructuring and globalisation

                                                    The long-term goal of the NSP is that India should have a modern and efficient

                                                    steel industry of world standards catering to diversified steel demand The focus of

                                                    the policy is to achieve global competitiveness not only in terms of cost quality and

                                                    product-mix but also in terms of global benchmarks of efficiency and productivity

                                                    In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                    NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                    an open globally integrated and competitive environment

                                                    The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                    policy goal On the demand side the strategy would be to create incremental

                                                    demand through promotional efforts creation of awareness and strengthening the

                                                    delivery chain particularly in rural areas On the supply side the strategy would be

                                                    to facilitate creation of additional capacity remove procedural and policy

                                                    bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                    investments in RampD and encourage the creation of infrastructure such as roads

                                                    railways and ports

                                                    The NSP acknowledges the low per capita consumption of steel in the country

                                                    especially in the rural areas and the need to boost steel consumption to improve

                                                    quality of life and help in meeting the growing aspirations of masses

                                                    In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                    industry would need additional capital In addition funds would be required for

                                                    technological upgrade of existing facilities In order to mobilize such vast resources

                                                    NSP seeks to encourage foreign direct investment In addition the policy also

                                                    seeks to make the fiscal incentives available to infrastructure projects accessible

                                                    to the steel industry

                                                    The NSP seeks to support developing of risk-hedging instruments like futures and

                                                    derivatives to contain price volatility in the steel market

                                                    The NSP seeks to strengthen the existing training and research facilities available

                                                    to the domestic steel industry so as to provide suitable training programmes

                                                    especially for the secondary small-scale units and also to collect and analyse data

                                                    on important parameters of the industry

                                                    The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                    capability for special types of steel substitute coking coal use iron ore fines

                                                    develop new products suited to rural needs enhance material and energy

                                                    efficiency utilize waste and arrest environmental degradation

                                                    The NSP acknowledges the important role played by the secondary steel sector in

                                                    providing employment meeting local demand of steel in rural and semi-urban

                                                    areas and meeting the countryrsquos demand of some special products and seeks to

                                                    endeavour to provide the necessary feedstock to these units at reasonable prices

                                                    from major plants through the existing mechanism of State Small Industries

                                                    Corporations

                                                    The NSP recognizes the fact that integration of the Indian steel industry with the

                                                    global economy requires that the industry should be protected from unfair trade

                                                    practices The NSP therefore envisages institution of mechanisms for import

                                                    surveillance and monitoring export subsidies in other countries

                                                    The present per capita consumption of steel in the country is very low compared to the

                                                    world average As mentioned above one of the objectives of the NSP is to augment

                                                    the demand and consumption of steel in the country by conscious promotion of steel

                                                    usage With a view to create a mass awareness campaign on conscious promotion of

                                                    steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                    the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                    The Committee is being serviced by Institute for Steel Development and Growth

                                                    (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                    way of an awareness campaign with particular emphasis on rural sectors The

                                                    Committee also aims at educating the designers architects builders and planners

                                                    regarding the qualitative and cost effective applications of steel in various structures

                                                    including buildings bridges flyovers and airports

                                                    FUTURE OF INDIAN STEEL INDUSTRY

                                                    India is amongst a few countries in the world having the dual advantage of fast

                                                    growing domestic demand coupled with access to raw materials Further the trend

                                                    that is already discernible is that the axis of global steel production consumption is

                                                    shifting towards Asia With their large populations China and India already account for

                                                    35 of the total world steel production - more than double of Europe Asia is

                                                    expected to outpace other regions of the world to an even greater extent in the coming

                                                    years

                                                    Amongst the Asian nations China has established a huge unbridgeable lead It

                                                    is accepted that China will continue to be the leader However India is slated to

                                                    emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                    the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                    splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                    China swallowed almost 32 of global steel It is unlikely that future production and

                                                    consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                    has been the case over the last few years On the other hand it is sun-rise time for

                                                    India where the demand has increased by 7-8 in the last couple of years In the long

                                                    run Indian steel is likely to be more cost-effective since unlike China India has

                                                    relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                    can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                    However the position with coal is not so favourable Though thermal coal

                                                    reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                    traditional blast furnace route would require coking coal India does not have adequate

                                                    reserves of coking coal nor is the meagre amount available of appropriate quality

                                                    Thus the steel industry always had to contend with the dual problems of inadequate

                                                    availability and poor quality of Indian coking coal This has been partly addressed by

                                                    adopting alternative iron making processes that are not dependent on coking coal it

                                                    can not be denied that coal is the biggest cause for concern for bulk steel production

                                                    in India

                                                    Because of the shortage of indigenous coal attempts have been made by steel

                                                    producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                    mines in other countries This is the only long-term solution but with a global shortage

                                                    of coal it may not remain cost-effective in the long run

                                                    India is the seventh largest producer of steel and may further improve its position

                                                    going by the current trends A series of investment decisions by major domestic

                                                    players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                    POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                    The keen interest shown by various prospective investors is not only due to

                                                    expectations of strong growth in domestic demand but also due to indigenous

                                                    availability of key resources like iron ore and skilled workforce

                                                    After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                    steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                    finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                    2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                    consumption has accelerated to 91 per cent

                                                    With the likely growth of Indian economy at around 7 per cent per annum

                                                    demand for steel is expected to remain strong and is projected to reach a level of 90

                                                    million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                    demand is sustainable considering the fact that Indias per capita consumption of steel

                                                    is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                    very low level of per capita consumption of steel in India is highlighted further when

                                                    compared with the consumption levels of its peer group consisting of countries like

                                                    China Brazil Mexico and Republic of Korea as also with selected developed

                                                    countries

                                                    Though there are realistic constraints in India to achieving as rapid a growth as in

                                                    China there seems to be consensus among analysts that India is likely to witness a

                                                    growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                    percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                    achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                    more conservative due to cyclicity of steel business it may be mentioned that in a

                                                    country like India cyclicity is more in terms of prices rather than volumes of production

                                                    Exports

                                                    Similar optimism prevails with regard to export of iron and steel Export of steel

                                                    starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                    2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                    rising domestic demand and low capacity additions Exports now constitute around 17

                                                    per cent of total production and Indias presence in the developing and developed

                                                    world is being increasingly felt Indian steel producers have recently been able to

                                                    supply specialized grades and products used for sophisticated applications like

                                                    automobiles On the cost front some of our producers are counted amongst the least

                                                    cost producers of the world For an average reference plant India is competitively

                                                    placed in the middle of the hierarchy of steel producing nations

                                                    However we have a long way to go to catch up with the leading exporters of the

                                                    world such as Japan the CIS countries Brazil etc It is however expected that by

                                                    2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                    per cent of total projected production The projected export ratio compares well with

                                                    the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                    The projected production of steel by 2019-20 to meet the domestic and export

                                                    demand will be around 110 million tonnes Management of resources and

                                                    infrastructural growth is going to be critical in achievement of the production level

                                                    envisaged The broad requirements of various resources will increase manifold from

                                                    the current level The bottlenecks in availability of critical inputs and various facilities

                                                    need to be removed through concerted efforts of Government and industry The broad

                                                    strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                    sector has been discussed in the National Steel Policy which has been recently

                                                    approved by the Government

                                                    As stated earlier the long-term goal of the National Steel Policy is that India

                                                    should have a modern and efficient steel industry of world standards catering to a

                                                    diversified steel demand The focus of the policy is to achieve global competitiveness

                                                    not only in terms of cost quality and product mix but also in terms of global

                                                    benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                    pronged strategy to achieve these goals On the demand side the strategy would be

                                                    to create incremental demand through promotional efforts creation of awareness and

                                                    strengthening the delivery chain particularly in rural areas On the supply side the

                                                    strategy would be to facilitate creation of additional capacity remove procedural and

                                                    policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                    investments in RampD and HRD and encourage the creation of infrastructure such as

                                                    roads railways and ports

                                                    The production figures exports and imports of finished carbon steel and pig iron

                                                    and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                    Steel and SAIL attest to the continuing growth for both the sectors

                                                    FINDINGS

                                                    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 increased its profit over the year particularly in 2006-07

                                                    Both the companies are planning to adopt modern technology which is going to

                                                    help them to compete in world market but they need to be less dependent on

                                                    state of art technology and coal for long term prospects

                                                    Public sector has undergone retrenchment for the employees and improved

                                                    has its lobour productivity but it is still lacking behind as compared to private

                                                    sector

                                                    SAIL has reduced the no of accidents due to improper handling of machinery

                                                    still no of accidents are more than that of TATA Steel

                                                    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

                                                    ie 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 have to be met

                                                    comprehensively if we are to take our legitimate place in the world as a developed

                                                    nation by 2020

                                                    BIBLIOGRAPHY

                                                    Annual report (2006-07) published by ministry of steel

                                                    Annual report (2006-07) published by TATA Steel

                                                    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                    REPORTrsquo posted by SAIL on its website

                                                    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                    held on 07 Nov 2006

                                                    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                    wwwsteelnicin (Official website of ministry of industry)

                                                    wwwtatasteelcom (Official website of TATA Steel)

                                                    wwwsailcoin (Official website of Steel Authority of India)

                                                    wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                    wwwjpcindiansteelnicin (Website of joint planning committee)

                                                    • DATA ANALYSIS
                                                    • Comparison between TATA Steel and Steel Authority of India
                                                    • Production
                                                    • Quantity 000 Tonnes
                                                    • Financials
                                                    • Research and Development
                                                    • (Rs Crore)
                                                    • TATA Steel
                                                    • Steel Authority of India
                                                    • Environment
                                                    • TATA Steel
                                                    • Emissions effluents and wastes
                                                    • Emissions
                                                    • Waste handling
                                                    • Effluent Management
                                                    • Steel Authority of India
                                                    • Solid Waste Management
                                                    • Environmental Plantation
                                                    • Environmental Recognitions
                                                    • Workforce and Welfare of Society
                                                    • TATA steel
                                                    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                    • Steel Authority of India
                                                    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                    • Technology
                                                    • Steel Authority of India
                                                    • Safety measures
                                                    • Tata Steel
                                                    • Steel Authority of India
                                                    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                    • Measures taken by Indian government to improve the industry
                                                    • Now letrsquos 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-
                                                    • Special assistance being provided by Ministry of Steel to Private Sector
                                                    • FUTURE OF INDIAN STEEL INDUSTRY

                                                      OBJECTIVES

                                                      To compare Private and Public steel sector with refrence to TATA Steel and

                                                      Steel Authority Of India

                                                      To analyse potential of both the companies ie TATA Steel and SAIL

                                                      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

                                                      Research Methodology

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

                                                      a) Research design-

                                                      In case of my research ldquoComparative analysis of Indian private and Public

                                                      sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                                      found to be more appropriate

                                                      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

                                                      Comparison between TATA Steel and Steel Authority of India

                                                      The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                                      significant improvements in the last two years The combined profit before tax of all 15

                                                      PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                                      Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                                      The profit before tax for all PSUs also exhibited a significant improvement of

                                                      around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                                      Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                                      comparable period of last year

                                                      Contribution of PSUs to public exchequer has also gone up significantly For

                                                      example the contribution of five leading companies namely SAIL RINL NMDC

                                                      KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                                      duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                                      from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                                      On the other hand 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

                                                      During the period (April-December 2006) 205 million tonne of steel was produced by

                                                      Private Sector steel units out of the total production of 3315 million tonne in the

                                                      country The private sector units consist of major steel producers in one hand and

                                                      relatively smaller amp 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

                                                      For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                                      companies on following parameters

                                                      Production

                                                      Chart showing production of both the companies

                                                      Quantity 000 Tonnes

                                                      2007-08 APR-DEC07APR-

                                                      DEC06 ACTUA

                                                      L

                                                      AGE OF CURRENT

                                                      PRODUCTION OVER

                                                      CAPACITY UTILISATION

                                                      TARGET TENTATIV

                                                      E

                                                      TARGET

                                                      ACTUAL

                                                      APR-DEC07 TARGE

                                                      T

                                                      APR-DEC06 ACTUA

                                                      L

                                                      APR-DEC 07

                                                      APR-DEC06

                                                      SAIL

                                                      i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                                      ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                                      iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                                      iv)BSL43500 32630 30970 30010 949 1032 950 910

                                                      v)ISP5000 3760 3520 3450 936 1020 940 920

                                                      vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                                      vii)VISL

                                                      1390 1050 1160 1190 1105 975 1300 1340

                                                      TATA 50000 37440 37090 37380 991 992 990 1000

                                                      TATA Steel

                                                      The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                      but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                      target of 3744 (mT) but could produce 3709 However for the same period in last

                                                      year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                      to 99 this year

                                                      Steel Authority of India

                                                      The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                      but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                      for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                      10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                      capacity utilisation of 103 this year as compared to 101 last year

                                                      Financials

                                                      TATA Steel

                                                      The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                      of the past four years The Company achieved the best ever sales turnover and

                                                      profitability during the year under review A robust Indian economy firm steel prices

                                                      higher volumes and several improvement initiatives contributed to the record

                                                      performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                      the previous year Export turnover was lower by about 5 due to lower volumes

                                                      Average price realisation improved mainly due to higher prices of hot rolled

                                                      coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                      (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                      Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                      due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                      funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                      providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                      crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                      before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                      after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                      20 compared to the previous year

                                                      The record financial results would not have been possible without a matching

                                                      performance by the operating departments including the raw materials division The

                                                      year witnessed the best ever crude steel production by the Company at 505 million

                                                      tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                      first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                      upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                      rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                      Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                      increase in production was backed by improvements in operating practices and

                                                      productivity resulting in a reduction in consumption of raw materials energy

                                                      refractories etc

                                                      Steel Authority of India

                                                      Financial Year 2006-07 has been eventful year for the company with further

                                                      momentum in improving operational efficiencies laying strong foundation and building

                                                      road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                      undertaken with its human resource at the core During the year the company got the

                                                      distinction of first metal company in the country to reach a market capitalization of Rs

                                                      50000 crore

                                                      There have been improvements in all financial parameters which are shown in

                                                      the table given below-

                                                      SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                      before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                      previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                      increase of 55

                                                      Research and Development

                                                      Chart showing production of both the companies

                                                      (Rs Crore)

                                                      TATA Steel

                                                      The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                      develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                      steel for body panels

                                                      Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                      coke energy conservation waste utilisation sintering blast furnace productivity and

                                                      phosphorous reduction product development and improvement in life of plant and

                                                      machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                      sealed and over 100 are in process

                                                      Steel Authority of India

                                                      Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                      innovative technological inputs to different units of SAIL with special emphasis on

                                                      cost reduction product development and application quality improvement energy

                                                      conservation and automation Several new products were developed and

                                                      commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                      Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                      specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                      micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                      Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                      Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                      strengthened its technology marketing efforts by providing consultancy services

                                                      organising specialised testing and transfer of technological innovations to outside

                                                      customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                      Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                      Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                      During the year 1998 technical papers were publishedpresented besides filing

                                                      of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                      awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                      achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                      Government of India

                                                      Environment

                                                      TATA Steel

                                                      Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                      Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                      has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                      Jamshedpur is the only town in the country which

                                                      Significant achievements by the Company include an improvement in

                                                      environment and resource conservation including a reduction in green house erosion

                                                      raw materials and water consumption The Company has increased waste re-use and

                                                      re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                      the-art pollution control systems being installed to prevent and control pollution The

                                                      Company has almost doubled its capital investment in Pollution Abatement in the last

                                                      five years

                                                      Emissions effluents and wastes

                                                      Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                      most relevance to the steel industry Considerable reduction has been effected by

                                                      Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                      granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                      Tata Steelrsquos activities

                                                      Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                      tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                      Hazardous Waste under Basel Convention The Company does not import or export

                                                      any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                      generated are handled as per the requirement of the Hazardous Waste Management

                                                      and Handling Rules 19892000

                                                      Emissions

                                                      Tata Steel has undertaken several initiatives which have resulted in

                                                      considerable reduction in stack emission Emissions are well below the Indian and

                                                      international standards The emission load including particulate matter Sulphur

                                                      Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                      undertaken at the Steel Works

                                                      Waste handling

                                                      Most of the solid waste generated from Steel Works is recycled or reused 18

                                                      of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                      was used to fill low-lying areas and for peripheral road construction around

                                                      Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                      power plants was dumped in a designated dump area

                                                      Effluent Management

                                                      Waste water from the steel making process is being treated with best available

                                                      physio-chemical methods as well as being recycled Waste water from the coke plant

                                                      is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                      organisms The Company has reduced the levels of total pollutant discharge in waste

                                                      water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                      Steel Authority of India

                                                      Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                      environmentally responsible manner to comply with applicable regulations and striving

                                                      to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                      efficiency and optimize resource consumption through various measures viz

                                                      improvement in process technology in the areas of raw materials coke iron and steel

                                                      making reuserecycle of the by-products generated and conservation of energy and

                                                      water

                                                      Solid Waste Management

                                                      During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                      and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                      Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                      these wastes are being made through internal recycling and selling to outside

                                                      agencies The wastes generated in the steel plants are being utilized mainly through

                                                      their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                      during April-September 2006

                                                      Environmental Plantation

                                                      Trees have a significant role in protection of environment and ecological balance

                                                      Extensive afforestation programme are being followed in all the plants and mines The

                                                      basis of choosing the species of plants mainly depends on local soil characteristics

                                                      and prevailing meteorological conditions The green belt developed by afforestation

                                                      adds to the aesthetic environment which becomes dust and noise barriers

                                                      A total number of 145521 saplings have been planted covering an area of 637

                                                      hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                      hectare in 2004-05 in and around the steel plants of SAIL

                                                      Environmental Recognitions

                                                      SAIL plants have been awarded various prizes for environmental management in

                                                      their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                      the Confederation of Indian Industries (CII) for exemplary performance in the

                                                      environmental economic andsocial dimensions of sustainable development and the

                                                      Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                      Excellence Award in the metal sector 2005 instuted by the World Environment

                                                      Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                      for 2005 from International Greenland Society

                                                      Workforce and Welfare of Society

                                                      TATA steel

                                                      Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                      and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                      enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                      provide a work environment that will ensure a sense of purpose and personal growth

                                                      for each individual The wish of the company is to see the smile on every face

                                                      everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                      people and enriched empowered and enhanced their lives

                                                      Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                      brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                      Tata Steel were the first of their kind in India and some even in the western countries

                                                      at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                      source of its competitiveness It focuses on constantly updating and challenging

                                                      intellectual capabilities to enable them to excel in performance Special efforts are

                                                      made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                      workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                      available with its people through Knowledge Management and sharing of best

                                                      practices

                                                      In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                      mutual co-operation coordination and understanding between the Management and

                                                      the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                      among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                      transparency fairness and equity in all its interactions with its employees to create an

                                                      enthused and happy workforce

                                                      In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                      assistance in the fields of education vocational training self-employment and

                                                      family welfare

                                                      Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                      12 times This facility provides on-the-spot diagnostic medical and advanced

                                                      surgical treatment for preventive and curative interventions to people in

                                                      inaccessible rural areas

                                                      Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                      for the 1920 Antwerp Olympics

                                                      The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                      track was inaugurated in 1991 The complex also houses facilities for handball

                                                      tennis volleyball hockey basketball boxing table tennis and a modern

                                                      gymnasium

                                                      The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                      services for the betterment of the people in and around Jamshedpur

                                                      At times of natural calamities the company has rushe immediate relief and off

                                                      ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                      fl ood ravaged Orissa and other such aff ected areas

                                                      Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                      er a unique environment for the children of Jamshedpur to grow up in

                                                      In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                      Jamshedpur has emerged as the one of the best cities in India

                                                      Steel Authority of India

                                                      The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                      executives and 123005 non-executives The total reduction in manpower achieved

                                                      during the year stood at 4864 which included separation of 881 employees through

                                                      voluntary retirement The labour productivity improved by around 12 over previous

                                                      year to 150 tonne crude steelmanyear

                                                      Some of the areas of assistance which are available to the weaker sections are the

                                                      following

                                                      The company has provided land for construction of school buildings in some of

                                                      the steel townships as well as in other places for spreading education among

                                                      the masses

                                                      The company has constructed roads in remote areas around the steel plants

                                                      and also where the captive mines are located to improve communication and

                                                      also increase activities such as organisation of health camps school facilities

                                                      drinking water etc under the peripheral development schemes

                                                      Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                      Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                      providing them with education boarding and lodging facilities

                                                      Construction of bridges by-pass roads metal-morum path waterways

                                                      levellingdressing area around township pre-mixed roads Installation of hand-

                                                      pumps tube wells and wells for villagers

                                                      Construction of school buildings (including for mentally retarded deaf and

                                                      dumb children) madarsas providing school furniture therein and construction

                                                      of hostels womenrsquos college building etc

                                                      Fourteen scholarships are awarded to deserving SCST undergraduate

                                                      engineering students in various disciplines to encourage technical education

                                                      among them

                                                      In many cases tuition fee in company run schools is exempt for SCST

                                                      students Steps are taken to provide education to more and more tribal children

                                                      in company schools

                                                      The unemployed SCST youth are given specialized training in various

                                                      technical trades to develop skill and knowledge Such training is provided free

                                                      of cost

                                                      Adult literacy campaign is carried out in most of the steel townships Every year

                                                      more and more men and women are being covered in this campaign

                                                      Development of fishery and cottage industry providing sewing machines to

                                                      village mahila mandals and promoting other self-employment generation

                                                      schemes

                                                      SAIL has established a hockey academy with stadium and hostel facilities at

                                                      Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                      academy was successful in spotting a number of young talented tribal players

                                                      and grooms them under expertise of ex-Olympian

                                                      Technology

                                                      The biggest boost to efficiency in the steel industry has come from the increased

                                                      use of continuous casting ndash an indicator of the modernity of the production process Its

                                                      share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                      now India is thus well on its way to joining the ranks of the leading steelmakers

                                                      among the industrial nations (share in EU-25 96) However in India some 6 of

                                                      crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                      suggests there is restructuring potential

                                                      TATA Steel

                                                      Tata Steels stall at the International Trade Fair was adjudged the best along

                                                      with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                      international companies also took part in the exhibition Participating companies from

                                                      countries all over the world exhibited latest technologies and know-how List of

                                                      participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                      Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                      companies of national and international repute China was the partner country for the

                                                      International Trade Fair this year

                                                      In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                      cutting-edge technology used in iron ore mining pioneering human resource

                                                      practices 78 years of industrial harmony and various other aspects of the worlds best

                                                      steel company

                                                      The 6th International Trade Fair and Conference an institutionalised global

                                                      event is considered to be one of the most prestigious forums for national as well

                                                      international participants It is a conclave of the finest minds concerned with the future

                                                      direction and growth of these sectors The forum provided the worlds most eminent

                                                      metallurgists manufacturers of metallurgical and mining machinery and related

                                                      sectors professionals analysts and experts with the opportunity to exchange views on

                                                      emerging technologies synergy and strengths and open up wider horizons for

                                                      sectorial development

                                                      Tata Steel to adopt Corus technology

                                                      Tata Steel plans to implement alternate technology used by the British steel

                                                      maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                      production according to Mr B Muthuraman Managing Director Tata Steel

                                                      ldquoWe are looking at alternate technology Corus has developed an alternate

                                                      technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                      newspersons on the sidelines of the 34th National Management Convention organised

                                                      by the All-India Management Association However he declined to give further details

                                                      on the type of technology the Indian steel giant plans to implement

                                                      Steel Authority of India

                                                      Modernisation holds the key to SAILs fortunes in the near future The objective

                                                      of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                      and productive capacity and in the process become more energy-efficient and

                                                      improve quality The key component of the ongoing modernisation drive - already

                                                      completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                      ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                      continuous casting techniques A senior SAIL official says Continuous casting and

                                                      basic oxygen furnaces ensure better quality steel through processes more easily

                                                      monitored for quality control The basic oxygen surfaces method is significantly faster

                                                      more automated and permits greater flexibility Continuous casting is more efficient

                                                      than the traditional ingot casting methods and gives increased yields while enabling

                                                      better quality standards SAIL is also modernising its finishing mills and is adding

                                                      secondary refining facilities to improve quality

                                                      Safety measures

                                                      A unique feature of safety management in steel industry is that a bipartite forum

                                                      named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                      was formed in 1973 at national level having representatives from steel plants in SAIL

                                                      RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                      Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                      workshops training programme safety competitions for member organisations JCSSI

                                                      with the co-operation and support of Trade Union representatives formulates policies

                                                      and guidelines for its member plants and monitors the implementation

                                                      Tata Steel

                                                      Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                      Safety department and a Safety Trophy helped spread the message all across the

                                                      company

                                                      TATA reaffirms its commitment to provide safe working place and clean

                                                      environment to its employees and other stakeholders as an integral part of its

                                                      business philosophy and values We will continually enhance our Environmental

                                                      Occupational Health amp Safety (EHS) performance in our activities products and

                                                      services through a structured EHS management framework Towards this

                                                      commitment we shall

                                                      Establish and achieve EHS objectives and targets

                                                      Ensure compliance with applicable EHS legislation and other requirement and

                                                      go beyond

                                                      Conserve natural resources and energy by constantly seeking to reduce

                                                      consumption and promoting waste avoidance and recycling measures

                                                      Eliminate minimize andor control adverse environmental impacts and

                                                      occupational health and safety risks by adopting appropriate state-of-the-art

                                                      technology and best EHS management practices at all levels sand functions

                                                      Enhance awareness skill and competence of our employees and contractors

                                                      so as to enable them to demonstrate their involvement responsibility and

                                                      accountability for sound EHS performance

                                                      Steel Authority of India

                                                      SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                      monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                      Annual Performance Plans (APP) for the areas of safety and fire services are

                                                      formulated and review of implementation of APP is done during Heads of

                                                      Safety meeting

                                                      Internal and external safety audits of major departments particularly hazardous

                                                      areas are conducted every year and points arising from these audits are

                                                      liquidated Safety aspects have been incorporated in standard operating

                                                      practices (SOP) and standard maintenance practices (SMP)

                                                      All major capital repairsshut downs are closely monitored round the clock

                                                      Periodic drives are conducted to inculcate safety awarenessculture up to

                                                      grass-root level apart from regular inspections as per checklists to identify

                                                      unsafe conditionsacts

                                                      Safety training is imparted to target group employees at various levels HRD

                                                      intervention in the area of safety covers Heads of Departments Line Managers

                                                      amp Departmental Safety Officers Besides area specific workshops are

                                                      conducted at different locations on important topics like gas safety railroad

                                                      safety safety in iron steel amp coke making etc

                                                      Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                      standards in the company by taking measures like intensive safety drives in works

                                                      area and conducting safety audits in hazardous departments of different plants and

                                                      mines In addition specific workshops on safety aspects were organised in various

                                                      SAIL steel plants

                                                      Measures taken by Indian government to improve the industry

                                                      Now letrsquos 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-

                                                      1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                      among others was removed from the list of industries reserved for the public

                                                      sector and also exempted from the provisions of compulsory licensing under the

                                                      Industries (Development and Regulation) Act 1951

                                                      2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                      of `high priority industries for automatic approval for foreign equity investment up

                                                      to 51 This limit has been recently increased to 100

                                                      3 Price and distribution of steel were deregulated from January 1992 At the same

                                                      time it was ensured that priority continued to be accorded for meeting the

                                                      requirements of small scale industries exporters of engineering goods and North

                                                      Eastern Region of the country besides strategic sectors such as Defence and

                                                      Railways

                                                      4 The trade policy has been liberalised and import and export of iron and steel is

                                                      freely allowed There are no quantitative restrictions on import of iron and steel

                                                      items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                      regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                      steel have drastically come down since 1991-92 levels and the government is

                                                      committed to bring them down to the international levels In Chapter 72 there are

                                                      two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                      5 Iron amp Steel are freely importable as per the Extant Policy

                                                      6 Iron amp Steel are freely exportable

                                                      7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                      8 The floor price for seconds and defectives continues till date

                                                      9 Imports of seconds and defectives of steel are allowed only through three

                                                      designated ports of Mumbai Calcutta and Chennai

                                                      10Mandatory pre inspection certificate by a reputed international agency for every

                                                      import consignment of seconds and defectives

                                                      11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                      10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                      the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                      per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                      15 per cent to 5 per cent

                                                      12Further customs duty on several raw materials used by the steel sector like

                                                      noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                      coking coal to zero

                                                      13To bring down the prices of steel the excise duty on steel products was reduced

                                                      from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                      that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                      increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                      cut on moderating prices was not achieved

                                                      14The union Budget 2007-08 the import duty on seconds and defective has been

                                                      further reduced from 20 to 10

                                                      Special assistance being provided by Ministry of Steel to Private Sector

                                                      1 Ministry of Steel is extending all possible support as detailed below for the

                                                      development of Iron and Steel Sector in the country

                                                      2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                      new plants and expansion of existing ones wherever applied for

                                                      3 To ensure an un-interrupted supply of raw materials to the producers

                                                      4 The Ministry has been interacting with All India Financial institutions to expedite

                                                      clearance of projects

                                                      5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                      Plants are held at the level of Secretary

                                                      6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                      industry so that their absence does not lead to bottlenecks in the future growth of

                                                      the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                      7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                      Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                      country are members of this Institute which has been set up with the objective of

                                                      promoting developing and propagating the proper and effective use of steel

                                                      8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                      major steel plants being implemented Govt has setup a Project Coordination

                                                      Group under the Chairmanship of Steel Minister

                                                      NATIONAL STEEL POLICY 2005

                                                      The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                      development and as such great importance is attached to capacity expansion in line

                                                      with expected demand at cost and prices which make Indian steel internationally

                                                      competitive The existing regime of liberalization decontrol and deregulation of

                                                      industry in the country has opened up new opportunities for the expansion of the steel

                                                      industry With a view to accelerating the growth of the steel sector and attaining the

                                                      vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                      formulated a National Steel Policy (NSP) in 2005

                                                      The following salient features can be derived after analysing the NSP 2005

                                                      The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                      towards reform restructuring and globalisation

                                                      The long-term goal of the NSP is that India should have a modern and efficient

                                                      steel industry of world standards catering to diversified steel demand The focus of

                                                      the policy is to achieve global competitiveness not only in terms of cost quality and

                                                      product-mix but also in terms of global benchmarks of efficiency and productivity

                                                      In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                      NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                      an open globally integrated and competitive environment

                                                      The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                      policy goal On the demand side the strategy would be to create incremental

                                                      demand through promotional efforts creation of awareness and strengthening the

                                                      delivery chain particularly in rural areas On the supply side the strategy would be

                                                      to facilitate creation of additional capacity remove procedural and policy

                                                      bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                      investments in RampD and encourage the creation of infrastructure such as roads

                                                      railways and ports

                                                      The NSP acknowledges the low per capita consumption of steel in the country

                                                      especially in the rural areas and the need to boost steel consumption to improve

                                                      quality of life and help in meeting the growing aspirations of masses

                                                      In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                      industry would need additional capital In addition funds would be required for

                                                      technological upgrade of existing facilities In order to mobilize such vast resources

                                                      NSP seeks to encourage foreign direct investment In addition the policy also

                                                      seeks to make the fiscal incentives available to infrastructure projects accessible

                                                      to the steel industry

                                                      The NSP seeks to support developing of risk-hedging instruments like futures and

                                                      derivatives to contain price volatility in the steel market

                                                      The NSP seeks to strengthen the existing training and research facilities available

                                                      to the domestic steel industry so as to provide suitable training programmes

                                                      especially for the secondary small-scale units and also to collect and analyse data

                                                      on important parameters of the industry

                                                      The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                      capability for special types of steel substitute coking coal use iron ore fines

                                                      develop new products suited to rural needs enhance material and energy

                                                      efficiency utilize waste and arrest environmental degradation

                                                      The NSP acknowledges the important role played by the secondary steel sector in

                                                      providing employment meeting local demand of steel in rural and semi-urban

                                                      areas and meeting the countryrsquos demand of some special products and seeks to

                                                      endeavour to provide the necessary feedstock to these units at reasonable prices

                                                      from major plants through the existing mechanism of State Small Industries

                                                      Corporations

                                                      The NSP recognizes the fact that integration of the Indian steel industry with the

                                                      global economy requires that the industry should be protected from unfair trade

                                                      practices The NSP therefore envisages institution of mechanisms for import

                                                      surveillance and monitoring export subsidies in other countries

                                                      The present per capita consumption of steel in the country is very low compared to the

                                                      world average As mentioned above one of the objectives of the NSP is to augment

                                                      the demand and consumption of steel in the country by conscious promotion of steel

                                                      usage With a view to create a mass awareness campaign on conscious promotion of

                                                      steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                      the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                      The Committee is being serviced by Institute for Steel Development and Growth

                                                      (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                      way of an awareness campaign with particular emphasis on rural sectors The

                                                      Committee also aims at educating the designers architects builders and planners

                                                      regarding the qualitative and cost effective applications of steel in various structures

                                                      including buildings bridges flyovers and airports

                                                      FUTURE OF INDIAN STEEL INDUSTRY

                                                      India is amongst a few countries in the world having the dual advantage of fast

                                                      growing domestic demand coupled with access to raw materials Further the trend

                                                      that is already discernible is that the axis of global steel production consumption is

                                                      shifting towards Asia With their large populations China and India already account for

                                                      35 of the total world steel production - more than double of Europe Asia is

                                                      expected to outpace other regions of the world to an even greater extent in the coming

                                                      years

                                                      Amongst the Asian nations China has established a huge unbridgeable lead It

                                                      is accepted that China will continue to be the leader However India is slated to

                                                      emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                      the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                      splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                      China swallowed almost 32 of global steel It is unlikely that future production and

                                                      consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                      has been the case over the last few years On the other hand it is sun-rise time for

                                                      India where the demand has increased by 7-8 in the last couple of years In the long

                                                      run Indian steel is likely to be more cost-effective since unlike China India has

                                                      relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                      can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                      However the position with coal is not so favourable Though thermal coal

                                                      reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                      traditional blast furnace route would require coking coal India does not have adequate

                                                      reserves of coking coal nor is the meagre amount available of appropriate quality

                                                      Thus the steel industry always had to contend with the dual problems of inadequate

                                                      availability and poor quality of Indian coking coal This has been partly addressed by

                                                      adopting alternative iron making processes that are not dependent on coking coal it

                                                      can not be denied that coal is the biggest cause for concern for bulk steel production

                                                      in India

                                                      Because of the shortage of indigenous coal attempts have been made by steel

                                                      producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                      mines in other countries This is the only long-term solution but with a global shortage

                                                      of coal it may not remain cost-effective in the long run

                                                      India is the seventh largest producer of steel and may further improve its position

                                                      going by the current trends A series of investment decisions by major domestic

                                                      players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                      POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                      The keen interest shown by various prospective investors is not only due to

                                                      expectations of strong growth in domestic demand but also due to indigenous

                                                      availability of key resources like iron ore and skilled workforce

                                                      After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                      steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                      finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                      2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                      consumption has accelerated to 91 per cent

                                                      With the likely growth of Indian economy at around 7 per cent per annum

                                                      demand for steel is expected to remain strong and is projected to reach a level of 90

                                                      million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                      demand is sustainable considering the fact that Indias per capita consumption of steel

                                                      is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                      very low level of per capita consumption of steel in India is highlighted further when

                                                      compared with the consumption levels of its peer group consisting of countries like

                                                      China Brazil Mexico and Republic of Korea as also with selected developed

                                                      countries

                                                      Though there are realistic constraints in India to achieving as rapid a growth as in

                                                      China there seems to be consensus among analysts that India is likely to witness a

                                                      growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                      percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                      achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                      more conservative due to cyclicity of steel business it may be mentioned that in a

                                                      country like India cyclicity is more in terms of prices rather than volumes of production

                                                      Exports

                                                      Similar optimism prevails with regard to export of iron and steel Export of steel

                                                      starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                      2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                      rising domestic demand and low capacity additions Exports now constitute around 17

                                                      per cent of total production and Indias presence in the developing and developed

                                                      world is being increasingly felt Indian steel producers have recently been able to

                                                      supply specialized grades and products used for sophisticated applications like

                                                      automobiles On the cost front some of our producers are counted amongst the least

                                                      cost producers of the world For an average reference plant India is competitively

                                                      placed in the middle of the hierarchy of steel producing nations

                                                      However we have a long way to go to catch up with the leading exporters of the

                                                      world such as Japan the CIS countries Brazil etc It is however expected that by

                                                      2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                      per cent of total projected production The projected export ratio compares well with

                                                      the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                      The projected production of steel by 2019-20 to meet the domestic and export

                                                      demand will be around 110 million tonnes Management of resources and

                                                      infrastructural growth is going to be critical in achievement of the production level

                                                      envisaged The broad requirements of various resources will increase manifold from

                                                      the current level The bottlenecks in availability of critical inputs and various facilities

                                                      need to be removed through concerted efforts of Government and industry The broad

                                                      strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                      sector has been discussed in the National Steel Policy which has been recently

                                                      approved by the Government

                                                      As stated earlier the long-term goal of the National Steel Policy is that India

                                                      should have a modern and efficient steel industry of world standards catering to a

                                                      diversified steel demand The focus of the policy is to achieve global competitiveness

                                                      not only in terms of cost quality and product mix but also in terms of global

                                                      benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                      pronged strategy to achieve these goals On the demand side the strategy would be

                                                      to create incremental demand through promotional efforts creation of awareness and

                                                      strengthening the delivery chain particularly in rural areas On the supply side the

                                                      strategy would be to facilitate creation of additional capacity remove procedural and

                                                      policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                      investments in RampD and HRD and encourage the creation of infrastructure such as

                                                      roads railways and ports

                                                      The production figures exports and imports of finished carbon steel and pig iron

                                                      and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                      Steel and SAIL attest to the continuing growth for both the sectors

                                                      FINDINGS

                                                      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 increased its profit over the year particularly in 2006-07

                                                      Both the companies are planning to adopt modern technology which is going to

                                                      help them to compete in world market but they need to be less dependent on

                                                      state of art technology and coal for long term prospects

                                                      Public sector has undergone retrenchment for the employees and improved

                                                      has its lobour productivity but it is still lacking behind as compared to private

                                                      sector

                                                      SAIL has reduced the no of accidents due to improper handling of machinery

                                                      still no of accidents are more than that of TATA Steel

                                                      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

                                                      ie 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 have to be met

                                                      comprehensively if we are to take our legitimate place in the world as a developed

                                                      nation by 2020

                                                      BIBLIOGRAPHY

                                                      Annual report (2006-07) published by ministry of steel

                                                      Annual report (2006-07) published by TATA Steel

                                                      Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                      REPORTrsquo posted by SAIL on its website

                                                      lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                      held on 07 Nov 2006

                                                      Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                      wwwsteelnicin (Official website of ministry of industry)

                                                      wwwtatasteelcom (Official website of TATA Steel)

                                                      wwwsailcoin (Official website of Steel Authority of India)

                                                      wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                      wwwjpcindiansteelnicin (Website of joint planning committee)

                                                      • DATA ANALYSIS
                                                      • Comparison between TATA Steel and Steel Authority of India
                                                      • Production
                                                      • Quantity 000 Tonnes
                                                      • Financials
                                                      • Research and Development
                                                      • (Rs Crore)
                                                      • TATA Steel
                                                      • Steel Authority of India
                                                      • Environment
                                                      • TATA Steel
                                                      • Emissions effluents and wastes
                                                      • Emissions
                                                      • Waste handling
                                                      • Effluent Management
                                                      • Steel Authority of India
                                                      • Solid Waste Management
                                                      • Environmental Plantation
                                                      • Environmental Recognitions
                                                      • Workforce and Welfare of Society
                                                      • TATA steel
                                                      • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                      • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                      • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                      • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                      • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                      • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                      • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                      • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                      • Steel Authority of India
                                                      • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                      • Technology
                                                      • Steel Authority of India
                                                      • Safety measures
                                                      • Tata Steel
                                                      • Steel Authority of India
                                                      • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                      • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                      • Measures taken by Indian government to improve the industry
                                                      • Now letrsquos 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-
                                                      • Special assistance being provided by Ministry of Steel to Private Sector
                                                      • FUTURE OF INDIAN STEEL INDUSTRY

                                                        Research Methodology

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

                                                        a) Research design-

                                                        In case of my research ldquoComparative analysis of Indian private and Public

                                                        sectors with special reference to TATA Steel and SAILrdquo the descriptive research is

                                                        found to be more appropriate

                                                        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

                                                        Comparison between TATA Steel and Steel Authority of India

                                                        The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                                        significant improvements in the last two years The combined profit before tax of all 15

                                                        PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                                        Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                                        The profit before tax for all PSUs also exhibited a significant improvement of

                                                        around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                                        Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                                        comparable period of last year

                                                        Contribution of PSUs to public exchequer has also gone up significantly For

                                                        example the contribution of five leading companies namely SAIL RINL NMDC

                                                        KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                                        duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                                        from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                                        On the other hand 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

                                                        During the period (April-December 2006) 205 million tonne of steel was produced by

                                                        Private Sector steel units out of the total production of 3315 million tonne in the

                                                        country The private sector units consist of major steel producers in one hand and

                                                        relatively smaller amp 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

                                                        For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                                        companies on following parameters

                                                        Production

                                                        Chart showing production of both the companies

                                                        Quantity 000 Tonnes

                                                        2007-08 APR-DEC07APR-

                                                        DEC06 ACTUA

                                                        L

                                                        AGE OF CURRENT

                                                        PRODUCTION OVER

                                                        CAPACITY UTILISATION

                                                        TARGET TENTATIV

                                                        E

                                                        TARGET

                                                        ACTUAL

                                                        APR-DEC07 TARGE

                                                        T

                                                        APR-DEC06 ACTUA

                                                        L

                                                        APR-DEC 07

                                                        APR-DEC06

                                                        SAIL

                                                        i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                                        ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                                        iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                                        iv)BSL43500 32630 30970 30010 949 1032 950 910

                                                        v)ISP5000 3760 3520 3450 936 1020 940 920

                                                        vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                                        vii)VISL

                                                        1390 1050 1160 1190 1105 975 1300 1340

                                                        TATA 50000 37440 37090 37380 991 992 990 1000

                                                        TATA Steel

                                                        The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                        but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                        target of 3744 (mT) but could produce 3709 However for the same period in last

                                                        year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                        to 99 this year

                                                        Steel Authority of India

                                                        The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                        but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                        for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                        10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                        capacity utilisation of 103 this year as compared to 101 last year

                                                        Financials

                                                        TATA Steel

                                                        The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                        of the past four years The Company achieved the best ever sales turnover and

                                                        profitability during the year under review A robust Indian economy firm steel prices

                                                        higher volumes and several improvement initiatives contributed to the record

                                                        performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                        the previous year Export turnover was lower by about 5 due to lower volumes

                                                        Average price realisation improved mainly due to higher prices of hot rolled

                                                        coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                        (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                        Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                        due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                        funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                        providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                        crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                        before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                        after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                        20 compared to the previous year

                                                        The record financial results would not have been possible without a matching

                                                        performance by the operating departments including the raw materials division The

                                                        year witnessed the best ever crude steel production by the Company at 505 million

                                                        tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                        first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                        upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                        rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                        Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                        increase in production was backed by improvements in operating practices and

                                                        productivity resulting in a reduction in consumption of raw materials energy

                                                        refractories etc

                                                        Steel Authority of India

                                                        Financial Year 2006-07 has been eventful year for the company with further

                                                        momentum in improving operational efficiencies laying strong foundation and building

                                                        road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                        undertaken with its human resource at the core During the year the company got the

                                                        distinction of first metal company in the country to reach a market capitalization of Rs

                                                        50000 crore

                                                        There have been improvements in all financial parameters which are shown in

                                                        the table given below-

                                                        SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                        before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                        previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                        increase of 55

                                                        Research and Development

                                                        Chart showing production of both the companies

                                                        (Rs Crore)

                                                        TATA Steel

                                                        The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                        develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                        steel for body panels

                                                        Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                        coke energy conservation waste utilisation sintering blast furnace productivity and

                                                        phosphorous reduction product development and improvement in life of plant and

                                                        machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                        sealed and over 100 are in process

                                                        Steel Authority of India

                                                        Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                        innovative technological inputs to different units of SAIL with special emphasis on

                                                        cost reduction product development and application quality improvement energy

                                                        conservation and automation Several new products were developed and

                                                        commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                        Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                        specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                        micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                        Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                        Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                        strengthened its technology marketing efforts by providing consultancy services

                                                        organising specialised testing and transfer of technological innovations to outside

                                                        customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                        Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                        Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                        During the year 1998 technical papers were publishedpresented besides filing

                                                        of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                        awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                        achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                        Government of India

                                                        Environment

                                                        TATA Steel

                                                        Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                        Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                        has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                        Jamshedpur is the only town in the country which

                                                        Significant achievements by the Company include an improvement in

                                                        environment and resource conservation including a reduction in green house erosion

                                                        raw materials and water consumption The Company has increased waste re-use and

                                                        re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                        the-art pollution control systems being installed to prevent and control pollution The

                                                        Company has almost doubled its capital investment in Pollution Abatement in the last

                                                        five years

                                                        Emissions effluents and wastes

                                                        Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                        most relevance to the steel industry Considerable reduction has been effected by

                                                        Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                        granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                        Tata Steelrsquos activities

                                                        Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                        tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                        Hazardous Waste under Basel Convention The Company does not import or export

                                                        any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                        generated are handled as per the requirement of the Hazardous Waste Management

                                                        and Handling Rules 19892000

                                                        Emissions

                                                        Tata Steel has undertaken several initiatives which have resulted in

                                                        considerable reduction in stack emission Emissions are well below the Indian and

                                                        international standards The emission load including particulate matter Sulphur

                                                        Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                        undertaken at the Steel Works

                                                        Waste handling

                                                        Most of the solid waste generated from Steel Works is recycled or reused 18

                                                        of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                        was used to fill low-lying areas and for peripheral road construction around

                                                        Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                        power plants was dumped in a designated dump area

                                                        Effluent Management

                                                        Waste water from the steel making process is being treated with best available

                                                        physio-chemical methods as well as being recycled Waste water from the coke plant

                                                        is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                        organisms The Company has reduced the levels of total pollutant discharge in waste

                                                        water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                        Steel Authority of India

                                                        Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                        environmentally responsible manner to comply with applicable regulations and striving

                                                        to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                        efficiency and optimize resource consumption through various measures viz

                                                        improvement in process technology in the areas of raw materials coke iron and steel

                                                        making reuserecycle of the by-products generated and conservation of energy and

                                                        water

                                                        Solid Waste Management

                                                        During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                        and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                        Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                        these wastes are being made through internal recycling and selling to outside

                                                        agencies The wastes generated in the steel plants are being utilized mainly through

                                                        their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                        during April-September 2006

                                                        Environmental Plantation

                                                        Trees have a significant role in protection of environment and ecological balance

                                                        Extensive afforestation programme are being followed in all the plants and mines The

                                                        basis of choosing the species of plants mainly depends on local soil characteristics

                                                        and prevailing meteorological conditions The green belt developed by afforestation

                                                        adds to the aesthetic environment which becomes dust and noise barriers

                                                        A total number of 145521 saplings have been planted covering an area of 637

                                                        hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                        hectare in 2004-05 in and around the steel plants of SAIL

                                                        Environmental Recognitions

                                                        SAIL plants have been awarded various prizes for environmental management in

                                                        their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                        the Confederation of Indian Industries (CII) for exemplary performance in the

                                                        environmental economic andsocial dimensions of sustainable development and the

                                                        Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                        Excellence Award in the metal sector 2005 instuted by the World Environment

                                                        Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                        for 2005 from International Greenland Society

                                                        Workforce and Welfare of Society

                                                        TATA steel

                                                        Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                        and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                        enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                        provide a work environment that will ensure a sense of purpose and personal growth

                                                        for each individual The wish of the company is to see the smile on every face

                                                        everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                        people and enriched empowered and enhanced their lives

                                                        Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                        brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                        Tata Steel were the first of their kind in India and some even in the western countries

                                                        at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                        source of its competitiveness It focuses on constantly updating and challenging

                                                        intellectual capabilities to enable them to excel in performance Special efforts are

                                                        made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                        workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                        available with its people through Knowledge Management and sharing of best

                                                        practices

                                                        In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                        mutual co-operation coordination and understanding between the Management and

                                                        the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                        among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                        transparency fairness and equity in all its interactions with its employees to create an

                                                        enthused and happy workforce

                                                        In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                        assistance in the fields of education vocational training self-employment and

                                                        family welfare

                                                        Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                        12 times This facility provides on-the-spot diagnostic medical and advanced

                                                        surgical treatment for preventive and curative interventions to people in

                                                        inaccessible rural areas

                                                        Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                        for the 1920 Antwerp Olympics

                                                        The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                        track was inaugurated in 1991 The complex also houses facilities for handball

                                                        tennis volleyball hockey basketball boxing table tennis and a modern

                                                        gymnasium

                                                        The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                        services for the betterment of the people in and around Jamshedpur

                                                        At times of natural calamities the company has rushe immediate relief and off

                                                        ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                        fl ood ravaged Orissa and other such aff ected areas

                                                        Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                        er a unique environment for the children of Jamshedpur to grow up in

                                                        In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                        Jamshedpur has emerged as the one of the best cities in India

                                                        Steel Authority of India

                                                        The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                        executives and 123005 non-executives The total reduction in manpower achieved

                                                        during the year stood at 4864 which included separation of 881 employees through

                                                        voluntary retirement The labour productivity improved by around 12 over previous

                                                        year to 150 tonne crude steelmanyear

                                                        Some of the areas of assistance which are available to the weaker sections are the

                                                        following

                                                        The company has provided land for construction of school buildings in some of

                                                        the steel townships as well as in other places for spreading education among

                                                        the masses

                                                        The company has constructed roads in remote areas around the steel plants

                                                        and also where the captive mines are located to improve communication and

                                                        also increase activities such as organisation of health camps school facilities

                                                        drinking water etc under the peripheral development schemes

                                                        Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                        Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                        providing them with education boarding and lodging facilities

                                                        Construction of bridges by-pass roads metal-morum path waterways

                                                        levellingdressing area around township pre-mixed roads Installation of hand-

                                                        pumps tube wells and wells for villagers

                                                        Construction of school buildings (including for mentally retarded deaf and

                                                        dumb children) madarsas providing school furniture therein and construction

                                                        of hostels womenrsquos college building etc

                                                        Fourteen scholarships are awarded to deserving SCST undergraduate

                                                        engineering students in various disciplines to encourage technical education

                                                        among them

                                                        In many cases tuition fee in company run schools is exempt for SCST

                                                        students Steps are taken to provide education to more and more tribal children

                                                        in company schools

                                                        The unemployed SCST youth are given specialized training in various

                                                        technical trades to develop skill and knowledge Such training is provided free

                                                        of cost

                                                        Adult literacy campaign is carried out in most of the steel townships Every year

                                                        more and more men and women are being covered in this campaign

                                                        Development of fishery and cottage industry providing sewing machines to

                                                        village mahila mandals and promoting other self-employment generation

                                                        schemes

                                                        SAIL has established a hockey academy with stadium and hostel facilities at

                                                        Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                        academy was successful in spotting a number of young talented tribal players

                                                        and grooms them under expertise of ex-Olympian

                                                        Technology

                                                        The biggest boost to efficiency in the steel industry has come from the increased

                                                        use of continuous casting ndash an indicator of the modernity of the production process Its

                                                        share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                        now India is thus well on its way to joining the ranks of the leading steelmakers

                                                        among the industrial nations (share in EU-25 96) However in India some 6 of

                                                        crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                        suggests there is restructuring potential

                                                        TATA Steel

                                                        Tata Steels stall at the International Trade Fair was adjudged the best along

                                                        with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                        international companies also took part in the exhibition Participating companies from

                                                        countries all over the world exhibited latest technologies and know-how List of

                                                        participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                        Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                        companies of national and international repute China was the partner country for the

                                                        International Trade Fair this year

                                                        In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                        cutting-edge technology used in iron ore mining pioneering human resource

                                                        practices 78 years of industrial harmony and various other aspects of the worlds best

                                                        steel company

                                                        The 6th International Trade Fair and Conference an institutionalised global

                                                        event is considered to be one of the most prestigious forums for national as well

                                                        international participants It is a conclave of the finest minds concerned with the future

                                                        direction and growth of these sectors The forum provided the worlds most eminent

                                                        metallurgists manufacturers of metallurgical and mining machinery and related

                                                        sectors professionals analysts and experts with the opportunity to exchange views on

                                                        emerging technologies synergy and strengths and open up wider horizons for

                                                        sectorial development

                                                        Tata Steel to adopt Corus technology

                                                        Tata Steel plans to implement alternate technology used by the British steel

                                                        maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                        production according to Mr B Muthuraman Managing Director Tata Steel

                                                        ldquoWe are looking at alternate technology Corus has developed an alternate

                                                        technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                        newspersons on the sidelines of the 34th National Management Convention organised

                                                        by the All-India Management Association However he declined to give further details

                                                        on the type of technology the Indian steel giant plans to implement

                                                        Steel Authority of India

                                                        Modernisation holds the key to SAILs fortunes in the near future The objective

                                                        of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                        and productive capacity and in the process become more energy-efficient and

                                                        improve quality The key component of the ongoing modernisation drive - already

                                                        completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                        ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                        continuous casting techniques A senior SAIL official says Continuous casting and

                                                        basic oxygen furnaces ensure better quality steel through processes more easily

                                                        monitored for quality control The basic oxygen surfaces method is significantly faster

                                                        more automated and permits greater flexibility Continuous casting is more efficient

                                                        than the traditional ingot casting methods and gives increased yields while enabling

                                                        better quality standards SAIL is also modernising its finishing mills and is adding

                                                        secondary refining facilities to improve quality

                                                        Safety measures

                                                        A unique feature of safety management in steel industry is that a bipartite forum

                                                        named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                        was formed in 1973 at national level having representatives from steel plants in SAIL

                                                        RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                        Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                        workshops training programme safety competitions for member organisations JCSSI

                                                        with the co-operation and support of Trade Union representatives formulates policies

                                                        and guidelines for its member plants and monitors the implementation

                                                        Tata Steel

                                                        Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                        Safety department and a Safety Trophy helped spread the message all across the

                                                        company

                                                        TATA reaffirms its commitment to provide safe working place and clean

                                                        environment to its employees and other stakeholders as an integral part of its

                                                        business philosophy and values We will continually enhance our Environmental

                                                        Occupational Health amp Safety (EHS) performance in our activities products and

                                                        services through a structured EHS management framework Towards this

                                                        commitment we shall

                                                        Establish and achieve EHS objectives and targets

                                                        Ensure compliance with applicable EHS legislation and other requirement and

                                                        go beyond

                                                        Conserve natural resources and energy by constantly seeking to reduce

                                                        consumption and promoting waste avoidance and recycling measures

                                                        Eliminate minimize andor control adverse environmental impacts and

                                                        occupational health and safety risks by adopting appropriate state-of-the-art

                                                        technology and best EHS management practices at all levels sand functions

                                                        Enhance awareness skill and competence of our employees and contractors

                                                        so as to enable them to demonstrate their involvement responsibility and

                                                        accountability for sound EHS performance

                                                        Steel Authority of India

                                                        SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                        monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                        Annual Performance Plans (APP) for the areas of safety and fire services are

                                                        formulated and review of implementation of APP is done during Heads of

                                                        Safety meeting

                                                        Internal and external safety audits of major departments particularly hazardous

                                                        areas are conducted every year and points arising from these audits are

                                                        liquidated Safety aspects have been incorporated in standard operating

                                                        practices (SOP) and standard maintenance practices (SMP)

                                                        All major capital repairsshut downs are closely monitored round the clock

                                                        Periodic drives are conducted to inculcate safety awarenessculture up to

                                                        grass-root level apart from regular inspections as per checklists to identify

                                                        unsafe conditionsacts

                                                        Safety training is imparted to target group employees at various levels HRD

                                                        intervention in the area of safety covers Heads of Departments Line Managers

                                                        amp Departmental Safety Officers Besides area specific workshops are

                                                        conducted at different locations on important topics like gas safety railroad

                                                        safety safety in iron steel amp coke making etc

                                                        Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                        standards in the company by taking measures like intensive safety drives in works

                                                        area and conducting safety audits in hazardous departments of different plants and

                                                        mines In addition specific workshops on safety aspects were organised in various

                                                        SAIL steel plants

                                                        Measures taken by Indian government to improve the industry

                                                        Now letrsquos 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-

                                                        1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                        among others was removed from the list of industries reserved for the public

                                                        sector and also exempted from the provisions of compulsory licensing under the

                                                        Industries (Development and Regulation) Act 1951

                                                        2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                        of `high priority industries for automatic approval for foreign equity investment up

                                                        to 51 This limit has been recently increased to 100

                                                        3 Price and distribution of steel were deregulated from January 1992 At the same

                                                        time it was ensured that priority continued to be accorded for meeting the

                                                        requirements of small scale industries exporters of engineering goods and North

                                                        Eastern Region of the country besides strategic sectors such as Defence and

                                                        Railways

                                                        4 The trade policy has been liberalised and import and export of iron and steel is

                                                        freely allowed There are no quantitative restrictions on import of iron and steel

                                                        items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                        regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                        steel have drastically come down since 1991-92 levels and the government is

                                                        committed to bring them down to the international levels In Chapter 72 there are

                                                        two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                        5 Iron amp Steel are freely importable as per the Extant Policy

                                                        6 Iron amp Steel are freely exportable

                                                        7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                        8 The floor price for seconds and defectives continues till date

                                                        9 Imports of seconds and defectives of steel are allowed only through three

                                                        designated ports of Mumbai Calcutta and Chennai

                                                        10Mandatory pre inspection certificate by a reputed international agency for every

                                                        import consignment of seconds and defectives

                                                        11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                        10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                        the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                        per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                        15 per cent to 5 per cent

                                                        12Further customs duty on several raw materials used by the steel sector like

                                                        noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                        coking coal to zero

                                                        13To bring down the prices of steel the excise duty on steel products was reduced

                                                        from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                        that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                        increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                        cut on moderating prices was not achieved

                                                        14The union Budget 2007-08 the import duty on seconds and defective has been

                                                        further reduced from 20 to 10

                                                        Special assistance being provided by Ministry of Steel to Private Sector

                                                        1 Ministry of Steel is extending all possible support as detailed below for the

                                                        development of Iron and Steel Sector in the country

                                                        2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                        new plants and expansion of existing ones wherever applied for

                                                        3 To ensure an un-interrupted supply of raw materials to the producers

                                                        4 The Ministry has been interacting with All India Financial institutions to expedite

                                                        clearance of projects

                                                        5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                        Plants are held at the level of Secretary

                                                        6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                        industry so that their absence does not lead to bottlenecks in the future growth of

                                                        the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                        7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                        Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                        country are members of this Institute which has been set up with the objective of

                                                        promoting developing and propagating the proper and effective use of steel

                                                        8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                        major steel plants being implemented Govt has setup a Project Coordination

                                                        Group under the Chairmanship of Steel Minister

                                                        NATIONAL STEEL POLICY 2005

                                                        The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                        development and as such great importance is attached to capacity expansion in line

                                                        with expected demand at cost and prices which make Indian steel internationally

                                                        competitive The existing regime of liberalization decontrol and deregulation of

                                                        industry in the country has opened up new opportunities for the expansion of the steel

                                                        industry With a view to accelerating the growth of the steel sector and attaining the

                                                        vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                        formulated a National Steel Policy (NSP) in 2005

                                                        The following salient features can be derived after analysing the NSP 2005

                                                        The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                        towards reform restructuring and globalisation

                                                        The long-term goal of the NSP is that India should have a modern and efficient

                                                        steel industry of world standards catering to diversified steel demand The focus of

                                                        the policy is to achieve global competitiveness not only in terms of cost quality and

                                                        product-mix but also in terms of global benchmarks of efficiency and productivity

                                                        In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                        NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                        an open globally integrated and competitive environment

                                                        The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                        policy goal On the demand side the strategy would be to create incremental

                                                        demand through promotional efforts creation of awareness and strengthening the

                                                        delivery chain particularly in rural areas On the supply side the strategy would be

                                                        to facilitate creation of additional capacity remove procedural and policy

                                                        bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                        investments in RampD and encourage the creation of infrastructure such as roads

                                                        railways and ports

                                                        The NSP acknowledges the low per capita consumption of steel in the country

                                                        especially in the rural areas and the need to boost steel consumption to improve

                                                        quality of life and help in meeting the growing aspirations of masses

                                                        In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                        industry would need additional capital In addition funds would be required for

                                                        technological upgrade of existing facilities In order to mobilize such vast resources

                                                        NSP seeks to encourage foreign direct investment In addition the policy also

                                                        seeks to make the fiscal incentives available to infrastructure projects accessible

                                                        to the steel industry

                                                        The NSP seeks to support developing of risk-hedging instruments like futures and

                                                        derivatives to contain price volatility in the steel market

                                                        The NSP seeks to strengthen the existing training and research facilities available

                                                        to the domestic steel industry so as to provide suitable training programmes

                                                        especially for the secondary small-scale units and also to collect and analyse data

                                                        on important parameters of the industry

                                                        The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                        capability for special types of steel substitute coking coal use iron ore fines

                                                        develop new products suited to rural needs enhance material and energy

                                                        efficiency utilize waste and arrest environmental degradation

                                                        The NSP acknowledges the important role played by the secondary steel sector in

                                                        providing employment meeting local demand of steel in rural and semi-urban

                                                        areas and meeting the countryrsquos demand of some special products and seeks to

                                                        endeavour to provide the necessary feedstock to these units at reasonable prices

                                                        from major plants through the existing mechanism of State Small Industries

                                                        Corporations

                                                        The NSP recognizes the fact that integration of the Indian steel industry with the

                                                        global economy requires that the industry should be protected from unfair trade

                                                        practices The NSP therefore envisages institution of mechanisms for import

                                                        surveillance and monitoring export subsidies in other countries

                                                        The present per capita consumption of steel in the country is very low compared to the

                                                        world average As mentioned above one of the objectives of the NSP is to augment

                                                        the demand and consumption of steel in the country by conscious promotion of steel

                                                        usage With a view to create a mass awareness campaign on conscious promotion of

                                                        steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                        the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                        The Committee is being serviced by Institute for Steel Development and Growth

                                                        (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                        way of an awareness campaign with particular emphasis on rural sectors The

                                                        Committee also aims at educating the designers architects builders and planners

                                                        regarding the qualitative and cost effective applications of steel in various structures

                                                        including buildings bridges flyovers and airports

                                                        FUTURE OF INDIAN STEEL INDUSTRY

                                                        India is amongst a few countries in the world having the dual advantage of fast

                                                        growing domestic demand coupled with access to raw materials Further the trend

                                                        that is already discernible is that the axis of global steel production consumption is

                                                        shifting towards Asia With their large populations China and India already account for

                                                        35 of the total world steel production - more than double of Europe Asia is

                                                        expected to outpace other regions of the world to an even greater extent in the coming

                                                        years

                                                        Amongst the Asian nations China has established a huge unbridgeable lead It

                                                        is accepted that China will continue to be the leader However India is slated to

                                                        emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                        the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                        splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                        China swallowed almost 32 of global steel It is unlikely that future production and

                                                        consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                        has been the case over the last few years On the other hand it is sun-rise time for

                                                        India where the demand has increased by 7-8 in the last couple of years In the long

                                                        run Indian steel is likely to be more cost-effective since unlike China India has

                                                        relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                        can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                        However the position with coal is not so favourable Though thermal coal

                                                        reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                        traditional blast furnace route would require coking coal India does not have adequate

                                                        reserves of coking coal nor is the meagre amount available of appropriate quality

                                                        Thus the steel industry always had to contend with the dual problems of inadequate

                                                        availability and poor quality of Indian coking coal This has been partly addressed by

                                                        adopting alternative iron making processes that are not dependent on coking coal it

                                                        can not be denied that coal is the biggest cause for concern for bulk steel production

                                                        in India

                                                        Because of the shortage of indigenous coal attempts have been made by steel

                                                        producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                        mines in other countries This is the only long-term solution but with a global shortage

                                                        of coal it may not remain cost-effective in the long run

                                                        India is the seventh largest producer of steel and may further improve its position

                                                        going by the current trends A series of investment decisions by major domestic

                                                        players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                        POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                        The keen interest shown by various prospective investors is not only due to

                                                        expectations of strong growth in domestic demand but also due to indigenous

                                                        availability of key resources like iron ore and skilled workforce

                                                        After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                        steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                        finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                        2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                        consumption has accelerated to 91 per cent

                                                        With the likely growth of Indian economy at around 7 per cent per annum

                                                        demand for steel is expected to remain strong and is projected to reach a level of 90

                                                        million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                        demand is sustainable considering the fact that Indias per capita consumption of steel

                                                        is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                        very low level of per capita consumption of steel in India is highlighted further when

                                                        compared with the consumption levels of its peer group consisting of countries like

                                                        China Brazil Mexico and Republic of Korea as also with selected developed

                                                        countries

                                                        Though there are realistic constraints in India to achieving as rapid a growth as in

                                                        China there seems to be consensus among analysts that India is likely to witness a

                                                        growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                        percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                        achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                        more conservative due to cyclicity of steel business it may be mentioned that in a

                                                        country like India cyclicity is more in terms of prices rather than volumes of production

                                                        Exports

                                                        Similar optimism prevails with regard to export of iron and steel Export of steel

                                                        starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                        2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                        rising domestic demand and low capacity additions Exports now constitute around 17

                                                        per cent of total production and Indias presence in the developing and developed

                                                        world is being increasingly felt Indian steel producers have recently been able to

                                                        supply specialized grades and products used for sophisticated applications like

                                                        automobiles On the cost front some of our producers are counted amongst the least

                                                        cost producers of the world For an average reference plant India is competitively

                                                        placed in the middle of the hierarchy of steel producing nations

                                                        However we have a long way to go to catch up with the leading exporters of the

                                                        world such as Japan the CIS countries Brazil etc It is however expected that by

                                                        2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                        per cent of total projected production The projected export ratio compares well with

                                                        the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                        The projected production of steel by 2019-20 to meet the domestic and export

                                                        demand will be around 110 million tonnes Management of resources and

                                                        infrastructural growth is going to be critical in achievement of the production level

                                                        envisaged The broad requirements of various resources will increase manifold from

                                                        the current level The bottlenecks in availability of critical inputs and various facilities

                                                        need to be removed through concerted efforts of Government and industry The broad

                                                        strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                        sector has been discussed in the National Steel Policy which has been recently

                                                        approved by the Government

                                                        As stated earlier the long-term goal of the National Steel Policy is that India

                                                        should have a modern and efficient steel industry of world standards catering to a

                                                        diversified steel demand The focus of the policy is to achieve global competitiveness

                                                        not only in terms of cost quality and product mix but also in terms of global

                                                        benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                        pronged strategy to achieve these goals On the demand side the strategy would be

                                                        to create incremental demand through promotional efforts creation of awareness and

                                                        strengthening the delivery chain particularly in rural areas On the supply side the

                                                        strategy would be to facilitate creation of additional capacity remove procedural and

                                                        policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                        investments in RampD and HRD and encourage the creation of infrastructure such as

                                                        roads railways and ports

                                                        The production figures exports and imports of finished carbon steel and pig iron

                                                        and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                        Steel and SAIL attest to the continuing growth for both the sectors

                                                        FINDINGS

                                                        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 increased its profit over the year particularly in 2006-07

                                                        Both the companies are planning to adopt modern technology which is going to

                                                        help them to compete in world market but they need to be less dependent on

                                                        state of art technology and coal for long term prospects

                                                        Public sector has undergone retrenchment for the employees and improved

                                                        has its lobour productivity but it is still lacking behind as compared to private

                                                        sector

                                                        SAIL has reduced the no of accidents due to improper handling of machinery

                                                        still no of accidents are more than that of TATA Steel

                                                        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

                                                        ie 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 have to be met

                                                        comprehensively if we are to take our legitimate place in the world as a developed

                                                        nation by 2020

                                                        BIBLIOGRAPHY

                                                        Annual report (2006-07) published by ministry of steel

                                                        Annual report (2006-07) published by TATA Steel

                                                        Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                        REPORTrsquo posted by SAIL on its website

                                                        lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                        held on 07 Nov 2006

                                                        Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                        wwwsteelnicin (Official website of ministry of industry)

                                                        wwwtatasteelcom (Official website of TATA Steel)

                                                        wwwsailcoin (Official website of Steel Authority of India)

                                                        wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                        wwwjpcindiansteelnicin (Website of joint planning committee)

                                                        • DATA ANALYSIS
                                                        • Comparison between TATA Steel and Steel Authority of India
                                                        • Production
                                                        • Quantity 000 Tonnes
                                                        • Financials
                                                        • Research and Development
                                                        • (Rs Crore)
                                                        • TATA Steel
                                                        • Steel Authority of India
                                                        • Environment
                                                        • TATA Steel
                                                        • Emissions effluents and wastes
                                                        • Emissions
                                                        • Waste handling
                                                        • Effluent Management
                                                        • Steel Authority of India
                                                        • Solid Waste Management
                                                        • Environmental Plantation
                                                        • Environmental Recognitions
                                                        • Workforce and Welfare of Society
                                                        • TATA steel
                                                        • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                        • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                        • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                        • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                        • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                        • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                        • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                        • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                        • Steel Authority of India
                                                        • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                        • Technology
                                                        • Steel Authority of India
                                                        • Safety measures
                                                        • Tata Steel
                                                        • Steel Authority of India
                                                        • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                        • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                        • Measures taken by Indian government to improve the industry
                                                        • Now letrsquos 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-
                                                        • Special assistance being provided by Ministry of Steel to Private Sector
                                                        • FUTURE OF INDIAN STEEL INDUSTRY

                                                          DATA ANALYSIS

                                                          Comparison between TATA Steel and Steel Authority of India

                                                          The Public sector undertakings (PSUs) under the Ministry of Steel have shown

                                                          significant improvements in the last two years The combined profit before tax of all 15

                                                          PSUs of the Steel Ministry exhibited an enhancement of more than two times from

                                                          Rs 5568 crore in fiscal 2003-04 to Rs 11497 crore in 2005-06

                                                          The profit before tax for all PSUs also exhibited a significant improvement of

                                                          around 26 in the three quarters of 2005-06 (April-December 2006) amounting to

                                                          Rs1056640 crore as against a combined profit before tax of Rs836875 crore in the

                                                          comparable period of last year

                                                          Contribution of PSUs to public exchequer has also gone up significantly For

                                                          example the contribution of five leading companies namely SAIL RINL NMDC

                                                          KIOCL and MOIL to Central and State exchequer by way of excise duty customs

                                                          duty dividend corporate tax sales tax royalty etc has gone up by more than double

                                                          from Rs 5761 crore in 2003-04 to Rs13110 crore in 2005-06

                                                          On the other hand 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

                                                          During the period (April-December 2006) 205 million tonne of steel was produced by

                                                          Private Sector steel units out of the total production of 3315 million tonne in the

                                                          country The private sector units consist of major steel producers in one hand and

                                                          relatively smaller amp 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

                                                          For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                                          companies on following parameters

                                                          Production

                                                          Chart showing production of both the companies

                                                          Quantity 000 Tonnes

                                                          2007-08 APR-DEC07APR-

                                                          DEC06 ACTUA

                                                          L

                                                          AGE OF CURRENT

                                                          PRODUCTION OVER

                                                          CAPACITY UTILISATION

                                                          TARGET TENTATIV

                                                          E

                                                          TARGET

                                                          ACTUAL

                                                          APR-DEC07 TARGE

                                                          T

                                                          APR-DEC06 ACTUA

                                                          L

                                                          APR-DEC 07

                                                          APR-DEC06

                                                          SAIL

                                                          i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                                          ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                                          iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                                          iv)BSL43500 32630 30970 30010 949 1032 950 910

                                                          v)ISP5000 3760 3520 3450 936 1020 940 920

                                                          vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                                          vii)VISL

                                                          1390 1050 1160 1190 1105 975 1300 1340

                                                          TATA 50000 37440 37090 37380 991 992 990 1000

                                                          TATA Steel

                                                          The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                          but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                          target of 3744 (mT) but could produce 3709 However for the same period in last

                                                          year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                          to 99 this year

                                                          Steel Authority of India

                                                          The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                          but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                          for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                          10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                          capacity utilisation of 103 this year as compared to 101 last year

                                                          Financials

                                                          TATA Steel

                                                          The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                          of the past four years The Company achieved the best ever sales turnover and

                                                          profitability during the year under review A robust Indian economy firm steel prices

                                                          higher volumes and several improvement initiatives contributed to the record

                                                          performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                          the previous year Export turnover was lower by about 5 due to lower volumes

                                                          Average price realisation improved mainly due to higher prices of hot rolled

                                                          coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                          (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                          Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                          due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                          funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                          providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                          crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                          before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                          after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                          20 compared to the previous year

                                                          The record financial results would not have been possible without a matching

                                                          performance by the operating departments including the raw materials division The

                                                          year witnessed the best ever crude steel production by the Company at 505 million

                                                          tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                          first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                          upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                          rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                          Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                          increase in production was backed by improvements in operating practices and

                                                          productivity resulting in a reduction in consumption of raw materials energy

                                                          refractories etc

                                                          Steel Authority of India

                                                          Financial Year 2006-07 has been eventful year for the company with further

                                                          momentum in improving operational efficiencies laying strong foundation and building

                                                          road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                          undertaken with its human resource at the core During the year the company got the

                                                          distinction of first metal company in the country to reach a market capitalization of Rs

                                                          50000 crore

                                                          There have been improvements in all financial parameters which are shown in

                                                          the table given below-

                                                          SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                          before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                          previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                          increase of 55

                                                          Research and Development

                                                          Chart showing production of both the companies

                                                          (Rs Crore)

                                                          TATA Steel

                                                          The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                          develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                          steel for body panels

                                                          Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                          coke energy conservation waste utilisation sintering blast furnace productivity and

                                                          phosphorous reduction product development and improvement in life of plant and

                                                          machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                          sealed and over 100 are in process

                                                          Steel Authority of India

                                                          Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                          innovative technological inputs to different units of SAIL with special emphasis on

                                                          cost reduction product development and application quality improvement energy

                                                          conservation and automation Several new products were developed and

                                                          commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                          Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                          specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                          micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                          Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                          Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                          strengthened its technology marketing efforts by providing consultancy services

                                                          organising specialised testing and transfer of technological innovations to outside

                                                          customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                          Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                          Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                          During the year 1998 technical papers were publishedpresented besides filing

                                                          of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                          awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                          achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                          Government of India

                                                          Environment

                                                          TATA Steel

                                                          Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                          Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                          has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                          Jamshedpur is the only town in the country which

                                                          Significant achievements by the Company include an improvement in

                                                          environment and resource conservation including a reduction in green house erosion

                                                          raw materials and water consumption The Company has increased waste re-use and

                                                          re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                          the-art pollution control systems being installed to prevent and control pollution The

                                                          Company has almost doubled its capital investment in Pollution Abatement in the last

                                                          five years

                                                          Emissions effluents and wastes

                                                          Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                          most relevance to the steel industry Considerable reduction has been effected by

                                                          Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                          granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                          Tata Steelrsquos activities

                                                          Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                          tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                          Hazardous Waste under Basel Convention The Company does not import or export

                                                          any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                          generated are handled as per the requirement of the Hazardous Waste Management

                                                          and Handling Rules 19892000

                                                          Emissions

                                                          Tata Steel has undertaken several initiatives which have resulted in

                                                          considerable reduction in stack emission Emissions are well below the Indian and

                                                          international standards The emission load including particulate matter Sulphur

                                                          Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                          undertaken at the Steel Works

                                                          Waste handling

                                                          Most of the solid waste generated from Steel Works is recycled or reused 18

                                                          of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                          was used to fill low-lying areas and for peripheral road construction around

                                                          Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                          power plants was dumped in a designated dump area

                                                          Effluent Management

                                                          Waste water from the steel making process is being treated with best available

                                                          physio-chemical methods as well as being recycled Waste water from the coke plant

                                                          is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                          organisms The Company has reduced the levels of total pollutant discharge in waste

                                                          water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                          Steel Authority of India

                                                          Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                          environmentally responsible manner to comply with applicable regulations and striving

                                                          to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                          efficiency and optimize resource consumption through various measures viz

                                                          improvement in process technology in the areas of raw materials coke iron and steel

                                                          making reuserecycle of the by-products generated and conservation of energy and

                                                          water

                                                          Solid Waste Management

                                                          During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                          and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                          Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                          these wastes are being made through internal recycling and selling to outside

                                                          agencies The wastes generated in the steel plants are being utilized mainly through

                                                          their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                          during April-September 2006

                                                          Environmental Plantation

                                                          Trees have a significant role in protection of environment and ecological balance

                                                          Extensive afforestation programme are being followed in all the plants and mines The

                                                          basis of choosing the species of plants mainly depends on local soil characteristics

                                                          and prevailing meteorological conditions The green belt developed by afforestation

                                                          adds to the aesthetic environment which becomes dust and noise barriers

                                                          A total number of 145521 saplings have been planted covering an area of 637

                                                          hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                          hectare in 2004-05 in and around the steel plants of SAIL

                                                          Environmental Recognitions

                                                          SAIL plants have been awarded various prizes for environmental management in

                                                          their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                          the Confederation of Indian Industries (CII) for exemplary performance in the

                                                          environmental economic andsocial dimensions of sustainable development and the

                                                          Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                          Excellence Award in the metal sector 2005 instuted by the World Environment

                                                          Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                          for 2005 from International Greenland Society

                                                          Workforce and Welfare of Society

                                                          TATA steel

                                                          Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                          and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                          enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                          provide a work environment that will ensure a sense of purpose and personal growth

                                                          for each individual The wish of the company is to see the smile on every face

                                                          everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                          people and enriched empowered and enhanced their lives

                                                          Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                          brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                          Tata Steel were the first of their kind in India and some even in the western countries

                                                          at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                          source of its competitiveness It focuses on constantly updating and challenging

                                                          intellectual capabilities to enable them to excel in performance Special efforts are

                                                          made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                          workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                          available with its people through Knowledge Management and sharing of best

                                                          practices

                                                          In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                          mutual co-operation coordination and understanding between the Management and

                                                          the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                          among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                          transparency fairness and equity in all its interactions with its employees to create an

                                                          enthused and happy workforce

                                                          In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                          assistance in the fields of education vocational training self-employment and

                                                          family welfare

                                                          Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                          12 times This facility provides on-the-spot diagnostic medical and advanced

                                                          surgical treatment for preventive and curative interventions to people in

                                                          inaccessible rural areas

                                                          Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                          for the 1920 Antwerp Olympics

                                                          The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                          track was inaugurated in 1991 The complex also houses facilities for handball

                                                          tennis volleyball hockey basketball boxing table tennis and a modern

                                                          gymnasium

                                                          The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                          services for the betterment of the people in and around Jamshedpur

                                                          At times of natural calamities the company has rushe immediate relief and off

                                                          ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                          fl ood ravaged Orissa and other such aff ected areas

                                                          Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                          er a unique environment for the children of Jamshedpur to grow up in

                                                          In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                          Jamshedpur has emerged as the one of the best cities in India

                                                          Steel Authority of India

                                                          The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                          executives and 123005 non-executives The total reduction in manpower achieved

                                                          during the year stood at 4864 which included separation of 881 employees through

                                                          voluntary retirement The labour productivity improved by around 12 over previous

                                                          year to 150 tonne crude steelmanyear

                                                          Some of the areas of assistance which are available to the weaker sections are the

                                                          following

                                                          The company has provided land for construction of school buildings in some of

                                                          the steel townships as well as in other places for spreading education among

                                                          the masses

                                                          The company has constructed roads in remote areas around the steel plants

                                                          and also where the captive mines are located to improve communication and

                                                          also increase activities such as organisation of health camps school facilities

                                                          drinking water etc under the peripheral development schemes

                                                          Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                          Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                          providing them with education boarding and lodging facilities

                                                          Construction of bridges by-pass roads metal-morum path waterways

                                                          levellingdressing area around township pre-mixed roads Installation of hand-

                                                          pumps tube wells and wells for villagers

                                                          Construction of school buildings (including for mentally retarded deaf and

                                                          dumb children) madarsas providing school furniture therein and construction

                                                          of hostels womenrsquos college building etc

                                                          Fourteen scholarships are awarded to deserving SCST undergraduate

                                                          engineering students in various disciplines to encourage technical education

                                                          among them

                                                          In many cases tuition fee in company run schools is exempt for SCST

                                                          students Steps are taken to provide education to more and more tribal children

                                                          in company schools

                                                          The unemployed SCST youth are given specialized training in various

                                                          technical trades to develop skill and knowledge Such training is provided free

                                                          of cost

                                                          Adult literacy campaign is carried out in most of the steel townships Every year

                                                          more and more men and women are being covered in this campaign

                                                          Development of fishery and cottage industry providing sewing machines to

                                                          village mahila mandals and promoting other self-employment generation

                                                          schemes

                                                          SAIL has established a hockey academy with stadium and hostel facilities at

                                                          Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                          academy was successful in spotting a number of young talented tribal players

                                                          and grooms them under expertise of ex-Olympian

                                                          Technology

                                                          The biggest boost to efficiency in the steel industry has come from the increased

                                                          use of continuous casting ndash an indicator of the modernity of the production process Its

                                                          share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                          now India is thus well on its way to joining the ranks of the leading steelmakers

                                                          among the industrial nations (share in EU-25 96) However in India some 6 of

                                                          crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                          suggests there is restructuring potential

                                                          TATA Steel

                                                          Tata Steels stall at the International Trade Fair was adjudged the best along

                                                          with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                          international companies also took part in the exhibition Participating companies from

                                                          countries all over the world exhibited latest technologies and know-how List of

                                                          participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                          Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                          companies of national and international repute China was the partner country for the

                                                          International Trade Fair this year

                                                          In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                          cutting-edge technology used in iron ore mining pioneering human resource

                                                          practices 78 years of industrial harmony and various other aspects of the worlds best

                                                          steel company

                                                          The 6th International Trade Fair and Conference an institutionalised global

                                                          event is considered to be one of the most prestigious forums for national as well

                                                          international participants It is a conclave of the finest minds concerned with the future

                                                          direction and growth of these sectors The forum provided the worlds most eminent

                                                          metallurgists manufacturers of metallurgical and mining machinery and related

                                                          sectors professionals analysts and experts with the opportunity to exchange views on

                                                          emerging technologies synergy and strengths and open up wider horizons for

                                                          sectorial development

                                                          Tata Steel to adopt Corus technology

                                                          Tata Steel plans to implement alternate technology used by the British steel

                                                          maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                          production according to Mr B Muthuraman Managing Director Tata Steel

                                                          ldquoWe are looking at alternate technology Corus has developed an alternate

                                                          technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                          newspersons on the sidelines of the 34th National Management Convention organised

                                                          by the All-India Management Association However he declined to give further details

                                                          on the type of technology the Indian steel giant plans to implement

                                                          Steel Authority of India

                                                          Modernisation holds the key to SAILs fortunes in the near future The objective

                                                          of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                          and productive capacity and in the process become more energy-efficient and

                                                          improve quality The key component of the ongoing modernisation drive - already

                                                          completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                          ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                          continuous casting techniques A senior SAIL official says Continuous casting and

                                                          basic oxygen furnaces ensure better quality steel through processes more easily

                                                          monitored for quality control The basic oxygen surfaces method is significantly faster

                                                          more automated and permits greater flexibility Continuous casting is more efficient

                                                          than the traditional ingot casting methods and gives increased yields while enabling

                                                          better quality standards SAIL is also modernising its finishing mills and is adding

                                                          secondary refining facilities to improve quality

                                                          Safety measures

                                                          A unique feature of safety management in steel industry is that a bipartite forum

                                                          named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                          was formed in 1973 at national level having representatives from steel plants in SAIL

                                                          RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                          Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                          workshops training programme safety competitions for member organisations JCSSI

                                                          with the co-operation and support of Trade Union representatives formulates policies

                                                          and guidelines for its member plants and monitors the implementation

                                                          Tata Steel

                                                          Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                          Safety department and a Safety Trophy helped spread the message all across the

                                                          company

                                                          TATA reaffirms its commitment to provide safe working place and clean

                                                          environment to its employees and other stakeholders as an integral part of its

                                                          business philosophy and values We will continually enhance our Environmental

                                                          Occupational Health amp Safety (EHS) performance in our activities products and

                                                          services through a structured EHS management framework Towards this

                                                          commitment we shall

                                                          Establish and achieve EHS objectives and targets

                                                          Ensure compliance with applicable EHS legislation and other requirement and

                                                          go beyond

                                                          Conserve natural resources and energy by constantly seeking to reduce

                                                          consumption and promoting waste avoidance and recycling measures

                                                          Eliminate minimize andor control adverse environmental impacts and

                                                          occupational health and safety risks by adopting appropriate state-of-the-art

                                                          technology and best EHS management practices at all levels sand functions

                                                          Enhance awareness skill and competence of our employees and contractors

                                                          so as to enable them to demonstrate their involvement responsibility and

                                                          accountability for sound EHS performance

                                                          Steel Authority of India

                                                          SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                          monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                          Annual Performance Plans (APP) for the areas of safety and fire services are

                                                          formulated and review of implementation of APP is done during Heads of

                                                          Safety meeting

                                                          Internal and external safety audits of major departments particularly hazardous

                                                          areas are conducted every year and points arising from these audits are

                                                          liquidated Safety aspects have been incorporated in standard operating

                                                          practices (SOP) and standard maintenance practices (SMP)

                                                          All major capital repairsshut downs are closely monitored round the clock

                                                          Periodic drives are conducted to inculcate safety awarenessculture up to

                                                          grass-root level apart from regular inspections as per checklists to identify

                                                          unsafe conditionsacts

                                                          Safety training is imparted to target group employees at various levels HRD

                                                          intervention in the area of safety covers Heads of Departments Line Managers

                                                          amp Departmental Safety Officers Besides area specific workshops are

                                                          conducted at different locations on important topics like gas safety railroad

                                                          safety safety in iron steel amp coke making etc

                                                          Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                          standards in the company by taking measures like intensive safety drives in works

                                                          area and conducting safety audits in hazardous departments of different plants and

                                                          mines In addition specific workshops on safety aspects were organised in various

                                                          SAIL steel plants

                                                          Measures taken by Indian government to improve the industry

                                                          Now letrsquos 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-

                                                          1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                          among others was removed from the list of industries reserved for the public

                                                          sector and also exempted from the provisions of compulsory licensing under the

                                                          Industries (Development and Regulation) Act 1951

                                                          2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                          of `high priority industries for automatic approval for foreign equity investment up

                                                          to 51 This limit has been recently increased to 100

                                                          3 Price and distribution of steel were deregulated from January 1992 At the same

                                                          time it was ensured that priority continued to be accorded for meeting the

                                                          requirements of small scale industries exporters of engineering goods and North

                                                          Eastern Region of the country besides strategic sectors such as Defence and

                                                          Railways

                                                          4 The trade policy has been liberalised and import and export of iron and steel is

                                                          freely allowed There are no quantitative restrictions on import of iron and steel

                                                          items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                          regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                          steel have drastically come down since 1991-92 levels and the government is

                                                          committed to bring them down to the international levels In Chapter 72 there are

                                                          two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                          5 Iron amp Steel are freely importable as per the Extant Policy

                                                          6 Iron amp Steel are freely exportable

                                                          7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                          8 The floor price for seconds and defectives continues till date

                                                          9 Imports of seconds and defectives of steel are allowed only through three

                                                          designated ports of Mumbai Calcutta and Chennai

                                                          10Mandatory pre inspection certificate by a reputed international agency for every

                                                          import consignment of seconds and defectives

                                                          11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                          10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                          the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                          per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                          15 per cent to 5 per cent

                                                          12Further customs duty on several raw materials used by the steel sector like

                                                          noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                          coking coal to zero

                                                          13To bring down the prices of steel the excise duty on steel products was reduced

                                                          from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                          that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                          increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                          cut on moderating prices was not achieved

                                                          14The union Budget 2007-08 the import duty on seconds and defective has been

                                                          further reduced from 20 to 10

                                                          Special assistance being provided by Ministry of Steel to Private Sector

                                                          1 Ministry of Steel is extending all possible support as detailed below for the

                                                          development of Iron and Steel Sector in the country

                                                          2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                          new plants and expansion of existing ones wherever applied for

                                                          3 To ensure an un-interrupted supply of raw materials to the producers

                                                          4 The Ministry has been interacting with All India Financial institutions to expedite

                                                          clearance of projects

                                                          5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                          Plants are held at the level of Secretary

                                                          6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                          industry so that their absence does not lead to bottlenecks in the future growth of

                                                          the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                          7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                          Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                          country are members of this Institute which has been set up with the objective of

                                                          promoting developing and propagating the proper and effective use of steel

                                                          8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                          major steel plants being implemented Govt has setup a Project Coordination

                                                          Group under the Chairmanship of Steel Minister

                                                          NATIONAL STEEL POLICY 2005

                                                          The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                          development and as such great importance is attached to capacity expansion in line

                                                          with expected demand at cost and prices which make Indian steel internationally

                                                          competitive The existing regime of liberalization decontrol and deregulation of

                                                          industry in the country has opened up new opportunities for the expansion of the steel

                                                          industry With a view to accelerating the growth of the steel sector and attaining the

                                                          vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                          formulated a National Steel Policy (NSP) in 2005

                                                          The following salient features can be derived after analysing the NSP 2005

                                                          The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                          towards reform restructuring and globalisation

                                                          The long-term goal of the NSP is that India should have a modern and efficient

                                                          steel industry of world standards catering to diversified steel demand The focus of

                                                          the policy is to achieve global competitiveness not only in terms of cost quality and

                                                          product-mix but also in terms of global benchmarks of efficiency and productivity

                                                          In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                          NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                          an open globally integrated and competitive environment

                                                          The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                          policy goal On the demand side the strategy would be to create incremental

                                                          demand through promotional efforts creation of awareness and strengthening the

                                                          delivery chain particularly in rural areas On the supply side the strategy would be

                                                          to facilitate creation of additional capacity remove procedural and policy

                                                          bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                          investments in RampD and encourage the creation of infrastructure such as roads

                                                          railways and ports

                                                          The NSP acknowledges the low per capita consumption of steel in the country

                                                          especially in the rural areas and the need to boost steel consumption to improve

                                                          quality of life and help in meeting the growing aspirations of masses

                                                          In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                          industry would need additional capital In addition funds would be required for

                                                          technological upgrade of existing facilities In order to mobilize such vast resources

                                                          NSP seeks to encourage foreign direct investment In addition the policy also

                                                          seeks to make the fiscal incentives available to infrastructure projects accessible

                                                          to the steel industry

                                                          The NSP seeks to support developing of risk-hedging instruments like futures and

                                                          derivatives to contain price volatility in the steel market

                                                          The NSP seeks to strengthen the existing training and research facilities available

                                                          to the domestic steel industry so as to provide suitable training programmes

                                                          especially for the secondary small-scale units and also to collect and analyse data

                                                          on important parameters of the industry

                                                          The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                          capability for special types of steel substitute coking coal use iron ore fines

                                                          develop new products suited to rural needs enhance material and energy

                                                          efficiency utilize waste and arrest environmental degradation

                                                          The NSP acknowledges the important role played by the secondary steel sector in

                                                          providing employment meeting local demand of steel in rural and semi-urban

                                                          areas and meeting the countryrsquos demand of some special products and seeks to

                                                          endeavour to provide the necessary feedstock to these units at reasonable prices

                                                          from major plants through the existing mechanism of State Small Industries

                                                          Corporations

                                                          The NSP recognizes the fact that integration of the Indian steel industry with the

                                                          global economy requires that the industry should be protected from unfair trade

                                                          practices The NSP therefore envisages institution of mechanisms for import

                                                          surveillance and monitoring export subsidies in other countries

                                                          The present per capita consumption of steel in the country is very low compared to the

                                                          world average As mentioned above one of the objectives of the NSP is to augment

                                                          the demand and consumption of steel in the country by conscious promotion of steel

                                                          usage With a view to create a mass awareness campaign on conscious promotion of

                                                          steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                          the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                          The Committee is being serviced by Institute for Steel Development and Growth

                                                          (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                          way of an awareness campaign with particular emphasis on rural sectors The

                                                          Committee also aims at educating the designers architects builders and planners

                                                          regarding the qualitative and cost effective applications of steel in various structures

                                                          including buildings bridges flyovers and airports

                                                          FUTURE OF INDIAN STEEL INDUSTRY

                                                          India is amongst a few countries in the world having the dual advantage of fast

                                                          growing domestic demand coupled with access to raw materials Further the trend

                                                          that is already discernible is that the axis of global steel production consumption is

                                                          shifting towards Asia With their large populations China and India already account for

                                                          35 of the total world steel production - more than double of Europe Asia is

                                                          expected to outpace other regions of the world to an even greater extent in the coming

                                                          years

                                                          Amongst the Asian nations China has established a huge unbridgeable lead It

                                                          is accepted that China will continue to be the leader However India is slated to

                                                          emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                          the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                          splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                          China swallowed almost 32 of global steel It is unlikely that future production and

                                                          consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                          has been the case over the last few years On the other hand it is sun-rise time for

                                                          India where the demand has increased by 7-8 in the last couple of years In the long

                                                          run Indian steel is likely to be more cost-effective since unlike China India has

                                                          relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                          can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                          However the position with coal is not so favourable Though thermal coal

                                                          reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                          traditional blast furnace route would require coking coal India does not have adequate

                                                          reserves of coking coal nor is the meagre amount available of appropriate quality

                                                          Thus the steel industry always had to contend with the dual problems of inadequate

                                                          availability and poor quality of Indian coking coal This has been partly addressed by

                                                          adopting alternative iron making processes that are not dependent on coking coal it

                                                          can not be denied that coal is the biggest cause for concern for bulk steel production

                                                          in India

                                                          Because of the shortage of indigenous coal attempts have been made by steel

                                                          producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                          mines in other countries This is the only long-term solution but with a global shortage

                                                          of coal it may not remain cost-effective in the long run

                                                          India is the seventh largest producer of steel and may further improve its position

                                                          going by the current trends A series of investment decisions by major domestic

                                                          players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                          POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                          The keen interest shown by various prospective investors is not only due to

                                                          expectations of strong growth in domestic demand but also due to indigenous

                                                          availability of key resources like iron ore and skilled workforce

                                                          After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                          steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                          finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                          2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                          consumption has accelerated to 91 per cent

                                                          With the likely growth of Indian economy at around 7 per cent per annum

                                                          demand for steel is expected to remain strong and is projected to reach a level of 90

                                                          million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                          demand is sustainable considering the fact that Indias per capita consumption of steel

                                                          is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                          very low level of per capita consumption of steel in India is highlighted further when

                                                          compared with the consumption levels of its peer group consisting of countries like

                                                          China Brazil Mexico and Republic of Korea as also with selected developed

                                                          countries

                                                          Though there are realistic constraints in India to achieving as rapid a growth as in

                                                          China there seems to be consensus among analysts that India is likely to witness a

                                                          growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                          percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                          achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                          more conservative due to cyclicity of steel business it may be mentioned that in a

                                                          country like India cyclicity is more in terms of prices rather than volumes of production

                                                          Exports

                                                          Similar optimism prevails with regard to export of iron and steel Export of steel

                                                          starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                          2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                          rising domestic demand and low capacity additions Exports now constitute around 17

                                                          per cent of total production and Indias presence in the developing and developed

                                                          world is being increasingly felt Indian steel producers have recently been able to

                                                          supply specialized grades and products used for sophisticated applications like

                                                          automobiles On the cost front some of our producers are counted amongst the least

                                                          cost producers of the world For an average reference plant India is competitively

                                                          placed in the middle of the hierarchy of steel producing nations

                                                          However we have a long way to go to catch up with the leading exporters of the

                                                          world such as Japan the CIS countries Brazil etc It is however expected that by

                                                          2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                          per cent of total projected production The projected export ratio compares well with

                                                          the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                          The projected production of steel by 2019-20 to meet the domestic and export

                                                          demand will be around 110 million tonnes Management of resources and

                                                          infrastructural growth is going to be critical in achievement of the production level

                                                          envisaged The broad requirements of various resources will increase manifold from

                                                          the current level The bottlenecks in availability of critical inputs and various facilities

                                                          need to be removed through concerted efforts of Government and industry The broad

                                                          strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                          sector has been discussed in the National Steel Policy which has been recently

                                                          approved by the Government

                                                          As stated earlier the long-term goal of the National Steel Policy is that India

                                                          should have a modern and efficient steel industry of world standards catering to a

                                                          diversified steel demand The focus of the policy is to achieve global competitiveness

                                                          not only in terms of cost quality and product mix but also in terms of global

                                                          benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                          pronged strategy to achieve these goals On the demand side the strategy would be

                                                          to create incremental demand through promotional efforts creation of awareness and

                                                          strengthening the delivery chain particularly in rural areas On the supply side the

                                                          strategy would be to facilitate creation of additional capacity remove procedural and

                                                          policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                          investments in RampD and HRD and encourage the creation of infrastructure such as

                                                          roads railways and ports

                                                          The production figures exports and imports of finished carbon steel and pig iron

                                                          and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                          Steel and SAIL attest to the continuing growth for both the sectors

                                                          FINDINGS

                                                          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 increased its profit over the year particularly in 2006-07

                                                          Both the companies are planning to adopt modern technology which is going to

                                                          help them to compete in world market but they need to be less dependent on

                                                          state of art technology and coal for long term prospects

                                                          Public sector has undergone retrenchment for the employees and improved

                                                          has its lobour productivity but it is still lacking behind as compared to private

                                                          sector

                                                          SAIL has reduced the no of accidents due to improper handling of machinery

                                                          still no of accidents are more than that of TATA Steel

                                                          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

                                                          ie 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 have to be met

                                                          comprehensively if we are to take our legitimate place in the world as a developed

                                                          nation by 2020

                                                          BIBLIOGRAPHY

                                                          Annual report (2006-07) published by ministry of steel

                                                          Annual report (2006-07) published by TATA Steel

                                                          Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                          REPORTrsquo posted by SAIL on its website

                                                          lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                          held on 07 Nov 2006

                                                          Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                          wwwsteelnicin (Official website of ministry of industry)

                                                          wwwtatasteelcom (Official website of TATA Steel)

                                                          wwwsailcoin (Official website of Steel Authority of India)

                                                          wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                          wwwjpcindiansteelnicin (Website of joint planning committee)

                                                          • DATA ANALYSIS
                                                          • Comparison between TATA Steel and Steel Authority of India
                                                          • Production
                                                          • Quantity 000 Tonnes
                                                          • Financials
                                                          • Research and Development
                                                          • (Rs Crore)
                                                          • TATA Steel
                                                          • Steel Authority of India
                                                          • Environment
                                                          • TATA Steel
                                                          • Emissions effluents and wastes
                                                          • Emissions
                                                          • Waste handling
                                                          • Effluent Management
                                                          • Steel Authority of India
                                                          • Solid Waste Management
                                                          • Environmental Plantation
                                                          • Environmental Recognitions
                                                          • Workforce and Welfare of Society
                                                          • TATA steel
                                                          • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                          • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                          • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                          • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                          • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                          • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                          • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                          • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                          • Steel Authority of India
                                                          • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                          • Technology
                                                          • Steel Authority of India
                                                          • Safety measures
                                                          • Tata Steel
                                                          • Steel Authority of India
                                                          • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                          • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                          • Measures taken by Indian government to improve the industry
                                                          • Now letrsquos 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-
                                                          • Special assistance being provided by Ministry of Steel to Private Sector
                                                          • FUTURE OF INDIAN STEEL INDUSTRY

                                                            role in production of primary and secondary steel but also contribute substantial value

                                                            addition in terms of quality innovation and cost effectiveness

                                                            For comparing both the companies ie Tata Steel and SAIL lets analyse both the

                                                            companies on following parameters

                                                            Production

                                                            Chart showing production of both the companies

                                                            Quantity 000 Tonnes

                                                            2007-08 APR-DEC07APR-

                                                            DEC06 ACTUA

                                                            L

                                                            AGE OF CURRENT

                                                            PRODUCTION OVER

                                                            CAPACITY UTILISATION

                                                            TARGET TENTATIV

                                                            E

                                                            TARGET

                                                            ACTUAL

                                                            APR-DEC07 TARGE

                                                            T

                                                            APR-DEC06 ACTUA

                                                            L

                                                            APR-DEC 07

                                                            APR-DEC06

                                                            SAIL

                                                            i)BSP49500 37110 37320 35780 1006 1043 1270 1210

                                                            ii)DSP18400 13580 14330 13450 1055 1065 1060 990

                                                            iii)RSP18130 13450 15360 15120 1142 1016 1080 1060

                                                            iv)BSL43500 32630 30970 30010 949 1032 950 910

                                                            v)ISP5000 3760 3520 3450 936 1020 940 920

                                                            vi)ASP1470 1070 1140 1130 1065 1009 650 640

                                                            vii)VISL

                                                            1390 1050 1160 1190 1105 975 1300 1340

                                                            TATA 50000 37440 37090 37380 991 992 990 1000

                                                            TATA Steel

                                                            The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                            but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                            target of 3744 (mT) but could produce 3709 However for the same period in last

                                                            year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                            to 99 this year

                                                            Steel Authority of India

                                                            The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                            but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                            for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                            10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                            capacity utilisation of 103 this year as compared to 101 last year

                                                            Financials

                                                            TATA Steel

                                                            The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                            of the past four years The Company achieved the best ever sales turnover and

                                                            profitability during the year under review A robust Indian economy firm steel prices

                                                            higher volumes and several improvement initiatives contributed to the record

                                                            performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                            the previous year Export turnover was lower by about 5 due to lower volumes

                                                            Average price realisation improved mainly due to higher prices of hot rolled

                                                            coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                            (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                            Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                            due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                            funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                            providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                            crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                            before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                            after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                            20 compared to the previous year

                                                            The record financial results would not have been possible without a matching

                                                            performance by the operating departments including the raw materials division The

                                                            year witnessed the best ever crude steel production by the Company at 505 million

                                                            tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                            first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                            upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                            rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                            Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                            increase in production was backed by improvements in operating practices and

                                                            productivity resulting in a reduction in consumption of raw materials energy

                                                            refractories etc

                                                            Steel Authority of India

                                                            Financial Year 2006-07 has been eventful year for the company with further

                                                            momentum in improving operational efficiencies laying strong foundation and building

                                                            road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                            undertaken with its human resource at the core During the year the company got the

                                                            distinction of first metal company in the country to reach a market capitalization of Rs

                                                            50000 crore

                                                            There have been improvements in all financial parameters which are shown in

                                                            the table given below-

                                                            SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                            before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                            previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                            increase of 55

                                                            Research and Development

                                                            Chart showing production of both the companies

                                                            (Rs Crore)

                                                            TATA Steel

                                                            The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                            develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                            steel for body panels

                                                            Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                            coke energy conservation waste utilisation sintering blast furnace productivity and

                                                            phosphorous reduction product development and improvement in life of plant and

                                                            machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                            sealed and over 100 are in process

                                                            Steel Authority of India

                                                            Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                            innovative technological inputs to different units of SAIL with special emphasis on

                                                            cost reduction product development and application quality improvement energy

                                                            conservation and automation Several new products were developed and

                                                            commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                            Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                            specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                            micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                            Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                            Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                            strengthened its technology marketing efforts by providing consultancy services

                                                            organising specialised testing and transfer of technological innovations to outside

                                                            customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                            Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                            Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                            During the year 1998 technical papers were publishedpresented besides filing

                                                            of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                            awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                            achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                            Government of India

                                                            Environment

                                                            TATA Steel

                                                            Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                            Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                            has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                            Jamshedpur is the only town in the country which

                                                            Significant achievements by the Company include an improvement in

                                                            environment and resource conservation including a reduction in green house erosion

                                                            raw materials and water consumption The Company has increased waste re-use and

                                                            re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                            the-art pollution control systems being installed to prevent and control pollution The

                                                            Company has almost doubled its capital investment in Pollution Abatement in the last

                                                            five years

                                                            Emissions effluents and wastes

                                                            Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                            most relevance to the steel industry Considerable reduction has been effected by

                                                            Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                            granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                            Tata Steelrsquos activities

                                                            Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                            tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                            Hazardous Waste under Basel Convention The Company does not import or export

                                                            any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                            generated are handled as per the requirement of the Hazardous Waste Management

                                                            and Handling Rules 19892000

                                                            Emissions

                                                            Tata Steel has undertaken several initiatives which have resulted in

                                                            considerable reduction in stack emission Emissions are well below the Indian and

                                                            international standards The emission load including particulate matter Sulphur

                                                            Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                            undertaken at the Steel Works

                                                            Waste handling

                                                            Most of the solid waste generated from Steel Works is recycled or reused 18

                                                            of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                            was used to fill low-lying areas and for peripheral road construction around

                                                            Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                            power plants was dumped in a designated dump area

                                                            Effluent Management

                                                            Waste water from the steel making process is being treated with best available

                                                            physio-chemical methods as well as being recycled Waste water from the coke plant

                                                            is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                            organisms The Company has reduced the levels of total pollutant discharge in waste

                                                            water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                            Steel Authority of India

                                                            Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                            environmentally responsible manner to comply with applicable regulations and striving

                                                            to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                            efficiency and optimize resource consumption through various measures viz

                                                            improvement in process technology in the areas of raw materials coke iron and steel

                                                            making reuserecycle of the by-products generated and conservation of energy and

                                                            water

                                                            Solid Waste Management

                                                            During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                            and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                            Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                            these wastes are being made through internal recycling and selling to outside

                                                            agencies The wastes generated in the steel plants are being utilized mainly through

                                                            their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                            during April-September 2006

                                                            Environmental Plantation

                                                            Trees have a significant role in protection of environment and ecological balance

                                                            Extensive afforestation programme are being followed in all the plants and mines The

                                                            basis of choosing the species of plants mainly depends on local soil characteristics

                                                            and prevailing meteorological conditions The green belt developed by afforestation

                                                            adds to the aesthetic environment which becomes dust and noise barriers

                                                            A total number of 145521 saplings have been planted covering an area of 637

                                                            hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                            hectare in 2004-05 in and around the steel plants of SAIL

                                                            Environmental Recognitions

                                                            SAIL plants have been awarded various prizes for environmental management in

                                                            their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                            the Confederation of Indian Industries (CII) for exemplary performance in the

                                                            environmental economic andsocial dimensions of sustainable development and the

                                                            Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                            Excellence Award in the metal sector 2005 instuted by the World Environment

                                                            Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                            for 2005 from International Greenland Society

                                                            Workforce and Welfare of Society

                                                            TATA steel

                                                            Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                            and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                            enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                            provide a work environment that will ensure a sense of purpose and personal growth

                                                            for each individual The wish of the company is to see the smile on every face

                                                            everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                            people and enriched empowered and enhanced their lives

                                                            Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                            brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                            Tata Steel were the first of their kind in India and some even in the western countries

                                                            at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                            source of its competitiveness It focuses on constantly updating and challenging

                                                            intellectual capabilities to enable them to excel in performance Special efforts are

                                                            made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                            workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                            available with its people through Knowledge Management and sharing of best

                                                            practices

                                                            In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                            mutual co-operation coordination and understanding between the Management and

                                                            the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                            among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                            transparency fairness and equity in all its interactions with its employees to create an

                                                            enthused and happy workforce

                                                            In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                            assistance in the fields of education vocational training self-employment and

                                                            family welfare

                                                            Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                            12 times This facility provides on-the-spot diagnostic medical and advanced

                                                            surgical treatment for preventive and curative interventions to people in

                                                            inaccessible rural areas

                                                            Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                            for the 1920 Antwerp Olympics

                                                            The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                            track was inaugurated in 1991 The complex also houses facilities for handball

                                                            tennis volleyball hockey basketball boxing table tennis and a modern

                                                            gymnasium

                                                            The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                            services for the betterment of the people in and around Jamshedpur

                                                            At times of natural calamities the company has rushe immediate relief and off

                                                            ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                            fl ood ravaged Orissa and other such aff ected areas

                                                            Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                            er a unique environment for the children of Jamshedpur to grow up in

                                                            In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                            Jamshedpur has emerged as the one of the best cities in India

                                                            Steel Authority of India

                                                            The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                            executives and 123005 non-executives The total reduction in manpower achieved

                                                            during the year stood at 4864 which included separation of 881 employees through

                                                            voluntary retirement The labour productivity improved by around 12 over previous

                                                            year to 150 tonne crude steelmanyear

                                                            Some of the areas of assistance which are available to the weaker sections are the

                                                            following

                                                            The company has provided land for construction of school buildings in some of

                                                            the steel townships as well as in other places for spreading education among

                                                            the masses

                                                            The company has constructed roads in remote areas around the steel plants

                                                            and also where the captive mines are located to improve communication and

                                                            also increase activities such as organisation of health camps school facilities

                                                            drinking water etc under the peripheral development schemes

                                                            Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                            Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                            providing them with education boarding and lodging facilities

                                                            Construction of bridges by-pass roads metal-morum path waterways

                                                            levellingdressing area around township pre-mixed roads Installation of hand-

                                                            pumps tube wells and wells for villagers

                                                            Construction of school buildings (including for mentally retarded deaf and

                                                            dumb children) madarsas providing school furniture therein and construction

                                                            of hostels womenrsquos college building etc

                                                            Fourteen scholarships are awarded to deserving SCST undergraduate

                                                            engineering students in various disciplines to encourage technical education

                                                            among them

                                                            In many cases tuition fee in company run schools is exempt for SCST

                                                            students Steps are taken to provide education to more and more tribal children

                                                            in company schools

                                                            The unemployed SCST youth are given specialized training in various

                                                            technical trades to develop skill and knowledge Such training is provided free

                                                            of cost

                                                            Adult literacy campaign is carried out in most of the steel townships Every year

                                                            more and more men and women are being covered in this campaign

                                                            Development of fishery and cottage industry providing sewing machines to

                                                            village mahila mandals and promoting other self-employment generation

                                                            schemes

                                                            SAIL has established a hockey academy with stadium and hostel facilities at

                                                            Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                            academy was successful in spotting a number of young talented tribal players

                                                            and grooms them under expertise of ex-Olympian

                                                            Technology

                                                            The biggest boost to efficiency in the steel industry has come from the increased

                                                            use of continuous casting ndash an indicator of the modernity of the production process Its

                                                            share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                            now India is thus well on its way to joining the ranks of the leading steelmakers

                                                            among the industrial nations (share in EU-25 96) However in India some 6 of

                                                            crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                            suggests there is restructuring potential

                                                            TATA Steel

                                                            Tata Steels stall at the International Trade Fair was adjudged the best along

                                                            with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                            international companies also took part in the exhibition Participating companies from

                                                            countries all over the world exhibited latest technologies and know-how List of

                                                            participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                            Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                            companies of national and international repute China was the partner country for the

                                                            International Trade Fair this year

                                                            In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                            cutting-edge technology used in iron ore mining pioneering human resource

                                                            practices 78 years of industrial harmony and various other aspects of the worlds best

                                                            steel company

                                                            The 6th International Trade Fair and Conference an institutionalised global

                                                            event is considered to be one of the most prestigious forums for national as well

                                                            international participants It is a conclave of the finest minds concerned with the future

                                                            direction and growth of these sectors The forum provided the worlds most eminent

                                                            metallurgists manufacturers of metallurgical and mining machinery and related

                                                            sectors professionals analysts and experts with the opportunity to exchange views on

                                                            emerging technologies synergy and strengths and open up wider horizons for

                                                            sectorial development

                                                            Tata Steel to adopt Corus technology

                                                            Tata Steel plans to implement alternate technology used by the British steel

                                                            maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                            production according to Mr B Muthuraman Managing Director Tata Steel

                                                            ldquoWe are looking at alternate technology Corus has developed an alternate

                                                            technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                            newspersons on the sidelines of the 34th National Management Convention organised

                                                            by the All-India Management Association However he declined to give further details

                                                            on the type of technology the Indian steel giant plans to implement

                                                            Steel Authority of India

                                                            Modernisation holds the key to SAILs fortunes in the near future The objective

                                                            of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                            and productive capacity and in the process become more energy-efficient and

                                                            improve quality The key component of the ongoing modernisation drive - already

                                                            completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                            ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                            continuous casting techniques A senior SAIL official says Continuous casting and

                                                            basic oxygen furnaces ensure better quality steel through processes more easily

                                                            monitored for quality control The basic oxygen surfaces method is significantly faster

                                                            more automated and permits greater flexibility Continuous casting is more efficient

                                                            than the traditional ingot casting methods and gives increased yields while enabling

                                                            better quality standards SAIL is also modernising its finishing mills and is adding

                                                            secondary refining facilities to improve quality

                                                            Safety measures

                                                            A unique feature of safety management in steel industry is that a bipartite forum

                                                            named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                            was formed in 1973 at national level having representatives from steel plants in SAIL

                                                            RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                            Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                            workshops training programme safety competitions for member organisations JCSSI

                                                            with the co-operation and support of Trade Union representatives formulates policies

                                                            and guidelines for its member plants and monitors the implementation

                                                            Tata Steel

                                                            Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                            Safety department and a Safety Trophy helped spread the message all across the

                                                            company

                                                            TATA reaffirms its commitment to provide safe working place and clean

                                                            environment to its employees and other stakeholders as an integral part of its

                                                            business philosophy and values We will continually enhance our Environmental

                                                            Occupational Health amp Safety (EHS) performance in our activities products and

                                                            services through a structured EHS management framework Towards this

                                                            commitment we shall

                                                            Establish and achieve EHS objectives and targets

                                                            Ensure compliance with applicable EHS legislation and other requirement and

                                                            go beyond

                                                            Conserve natural resources and energy by constantly seeking to reduce

                                                            consumption and promoting waste avoidance and recycling measures

                                                            Eliminate minimize andor control adverse environmental impacts and

                                                            occupational health and safety risks by adopting appropriate state-of-the-art

                                                            technology and best EHS management practices at all levels sand functions

                                                            Enhance awareness skill and competence of our employees and contractors

                                                            so as to enable them to demonstrate their involvement responsibility and

                                                            accountability for sound EHS performance

                                                            Steel Authority of India

                                                            SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                            monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                            Annual Performance Plans (APP) for the areas of safety and fire services are

                                                            formulated and review of implementation of APP is done during Heads of

                                                            Safety meeting

                                                            Internal and external safety audits of major departments particularly hazardous

                                                            areas are conducted every year and points arising from these audits are

                                                            liquidated Safety aspects have been incorporated in standard operating

                                                            practices (SOP) and standard maintenance practices (SMP)

                                                            All major capital repairsshut downs are closely monitored round the clock

                                                            Periodic drives are conducted to inculcate safety awarenessculture up to

                                                            grass-root level apart from regular inspections as per checklists to identify

                                                            unsafe conditionsacts

                                                            Safety training is imparted to target group employees at various levels HRD

                                                            intervention in the area of safety covers Heads of Departments Line Managers

                                                            amp Departmental Safety Officers Besides area specific workshops are

                                                            conducted at different locations on important topics like gas safety railroad

                                                            safety safety in iron steel amp coke making etc

                                                            Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                            standards in the company by taking measures like intensive safety drives in works

                                                            area and conducting safety audits in hazardous departments of different plants and

                                                            mines In addition specific workshops on safety aspects were organised in various

                                                            SAIL steel plants

                                                            Measures taken by Indian government to improve the industry

                                                            Now letrsquos 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-

                                                            1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                            among others was removed from the list of industries reserved for the public

                                                            sector and also exempted from the provisions of compulsory licensing under the

                                                            Industries (Development and Regulation) Act 1951

                                                            2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                            of `high priority industries for automatic approval for foreign equity investment up

                                                            to 51 This limit has been recently increased to 100

                                                            3 Price and distribution of steel were deregulated from January 1992 At the same

                                                            time it was ensured that priority continued to be accorded for meeting the

                                                            requirements of small scale industries exporters of engineering goods and North

                                                            Eastern Region of the country besides strategic sectors such as Defence and

                                                            Railways

                                                            4 The trade policy has been liberalised and import and export of iron and steel is

                                                            freely allowed There are no quantitative restrictions on import of iron and steel

                                                            items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                            regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                            steel have drastically come down since 1991-92 levels and the government is

                                                            committed to bring them down to the international levels In Chapter 72 there are

                                                            two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                            5 Iron amp Steel are freely importable as per the Extant Policy

                                                            6 Iron amp Steel are freely exportable

                                                            7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                            8 The floor price for seconds and defectives continues till date

                                                            9 Imports of seconds and defectives of steel are allowed only through three

                                                            designated ports of Mumbai Calcutta and Chennai

                                                            10Mandatory pre inspection certificate by a reputed international agency for every

                                                            import consignment of seconds and defectives

                                                            11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                            10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                            the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                            per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                            15 per cent to 5 per cent

                                                            12Further customs duty on several raw materials used by the steel sector like

                                                            noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                            coking coal to zero

                                                            13To bring down the prices of steel the excise duty on steel products was reduced

                                                            from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                            that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                            increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                            cut on moderating prices was not achieved

                                                            14The union Budget 2007-08 the import duty on seconds and defective has been

                                                            further reduced from 20 to 10

                                                            Special assistance being provided by Ministry of Steel to Private Sector

                                                            1 Ministry of Steel is extending all possible support as detailed below for the

                                                            development of Iron and Steel Sector in the country

                                                            2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                            new plants and expansion of existing ones wherever applied for

                                                            3 To ensure an un-interrupted supply of raw materials to the producers

                                                            4 The Ministry has been interacting with All India Financial institutions to expedite

                                                            clearance of projects

                                                            5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                            Plants are held at the level of Secretary

                                                            6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                            industry so that their absence does not lead to bottlenecks in the future growth of

                                                            the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                            7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                            Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                            country are members of this Institute which has been set up with the objective of

                                                            promoting developing and propagating the proper and effective use of steel

                                                            8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                            major steel plants being implemented Govt has setup a Project Coordination

                                                            Group under the Chairmanship of Steel Minister

                                                            NATIONAL STEEL POLICY 2005

                                                            The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                            development and as such great importance is attached to capacity expansion in line

                                                            with expected demand at cost and prices which make Indian steel internationally

                                                            competitive The existing regime of liberalization decontrol and deregulation of

                                                            industry in the country has opened up new opportunities for the expansion of the steel

                                                            industry With a view to accelerating the growth of the steel sector and attaining the

                                                            vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                            formulated a National Steel Policy (NSP) in 2005

                                                            The following salient features can be derived after analysing the NSP 2005

                                                            The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                            towards reform restructuring and globalisation

                                                            The long-term goal of the NSP is that India should have a modern and efficient

                                                            steel industry of world standards catering to diversified steel demand The focus of

                                                            the policy is to achieve global competitiveness not only in terms of cost quality and

                                                            product-mix but also in terms of global benchmarks of efficiency and productivity

                                                            In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                            NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                            an open globally integrated and competitive environment

                                                            The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                            policy goal On the demand side the strategy would be to create incremental

                                                            demand through promotional efforts creation of awareness and strengthening the

                                                            delivery chain particularly in rural areas On the supply side the strategy would be

                                                            to facilitate creation of additional capacity remove procedural and policy

                                                            bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                            investments in RampD and encourage the creation of infrastructure such as roads

                                                            railways and ports

                                                            The NSP acknowledges the low per capita consumption of steel in the country

                                                            especially in the rural areas and the need to boost steel consumption to improve

                                                            quality of life and help in meeting the growing aspirations of masses

                                                            In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                            industry would need additional capital In addition funds would be required for

                                                            technological upgrade of existing facilities In order to mobilize such vast resources

                                                            NSP seeks to encourage foreign direct investment In addition the policy also

                                                            seeks to make the fiscal incentives available to infrastructure projects accessible

                                                            to the steel industry

                                                            The NSP seeks to support developing of risk-hedging instruments like futures and

                                                            derivatives to contain price volatility in the steel market

                                                            The NSP seeks to strengthen the existing training and research facilities available

                                                            to the domestic steel industry so as to provide suitable training programmes

                                                            especially for the secondary small-scale units and also to collect and analyse data

                                                            on important parameters of the industry

                                                            The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                            capability for special types of steel substitute coking coal use iron ore fines

                                                            develop new products suited to rural needs enhance material and energy

                                                            efficiency utilize waste and arrest environmental degradation

                                                            The NSP acknowledges the important role played by the secondary steel sector in

                                                            providing employment meeting local demand of steel in rural and semi-urban

                                                            areas and meeting the countryrsquos demand of some special products and seeks to

                                                            endeavour to provide the necessary feedstock to these units at reasonable prices

                                                            from major plants through the existing mechanism of State Small Industries

                                                            Corporations

                                                            The NSP recognizes the fact that integration of the Indian steel industry with the

                                                            global economy requires that the industry should be protected from unfair trade

                                                            practices The NSP therefore envisages institution of mechanisms for import

                                                            surveillance and monitoring export subsidies in other countries

                                                            The present per capita consumption of steel in the country is very low compared to the

                                                            world average As mentioned above one of the objectives of the NSP is to augment

                                                            the demand and consumption of steel in the country by conscious promotion of steel

                                                            usage With a view to create a mass awareness campaign on conscious promotion of

                                                            steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                            the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                            The Committee is being serviced by Institute for Steel Development and Growth

                                                            (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                            way of an awareness campaign with particular emphasis on rural sectors The

                                                            Committee also aims at educating the designers architects builders and planners

                                                            regarding the qualitative and cost effective applications of steel in various structures

                                                            including buildings bridges flyovers and airports

                                                            FUTURE OF INDIAN STEEL INDUSTRY

                                                            India is amongst a few countries in the world having the dual advantage of fast

                                                            growing domestic demand coupled with access to raw materials Further the trend

                                                            that is already discernible is that the axis of global steel production consumption is

                                                            shifting towards Asia With their large populations China and India already account for

                                                            35 of the total world steel production - more than double of Europe Asia is

                                                            expected to outpace other regions of the world to an even greater extent in the coming

                                                            years

                                                            Amongst the Asian nations China has established a huge unbridgeable lead It

                                                            is accepted that China will continue to be the leader However India is slated to

                                                            emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                            the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                            splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                            China swallowed almost 32 of global steel It is unlikely that future production and

                                                            consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                            has been the case over the last few years On the other hand it is sun-rise time for

                                                            India where the demand has increased by 7-8 in the last couple of years In the long

                                                            run Indian steel is likely to be more cost-effective since unlike China India has

                                                            relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                            can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                            However the position with coal is not so favourable Though thermal coal

                                                            reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                            traditional blast furnace route would require coking coal India does not have adequate

                                                            reserves of coking coal nor is the meagre amount available of appropriate quality

                                                            Thus the steel industry always had to contend with the dual problems of inadequate

                                                            availability and poor quality of Indian coking coal This has been partly addressed by

                                                            adopting alternative iron making processes that are not dependent on coking coal it

                                                            can not be denied that coal is the biggest cause for concern for bulk steel production

                                                            in India

                                                            Because of the shortage of indigenous coal attempts have been made by steel

                                                            producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                            mines in other countries This is the only long-term solution but with a global shortage

                                                            of coal it may not remain cost-effective in the long run

                                                            India is the seventh largest producer of steel and may further improve its position

                                                            going by the current trends A series of investment decisions by major domestic

                                                            players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                            POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                            The keen interest shown by various prospective investors is not only due to

                                                            expectations of strong growth in domestic demand but also due to indigenous

                                                            availability of key resources like iron ore and skilled workforce

                                                            After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                            steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                            finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                            2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                            consumption has accelerated to 91 per cent

                                                            With the likely growth of Indian economy at around 7 per cent per annum

                                                            demand for steel is expected to remain strong and is projected to reach a level of 90

                                                            million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                            demand is sustainable considering the fact that Indias per capita consumption of steel

                                                            is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                            very low level of per capita consumption of steel in India is highlighted further when

                                                            compared with the consumption levels of its peer group consisting of countries like

                                                            China Brazil Mexico and Republic of Korea as also with selected developed

                                                            countries

                                                            Though there are realistic constraints in India to achieving as rapid a growth as in

                                                            China there seems to be consensus among analysts that India is likely to witness a

                                                            growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                            percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                            achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                            more conservative due to cyclicity of steel business it may be mentioned that in a

                                                            country like India cyclicity is more in terms of prices rather than volumes of production

                                                            Exports

                                                            Similar optimism prevails with regard to export of iron and steel Export of steel

                                                            starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                            2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                            rising domestic demand and low capacity additions Exports now constitute around 17

                                                            per cent of total production and Indias presence in the developing and developed

                                                            world is being increasingly felt Indian steel producers have recently been able to

                                                            supply specialized grades and products used for sophisticated applications like

                                                            automobiles On the cost front some of our producers are counted amongst the least

                                                            cost producers of the world For an average reference plant India is competitively

                                                            placed in the middle of the hierarchy of steel producing nations

                                                            However we have a long way to go to catch up with the leading exporters of the

                                                            world such as Japan the CIS countries Brazil etc It is however expected that by

                                                            2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                            per cent of total projected production The projected export ratio compares well with

                                                            the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                            The projected production of steel by 2019-20 to meet the domestic and export

                                                            demand will be around 110 million tonnes Management of resources and

                                                            infrastructural growth is going to be critical in achievement of the production level

                                                            envisaged The broad requirements of various resources will increase manifold from

                                                            the current level The bottlenecks in availability of critical inputs and various facilities

                                                            need to be removed through concerted efforts of Government and industry The broad

                                                            strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                            sector has been discussed in the National Steel Policy which has been recently

                                                            approved by the Government

                                                            As stated earlier the long-term goal of the National Steel Policy is that India

                                                            should have a modern and efficient steel industry of world standards catering to a

                                                            diversified steel demand The focus of the policy is to achieve global competitiveness

                                                            not only in terms of cost quality and product mix but also in terms of global

                                                            benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                            pronged strategy to achieve these goals On the demand side the strategy would be

                                                            to create incremental demand through promotional efforts creation of awareness and

                                                            strengthening the delivery chain particularly in rural areas On the supply side the

                                                            strategy would be to facilitate creation of additional capacity remove procedural and

                                                            policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                            investments in RampD and HRD and encourage the creation of infrastructure such as

                                                            roads railways and ports

                                                            The production figures exports and imports of finished carbon steel and pig iron

                                                            and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                            Steel and SAIL attest to the continuing growth for both the sectors

                                                            FINDINGS

                                                            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 increased its profit over the year particularly in 2006-07

                                                            Both the companies are planning to adopt modern technology which is going to

                                                            help them to compete in world market but they need to be less dependent on

                                                            state of art technology and coal for long term prospects

                                                            Public sector has undergone retrenchment for the employees and improved

                                                            has its lobour productivity but it is still lacking behind as compared to private

                                                            sector

                                                            SAIL has reduced the no of accidents due to improper handling of machinery

                                                            still no of accidents are more than that of TATA Steel

                                                            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

                                                            ie 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 have to be met

                                                            comprehensively if we are to take our legitimate place in the world as a developed

                                                            nation by 2020

                                                            BIBLIOGRAPHY

                                                            Annual report (2006-07) published by ministry of steel

                                                            Annual report (2006-07) published by TATA Steel

                                                            Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                            REPORTrsquo posted by SAIL on its website

                                                            lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                            held on 07 Nov 2006

                                                            Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                            wwwsteelnicin (Official website of ministry of industry)

                                                            wwwtatasteelcom (Official website of TATA Steel)

                                                            wwwsailcoin (Official website of Steel Authority of India)

                                                            wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                            wwwjpcindiansteelnicin (Website of joint planning committee)

                                                            • DATA ANALYSIS
                                                            • Comparison between TATA Steel and Steel Authority of India
                                                            • Production
                                                            • Quantity 000 Tonnes
                                                            • Financials
                                                            • Research and Development
                                                            • (Rs Crore)
                                                            • TATA Steel
                                                            • Steel Authority of India
                                                            • Environment
                                                            • TATA Steel
                                                            • Emissions effluents and wastes
                                                            • Emissions
                                                            • Waste handling
                                                            • Effluent Management
                                                            • Steel Authority of India
                                                            • Solid Waste Management
                                                            • Environmental Plantation
                                                            • Environmental Recognitions
                                                            • Workforce and Welfare of Society
                                                            • TATA steel
                                                            • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                            • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                            • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                            • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                            • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                            • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                            • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                            • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                            • Steel Authority of India
                                                            • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                            • Technology
                                                            • Steel Authority of India
                                                            • Safety measures
                                                            • Tata Steel
                                                            • Steel Authority of India
                                                            • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                            • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                            • Measures taken by Indian government to improve the industry
                                                            • Now letrsquos 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-
                                                            • Special assistance being provided by Ministry of Steel to Private Sector
                                                            • FUTURE OF INDIAN STEEL INDUSTRY

                                                              TATA Steel

                                                              The company had a Production target for the year 2007-08 was 5 million tonnes (mT)

                                                              but it could produce only 493 (mT) For the first 3 quarters of the years company set a

                                                              target of 3744 (mT) but could produce 3709 However for the same period in last

                                                              year company produced 3738 (mT) steel a capacity utilisation of 100 as compared

                                                              to 99 this year

                                                              Steel Authority of India

                                                              The company had a aggregate production target of 13739 (mT) for the year 2007-08

                                                              but it could produce only 126 (mT) a growth of 4 over the previous year However

                                                              for the first 3 quarters of the years company set a target of 10265 (mT) and produced

                                                              10380 as compared to around 10 (mT) for the same period last year SAIL had a

                                                              capacity utilisation of 103 this year as compared to 101 last year

                                                              Financials

                                                              TATA Steel

                                                              The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                              of the past four years The Company achieved the best ever sales turnover and

                                                              profitability during the year under review A robust Indian economy firm steel prices

                                                              higher volumes and several improvement initiatives contributed to the record

                                                              performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                              the previous year Export turnover was lower by about 5 due to lower volumes

                                                              Average price realisation improved mainly due to higher prices of hot rolled

                                                              coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                              (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                              Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                              due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                              funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                              providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                              crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                              before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                              after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                              20 compared to the previous year

                                                              The record financial results would not have been possible without a matching

                                                              performance by the operating departments including the raw materials division The

                                                              year witnessed the best ever crude steel production by the Company at 505 million

                                                              tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                              first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                              upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                              rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                              Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                              increase in production was backed by improvements in operating practices and

                                                              productivity resulting in a reduction in consumption of raw materials energy

                                                              refractories etc

                                                              Steel Authority of India

                                                              Financial Year 2006-07 has been eventful year for the company with further

                                                              momentum in improving operational efficiencies laying strong foundation and building

                                                              road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                              undertaken with its human resource at the core During the year the company got the

                                                              distinction of first metal company in the country to reach a market capitalization of Rs

                                                              50000 crore

                                                              There have been improvements in all financial parameters which are shown in

                                                              the table given below-

                                                              SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                              before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                              previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                              increase of 55

                                                              Research and Development

                                                              Chart showing production of both the companies

                                                              (Rs Crore)

                                                              TATA Steel

                                                              The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                              develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                              steel for body panels

                                                              Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                              coke energy conservation waste utilisation sintering blast furnace productivity and

                                                              phosphorous reduction product development and improvement in life of plant and

                                                              machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                              sealed and over 100 are in process

                                                              Steel Authority of India

                                                              Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                              innovative technological inputs to different units of SAIL with special emphasis on

                                                              cost reduction product development and application quality improvement energy

                                                              conservation and automation Several new products were developed and

                                                              commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                              Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                              specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                              micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                              Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                              Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                              strengthened its technology marketing efforts by providing consultancy services

                                                              organising specialised testing and transfer of technological innovations to outside

                                                              customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                              Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                              Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                              During the year 1998 technical papers were publishedpresented besides filing

                                                              of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                              awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                              achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                              Government of India

                                                              Environment

                                                              TATA Steel

                                                              Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                              Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                              has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                              Jamshedpur is the only town in the country which

                                                              Significant achievements by the Company include an improvement in

                                                              environment and resource conservation including a reduction in green house erosion

                                                              raw materials and water consumption The Company has increased waste re-use and

                                                              re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                              the-art pollution control systems being installed to prevent and control pollution The

                                                              Company has almost doubled its capital investment in Pollution Abatement in the last

                                                              five years

                                                              Emissions effluents and wastes

                                                              Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                              most relevance to the steel industry Considerable reduction has been effected by

                                                              Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                              granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                              Tata Steelrsquos activities

                                                              Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                              tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                              Hazardous Waste under Basel Convention The Company does not import or export

                                                              any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                              generated are handled as per the requirement of the Hazardous Waste Management

                                                              and Handling Rules 19892000

                                                              Emissions

                                                              Tata Steel has undertaken several initiatives which have resulted in

                                                              considerable reduction in stack emission Emissions are well below the Indian and

                                                              international standards The emission load including particulate matter Sulphur

                                                              Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                              undertaken at the Steel Works

                                                              Waste handling

                                                              Most of the solid waste generated from Steel Works is recycled or reused 18

                                                              of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                              was used to fill low-lying areas and for peripheral road construction around

                                                              Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                              power plants was dumped in a designated dump area

                                                              Effluent Management

                                                              Waste water from the steel making process is being treated with best available

                                                              physio-chemical methods as well as being recycled Waste water from the coke plant

                                                              is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                              organisms The Company has reduced the levels of total pollutant discharge in waste

                                                              water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                              Steel Authority of India

                                                              Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                              environmentally responsible manner to comply with applicable regulations and striving

                                                              to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                              efficiency and optimize resource consumption through various measures viz

                                                              improvement in process technology in the areas of raw materials coke iron and steel

                                                              making reuserecycle of the by-products generated and conservation of energy and

                                                              water

                                                              Solid Waste Management

                                                              During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                              and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                              Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                              these wastes are being made through internal recycling and selling to outside

                                                              agencies The wastes generated in the steel plants are being utilized mainly through

                                                              their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                              during April-September 2006

                                                              Environmental Plantation

                                                              Trees have a significant role in protection of environment and ecological balance

                                                              Extensive afforestation programme are being followed in all the plants and mines The

                                                              basis of choosing the species of plants mainly depends on local soil characteristics

                                                              and prevailing meteorological conditions The green belt developed by afforestation

                                                              adds to the aesthetic environment which becomes dust and noise barriers

                                                              A total number of 145521 saplings have been planted covering an area of 637

                                                              hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                              hectare in 2004-05 in and around the steel plants of SAIL

                                                              Environmental Recognitions

                                                              SAIL plants have been awarded various prizes for environmental management in

                                                              their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                              the Confederation of Indian Industries (CII) for exemplary performance in the

                                                              environmental economic andsocial dimensions of sustainable development and the

                                                              Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                              Excellence Award in the metal sector 2005 instuted by the World Environment

                                                              Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                              for 2005 from International Greenland Society

                                                              Workforce and Welfare of Society

                                                              TATA steel

                                                              Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                              and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                              enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                              provide a work environment that will ensure a sense of purpose and personal growth

                                                              for each individual The wish of the company is to see the smile on every face

                                                              everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                              people and enriched empowered and enhanced their lives

                                                              Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                              brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                              Tata Steel were the first of their kind in India and some even in the western countries

                                                              at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                              source of its competitiveness It focuses on constantly updating and challenging

                                                              intellectual capabilities to enable them to excel in performance Special efforts are

                                                              made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                              workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                              available with its people through Knowledge Management and sharing of best

                                                              practices

                                                              In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                              mutual co-operation coordination and understanding between the Management and

                                                              the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                              among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                              transparency fairness and equity in all its interactions with its employees to create an

                                                              enthused and happy workforce

                                                              In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                              assistance in the fields of education vocational training self-employment and

                                                              family welfare

                                                              Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                              12 times This facility provides on-the-spot diagnostic medical and advanced

                                                              surgical treatment for preventive and curative interventions to people in

                                                              inaccessible rural areas

                                                              Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                              for the 1920 Antwerp Olympics

                                                              The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                              track was inaugurated in 1991 The complex also houses facilities for handball

                                                              tennis volleyball hockey basketball boxing table tennis and a modern

                                                              gymnasium

                                                              The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                              services for the betterment of the people in and around Jamshedpur

                                                              At times of natural calamities the company has rushe immediate relief and off

                                                              ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                              fl ood ravaged Orissa and other such aff ected areas

                                                              Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                              er a unique environment for the children of Jamshedpur to grow up in

                                                              In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                              Jamshedpur has emerged as the one of the best cities in India

                                                              Steel Authority of India

                                                              The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                              executives and 123005 non-executives The total reduction in manpower achieved

                                                              during the year stood at 4864 which included separation of 881 employees through

                                                              voluntary retirement The labour productivity improved by around 12 over previous

                                                              year to 150 tonne crude steelmanyear

                                                              Some of the areas of assistance which are available to the weaker sections are the

                                                              following

                                                              The company has provided land for construction of school buildings in some of

                                                              the steel townships as well as in other places for spreading education among

                                                              the masses

                                                              The company has constructed roads in remote areas around the steel plants

                                                              and also where the captive mines are located to improve communication and

                                                              also increase activities such as organisation of health camps school facilities

                                                              drinking water etc under the peripheral development schemes

                                                              Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                              Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                              providing them with education boarding and lodging facilities

                                                              Construction of bridges by-pass roads metal-morum path waterways

                                                              levellingdressing area around township pre-mixed roads Installation of hand-

                                                              pumps tube wells and wells for villagers

                                                              Construction of school buildings (including for mentally retarded deaf and

                                                              dumb children) madarsas providing school furniture therein and construction

                                                              of hostels womenrsquos college building etc

                                                              Fourteen scholarships are awarded to deserving SCST undergraduate

                                                              engineering students in various disciplines to encourage technical education

                                                              among them

                                                              In many cases tuition fee in company run schools is exempt for SCST

                                                              students Steps are taken to provide education to more and more tribal children

                                                              in company schools

                                                              The unemployed SCST youth are given specialized training in various

                                                              technical trades to develop skill and knowledge Such training is provided free

                                                              of cost

                                                              Adult literacy campaign is carried out in most of the steel townships Every year

                                                              more and more men and women are being covered in this campaign

                                                              Development of fishery and cottage industry providing sewing machines to

                                                              village mahila mandals and promoting other self-employment generation

                                                              schemes

                                                              SAIL has established a hockey academy with stadium and hostel facilities at

                                                              Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                              academy was successful in spotting a number of young talented tribal players

                                                              and grooms them under expertise of ex-Olympian

                                                              Technology

                                                              The biggest boost to efficiency in the steel industry has come from the increased

                                                              use of continuous casting ndash an indicator of the modernity of the production process Its

                                                              share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                              now India is thus well on its way to joining the ranks of the leading steelmakers

                                                              among the industrial nations (share in EU-25 96) However in India some 6 of

                                                              crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                              suggests there is restructuring potential

                                                              TATA Steel

                                                              Tata Steels stall at the International Trade Fair was adjudged the best along

                                                              with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                              international companies also took part in the exhibition Participating companies from

                                                              countries all over the world exhibited latest technologies and know-how List of

                                                              participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                              Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                              companies of national and international repute China was the partner country for the

                                                              International Trade Fair this year

                                                              In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                              cutting-edge technology used in iron ore mining pioneering human resource

                                                              practices 78 years of industrial harmony and various other aspects of the worlds best

                                                              steel company

                                                              The 6th International Trade Fair and Conference an institutionalised global

                                                              event is considered to be one of the most prestigious forums for national as well

                                                              international participants It is a conclave of the finest minds concerned with the future

                                                              direction and growth of these sectors The forum provided the worlds most eminent

                                                              metallurgists manufacturers of metallurgical and mining machinery and related

                                                              sectors professionals analysts and experts with the opportunity to exchange views on

                                                              emerging technologies synergy and strengths and open up wider horizons for

                                                              sectorial development

                                                              Tata Steel to adopt Corus technology

                                                              Tata Steel plans to implement alternate technology used by the British steel

                                                              maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                              production according to Mr B Muthuraman Managing Director Tata Steel

                                                              ldquoWe are looking at alternate technology Corus has developed an alternate

                                                              technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                              newspersons on the sidelines of the 34th National Management Convention organised

                                                              by the All-India Management Association However he declined to give further details

                                                              on the type of technology the Indian steel giant plans to implement

                                                              Steel Authority of India

                                                              Modernisation holds the key to SAILs fortunes in the near future The objective

                                                              of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                              and productive capacity and in the process become more energy-efficient and

                                                              improve quality The key component of the ongoing modernisation drive - already

                                                              completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                              ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                              continuous casting techniques A senior SAIL official says Continuous casting and

                                                              basic oxygen furnaces ensure better quality steel through processes more easily

                                                              monitored for quality control The basic oxygen surfaces method is significantly faster

                                                              more automated and permits greater flexibility Continuous casting is more efficient

                                                              than the traditional ingot casting methods and gives increased yields while enabling

                                                              better quality standards SAIL is also modernising its finishing mills and is adding

                                                              secondary refining facilities to improve quality

                                                              Safety measures

                                                              A unique feature of safety management in steel industry is that a bipartite forum

                                                              named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                              was formed in 1973 at national level having representatives from steel plants in SAIL

                                                              RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                              Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                              workshops training programme safety competitions for member organisations JCSSI

                                                              with the co-operation and support of Trade Union representatives formulates policies

                                                              and guidelines for its member plants and monitors the implementation

                                                              Tata Steel

                                                              Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                              Safety department and a Safety Trophy helped spread the message all across the

                                                              company

                                                              TATA reaffirms its commitment to provide safe working place and clean

                                                              environment to its employees and other stakeholders as an integral part of its

                                                              business philosophy and values We will continually enhance our Environmental

                                                              Occupational Health amp Safety (EHS) performance in our activities products and

                                                              services through a structured EHS management framework Towards this

                                                              commitment we shall

                                                              Establish and achieve EHS objectives and targets

                                                              Ensure compliance with applicable EHS legislation and other requirement and

                                                              go beyond

                                                              Conserve natural resources and energy by constantly seeking to reduce

                                                              consumption and promoting waste avoidance and recycling measures

                                                              Eliminate minimize andor control adverse environmental impacts and

                                                              occupational health and safety risks by adopting appropriate state-of-the-art

                                                              technology and best EHS management practices at all levels sand functions

                                                              Enhance awareness skill and competence of our employees and contractors

                                                              so as to enable them to demonstrate their involvement responsibility and

                                                              accountability for sound EHS performance

                                                              Steel Authority of India

                                                              SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                              monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                              Annual Performance Plans (APP) for the areas of safety and fire services are

                                                              formulated and review of implementation of APP is done during Heads of

                                                              Safety meeting

                                                              Internal and external safety audits of major departments particularly hazardous

                                                              areas are conducted every year and points arising from these audits are

                                                              liquidated Safety aspects have been incorporated in standard operating

                                                              practices (SOP) and standard maintenance practices (SMP)

                                                              All major capital repairsshut downs are closely monitored round the clock

                                                              Periodic drives are conducted to inculcate safety awarenessculture up to

                                                              grass-root level apart from regular inspections as per checklists to identify

                                                              unsafe conditionsacts

                                                              Safety training is imparted to target group employees at various levels HRD

                                                              intervention in the area of safety covers Heads of Departments Line Managers

                                                              amp Departmental Safety Officers Besides area specific workshops are

                                                              conducted at different locations on important topics like gas safety railroad

                                                              safety safety in iron steel amp coke making etc

                                                              Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                              standards in the company by taking measures like intensive safety drives in works

                                                              area and conducting safety audits in hazardous departments of different plants and

                                                              mines In addition specific workshops on safety aspects were organised in various

                                                              SAIL steel plants

                                                              Measures taken by Indian government to improve the industry

                                                              Now letrsquos 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-

                                                              1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                              among others was removed from the list of industries reserved for the public

                                                              sector and also exempted from the provisions of compulsory licensing under the

                                                              Industries (Development and Regulation) Act 1951

                                                              2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                              of `high priority industries for automatic approval for foreign equity investment up

                                                              to 51 This limit has been recently increased to 100

                                                              3 Price and distribution of steel were deregulated from January 1992 At the same

                                                              time it was ensured that priority continued to be accorded for meeting the

                                                              requirements of small scale industries exporters of engineering goods and North

                                                              Eastern Region of the country besides strategic sectors such as Defence and

                                                              Railways

                                                              4 The trade policy has been liberalised and import and export of iron and steel is

                                                              freely allowed There are no quantitative restrictions on import of iron and steel

                                                              items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                              regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                              steel have drastically come down since 1991-92 levels and the government is

                                                              committed to bring them down to the international levels In Chapter 72 there are

                                                              two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                              5 Iron amp Steel are freely importable as per the Extant Policy

                                                              6 Iron amp Steel are freely exportable

                                                              7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                              8 The floor price for seconds and defectives continues till date

                                                              9 Imports of seconds and defectives of steel are allowed only through three

                                                              designated ports of Mumbai Calcutta and Chennai

                                                              10Mandatory pre inspection certificate by a reputed international agency for every

                                                              import consignment of seconds and defectives

                                                              11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                              10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                              the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                              per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                              15 per cent to 5 per cent

                                                              12Further customs duty on several raw materials used by the steel sector like

                                                              noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                              coking coal to zero

                                                              13To bring down the prices of steel the excise duty on steel products was reduced

                                                              from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                              that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                              increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                              cut on moderating prices was not achieved

                                                              14The union Budget 2007-08 the import duty on seconds and defective has been

                                                              further reduced from 20 to 10

                                                              Special assistance being provided by Ministry of Steel to Private Sector

                                                              1 Ministry of Steel is extending all possible support as detailed below for the

                                                              development of Iron and Steel Sector in the country

                                                              2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                              new plants and expansion of existing ones wherever applied for

                                                              3 To ensure an un-interrupted supply of raw materials to the producers

                                                              4 The Ministry has been interacting with All India Financial institutions to expedite

                                                              clearance of projects

                                                              5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                              Plants are held at the level of Secretary

                                                              6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                              industry so that their absence does not lead to bottlenecks in the future growth of

                                                              the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                              7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                              Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                              country are members of this Institute which has been set up with the objective of

                                                              promoting developing and propagating the proper and effective use of steel

                                                              8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                              major steel plants being implemented Govt has setup a Project Coordination

                                                              Group under the Chairmanship of Steel Minister

                                                              NATIONAL STEEL POLICY 2005

                                                              The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                              development and as such great importance is attached to capacity expansion in line

                                                              with expected demand at cost and prices which make Indian steel internationally

                                                              competitive The existing regime of liberalization decontrol and deregulation of

                                                              industry in the country has opened up new opportunities for the expansion of the steel

                                                              industry With a view to accelerating the growth of the steel sector and attaining the

                                                              vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                              formulated a National Steel Policy (NSP) in 2005

                                                              The following salient features can be derived after analysing the NSP 2005

                                                              The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                              towards reform restructuring and globalisation

                                                              The long-term goal of the NSP is that India should have a modern and efficient

                                                              steel industry of world standards catering to diversified steel demand The focus of

                                                              the policy is to achieve global competitiveness not only in terms of cost quality and

                                                              product-mix but also in terms of global benchmarks of efficiency and productivity

                                                              In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                              NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                              an open globally integrated and competitive environment

                                                              The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                              policy goal On the demand side the strategy would be to create incremental

                                                              demand through promotional efforts creation of awareness and strengthening the

                                                              delivery chain particularly in rural areas On the supply side the strategy would be

                                                              to facilitate creation of additional capacity remove procedural and policy

                                                              bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                              investments in RampD and encourage the creation of infrastructure such as roads

                                                              railways and ports

                                                              The NSP acknowledges the low per capita consumption of steel in the country

                                                              especially in the rural areas and the need to boost steel consumption to improve

                                                              quality of life and help in meeting the growing aspirations of masses

                                                              In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                              industry would need additional capital In addition funds would be required for

                                                              technological upgrade of existing facilities In order to mobilize such vast resources

                                                              NSP seeks to encourage foreign direct investment In addition the policy also

                                                              seeks to make the fiscal incentives available to infrastructure projects accessible

                                                              to the steel industry

                                                              The NSP seeks to support developing of risk-hedging instruments like futures and

                                                              derivatives to contain price volatility in the steel market

                                                              The NSP seeks to strengthen the existing training and research facilities available

                                                              to the domestic steel industry so as to provide suitable training programmes

                                                              especially for the secondary small-scale units and also to collect and analyse data

                                                              on important parameters of the industry

                                                              The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                              capability for special types of steel substitute coking coal use iron ore fines

                                                              develop new products suited to rural needs enhance material and energy

                                                              efficiency utilize waste and arrest environmental degradation

                                                              The NSP acknowledges the important role played by the secondary steel sector in

                                                              providing employment meeting local demand of steel in rural and semi-urban

                                                              areas and meeting the countryrsquos demand of some special products and seeks to

                                                              endeavour to provide the necessary feedstock to these units at reasonable prices

                                                              from major plants through the existing mechanism of State Small Industries

                                                              Corporations

                                                              The NSP recognizes the fact that integration of the Indian steel industry with the

                                                              global economy requires that the industry should be protected from unfair trade

                                                              practices The NSP therefore envisages institution of mechanisms for import

                                                              surveillance and monitoring export subsidies in other countries

                                                              The present per capita consumption of steel in the country is very low compared to the

                                                              world average As mentioned above one of the objectives of the NSP is to augment

                                                              the demand and consumption of steel in the country by conscious promotion of steel

                                                              usage With a view to create a mass awareness campaign on conscious promotion of

                                                              steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                              the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                              The Committee is being serviced by Institute for Steel Development and Growth

                                                              (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                              way of an awareness campaign with particular emphasis on rural sectors The

                                                              Committee also aims at educating the designers architects builders and planners

                                                              regarding the qualitative and cost effective applications of steel in various structures

                                                              including buildings bridges flyovers and airports

                                                              FUTURE OF INDIAN STEEL INDUSTRY

                                                              India is amongst a few countries in the world having the dual advantage of fast

                                                              growing domestic demand coupled with access to raw materials Further the trend

                                                              that is already discernible is that the axis of global steel production consumption is

                                                              shifting towards Asia With their large populations China and India already account for

                                                              35 of the total world steel production - more than double of Europe Asia is

                                                              expected to outpace other regions of the world to an even greater extent in the coming

                                                              years

                                                              Amongst the Asian nations China has established a huge unbridgeable lead It

                                                              is accepted that China will continue to be the leader However India is slated to

                                                              emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                              the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                              splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                              China swallowed almost 32 of global steel It is unlikely that future production and

                                                              consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                              has been the case over the last few years On the other hand it is sun-rise time for

                                                              India where the demand has increased by 7-8 in the last couple of years In the long

                                                              run Indian steel is likely to be more cost-effective since unlike China India has

                                                              relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                              can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                              However the position with coal is not so favourable Though thermal coal

                                                              reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                              traditional blast furnace route would require coking coal India does not have adequate

                                                              reserves of coking coal nor is the meagre amount available of appropriate quality

                                                              Thus the steel industry always had to contend with the dual problems of inadequate

                                                              availability and poor quality of Indian coking coal This has been partly addressed by

                                                              adopting alternative iron making processes that are not dependent on coking coal it

                                                              can not be denied that coal is the biggest cause for concern for bulk steel production

                                                              in India

                                                              Because of the shortage of indigenous coal attempts have been made by steel

                                                              producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                              mines in other countries This is the only long-term solution but with a global shortage

                                                              of coal it may not remain cost-effective in the long run

                                                              India is the seventh largest producer of steel and may further improve its position

                                                              going by the current trends A series of investment decisions by major domestic

                                                              players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                              POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                              The keen interest shown by various prospective investors is not only due to

                                                              expectations of strong growth in domestic demand but also due to indigenous

                                                              availability of key resources like iron ore and skilled workforce

                                                              After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                              steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                              finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                              2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                              consumption has accelerated to 91 per cent

                                                              With the likely growth of Indian economy at around 7 per cent per annum

                                                              demand for steel is expected to remain strong and is projected to reach a level of 90

                                                              million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                              demand is sustainable considering the fact that Indias per capita consumption of steel

                                                              is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                              very low level of per capita consumption of steel in India is highlighted further when

                                                              compared with the consumption levels of its peer group consisting of countries like

                                                              China Brazil Mexico and Republic of Korea as also with selected developed

                                                              countries

                                                              Though there are realistic constraints in India to achieving as rapid a growth as in

                                                              China there seems to be consensus among analysts that India is likely to witness a

                                                              growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                              percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                              achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                              more conservative due to cyclicity of steel business it may be mentioned that in a

                                                              country like India cyclicity is more in terms of prices rather than volumes of production

                                                              Exports

                                                              Similar optimism prevails with regard to export of iron and steel Export of steel

                                                              starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                              2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                              rising domestic demand and low capacity additions Exports now constitute around 17

                                                              per cent of total production and Indias presence in the developing and developed

                                                              world is being increasingly felt Indian steel producers have recently been able to

                                                              supply specialized grades and products used for sophisticated applications like

                                                              automobiles On the cost front some of our producers are counted amongst the least

                                                              cost producers of the world For an average reference plant India is competitively

                                                              placed in the middle of the hierarchy of steel producing nations

                                                              However we have a long way to go to catch up with the leading exporters of the

                                                              world such as Japan the CIS countries Brazil etc It is however expected that by

                                                              2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                              per cent of total projected production The projected export ratio compares well with

                                                              the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                              The projected production of steel by 2019-20 to meet the domestic and export

                                                              demand will be around 110 million tonnes Management of resources and

                                                              infrastructural growth is going to be critical in achievement of the production level

                                                              envisaged The broad requirements of various resources will increase manifold from

                                                              the current level The bottlenecks in availability of critical inputs and various facilities

                                                              need to be removed through concerted efforts of Government and industry The broad

                                                              strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                              sector has been discussed in the National Steel Policy which has been recently

                                                              approved by the Government

                                                              As stated earlier the long-term goal of the National Steel Policy is that India

                                                              should have a modern and efficient steel industry of world standards catering to a

                                                              diversified steel demand The focus of the policy is to achieve global competitiveness

                                                              not only in terms of cost quality and product mix but also in terms of global

                                                              benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                              pronged strategy to achieve these goals On the demand side the strategy would be

                                                              to create incremental demand through promotional efforts creation of awareness and

                                                              strengthening the delivery chain particularly in rural areas On the supply side the

                                                              strategy would be to facilitate creation of additional capacity remove procedural and

                                                              policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                              investments in RampD and HRD and encourage the creation of infrastructure such as

                                                              roads railways and ports

                                                              The production figures exports and imports of finished carbon steel and pig iron

                                                              and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                              Steel and SAIL attest to the continuing growth for both the sectors

                                                              FINDINGS

                                                              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 increased its profit over the year particularly in 2006-07

                                                              Both the companies are planning to adopt modern technology which is going to

                                                              help them to compete in world market but they need to be less dependent on

                                                              state of art technology and coal for long term prospects

                                                              Public sector has undergone retrenchment for the employees and improved

                                                              has its lobour productivity but it is still lacking behind as compared to private

                                                              sector

                                                              SAIL has reduced the no of accidents due to improper handling of machinery

                                                              still no of accidents are more than that of TATA Steel

                                                              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

                                                              ie 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 have to be met

                                                              comprehensively if we are to take our legitimate place in the world as a developed

                                                              nation by 2020

                                                              BIBLIOGRAPHY

                                                              Annual report (2006-07) published by ministry of steel

                                                              Annual report (2006-07) published by TATA Steel

                                                              Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                              REPORTrsquo posted by SAIL on its website

                                                              lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                              held on 07 Nov 2006

                                                              Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                              wwwsteelnicin (Official website of ministry of industry)

                                                              wwwtatasteelcom (Official website of TATA Steel)

                                                              wwwsailcoin (Official website of Steel Authority of India)

                                                              wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                              wwwjpcindiansteelnicin (Website of joint planning committee)

                                                              • DATA ANALYSIS
                                                              • Comparison between TATA Steel and Steel Authority of India
                                                              • Production
                                                              • Quantity 000 Tonnes
                                                              • Financials
                                                              • Research and Development
                                                              • (Rs Crore)
                                                              • TATA Steel
                                                              • Steel Authority of India
                                                              • Environment
                                                              • TATA Steel
                                                              • Emissions effluents and wastes
                                                              • Emissions
                                                              • Waste handling
                                                              • Effluent Management
                                                              • Steel Authority of India
                                                              • Solid Waste Management
                                                              • Environmental Plantation
                                                              • Environmental Recognitions
                                                              • Workforce and Welfare of Society
                                                              • TATA steel
                                                              • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                              • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                              • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                              • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                              • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                              • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                              • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                              • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                              • Steel Authority of India
                                                              • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                              • Technology
                                                              • Steel Authority of India
                                                              • Safety measures
                                                              • Tata Steel
                                                              • Steel Authority of India
                                                              • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                              • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                              • Measures taken by Indian government to improve the industry
                                                              • Now letrsquos 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-
                                                              • Special assistance being provided by Ministry of Steel to Private Sector
                                                              • FUTURE OF INDIAN STEEL INDUSTRY

                                                                The year 2006-07 has seen the highest turnover and profits continuing the trend

                                                                of the past four years The Company achieved the best ever sales turnover and

                                                                profitability during the year under review A robust Indian economy firm steel prices

                                                                higher volumes and several improvement initiatives contributed to the record

                                                                performance Finished steel sales were higher by 1133 at 451 million tonnes over

                                                                the previous year Export turnover was lower by about 5 due to lower volumes

                                                                Average price realisation improved mainly due to higher prices of hot rolled

                                                                coilssheets Operating profit was higher by over Rs 1000 crores at Rs 6973 crores

                                                                (2005-06 Rs 5938 crores) an increase of 17 over the previous year

                                                                Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores)

                                                                due to additional borrowings for the Companyrsquos domestic expansion programs and

                                                                funding Companyrsquos contribution for financing the acquisition of Corus Group plc After

                                                                providing for Rs 819 crores for depreciation (2005-06 Rs 775 crores) and Rs 152

                                                                crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                                before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                                after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                                20 compared to the previous year

                                                                The record financial results would not have been possible without a matching

                                                                performance by the operating departments including the raw materials division The

                                                                year witnessed the best ever crude steel production by the Company at 505 million

                                                                tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                                first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                                upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                                rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                                Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                                increase in production was backed by improvements in operating practices and

                                                                productivity resulting in a reduction in consumption of raw materials energy

                                                                refractories etc

                                                                Steel Authority of India

                                                                Financial Year 2006-07 has been eventful year for the company with further

                                                                momentum in improving operational efficiencies laying strong foundation and building

                                                                road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                                undertaken with its human resource at the core During the year the company got the

                                                                distinction of first metal company in the country to reach a market capitalization of Rs

                                                                50000 crore

                                                                There have been improvements in all financial parameters which are shown in

                                                                the table given below-

                                                                SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                                before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                                previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                                increase of 55

                                                                Research and Development

                                                                Chart showing production of both the companies

                                                                (Rs Crore)

                                                                TATA Steel

                                                                The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                                develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                                steel for body panels

                                                                Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                                coke energy conservation waste utilisation sintering blast furnace productivity and

                                                                phosphorous reduction product development and improvement in life of plant and

                                                                machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                                sealed and over 100 are in process

                                                                Steel Authority of India

                                                                Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                                innovative technological inputs to different units of SAIL with special emphasis on

                                                                cost reduction product development and application quality improvement energy

                                                                conservation and automation Several new products were developed and

                                                                commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                                Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                                specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                                micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                                Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                                Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                                strengthened its technology marketing efforts by providing consultancy services

                                                                organising specialised testing and transfer of technological innovations to outside

                                                                customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                                Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                                Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                                During the year 1998 technical papers were publishedpresented besides filing

                                                                of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                                awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                                achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                                Government of India

                                                                Environment

                                                                TATA Steel

                                                                Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                                Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                                has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                                Jamshedpur is the only town in the country which

                                                                Significant achievements by the Company include an improvement in

                                                                environment and resource conservation including a reduction in green house erosion

                                                                raw materials and water consumption The Company has increased waste re-use and

                                                                re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                                the-art pollution control systems being installed to prevent and control pollution The

                                                                Company has almost doubled its capital investment in Pollution Abatement in the last

                                                                five years

                                                                Emissions effluents and wastes

                                                                Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                                most relevance to the steel industry Considerable reduction has been effected by

                                                                Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                                granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                                Tata Steelrsquos activities

                                                                Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                                tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                                Hazardous Waste under Basel Convention The Company does not import or export

                                                                any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                                generated are handled as per the requirement of the Hazardous Waste Management

                                                                and Handling Rules 19892000

                                                                Emissions

                                                                Tata Steel has undertaken several initiatives which have resulted in

                                                                considerable reduction in stack emission Emissions are well below the Indian and

                                                                international standards The emission load including particulate matter Sulphur

                                                                Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                                undertaken at the Steel Works

                                                                Waste handling

                                                                Most of the solid waste generated from Steel Works is recycled or reused 18

                                                                of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                                was used to fill low-lying areas and for peripheral road construction around

                                                                Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                                power plants was dumped in a designated dump area

                                                                Effluent Management

                                                                Waste water from the steel making process is being treated with best available

                                                                physio-chemical methods as well as being recycled Waste water from the coke plant

                                                                is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                                organisms The Company has reduced the levels of total pollutant discharge in waste

                                                                water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                                Steel Authority of India

                                                                Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                                environmentally responsible manner to comply with applicable regulations and striving

                                                                to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                                efficiency and optimize resource consumption through various measures viz

                                                                improvement in process technology in the areas of raw materials coke iron and steel

                                                                making reuserecycle of the by-products generated and conservation of energy and

                                                                water

                                                                Solid Waste Management

                                                                During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                                and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                                Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                                these wastes are being made through internal recycling and selling to outside

                                                                agencies The wastes generated in the steel plants are being utilized mainly through

                                                                their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                during April-September 2006

                                                                Environmental Plantation

                                                                Trees have a significant role in protection of environment and ecological balance

                                                                Extensive afforestation programme are being followed in all the plants and mines The

                                                                basis of choosing the species of plants mainly depends on local soil characteristics

                                                                and prevailing meteorological conditions The green belt developed by afforestation

                                                                adds to the aesthetic environment which becomes dust and noise barriers

                                                                A total number of 145521 saplings have been planted covering an area of 637

                                                                hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                hectare in 2004-05 in and around the steel plants of SAIL

                                                                Environmental Recognitions

                                                                SAIL plants have been awarded various prizes for environmental management in

                                                                their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                environmental economic andsocial dimensions of sustainable development and the

                                                                Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                for 2005 from International Greenland Society

                                                                Workforce and Welfare of Society

                                                                TATA steel

                                                                Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                provide a work environment that will ensure a sense of purpose and personal growth

                                                                for each individual The wish of the company is to see the smile on every face

                                                                everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                people and enriched empowered and enhanced their lives

                                                                Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                Tata Steel were the first of their kind in India and some even in the western countries

                                                                at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                source of its competitiveness It focuses on constantly updating and challenging

                                                                intellectual capabilities to enable them to excel in performance Special efforts are

                                                                made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                available with its people through Knowledge Management and sharing of best

                                                                practices

                                                                In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                mutual co-operation coordination and understanding between the Management and

                                                                the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                transparency fairness and equity in all its interactions with its employees to create an

                                                                enthused and happy workforce

                                                                In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                assistance in the fields of education vocational training self-employment and

                                                                family welfare

                                                                Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                surgical treatment for preventive and curative interventions to people in

                                                                inaccessible rural areas

                                                                Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                for the 1920 Antwerp Olympics

                                                                The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                track was inaugurated in 1991 The complex also houses facilities for handball

                                                                tennis volleyball hockey basketball boxing table tennis and a modern

                                                                gymnasium

                                                                The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                services for the betterment of the people in and around Jamshedpur

                                                                At times of natural calamities the company has rushe immediate relief and off

                                                                ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                fl ood ravaged Orissa and other such aff ected areas

                                                                Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                er a unique environment for the children of Jamshedpur to grow up in

                                                                In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                Jamshedpur has emerged as the one of the best cities in India

                                                                Steel Authority of India

                                                                The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                executives and 123005 non-executives The total reduction in manpower achieved

                                                                during the year stood at 4864 which included separation of 881 employees through

                                                                voluntary retirement The labour productivity improved by around 12 over previous

                                                                year to 150 tonne crude steelmanyear

                                                                Some of the areas of assistance which are available to the weaker sections are the

                                                                following

                                                                The company has provided land for construction of school buildings in some of

                                                                the steel townships as well as in other places for spreading education among

                                                                the masses

                                                                The company has constructed roads in remote areas around the steel plants

                                                                and also where the captive mines are located to improve communication and

                                                                also increase activities such as organisation of health camps school facilities

                                                                drinking water etc under the peripheral development schemes

                                                                Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                providing them with education boarding and lodging facilities

                                                                Construction of bridges by-pass roads metal-morum path waterways

                                                                levellingdressing area around township pre-mixed roads Installation of hand-

                                                                pumps tube wells and wells for villagers

                                                                Construction of school buildings (including for mentally retarded deaf and

                                                                dumb children) madarsas providing school furniture therein and construction

                                                                of hostels womenrsquos college building etc

                                                                Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                engineering students in various disciplines to encourage technical education

                                                                among them

                                                                In many cases tuition fee in company run schools is exempt for SCST

                                                                students Steps are taken to provide education to more and more tribal children

                                                                in company schools

                                                                The unemployed SCST youth are given specialized training in various

                                                                technical trades to develop skill and knowledge Such training is provided free

                                                                of cost

                                                                Adult literacy campaign is carried out in most of the steel townships Every year

                                                                more and more men and women are being covered in this campaign

                                                                Development of fishery and cottage industry providing sewing machines to

                                                                village mahila mandals and promoting other self-employment generation

                                                                schemes

                                                                SAIL has established a hockey academy with stadium and hostel facilities at

                                                                Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                academy was successful in spotting a number of young talented tribal players

                                                                and grooms them under expertise of ex-Olympian

                                                                Technology

                                                                The biggest boost to efficiency in the steel industry has come from the increased

                                                                use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                suggests there is restructuring potential

                                                                TATA Steel

                                                                Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                international companies also took part in the exhibition Participating companies from

                                                                countries all over the world exhibited latest technologies and know-how List of

                                                                participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                companies of national and international repute China was the partner country for the

                                                                International Trade Fair this year

                                                                In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                cutting-edge technology used in iron ore mining pioneering human resource

                                                                practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                steel company

                                                                The 6th International Trade Fair and Conference an institutionalised global

                                                                event is considered to be one of the most prestigious forums for national as well

                                                                international participants It is a conclave of the finest minds concerned with the future

                                                                direction and growth of these sectors The forum provided the worlds most eminent

                                                                metallurgists manufacturers of metallurgical and mining machinery and related

                                                                sectors professionals analysts and experts with the opportunity to exchange views on

                                                                emerging technologies synergy and strengths and open up wider horizons for

                                                                sectorial development

                                                                Tata Steel to adopt Corus technology

                                                                Tata Steel plans to implement alternate technology used by the British steel

                                                                maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                production according to Mr B Muthuraman Managing Director Tata Steel

                                                                ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                newspersons on the sidelines of the 34th National Management Convention organised

                                                                by the All-India Management Association However he declined to give further details

                                                                on the type of technology the Indian steel giant plans to implement

                                                                Steel Authority of India

                                                                Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                and productive capacity and in the process become more energy-efficient and

                                                                improve quality The key component of the ongoing modernisation drive - already

                                                                completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                continuous casting techniques A senior SAIL official says Continuous casting and

                                                                basic oxygen furnaces ensure better quality steel through processes more easily

                                                                monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                more automated and permits greater flexibility Continuous casting is more efficient

                                                                than the traditional ingot casting methods and gives increased yields while enabling

                                                                better quality standards SAIL is also modernising its finishing mills and is adding

                                                                secondary refining facilities to improve quality

                                                                Safety measures

                                                                A unique feature of safety management in steel industry is that a bipartite forum

                                                                named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                workshops training programme safety competitions for member organisations JCSSI

                                                                with the co-operation and support of Trade Union representatives formulates policies

                                                                and guidelines for its member plants and monitors the implementation

                                                                Tata Steel

                                                                Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                Safety department and a Safety Trophy helped spread the message all across the

                                                                company

                                                                TATA reaffirms its commitment to provide safe working place and clean

                                                                environment to its employees and other stakeholders as an integral part of its

                                                                business philosophy and values We will continually enhance our Environmental

                                                                Occupational Health amp Safety (EHS) performance in our activities products and

                                                                services through a structured EHS management framework Towards this

                                                                commitment we shall

                                                                Establish and achieve EHS objectives and targets

                                                                Ensure compliance with applicable EHS legislation and other requirement and

                                                                go beyond

                                                                Conserve natural resources and energy by constantly seeking to reduce

                                                                consumption and promoting waste avoidance and recycling measures

                                                                Eliminate minimize andor control adverse environmental impacts and

                                                                occupational health and safety risks by adopting appropriate state-of-the-art

                                                                technology and best EHS management practices at all levels sand functions

                                                                Enhance awareness skill and competence of our employees and contractors

                                                                so as to enable them to demonstrate their involvement responsibility and

                                                                accountability for sound EHS performance

                                                                Steel Authority of India

                                                                SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                formulated and review of implementation of APP is done during Heads of

                                                                Safety meeting

                                                                Internal and external safety audits of major departments particularly hazardous

                                                                areas are conducted every year and points arising from these audits are

                                                                liquidated Safety aspects have been incorporated in standard operating

                                                                practices (SOP) and standard maintenance practices (SMP)

                                                                All major capital repairsshut downs are closely monitored round the clock

                                                                Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                grass-root level apart from regular inspections as per checklists to identify

                                                                unsafe conditionsacts

                                                                Safety training is imparted to target group employees at various levels HRD

                                                                intervention in the area of safety covers Heads of Departments Line Managers

                                                                amp Departmental Safety Officers Besides area specific workshops are

                                                                conducted at different locations on important topics like gas safety railroad

                                                                safety safety in iron steel amp coke making etc

                                                                Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                standards in the company by taking measures like intensive safety drives in works

                                                                area and conducting safety audits in hazardous departments of different plants and

                                                                mines In addition specific workshops on safety aspects were organised in various

                                                                SAIL steel plants

                                                                Measures taken by Indian government to improve the industry

                                                                Now letrsquos 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-

                                                                1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                among others was removed from the list of industries reserved for the public

                                                                sector and also exempted from the provisions of compulsory licensing under the

                                                                Industries (Development and Regulation) Act 1951

                                                                2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                of `high priority industries for automatic approval for foreign equity investment up

                                                                to 51 This limit has been recently increased to 100

                                                                3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                time it was ensured that priority continued to be accorded for meeting the

                                                                requirements of small scale industries exporters of engineering goods and North

                                                                Eastern Region of the country besides strategic sectors such as Defence and

                                                                Railways

                                                                4 The trade policy has been liberalised and import and export of iron and steel is

                                                                freely allowed There are no quantitative restrictions on import of iron and steel

                                                                items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                steel have drastically come down since 1991-92 levels and the government is

                                                                committed to bring them down to the international levels In Chapter 72 there are

                                                                two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                5 Iron amp Steel are freely importable as per the Extant Policy

                                                                6 Iron amp Steel are freely exportable

                                                                7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                8 The floor price for seconds and defectives continues till date

                                                                9 Imports of seconds and defectives of steel are allowed only through three

                                                                designated ports of Mumbai Calcutta and Chennai

                                                                10Mandatory pre inspection certificate by a reputed international agency for every

                                                                import consignment of seconds and defectives

                                                                11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                15 per cent to 5 per cent

                                                                12Further customs duty on several raw materials used by the steel sector like

                                                                noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                coking coal to zero

                                                                13To bring down the prices of steel the excise duty on steel products was reduced

                                                                from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                cut on moderating prices was not achieved

                                                                14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                further reduced from 20 to 10

                                                                Special assistance being provided by Ministry of Steel to Private Sector

                                                                1 Ministry of Steel is extending all possible support as detailed below for the

                                                                development of Iron and Steel Sector in the country

                                                                2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                new plants and expansion of existing ones wherever applied for

                                                                3 To ensure an un-interrupted supply of raw materials to the producers

                                                                4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                clearance of projects

                                                                5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                Plants are held at the level of Secretary

                                                                6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                industry so that their absence does not lead to bottlenecks in the future growth of

                                                                the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                country are members of this Institute which has been set up with the objective of

                                                                promoting developing and propagating the proper and effective use of steel

                                                                8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                major steel plants being implemented Govt has setup a Project Coordination

                                                                Group under the Chairmanship of Steel Minister

                                                                NATIONAL STEEL POLICY 2005

                                                                The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                development and as such great importance is attached to capacity expansion in line

                                                                with expected demand at cost and prices which make Indian steel internationally

                                                                competitive The existing regime of liberalization decontrol and deregulation of

                                                                industry in the country has opened up new opportunities for the expansion of the steel

                                                                industry With a view to accelerating the growth of the steel sector and attaining the

                                                                vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                formulated a National Steel Policy (NSP) in 2005

                                                                The following salient features can be derived after analysing the NSP 2005

                                                                The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                towards reform restructuring and globalisation

                                                                The long-term goal of the NSP is that India should have a modern and efficient

                                                                steel industry of world standards catering to diversified steel demand The focus of

                                                                the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                an open globally integrated and competitive environment

                                                                The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                policy goal On the demand side the strategy would be to create incremental

                                                                demand through promotional efforts creation of awareness and strengthening the

                                                                delivery chain particularly in rural areas On the supply side the strategy would be

                                                                to facilitate creation of additional capacity remove procedural and policy

                                                                bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                investments in RampD and encourage the creation of infrastructure such as roads

                                                                railways and ports

                                                                The NSP acknowledges the low per capita consumption of steel in the country

                                                                especially in the rural areas and the need to boost steel consumption to improve

                                                                quality of life and help in meeting the growing aspirations of masses

                                                                In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                industry would need additional capital In addition funds would be required for

                                                                technological upgrade of existing facilities In order to mobilize such vast resources

                                                                NSP seeks to encourage foreign direct investment In addition the policy also

                                                                seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                to the steel industry

                                                                The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                derivatives to contain price volatility in the steel market

                                                                The NSP seeks to strengthen the existing training and research facilities available

                                                                to the domestic steel industry so as to provide suitable training programmes

                                                                especially for the secondary small-scale units and also to collect and analyse data

                                                                on important parameters of the industry

                                                                The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                capability for special types of steel substitute coking coal use iron ore fines

                                                                develop new products suited to rural needs enhance material and energy

                                                                efficiency utilize waste and arrest environmental degradation

                                                                The NSP acknowledges the important role played by the secondary steel sector in

                                                                providing employment meeting local demand of steel in rural and semi-urban

                                                                areas and meeting the countryrsquos demand of some special products and seeks to

                                                                endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                from major plants through the existing mechanism of State Small Industries

                                                                Corporations

                                                                The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                global economy requires that the industry should be protected from unfair trade

                                                                practices The NSP therefore envisages institution of mechanisms for import

                                                                surveillance and monitoring export subsidies in other countries

                                                                The present per capita consumption of steel in the country is very low compared to the

                                                                world average As mentioned above one of the objectives of the NSP is to augment

                                                                the demand and consumption of steel in the country by conscious promotion of steel

                                                                usage With a view to create a mass awareness campaign on conscious promotion of

                                                                steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                The Committee is being serviced by Institute for Steel Development and Growth

                                                                (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                way of an awareness campaign with particular emphasis on rural sectors The

                                                                Committee also aims at educating the designers architects builders and planners

                                                                regarding the qualitative and cost effective applications of steel in various structures

                                                                including buildings bridges flyovers and airports

                                                                FUTURE OF INDIAN STEEL INDUSTRY

                                                                India is amongst a few countries in the world having the dual advantage of fast

                                                                growing domestic demand coupled with access to raw materials Further the trend

                                                                that is already discernible is that the axis of global steel production consumption is

                                                                shifting towards Asia With their large populations China and India already account for

                                                                35 of the total world steel production - more than double of Europe Asia is

                                                                expected to outpace other regions of the world to an even greater extent in the coming

                                                                years

                                                                Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                is accepted that China will continue to be the leader However India is slated to

                                                                emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                China swallowed almost 32 of global steel It is unlikely that future production and

                                                                consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                has been the case over the last few years On the other hand it is sun-rise time for

                                                                India where the demand has increased by 7-8 in the last couple of years In the long

                                                                run Indian steel is likely to be more cost-effective since unlike China India has

                                                                relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                However the position with coal is not so favourable Though thermal coal

                                                                reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                traditional blast furnace route would require coking coal India does not have adequate

                                                                reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                Thus the steel industry always had to contend with the dual problems of inadequate

                                                                availability and poor quality of Indian coking coal This has been partly addressed by

                                                                adopting alternative iron making processes that are not dependent on coking coal it

                                                                can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                in India

                                                                Because of the shortage of indigenous coal attempts have been made by steel

                                                                producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                mines in other countries This is the only long-term solution but with a global shortage

                                                                of coal it may not remain cost-effective in the long run

                                                                India is the seventh largest producer of steel and may further improve its position

                                                                going by the current trends A series of investment decisions by major domestic

                                                                players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                The keen interest shown by various prospective investors is not only due to

                                                                expectations of strong growth in domestic demand but also due to indigenous

                                                                availability of key resources like iron ore and skilled workforce

                                                                After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                consumption has accelerated to 91 per cent

                                                                With the likely growth of Indian economy at around 7 per cent per annum

                                                                demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                very low level of per capita consumption of steel in India is highlighted further when

                                                                compared with the consumption levels of its peer group consisting of countries like

                                                                China Brazil Mexico and Republic of Korea as also with selected developed

                                                                countries

                                                                Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                China there seems to be consensus among analysts that India is likely to witness a

                                                                growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                country like India cyclicity is more in terms of prices rather than volumes of production

                                                                Exports

                                                                Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                rising domestic demand and low capacity additions Exports now constitute around 17

                                                                per cent of total production and Indias presence in the developing and developed

                                                                world is being increasingly felt Indian steel producers have recently been able to

                                                                supply specialized grades and products used for sophisticated applications like

                                                                automobiles On the cost front some of our producers are counted amongst the least

                                                                cost producers of the world For an average reference plant India is competitively

                                                                placed in the middle of the hierarchy of steel producing nations

                                                                However we have a long way to go to catch up with the leading exporters of the

                                                                world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                per cent of total projected production The projected export ratio compares well with

                                                                the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                The projected production of steel by 2019-20 to meet the domestic and export

                                                                demand will be around 110 million tonnes Management of resources and

                                                                infrastructural growth is going to be critical in achievement of the production level

                                                                envisaged The broad requirements of various resources will increase manifold from

                                                                the current level The bottlenecks in availability of critical inputs and various facilities

                                                                need to be removed through concerted efforts of Government and industry The broad

                                                                strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                sector has been discussed in the National Steel Policy which has been recently

                                                                approved by the Government

                                                                As stated earlier the long-term goal of the National Steel Policy is that India

                                                                should have a modern and efficient steel industry of world standards catering to a

                                                                diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                not only in terms of cost quality and product mix but also in terms of global

                                                                benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                pronged strategy to achieve these goals On the demand side the strategy would be

                                                                to create incremental demand through promotional efforts creation of awareness and

                                                                strengthening the delivery chain particularly in rural areas On the supply side the

                                                                strategy would be to facilitate creation of additional capacity remove procedural and

                                                                policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                roads railways and ports

                                                                The production figures exports and imports of finished carbon steel and pig iron

                                                                and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                Steel and SAIL attest to the continuing growth for both the sectors

                                                                FINDINGS

                                                                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 increased its profit over the year particularly in 2006-07

                                                                Both the companies are planning to adopt modern technology which is going to

                                                                help them to compete in world market but they need to be less dependent on

                                                                state of art technology and coal for long term prospects

                                                                Public sector has undergone retrenchment for the employees and improved

                                                                has its lobour productivity but it is still lacking behind as compared to private

                                                                sector

                                                                SAIL has reduced the no of accidents due to improper handling of machinery

                                                                still no of accidents are more than that of TATA Steel

                                                                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

                                                                ie 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 have to be met

                                                                comprehensively if we are to take our legitimate place in the world as a developed

                                                                nation by 2020

                                                                BIBLIOGRAPHY

                                                                Annual report (2006-07) published by ministry of steel

                                                                Annual report (2006-07) published by TATA Steel

                                                                Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                REPORTrsquo posted by SAIL on its website

                                                                lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                held on 07 Nov 2006

                                                                Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                wwwsteelnicin (Official website of ministry of industry)

                                                                wwwtatasteelcom (Official website of TATA Steel)

                                                                wwwsailcoin (Official website of Steel Authority of India)

                                                                wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                • DATA ANALYSIS
                                                                • Comparison between TATA Steel and Steel Authority of India
                                                                • Production
                                                                • Quantity 000 Tonnes
                                                                • Financials
                                                                • Research and Development
                                                                • (Rs Crore)
                                                                • TATA Steel
                                                                • Steel Authority of India
                                                                • Environment
                                                                • TATA Steel
                                                                • Emissions effluents and wastes
                                                                • Emissions
                                                                • Waste handling
                                                                • Effluent Management
                                                                • Steel Authority of India
                                                                • Solid Waste Management
                                                                • Environmental Plantation
                                                                • Environmental Recognitions
                                                                • Workforce and Welfare of Society
                                                                • TATA steel
                                                                • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                • Steel Authority of India
                                                                • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                • Technology
                                                                • Steel Authority of India
                                                                • Safety measures
                                                                • Tata Steel
                                                                • Steel Authority of India
                                                                • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                • Measures taken by Indian government to improve the industry
                                                                • Now letrsquos 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-
                                                                • Special assistance being provided by Ministry of Steel to Private Sector
                                                                • FUTURE OF INDIAN STEEL INDUSTRY

                                                                  crores towards employee separation scheme (2005-06 Rs 53 crores) the profit

                                                                  before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit

                                                                  after taxes was higher at Rs 4222 crores (2005-06 Rs 3506 crores) an increase of

                                                                  20 compared to the previous year

                                                                  The record financial results would not have been possible without a matching

                                                                  performance by the operating departments including the raw materials division The

                                                                  year witnessed the best ever crude steel production by the Company at 505 million

                                                                  tonnes an increase of 67 over the previous year Jamshedpur Plant became the

                                                                  first plant in India to produce more than 5 million tonnes of crude steel in a year The

                                                                  upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its

                                                                  rated capacity of 18 million tonnes Among the Finishing Mills the output at the Cold

                                                                  Rolling Mill and the Hot Strip Mill exceeded their rated capacities The all-round

                                                                  increase in production was backed by improvements in operating practices and

                                                                  productivity resulting in a reduction in consumption of raw materials energy

                                                                  refractories etc

                                                                  Steel Authority of India

                                                                  Financial Year 2006-07 has been eventful year for the company with further

                                                                  momentum in improving operational efficiencies laying strong foundation and building

                                                                  road map for modernisation and expansion of SAIL Plants with several new initiatives

                                                                  undertaken with its human resource at the core During the year the company got the

                                                                  distinction of first metal company in the country to reach a market capitalization of Rs

                                                                  50000 crore

                                                                  There have been improvements in all financial parameters which are shown in

                                                                  the table given below-

                                                                  SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                                  before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                                  previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                                  increase of 55

                                                                  Research and Development

                                                                  Chart showing production of both the companies

                                                                  (Rs Crore)

                                                                  TATA Steel

                                                                  The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                                  develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                                  steel for body panels

                                                                  Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                                  coke energy conservation waste utilisation sintering blast furnace productivity and

                                                                  phosphorous reduction product development and improvement in life of plant and

                                                                  machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                                  sealed and over 100 are in process

                                                                  Steel Authority of India

                                                                  Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                                  innovative technological inputs to different units of SAIL with special emphasis on

                                                                  cost reduction product development and application quality improvement energy

                                                                  conservation and automation Several new products were developed and

                                                                  commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                                  Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                                  specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                                  micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                                  Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                                  Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                                  strengthened its technology marketing efforts by providing consultancy services

                                                                  organising specialised testing and transfer of technological innovations to outside

                                                                  customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                                  Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                                  Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                                  During the year 1998 technical papers were publishedpresented besides filing

                                                                  of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                                  awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                                  achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                                  Government of India

                                                                  Environment

                                                                  TATA Steel

                                                                  Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                                  Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                                  has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                                  Jamshedpur is the only town in the country which

                                                                  Significant achievements by the Company include an improvement in

                                                                  environment and resource conservation including a reduction in green house erosion

                                                                  raw materials and water consumption The Company has increased waste re-use and

                                                                  re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                                  the-art pollution control systems being installed to prevent and control pollution The

                                                                  Company has almost doubled its capital investment in Pollution Abatement in the last

                                                                  five years

                                                                  Emissions effluents and wastes

                                                                  Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                                  most relevance to the steel industry Considerable reduction has been effected by

                                                                  Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                                  granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                                  Tata Steelrsquos activities

                                                                  Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                                  tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                                  Hazardous Waste under Basel Convention The Company does not import or export

                                                                  any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                                  generated are handled as per the requirement of the Hazardous Waste Management

                                                                  and Handling Rules 19892000

                                                                  Emissions

                                                                  Tata Steel has undertaken several initiatives which have resulted in

                                                                  considerable reduction in stack emission Emissions are well below the Indian and

                                                                  international standards The emission load including particulate matter Sulphur

                                                                  Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                                  undertaken at the Steel Works

                                                                  Waste handling

                                                                  Most of the solid waste generated from Steel Works is recycled or reused 18

                                                                  of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                                  was used to fill low-lying areas and for peripheral road construction around

                                                                  Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                                  power plants was dumped in a designated dump area

                                                                  Effluent Management

                                                                  Waste water from the steel making process is being treated with best available

                                                                  physio-chemical methods as well as being recycled Waste water from the coke plant

                                                                  is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                                  organisms The Company has reduced the levels of total pollutant discharge in waste

                                                                  water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                                  Steel Authority of India

                                                                  Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                                  environmentally responsible manner to comply with applicable regulations and striving

                                                                  to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                                  efficiency and optimize resource consumption through various measures viz

                                                                  improvement in process technology in the areas of raw materials coke iron and steel

                                                                  making reuserecycle of the by-products generated and conservation of energy and

                                                                  water

                                                                  Solid Waste Management

                                                                  During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                                  and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                                  Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                                  these wastes are being made through internal recycling and selling to outside

                                                                  agencies The wastes generated in the steel plants are being utilized mainly through

                                                                  their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                  during April-September 2006

                                                                  Environmental Plantation

                                                                  Trees have a significant role in protection of environment and ecological balance

                                                                  Extensive afforestation programme are being followed in all the plants and mines The

                                                                  basis of choosing the species of plants mainly depends on local soil characteristics

                                                                  and prevailing meteorological conditions The green belt developed by afforestation

                                                                  adds to the aesthetic environment which becomes dust and noise barriers

                                                                  A total number of 145521 saplings have been planted covering an area of 637

                                                                  hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                  hectare in 2004-05 in and around the steel plants of SAIL

                                                                  Environmental Recognitions

                                                                  SAIL plants have been awarded various prizes for environmental management in

                                                                  their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                  the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                  environmental economic andsocial dimensions of sustainable development and the

                                                                  Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                  Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                  Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                  for 2005 from International Greenland Society

                                                                  Workforce and Welfare of Society

                                                                  TATA steel

                                                                  Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                  and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                  enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                  provide a work environment that will ensure a sense of purpose and personal growth

                                                                  for each individual The wish of the company is to see the smile on every face

                                                                  everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                  people and enriched empowered and enhanced their lives

                                                                  Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                  brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                  Tata Steel were the first of their kind in India and some even in the western countries

                                                                  at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                  source of its competitiveness It focuses on constantly updating and challenging

                                                                  intellectual capabilities to enable them to excel in performance Special efforts are

                                                                  made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                  workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                  available with its people through Knowledge Management and sharing of best

                                                                  practices

                                                                  In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                  mutual co-operation coordination and understanding between the Management and

                                                                  the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                  among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                  transparency fairness and equity in all its interactions with its employees to create an

                                                                  enthused and happy workforce

                                                                  In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                  assistance in the fields of education vocational training self-employment and

                                                                  family welfare

                                                                  Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                  12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                  surgical treatment for preventive and curative interventions to people in

                                                                  inaccessible rural areas

                                                                  Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                  for the 1920 Antwerp Olympics

                                                                  The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                  track was inaugurated in 1991 The complex also houses facilities for handball

                                                                  tennis volleyball hockey basketball boxing table tennis and a modern

                                                                  gymnasium

                                                                  The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                  services for the betterment of the people in and around Jamshedpur

                                                                  At times of natural calamities the company has rushe immediate relief and off

                                                                  ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                  fl ood ravaged Orissa and other such aff ected areas

                                                                  Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                  er a unique environment for the children of Jamshedpur to grow up in

                                                                  In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                  Jamshedpur has emerged as the one of the best cities in India

                                                                  Steel Authority of India

                                                                  The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                  executives and 123005 non-executives The total reduction in manpower achieved

                                                                  during the year stood at 4864 which included separation of 881 employees through

                                                                  voluntary retirement The labour productivity improved by around 12 over previous

                                                                  year to 150 tonne crude steelmanyear

                                                                  Some of the areas of assistance which are available to the weaker sections are the

                                                                  following

                                                                  The company has provided land for construction of school buildings in some of

                                                                  the steel townships as well as in other places for spreading education among

                                                                  the masses

                                                                  The company has constructed roads in remote areas around the steel plants

                                                                  and also where the captive mines are located to improve communication and

                                                                  also increase activities such as organisation of health camps school facilities

                                                                  drinking water etc under the peripheral development schemes

                                                                  Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                  Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                  providing them with education boarding and lodging facilities

                                                                  Construction of bridges by-pass roads metal-morum path waterways

                                                                  levellingdressing area around township pre-mixed roads Installation of hand-

                                                                  pumps tube wells and wells for villagers

                                                                  Construction of school buildings (including for mentally retarded deaf and

                                                                  dumb children) madarsas providing school furniture therein and construction

                                                                  of hostels womenrsquos college building etc

                                                                  Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                  engineering students in various disciplines to encourage technical education

                                                                  among them

                                                                  In many cases tuition fee in company run schools is exempt for SCST

                                                                  students Steps are taken to provide education to more and more tribal children

                                                                  in company schools

                                                                  The unemployed SCST youth are given specialized training in various

                                                                  technical trades to develop skill and knowledge Such training is provided free

                                                                  of cost

                                                                  Adult literacy campaign is carried out in most of the steel townships Every year

                                                                  more and more men and women are being covered in this campaign

                                                                  Development of fishery and cottage industry providing sewing machines to

                                                                  village mahila mandals and promoting other self-employment generation

                                                                  schemes

                                                                  SAIL has established a hockey academy with stadium and hostel facilities at

                                                                  Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                  academy was successful in spotting a number of young talented tribal players

                                                                  and grooms them under expertise of ex-Olympian

                                                                  Technology

                                                                  The biggest boost to efficiency in the steel industry has come from the increased

                                                                  use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                  share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                  now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                  among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                  crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                  suggests there is restructuring potential

                                                                  TATA Steel

                                                                  Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                  with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                  international companies also took part in the exhibition Participating companies from

                                                                  countries all over the world exhibited latest technologies and know-how List of

                                                                  participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                  Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                  companies of national and international repute China was the partner country for the

                                                                  International Trade Fair this year

                                                                  In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                  cutting-edge technology used in iron ore mining pioneering human resource

                                                                  practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                  steel company

                                                                  The 6th International Trade Fair and Conference an institutionalised global

                                                                  event is considered to be one of the most prestigious forums for national as well

                                                                  international participants It is a conclave of the finest minds concerned with the future

                                                                  direction and growth of these sectors The forum provided the worlds most eminent

                                                                  metallurgists manufacturers of metallurgical and mining machinery and related

                                                                  sectors professionals analysts and experts with the opportunity to exchange views on

                                                                  emerging technologies synergy and strengths and open up wider horizons for

                                                                  sectorial development

                                                                  Tata Steel to adopt Corus technology

                                                                  Tata Steel plans to implement alternate technology used by the British steel

                                                                  maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                  production according to Mr B Muthuraman Managing Director Tata Steel

                                                                  ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                  technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                  newspersons on the sidelines of the 34th National Management Convention organised

                                                                  by the All-India Management Association However he declined to give further details

                                                                  on the type of technology the Indian steel giant plans to implement

                                                                  Steel Authority of India

                                                                  Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                  of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                  and productive capacity and in the process become more energy-efficient and

                                                                  improve quality The key component of the ongoing modernisation drive - already

                                                                  completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                  ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                  continuous casting techniques A senior SAIL official says Continuous casting and

                                                                  basic oxygen furnaces ensure better quality steel through processes more easily

                                                                  monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                  more automated and permits greater flexibility Continuous casting is more efficient

                                                                  than the traditional ingot casting methods and gives increased yields while enabling

                                                                  better quality standards SAIL is also modernising its finishing mills and is adding

                                                                  secondary refining facilities to improve quality

                                                                  Safety measures

                                                                  A unique feature of safety management in steel industry is that a bipartite forum

                                                                  named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                  was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                  RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                  Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                  workshops training programme safety competitions for member organisations JCSSI

                                                                  with the co-operation and support of Trade Union representatives formulates policies

                                                                  and guidelines for its member plants and monitors the implementation

                                                                  Tata Steel

                                                                  Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                  Safety department and a Safety Trophy helped spread the message all across the

                                                                  company

                                                                  TATA reaffirms its commitment to provide safe working place and clean

                                                                  environment to its employees and other stakeholders as an integral part of its

                                                                  business philosophy and values We will continually enhance our Environmental

                                                                  Occupational Health amp Safety (EHS) performance in our activities products and

                                                                  services through a structured EHS management framework Towards this

                                                                  commitment we shall

                                                                  Establish and achieve EHS objectives and targets

                                                                  Ensure compliance with applicable EHS legislation and other requirement and

                                                                  go beyond

                                                                  Conserve natural resources and energy by constantly seeking to reduce

                                                                  consumption and promoting waste avoidance and recycling measures

                                                                  Eliminate minimize andor control adverse environmental impacts and

                                                                  occupational health and safety risks by adopting appropriate state-of-the-art

                                                                  technology and best EHS management practices at all levels sand functions

                                                                  Enhance awareness skill and competence of our employees and contractors

                                                                  so as to enable them to demonstrate their involvement responsibility and

                                                                  accountability for sound EHS performance

                                                                  Steel Authority of India

                                                                  SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                  monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                  Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                  formulated and review of implementation of APP is done during Heads of

                                                                  Safety meeting

                                                                  Internal and external safety audits of major departments particularly hazardous

                                                                  areas are conducted every year and points arising from these audits are

                                                                  liquidated Safety aspects have been incorporated in standard operating

                                                                  practices (SOP) and standard maintenance practices (SMP)

                                                                  All major capital repairsshut downs are closely monitored round the clock

                                                                  Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                  grass-root level apart from regular inspections as per checklists to identify

                                                                  unsafe conditionsacts

                                                                  Safety training is imparted to target group employees at various levels HRD

                                                                  intervention in the area of safety covers Heads of Departments Line Managers

                                                                  amp Departmental Safety Officers Besides area specific workshops are

                                                                  conducted at different locations on important topics like gas safety railroad

                                                                  safety safety in iron steel amp coke making etc

                                                                  Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                  standards in the company by taking measures like intensive safety drives in works

                                                                  area and conducting safety audits in hazardous departments of different plants and

                                                                  mines In addition specific workshops on safety aspects were organised in various

                                                                  SAIL steel plants

                                                                  Measures taken by Indian government to improve the industry

                                                                  Now letrsquos 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-

                                                                  1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                  among others was removed from the list of industries reserved for the public

                                                                  sector and also exempted from the provisions of compulsory licensing under the

                                                                  Industries (Development and Regulation) Act 1951

                                                                  2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                  of `high priority industries for automatic approval for foreign equity investment up

                                                                  to 51 This limit has been recently increased to 100

                                                                  3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                  time it was ensured that priority continued to be accorded for meeting the

                                                                  requirements of small scale industries exporters of engineering goods and North

                                                                  Eastern Region of the country besides strategic sectors such as Defence and

                                                                  Railways

                                                                  4 The trade policy has been liberalised and import and export of iron and steel is

                                                                  freely allowed There are no quantitative restrictions on import of iron and steel

                                                                  items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                  regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                  steel have drastically come down since 1991-92 levels and the government is

                                                                  committed to bring them down to the international levels In Chapter 72 there are

                                                                  two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                  5 Iron amp Steel are freely importable as per the Extant Policy

                                                                  6 Iron amp Steel are freely exportable

                                                                  7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                  8 The floor price for seconds and defectives continues till date

                                                                  9 Imports of seconds and defectives of steel are allowed only through three

                                                                  designated ports of Mumbai Calcutta and Chennai

                                                                  10Mandatory pre inspection certificate by a reputed international agency for every

                                                                  import consignment of seconds and defectives

                                                                  11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                  10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                  the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                  per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                  15 per cent to 5 per cent

                                                                  12Further customs duty on several raw materials used by the steel sector like

                                                                  noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                  coking coal to zero

                                                                  13To bring down the prices of steel the excise duty on steel products was reduced

                                                                  from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                  that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                  increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                  cut on moderating prices was not achieved

                                                                  14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                  further reduced from 20 to 10

                                                                  Special assistance being provided by Ministry of Steel to Private Sector

                                                                  1 Ministry of Steel is extending all possible support as detailed below for the

                                                                  development of Iron and Steel Sector in the country

                                                                  2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                  new plants and expansion of existing ones wherever applied for

                                                                  3 To ensure an un-interrupted supply of raw materials to the producers

                                                                  4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                  clearance of projects

                                                                  5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                  Plants are held at the level of Secretary

                                                                  6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                  industry so that their absence does not lead to bottlenecks in the future growth of

                                                                  the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                  7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                  Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                  country are members of this Institute which has been set up with the objective of

                                                                  promoting developing and propagating the proper and effective use of steel

                                                                  8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                  major steel plants being implemented Govt has setup a Project Coordination

                                                                  Group under the Chairmanship of Steel Minister

                                                                  NATIONAL STEEL POLICY 2005

                                                                  The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                  development and as such great importance is attached to capacity expansion in line

                                                                  with expected demand at cost and prices which make Indian steel internationally

                                                                  competitive The existing regime of liberalization decontrol and deregulation of

                                                                  industry in the country has opened up new opportunities for the expansion of the steel

                                                                  industry With a view to accelerating the growth of the steel sector and attaining the

                                                                  vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                  formulated a National Steel Policy (NSP) in 2005

                                                                  The following salient features can be derived after analysing the NSP 2005

                                                                  The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                  towards reform restructuring and globalisation

                                                                  The long-term goal of the NSP is that India should have a modern and efficient

                                                                  steel industry of world standards catering to diversified steel demand The focus of

                                                                  the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                  product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                  In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                  NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                  an open globally integrated and competitive environment

                                                                  The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                  policy goal On the demand side the strategy would be to create incremental

                                                                  demand through promotional efforts creation of awareness and strengthening the

                                                                  delivery chain particularly in rural areas On the supply side the strategy would be

                                                                  to facilitate creation of additional capacity remove procedural and policy

                                                                  bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                  investments in RampD and encourage the creation of infrastructure such as roads

                                                                  railways and ports

                                                                  The NSP acknowledges the low per capita consumption of steel in the country

                                                                  especially in the rural areas and the need to boost steel consumption to improve

                                                                  quality of life and help in meeting the growing aspirations of masses

                                                                  In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                  industry would need additional capital In addition funds would be required for

                                                                  technological upgrade of existing facilities In order to mobilize such vast resources

                                                                  NSP seeks to encourage foreign direct investment In addition the policy also

                                                                  seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                  to the steel industry

                                                                  The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                  derivatives to contain price volatility in the steel market

                                                                  The NSP seeks to strengthen the existing training and research facilities available

                                                                  to the domestic steel industry so as to provide suitable training programmes

                                                                  especially for the secondary small-scale units and also to collect and analyse data

                                                                  on important parameters of the industry

                                                                  The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                  capability for special types of steel substitute coking coal use iron ore fines

                                                                  develop new products suited to rural needs enhance material and energy

                                                                  efficiency utilize waste and arrest environmental degradation

                                                                  The NSP acknowledges the important role played by the secondary steel sector in

                                                                  providing employment meeting local demand of steel in rural and semi-urban

                                                                  areas and meeting the countryrsquos demand of some special products and seeks to

                                                                  endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                  from major plants through the existing mechanism of State Small Industries

                                                                  Corporations

                                                                  The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                  global economy requires that the industry should be protected from unfair trade

                                                                  practices The NSP therefore envisages institution of mechanisms for import

                                                                  surveillance and monitoring export subsidies in other countries

                                                                  The present per capita consumption of steel in the country is very low compared to the

                                                                  world average As mentioned above one of the objectives of the NSP is to augment

                                                                  the demand and consumption of steel in the country by conscious promotion of steel

                                                                  usage With a view to create a mass awareness campaign on conscious promotion of

                                                                  steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                  the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                  The Committee is being serviced by Institute for Steel Development and Growth

                                                                  (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                  way of an awareness campaign with particular emphasis on rural sectors The

                                                                  Committee also aims at educating the designers architects builders and planners

                                                                  regarding the qualitative and cost effective applications of steel in various structures

                                                                  including buildings bridges flyovers and airports

                                                                  FUTURE OF INDIAN STEEL INDUSTRY

                                                                  India is amongst a few countries in the world having the dual advantage of fast

                                                                  growing domestic demand coupled with access to raw materials Further the trend

                                                                  that is already discernible is that the axis of global steel production consumption is

                                                                  shifting towards Asia With their large populations China and India already account for

                                                                  35 of the total world steel production - more than double of Europe Asia is

                                                                  expected to outpace other regions of the world to an even greater extent in the coming

                                                                  years

                                                                  Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                  is accepted that China will continue to be the leader However India is slated to

                                                                  emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                  the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                  splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                  China swallowed almost 32 of global steel It is unlikely that future production and

                                                                  consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                  has been the case over the last few years On the other hand it is sun-rise time for

                                                                  India where the demand has increased by 7-8 in the last couple of years In the long

                                                                  run Indian steel is likely to be more cost-effective since unlike China India has

                                                                  relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                  can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                  However the position with coal is not so favourable Though thermal coal

                                                                  reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                  traditional blast furnace route would require coking coal India does not have adequate

                                                                  reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                  Thus the steel industry always had to contend with the dual problems of inadequate

                                                                  availability and poor quality of Indian coking coal This has been partly addressed by

                                                                  adopting alternative iron making processes that are not dependent on coking coal it

                                                                  can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                  in India

                                                                  Because of the shortage of indigenous coal attempts have been made by steel

                                                                  producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                  mines in other countries This is the only long-term solution but with a global shortage

                                                                  of coal it may not remain cost-effective in the long run

                                                                  India is the seventh largest producer of steel and may further improve its position

                                                                  going by the current trends A series of investment decisions by major domestic

                                                                  players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                  POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                  The keen interest shown by various prospective investors is not only due to

                                                                  expectations of strong growth in domestic demand but also due to indigenous

                                                                  availability of key resources like iron ore and skilled workforce

                                                                  After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                  steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                  finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                  2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                  consumption has accelerated to 91 per cent

                                                                  With the likely growth of Indian economy at around 7 per cent per annum

                                                                  demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                  million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                  demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                  is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                  very low level of per capita consumption of steel in India is highlighted further when

                                                                  compared with the consumption levels of its peer group consisting of countries like

                                                                  China Brazil Mexico and Republic of Korea as also with selected developed

                                                                  countries

                                                                  Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                  China there seems to be consensus among analysts that India is likely to witness a

                                                                  growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                  percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                  achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                  more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                  country like India cyclicity is more in terms of prices rather than volumes of production

                                                                  Exports

                                                                  Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                  starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                  2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                  rising domestic demand and low capacity additions Exports now constitute around 17

                                                                  per cent of total production and Indias presence in the developing and developed

                                                                  world is being increasingly felt Indian steel producers have recently been able to

                                                                  supply specialized grades and products used for sophisticated applications like

                                                                  automobiles On the cost front some of our producers are counted amongst the least

                                                                  cost producers of the world For an average reference plant India is competitively

                                                                  placed in the middle of the hierarchy of steel producing nations

                                                                  However we have a long way to go to catch up with the leading exporters of the

                                                                  world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                  2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                  per cent of total projected production The projected export ratio compares well with

                                                                  the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                  The projected production of steel by 2019-20 to meet the domestic and export

                                                                  demand will be around 110 million tonnes Management of resources and

                                                                  infrastructural growth is going to be critical in achievement of the production level

                                                                  envisaged The broad requirements of various resources will increase manifold from

                                                                  the current level The bottlenecks in availability of critical inputs and various facilities

                                                                  need to be removed through concerted efforts of Government and industry The broad

                                                                  strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                  sector has been discussed in the National Steel Policy which has been recently

                                                                  approved by the Government

                                                                  As stated earlier the long-term goal of the National Steel Policy is that India

                                                                  should have a modern and efficient steel industry of world standards catering to a

                                                                  diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                  not only in terms of cost quality and product mix but also in terms of global

                                                                  benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                  pronged strategy to achieve these goals On the demand side the strategy would be

                                                                  to create incremental demand through promotional efforts creation of awareness and

                                                                  strengthening the delivery chain particularly in rural areas On the supply side the

                                                                  strategy would be to facilitate creation of additional capacity remove procedural and

                                                                  policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                  investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                  roads railways and ports

                                                                  The production figures exports and imports of finished carbon steel and pig iron

                                                                  and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                  Steel and SAIL attest to the continuing growth for both the sectors

                                                                  FINDINGS

                                                                  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 increased its profit over the year particularly in 2006-07

                                                                  Both the companies are planning to adopt modern technology which is going to

                                                                  help them to compete in world market but they need to be less dependent on

                                                                  state of art technology and coal for long term prospects

                                                                  Public sector has undergone retrenchment for the employees and improved

                                                                  has its lobour productivity but it is still lacking behind as compared to private

                                                                  sector

                                                                  SAIL has reduced the no of accidents due to improper handling of machinery

                                                                  still no of accidents are more than that of TATA Steel

                                                                  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

                                                                  ie 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 have to be met

                                                                  comprehensively if we are to take our legitimate place in the world as a developed

                                                                  nation by 2020

                                                                  BIBLIOGRAPHY

                                                                  Annual report (2006-07) published by ministry of steel

                                                                  Annual report (2006-07) published by TATA Steel

                                                                  Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                  REPORTrsquo posted by SAIL on its website

                                                                  lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                  held on 07 Nov 2006

                                                                  Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                  wwwsteelnicin (Official website of ministry of industry)

                                                                  wwwtatasteelcom (Official website of TATA Steel)

                                                                  wwwsailcoin (Official website of Steel Authority of India)

                                                                  wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                  wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                  • DATA ANALYSIS
                                                                  • Comparison between TATA Steel and Steel Authority of India
                                                                  • Production
                                                                  • Quantity 000 Tonnes
                                                                  • Financials
                                                                  • Research and Development
                                                                  • (Rs Crore)
                                                                  • TATA Steel
                                                                  • Steel Authority of India
                                                                  • Environment
                                                                  • TATA Steel
                                                                  • Emissions effluents and wastes
                                                                  • Emissions
                                                                  • Waste handling
                                                                  • Effluent Management
                                                                  • Steel Authority of India
                                                                  • Solid Waste Management
                                                                  • Environmental Plantation
                                                                  • Environmental Recognitions
                                                                  • Workforce and Welfare of Society
                                                                  • TATA steel
                                                                  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                  • Steel Authority of India
                                                                  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                  • Technology
                                                                  • Steel Authority of India
                                                                  • Safety measures
                                                                  • Tata Steel
                                                                  • Steel Authority of India
                                                                  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                  • Measures taken by Indian government to improve the industry
                                                                  • Now letrsquos 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-
                                                                  • Special assistance being provided by Ministry of Steel to Private Sector
                                                                  • FUTURE OF INDIAN STEEL INDUSTRY

                                                                    SAIL set new record in achieving the turnover of Rs39189 crore and profit

                                                                    before tax of Rs9423 crore registering growth of 21 amp 65 respectively over

                                                                    previous year The company recorded net profit after tax (PAT) of Rs6202 crore an

                                                                    increase of 55

                                                                    Research and Development

                                                                    Chart showing production of both the companies

                                                                    (Rs Crore)

                                                                    TATA Steel

                                                                    The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                                    develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                                    steel for body panels

                                                                    Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                                    coke energy conservation waste utilisation sintering blast furnace productivity and

                                                                    phosphorous reduction product development and improvement in life of plant and

                                                                    machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                                    sealed and over 100 are in process

                                                                    Steel Authority of India

                                                                    Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                                    innovative technological inputs to different units of SAIL with special emphasis on

                                                                    cost reduction product development and application quality improvement energy

                                                                    conservation and automation Several new products were developed and

                                                                    commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                                    Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                                    specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                                    micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                                    Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                                    Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                                    strengthened its technology marketing efforts by providing consultancy services

                                                                    organising specialised testing and transfer of technological innovations to outside

                                                                    customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                                    Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                                    Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                                    During the year 1998 technical papers were publishedpresented besides filing

                                                                    of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                                    awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                                    achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                                    Government of India

                                                                    Environment

                                                                    TATA Steel

                                                                    Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                                    Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                                    has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                                    Jamshedpur is the only town in the country which

                                                                    Significant achievements by the Company include an improvement in

                                                                    environment and resource conservation including a reduction in green house erosion

                                                                    raw materials and water consumption The Company has increased waste re-use and

                                                                    re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                                    the-art pollution control systems being installed to prevent and control pollution The

                                                                    Company has almost doubled its capital investment in Pollution Abatement in the last

                                                                    five years

                                                                    Emissions effluents and wastes

                                                                    Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                                    most relevance to the steel industry Considerable reduction has been effected by

                                                                    Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                                    granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                                    Tata Steelrsquos activities

                                                                    Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                                    tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                                    Hazardous Waste under Basel Convention The Company does not import or export

                                                                    any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                                    generated are handled as per the requirement of the Hazardous Waste Management

                                                                    and Handling Rules 19892000

                                                                    Emissions

                                                                    Tata Steel has undertaken several initiatives which have resulted in

                                                                    considerable reduction in stack emission Emissions are well below the Indian and

                                                                    international standards The emission load including particulate matter Sulphur

                                                                    Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                                    undertaken at the Steel Works

                                                                    Waste handling

                                                                    Most of the solid waste generated from Steel Works is recycled or reused 18

                                                                    of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                                    was used to fill low-lying areas and for peripheral road construction around

                                                                    Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                                    power plants was dumped in a designated dump area

                                                                    Effluent Management

                                                                    Waste water from the steel making process is being treated with best available

                                                                    physio-chemical methods as well as being recycled Waste water from the coke plant

                                                                    is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                                    organisms The Company has reduced the levels of total pollutant discharge in waste

                                                                    water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                                    Steel Authority of India

                                                                    Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                                    environmentally responsible manner to comply with applicable regulations and striving

                                                                    to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                                    efficiency and optimize resource consumption through various measures viz

                                                                    improvement in process technology in the areas of raw materials coke iron and steel

                                                                    making reuserecycle of the by-products generated and conservation of energy and

                                                                    water

                                                                    Solid Waste Management

                                                                    During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                                    and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                                    Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                                    these wastes are being made through internal recycling and selling to outside

                                                                    agencies The wastes generated in the steel plants are being utilized mainly through

                                                                    their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                    during April-September 2006

                                                                    Environmental Plantation

                                                                    Trees have a significant role in protection of environment and ecological balance

                                                                    Extensive afforestation programme are being followed in all the plants and mines The

                                                                    basis of choosing the species of plants mainly depends on local soil characteristics

                                                                    and prevailing meteorological conditions The green belt developed by afforestation

                                                                    adds to the aesthetic environment which becomes dust and noise barriers

                                                                    A total number of 145521 saplings have been planted covering an area of 637

                                                                    hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                    hectare in 2004-05 in and around the steel plants of SAIL

                                                                    Environmental Recognitions

                                                                    SAIL plants have been awarded various prizes for environmental management in

                                                                    their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                    the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                    environmental economic andsocial dimensions of sustainable development and the

                                                                    Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                    Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                    Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                    for 2005 from International Greenland Society

                                                                    Workforce and Welfare of Society

                                                                    TATA steel

                                                                    Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                    and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                    enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                    provide a work environment that will ensure a sense of purpose and personal growth

                                                                    for each individual The wish of the company is to see the smile on every face

                                                                    everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                    people and enriched empowered and enhanced their lives

                                                                    Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                    brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                    Tata Steel were the first of their kind in India and some even in the western countries

                                                                    at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                    source of its competitiveness It focuses on constantly updating and challenging

                                                                    intellectual capabilities to enable them to excel in performance Special efforts are

                                                                    made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                    workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                    available with its people through Knowledge Management and sharing of best

                                                                    practices

                                                                    In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                    mutual co-operation coordination and understanding between the Management and

                                                                    the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                    among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                    transparency fairness and equity in all its interactions with its employees to create an

                                                                    enthused and happy workforce

                                                                    In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                    assistance in the fields of education vocational training self-employment and

                                                                    family welfare

                                                                    Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                    12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                    surgical treatment for preventive and curative interventions to people in

                                                                    inaccessible rural areas

                                                                    Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                    for the 1920 Antwerp Olympics

                                                                    The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                    track was inaugurated in 1991 The complex also houses facilities for handball

                                                                    tennis volleyball hockey basketball boxing table tennis and a modern

                                                                    gymnasium

                                                                    The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                    services for the betterment of the people in and around Jamshedpur

                                                                    At times of natural calamities the company has rushe immediate relief and off

                                                                    ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                    fl ood ravaged Orissa and other such aff ected areas

                                                                    Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                    er a unique environment for the children of Jamshedpur to grow up in

                                                                    In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                    Jamshedpur has emerged as the one of the best cities in India

                                                                    Steel Authority of India

                                                                    The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                    executives and 123005 non-executives The total reduction in manpower achieved

                                                                    during the year stood at 4864 which included separation of 881 employees through

                                                                    voluntary retirement The labour productivity improved by around 12 over previous

                                                                    year to 150 tonne crude steelmanyear

                                                                    Some of the areas of assistance which are available to the weaker sections are the

                                                                    following

                                                                    The company has provided land for construction of school buildings in some of

                                                                    the steel townships as well as in other places for spreading education among

                                                                    the masses

                                                                    The company has constructed roads in remote areas around the steel plants

                                                                    and also where the captive mines are located to improve communication and

                                                                    also increase activities such as organisation of health camps school facilities

                                                                    drinking water etc under the peripheral development schemes

                                                                    Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                    Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                    providing them with education boarding and lodging facilities

                                                                    Construction of bridges by-pass roads metal-morum path waterways

                                                                    levellingdressing area around township pre-mixed roads Installation of hand-

                                                                    pumps tube wells and wells for villagers

                                                                    Construction of school buildings (including for mentally retarded deaf and

                                                                    dumb children) madarsas providing school furniture therein and construction

                                                                    of hostels womenrsquos college building etc

                                                                    Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                    engineering students in various disciplines to encourage technical education

                                                                    among them

                                                                    In many cases tuition fee in company run schools is exempt for SCST

                                                                    students Steps are taken to provide education to more and more tribal children

                                                                    in company schools

                                                                    The unemployed SCST youth are given specialized training in various

                                                                    technical trades to develop skill and knowledge Such training is provided free

                                                                    of cost

                                                                    Adult literacy campaign is carried out in most of the steel townships Every year

                                                                    more and more men and women are being covered in this campaign

                                                                    Development of fishery and cottage industry providing sewing machines to

                                                                    village mahila mandals and promoting other self-employment generation

                                                                    schemes

                                                                    SAIL has established a hockey academy with stadium and hostel facilities at

                                                                    Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                    academy was successful in spotting a number of young talented tribal players

                                                                    and grooms them under expertise of ex-Olympian

                                                                    Technology

                                                                    The biggest boost to efficiency in the steel industry has come from the increased

                                                                    use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                    share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                    now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                    among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                    crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                    suggests there is restructuring potential

                                                                    TATA Steel

                                                                    Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                    with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                    international companies also took part in the exhibition Participating companies from

                                                                    countries all over the world exhibited latest technologies and know-how List of

                                                                    participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                    Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                    companies of national and international repute China was the partner country for the

                                                                    International Trade Fair this year

                                                                    In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                    cutting-edge technology used in iron ore mining pioneering human resource

                                                                    practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                    steel company

                                                                    The 6th International Trade Fair and Conference an institutionalised global

                                                                    event is considered to be one of the most prestigious forums for national as well

                                                                    international participants It is a conclave of the finest minds concerned with the future

                                                                    direction and growth of these sectors The forum provided the worlds most eminent

                                                                    metallurgists manufacturers of metallurgical and mining machinery and related

                                                                    sectors professionals analysts and experts with the opportunity to exchange views on

                                                                    emerging technologies synergy and strengths and open up wider horizons for

                                                                    sectorial development

                                                                    Tata Steel to adopt Corus technology

                                                                    Tata Steel plans to implement alternate technology used by the British steel

                                                                    maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                    production according to Mr B Muthuraman Managing Director Tata Steel

                                                                    ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                    technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                    newspersons on the sidelines of the 34th National Management Convention organised

                                                                    by the All-India Management Association However he declined to give further details

                                                                    on the type of technology the Indian steel giant plans to implement

                                                                    Steel Authority of India

                                                                    Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                    of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                    and productive capacity and in the process become more energy-efficient and

                                                                    improve quality The key component of the ongoing modernisation drive - already

                                                                    completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                    ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                    continuous casting techniques A senior SAIL official says Continuous casting and

                                                                    basic oxygen furnaces ensure better quality steel through processes more easily

                                                                    monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                    more automated and permits greater flexibility Continuous casting is more efficient

                                                                    than the traditional ingot casting methods and gives increased yields while enabling

                                                                    better quality standards SAIL is also modernising its finishing mills and is adding

                                                                    secondary refining facilities to improve quality

                                                                    Safety measures

                                                                    A unique feature of safety management in steel industry is that a bipartite forum

                                                                    named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                    was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                    RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                    Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                    workshops training programme safety competitions for member organisations JCSSI

                                                                    with the co-operation and support of Trade Union representatives formulates policies

                                                                    and guidelines for its member plants and monitors the implementation

                                                                    Tata Steel

                                                                    Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                    Safety department and a Safety Trophy helped spread the message all across the

                                                                    company

                                                                    TATA reaffirms its commitment to provide safe working place and clean

                                                                    environment to its employees and other stakeholders as an integral part of its

                                                                    business philosophy and values We will continually enhance our Environmental

                                                                    Occupational Health amp Safety (EHS) performance in our activities products and

                                                                    services through a structured EHS management framework Towards this

                                                                    commitment we shall

                                                                    Establish and achieve EHS objectives and targets

                                                                    Ensure compliance with applicable EHS legislation and other requirement and

                                                                    go beyond

                                                                    Conserve natural resources and energy by constantly seeking to reduce

                                                                    consumption and promoting waste avoidance and recycling measures

                                                                    Eliminate minimize andor control adverse environmental impacts and

                                                                    occupational health and safety risks by adopting appropriate state-of-the-art

                                                                    technology and best EHS management practices at all levels sand functions

                                                                    Enhance awareness skill and competence of our employees and contractors

                                                                    so as to enable them to demonstrate their involvement responsibility and

                                                                    accountability for sound EHS performance

                                                                    Steel Authority of India

                                                                    SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                    monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                    Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                    formulated and review of implementation of APP is done during Heads of

                                                                    Safety meeting

                                                                    Internal and external safety audits of major departments particularly hazardous

                                                                    areas are conducted every year and points arising from these audits are

                                                                    liquidated Safety aspects have been incorporated in standard operating

                                                                    practices (SOP) and standard maintenance practices (SMP)

                                                                    All major capital repairsshut downs are closely monitored round the clock

                                                                    Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                    grass-root level apart from regular inspections as per checklists to identify

                                                                    unsafe conditionsacts

                                                                    Safety training is imparted to target group employees at various levels HRD

                                                                    intervention in the area of safety covers Heads of Departments Line Managers

                                                                    amp Departmental Safety Officers Besides area specific workshops are

                                                                    conducted at different locations on important topics like gas safety railroad

                                                                    safety safety in iron steel amp coke making etc

                                                                    Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                    standards in the company by taking measures like intensive safety drives in works

                                                                    area and conducting safety audits in hazardous departments of different plants and

                                                                    mines In addition specific workshops on safety aspects were organised in various

                                                                    SAIL steel plants

                                                                    Measures taken by Indian government to improve the industry

                                                                    Now letrsquos 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-

                                                                    1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                    among others was removed from the list of industries reserved for the public

                                                                    sector and also exempted from the provisions of compulsory licensing under the

                                                                    Industries (Development and Regulation) Act 1951

                                                                    2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                    of `high priority industries for automatic approval for foreign equity investment up

                                                                    to 51 This limit has been recently increased to 100

                                                                    3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                    time it was ensured that priority continued to be accorded for meeting the

                                                                    requirements of small scale industries exporters of engineering goods and North

                                                                    Eastern Region of the country besides strategic sectors such as Defence and

                                                                    Railways

                                                                    4 The trade policy has been liberalised and import and export of iron and steel is

                                                                    freely allowed There are no quantitative restrictions on import of iron and steel

                                                                    items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                    regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                    steel have drastically come down since 1991-92 levels and the government is

                                                                    committed to bring them down to the international levels In Chapter 72 there are

                                                                    two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                    5 Iron amp Steel are freely importable as per the Extant Policy

                                                                    6 Iron amp Steel are freely exportable

                                                                    7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                    8 The floor price for seconds and defectives continues till date

                                                                    9 Imports of seconds and defectives of steel are allowed only through three

                                                                    designated ports of Mumbai Calcutta and Chennai

                                                                    10Mandatory pre inspection certificate by a reputed international agency for every

                                                                    import consignment of seconds and defectives

                                                                    11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                    10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                    the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                    per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                    15 per cent to 5 per cent

                                                                    12Further customs duty on several raw materials used by the steel sector like

                                                                    noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                    coking coal to zero

                                                                    13To bring down the prices of steel the excise duty on steel products was reduced

                                                                    from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                    that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                    increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                    cut on moderating prices was not achieved

                                                                    14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                    further reduced from 20 to 10

                                                                    Special assistance being provided by Ministry of Steel to Private Sector

                                                                    1 Ministry of Steel is extending all possible support as detailed below for the

                                                                    development of Iron and Steel Sector in the country

                                                                    2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                    new plants and expansion of existing ones wherever applied for

                                                                    3 To ensure an un-interrupted supply of raw materials to the producers

                                                                    4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                    clearance of projects

                                                                    5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                    Plants are held at the level of Secretary

                                                                    6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                    industry so that their absence does not lead to bottlenecks in the future growth of

                                                                    the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                    7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                    Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                    country are members of this Institute which has been set up with the objective of

                                                                    promoting developing and propagating the proper and effective use of steel

                                                                    8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                    major steel plants being implemented Govt has setup a Project Coordination

                                                                    Group under the Chairmanship of Steel Minister

                                                                    NATIONAL STEEL POLICY 2005

                                                                    The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                    development and as such great importance is attached to capacity expansion in line

                                                                    with expected demand at cost and prices which make Indian steel internationally

                                                                    competitive The existing regime of liberalization decontrol and deregulation of

                                                                    industry in the country has opened up new opportunities for the expansion of the steel

                                                                    industry With a view to accelerating the growth of the steel sector and attaining the

                                                                    vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                    formulated a National Steel Policy (NSP) in 2005

                                                                    The following salient features can be derived after analysing the NSP 2005

                                                                    The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                    towards reform restructuring and globalisation

                                                                    The long-term goal of the NSP is that India should have a modern and efficient

                                                                    steel industry of world standards catering to diversified steel demand The focus of

                                                                    the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                    product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                    In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                    NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                    an open globally integrated and competitive environment

                                                                    The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                    policy goal On the demand side the strategy would be to create incremental

                                                                    demand through promotional efforts creation of awareness and strengthening the

                                                                    delivery chain particularly in rural areas On the supply side the strategy would be

                                                                    to facilitate creation of additional capacity remove procedural and policy

                                                                    bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                    investments in RampD and encourage the creation of infrastructure such as roads

                                                                    railways and ports

                                                                    The NSP acknowledges the low per capita consumption of steel in the country

                                                                    especially in the rural areas and the need to boost steel consumption to improve

                                                                    quality of life and help in meeting the growing aspirations of masses

                                                                    In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                    industry would need additional capital In addition funds would be required for

                                                                    technological upgrade of existing facilities In order to mobilize such vast resources

                                                                    NSP seeks to encourage foreign direct investment In addition the policy also

                                                                    seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                    to the steel industry

                                                                    The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                    derivatives to contain price volatility in the steel market

                                                                    The NSP seeks to strengthen the existing training and research facilities available

                                                                    to the domestic steel industry so as to provide suitable training programmes

                                                                    especially for the secondary small-scale units and also to collect and analyse data

                                                                    on important parameters of the industry

                                                                    The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                    capability for special types of steel substitute coking coal use iron ore fines

                                                                    develop new products suited to rural needs enhance material and energy

                                                                    efficiency utilize waste and arrest environmental degradation

                                                                    The NSP acknowledges the important role played by the secondary steel sector in

                                                                    providing employment meeting local demand of steel in rural and semi-urban

                                                                    areas and meeting the countryrsquos demand of some special products and seeks to

                                                                    endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                    from major plants through the existing mechanism of State Small Industries

                                                                    Corporations

                                                                    The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                    global economy requires that the industry should be protected from unfair trade

                                                                    practices The NSP therefore envisages institution of mechanisms for import

                                                                    surveillance and monitoring export subsidies in other countries

                                                                    The present per capita consumption of steel in the country is very low compared to the

                                                                    world average As mentioned above one of the objectives of the NSP is to augment

                                                                    the demand and consumption of steel in the country by conscious promotion of steel

                                                                    usage With a view to create a mass awareness campaign on conscious promotion of

                                                                    steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                    the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                    The Committee is being serviced by Institute for Steel Development and Growth

                                                                    (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                    way of an awareness campaign with particular emphasis on rural sectors The

                                                                    Committee also aims at educating the designers architects builders and planners

                                                                    regarding the qualitative and cost effective applications of steel in various structures

                                                                    including buildings bridges flyovers and airports

                                                                    FUTURE OF INDIAN STEEL INDUSTRY

                                                                    India is amongst a few countries in the world having the dual advantage of fast

                                                                    growing domestic demand coupled with access to raw materials Further the trend

                                                                    that is already discernible is that the axis of global steel production consumption is

                                                                    shifting towards Asia With their large populations China and India already account for

                                                                    35 of the total world steel production - more than double of Europe Asia is

                                                                    expected to outpace other regions of the world to an even greater extent in the coming

                                                                    years

                                                                    Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                    is accepted that China will continue to be the leader However India is slated to

                                                                    emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                    the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                    splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                    China swallowed almost 32 of global steel It is unlikely that future production and

                                                                    consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                    has been the case over the last few years On the other hand it is sun-rise time for

                                                                    India where the demand has increased by 7-8 in the last couple of years In the long

                                                                    run Indian steel is likely to be more cost-effective since unlike China India has

                                                                    relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                    can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                    However the position with coal is not so favourable Though thermal coal

                                                                    reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                    traditional blast furnace route would require coking coal India does not have adequate

                                                                    reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                    Thus the steel industry always had to contend with the dual problems of inadequate

                                                                    availability and poor quality of Indian coking coal This has been partly addressed by

                                                                    adopting alternative iron making processes that are not dependent on coking coal it

                                                                    can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                    in India

                                                                    Because of the shortage of indigenous coal attempts have been made by steel

                                                                    producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                    mines in other countries This is the only long-term solution but with a global shortage

                                                                    of coal it may not remain cost-effective in the long run

                                                                    India is the seventh largest producer of steel and may further improve its position

                                                                    going by the current trends A series of investment decisions by major domestic

                                                                    players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                    POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                    The keen interest shown by various prospective investors is not only due to

                                                                    expectations of strong growth in domestic demand but also due to indigenous

                                                                    availability of key resources like iron ore and skilled workforce

                                                                    After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                    steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                    finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                    2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                    consumption has accelerated to 91 per cent

                                                                    With the likely growth of Indian economy at around 7 per cent per annum

                                                                    demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                    million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                    demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                    is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                    very low level of per capita consumption of steel in India is highlighted further when

                                                                    compared with the consumption levels of its peer group consisting of countries like

                                                                    China Brazil Mexico and Republic of Korea as also with selected developed

                                                                    countries

                                                                    Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                    China there seems to be consensus among analysts that India is likely to witness a

                                                                    growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                    percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                    achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                    more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                    country like India cyclicity is more in terms of prices rather than volumes of production

                                                                    Exports

                                                                    Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                    starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                    2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                    rising domestic demand and low capacity additions Exports now constitute around 17

                                                                    per cent of total production and Indias presence in the developing and developed

                                                                    world is being increasingly felt Indian steel producers have recently been able to

                                                                    supply specialized grades and products used for sophisticated applications like

                                                                    automobiles On the cost front some of our producers are counted amongst the least

                                                                    cost producers of the world For an average reference plant India is competitively

                                                                    placed in the middle of the hierarchy of steel producing nations

                                                                    However we have a long way to go to catch up with the leading exporters of the

                                                                    world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                    2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                    per cent of total projected production The projected export ratio compares well with

                                                                    the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                    The projected production of steel by 2019-20 to meet the domestic and export

                                                                    demand will be around 110 million tonnes Management of resources and

                                                                    infrastructural growth is going to be critical in achievement of the production level

                                                                    envisaged The broad requirements of various resources will increase manifold from

                                                                    the current level The bottlenecks in availability of critical inputs and various facilities

                                                                    need to be removed through concerted efforts of Government and industry The broad

                                                                    strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                    sector has been discussed in the National Steel Policy which has been recently

                                                                    approved by the Government

                                                                    As stated earlier the long-term goal of the National Steel Policy is that India

                                                                    should have a modern and efficient steel industry of world standards catering to a

                                                                    diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                    not only in terms of cost quality and product mix but also in terms of global

                                                                    benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                    pronged strategy to achieve these goals On the demand side the strategy would be

                                                                    to create incremental demand through promotional efforts creation of awareness and

                                                                    strengthening the delivery chain particularly in rural areas On the supply side the

                                                                    strategy would be to facilitate creation of additional capacity remove procedural and

                                                                    policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                    investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                    roads railways and ports

                                                                    The production figures exports and imports of finished carbon steel and pig iron

                                                                    and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                    Steel and SAIL attest to the continuing growth for both the sectors

                                                                    FINDINGS

                                                                    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 increased its profit over the year particularly in 2006-07

                                                                    Both the companies are planning to adopt modern technology which is going to

                                                                    help them to compete in world market but they need to be less dependent on

                                                                    state of art technology and coal for long term prospects

                                                                    Public sector has undergone retrenchment for the employees and improved

                                                                    has its lobour productivity but it is still lacking behind as compared to private

                                                                    sector

                                                                    SAIL has reduced the no of accidents due to improper handling of machinery

                                                                    still no of accidents are more than that of TATA Steel

                                                                    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

                                                                    ie 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 have to be met

                                                                    comprehensively if we are to take our legitimate place in the world as a developed

                                                                    nation by 2020

                                                                    BIBLIOGRAPHY

                                                                    Annual report (2006-07) published by ministry of steel

                                                                    Annual report (2006-07) published by TATA Steel

                                                                    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                    REPORTrsquo posted by SAIL on its website

                                                                    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                    held on 07 Nov 2006

                                                                    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                    wwwsteelnicin (Official website of ministry of industry)

                                                                    wwwtatasteelcom (Official website of TATA Steel)

                                                                    wwwsailcoin (Official website of Steel Authority of India)

                                                                    wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                    wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                    • DATA ANALYSIS
                                                                    • Comparison between TATA Steel and Steel Authority of India
                                                                    • Production
                                                                    • Quantity 000 Tonnes
                                                                    • Financials
                                                                    • Research and Development
                                                                    • (Rs Crore)
                                                                    • TATA Steel
                                                                    • Steel Authority of India
                                                                    • Environment
                                                                    • TATA Steel
                                                                    • Emissions effluents and wastes
                                                                    • Emissions
                                                                    • Waste handling
                                                                    • Effluent Management
                                                                    • Steel Authority of India
                                                                    • Solid Waste Management
                                                                    • Environmental Plantation
                                                                    • Environmental Recognitions
                                                                    • Workforce and Welfare of Society
                                                                    • TATA steel
                                                                    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                    • Steel Authority of India
                                                                    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                    • Technology
                                                                    • Steel Authority of India
                                                                    • Safety measures
                                                                    • Tata Steel
                                                                    • Steel Authority of India
                                                                    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                    • Measures taken by Indian government to improve the industry
                                                                    • Now letrsquos 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-
                                                                    • Special assistance being provided by Ministry of Steel to Private Sector
                                                                    • FUTURE OF INDIAN STEEL INDUSTRY

                                                                      Research and Development

                                                                      Chart showing production of both the companies

                                                                      (Rs Crore)

                                                                      TATA Steel

                                                                      The R amp D laboratory was set up in 1937 Today Tata Steel is the first in India to

                                                                      develop galvannealed skin panels It is the only Indian supplier of bake hardening

                                                                      steel for body panels

                                                                      Research is undertaken at Tata Steel in the areas of raw materials including coal

                                                                      coke energy conservation waste utilisation sintering blast furnace productivity and

                                                                      phosphorous reduction product development and improvement in life of plant and

                                                                      machinery The Company spends 7 of its turnover for RampD 17 patents have been

                                                                      sealed and over 100 are in process

                                                                      Steel Authority of India

                                                                      Research and Development Centre for Iron and Steel (RDCIS) has provided

                                                                      innovative technological inputs to different units of SAIL with special emphasis on

                                                                      cost reduction product development and application quality improvement energy

                                                                      conservation and automation Several new products were developed and

                                                                      commercialised like DMR 249 Gr A at Bhilai Steel Plant (BSP) Bokaro Steel Plant

                                                                      Steel (BSL) and Rourkela Steel Plant (RSP) Spade M-1 steel as per CDA 99

                                                                      specification at RSP Fe 415 Gr Thermo Mechanically Treated (TMT) rebar with

                                                                      micro-alloying at BSP high strength corrosion resistance roof bolt grade bars at

                                                                      Durgapur Steel Plant (DSP) earthquake resistant TMT rebars (Fe-415) at DSP Cu-

                                                                      Mo pearlitic rail at BSP high strength micro alloyed rails at BSP etc The RDCIS

                                                                      strengthened its technology marketing efforts by providing consultancy services

                                                                      organising specialised testing and transfer of technological innovations to outside

                                                                      customers like Ms Power Grid Corporation of India Gurgaon Ms Refcom (India) Pvt

                                                                      Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                                      Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                                      During the year 1998 technical papers were publishedpresented besides filing

                                                                      of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                                      awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                                      achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                                      Government of India

                                                                      Environment

                                                                      TATA Steel

                                                                      Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                                      Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                                      has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                                      Jamshedpur is the only town in the country which

                                                                      Significant achievements by the Company include an improvement in

                                                                      environment and resource conservation including a reduction in green house erosion

                                                                      raw materials and water consumption The Company has increased waste re-use and

                                                                      re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                                      the-art pollution control systems being installed to prevent and control pollution The

                                                                      Company has almost doubled its capital investment in Pollution Abatement in the last

                                                                      five years

                                                                      Emissions effluents and wastes

                                                                      Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                                      most relevance to the steel industry Considerable reduction has been effected by

                                                                      Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                                      granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                                      Tata Steelrsquos activities

                                                                      Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                                      tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                                      Hazardous Waste under Basel Convention The Company does not import or export

                                                                      any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                                      generated are handled as per the requirement of the Hazardous Waste Management

                                                                      and Handling Rules 19892000

                                                                      Emissions

                                                                      Tata Steel has undertaken several initiatives which have resulted in

                                                                      considerable reduction in stack emission Emissions are well below the Indian and

                                                                      international standards The emission load including particulate matter Sulphur

                                                                      Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                                      undertaken at the Steel Works

                                                                      Waste handling

                                                                      Most of the solid waste generated from Steel Works is recycled or reused 18

                                                                      of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                                      was used to fill low-lying areas and for peripheral road construction around

                                                                      Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                                      power plants was dumped in a designated dump area

                                                                      Effluent Management

                                                                      Waste water from the steel making process is being treated with best available

                                                                      physio-chemical methods as well as being recycled Waste water from the coke plant

                                                                      is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                                      organisms The Company has reduced the levels of total pollutant discharge in waste

                                                                      water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                                      Steel Authority of India

                                                                      Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                                      environmentally responsible manner to comply with applicable regulations and striving

                                                                      to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                                      efficiency and optimize resource consumption through various measures viz

                                                                      improvement in process technology in the areas of raw materials coke iron and steel

                                                                      making reuserecycle of the by-products generated and conservation of energy and

                                                                      water

                                                                      Solid Waste Management

                                                                      During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                                      and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                                      Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                                      these wastes are being made through internal recycling and selling to outside

                                                                      agencies The wastes generated in the steel plants are being utilized mainly through

                                                                      their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                      during April-September 2006

                                                                      Environmental Plantation

                                                                      Trees have a significant role in protection of environment and ecological balance

                                                                      Extensive afforestation programme are being followed in all the plants and mines The

                                                                      basis of choosing the species of plants mainly depends on local soil characteristics

                                                                      and prevailing meteorological conditions The green belt developed by afforestation

                                                                      adds to the aesthetic environment which becomes dust and noise barriers

                                                                      A total number of 145521 saplings have been planted covering an area of 637

                                                                      hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                      hectare in 2004-05 in and around the steel plants of SAIL

                                                                      Environmental Recognitions

                                                                      SAIL plants have been awarded various prizes for environmental management in

                                                                      their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                      the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                      environmental economic andsocial dimensions of sustainable development and the

                                                                      Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                      Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                      Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                      for 2005 from International Greenland Society

                                                                      Workforce and Welfare of Society

                                                                      TATA steel

                                                                      Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                      and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                      enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                      provide a work environment that will ensure a sense of purpose and personal growth

                                                                      for each individual The wish of the company is to see the smile on every face

                                                                      everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                      people and enriched empowered and enhanced their lives

                                                                      Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                      brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                      Tata Steel were the first of their kind in India and some even in the western countries

                                                                      at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                      source of its competitiveness It focuses on constantly updating and challenging

                                                                      intellectual capabilities to enable them to excel in performance Special efforts are

                                                                      made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                      workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                      available with its people through Knowledge Management and sharing of best

                                                                      practices

                                                                      In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                      mutual co-operation coordination and understanding between the Management and

                                                                      the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                      among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                      transparency fairness and equity in all its interactions with its employees to create an

                                                                      enthused and happy workforce

                                                                      In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                      assistance in the fields of education vocational training self-employment and

                                                                      family welfare

                                                                      Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                      12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                      surgical treatment for preventive and curative interventions to people in

                                                                      inaccessible rural areas

                                                                      Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                      for the 1920 Antwerp Olympics

                                                                      The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                      track was inaugurated in 1991 The complex also houses facilities for handball

                                                                      tennis volleyball hockey basketball boxing table tennis and a modern

                                                                      gymnasium

                                                                      The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                      services for the betterment of the people in and around Jamshedpur

                                                                      At times of natural calamities the company has rushe immediate relief and off

                                                                      ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                      fl ood ravaged Orissa and other such aff ected areas

                                                                      Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                      er a unique environment for the children of Jamshedpur to grow up in

                                                                      In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                      Jamshedpur has emerged as the one of the best cities in India

                                                                      Steel Authority of India

                                                                      The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                      executives and 123005 non-executives The total reduction in manpower achieved

                                                                      during the year stood at 4864 which included separation of 881 employees through

                                                                      voluntary retirement The labour productivity improved by around 12 over previous

                                                                      year to 150 tonne crude steelmanyear

                                                                      Some of the areas of assistance which are available to the weaker sections are the

                                                                      following

                                                                      The company has provided land for construction of school buildings in some of

                                                                      the steel townships as well as in other places for spreading education among

                                                                      the masses

                                                                      The company has constructed roads in remote areas around the steel plants

                                                                      and also where the captive mines are located to improve communication and

                                                                      also increase activities such as organisation of health camps school facilities

                                                                      drinking water etc under the peripheral development schemes

                                                                      Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                      Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                      providing them with education boarding and lodging facilities

                                                                      Construction of bridges by-pass roads metal-morum path waterways

                                                                      levellingdressing area around township pre-mixed roads Installation of hand-

                                                                      pumps tube wells and wells for villagers

                                                                      Construction of school buildings (including for mentally retarded deaf and

                                                                      dumb children) madarsas providing school furniture therein and construction

                                                                      of hostels womenrsquos college building etc

                                                                      Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                      engineering students in various disciplines to encourage technical education

                                                                      among them

                                                                      In many cases tuition fee in company run schools is exempt for SCST

                                                                      students Steps are taken to provide education to more and more tribal children

                                                                      in company schools

                                                                      The unemployed SCST youth are given specialized training in various

                                                                      technical trades to develop skill and knowledge Such training is provided free

                                                                      of cost

                                                                      Adult literacy campaign is carried out in most of the steel townships Every year

                                                                      more and more men and women are being covered in this campaign

                                                                      Development of fishery and cottage industry providing sewing machines to

                                                                      village mahila mandals and promoting other self-employment generation

                                                                      schemes

                                                                      SAIL has established a hockey academy with stadium and hostel facilities at

                                                                      Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                      academy was successful in spotting a number of young talented tribal players

                                                                      and grooms them under expertise of ex-Olympian

                                                                      Technology

                                                                      The biggest boost to efficiency in the steel industry has come from the increased

                                                                      use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                      share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                      now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                      among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                      crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                      suggests there is restructuring potential

                                                                      TATA Steel

                                                                      Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                      with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                      international companies also took part in the exhibition Participating companies from

                                                                      countries all over the world exhibited latest technologies and know-how List of

                                                                      participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                      Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                      companies of national and international repute China was the partner country for the

                                                                      International Trade Fair this year

                                                                      In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                      cutting-edge technology used in iron ore mining pioneering human resource

                                                                      practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                      steel company

                                                                      The 6th International Trade Fair and Conference an institutionalised global

                                                                      event is considered to be one of the most prestigious forums for national as well

                                                                      international participants It is a conclave of the finest minds concerned with the future

                                                                      direction and growth of these sectors The forum provided the worlds most eminent

                                                                      metallurgists manufacturers of metallurgical and mining machinery and related

                                                                      sectors professionals analysts and experts with the opportunity to exchange views on

                                                                      emerging technologies synergy and strengths and open up wider horizons for

                                                                      sectorial development

                                                                      Tata Steel to adopt Corus technology

                                                                      Tata Steel plans to implement alternate technology used by the British steel

                                                                      maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                      production according to Mr B Muthuraman Managing Director Tata Steel

                                                                      ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                      technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                      newspersons on the sidelines of the 34th National Management Convention organised

                                                                      by the All-India Management Association However he declined to give further details

                                                                      on the type of technology the Indian steel giant plans to implement

                                                                      Steel Authority of India

                                                                      Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                      of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                      and productive capacity and in the process become more energy-efficient and

                                                                      improve quality The key component of the ongoing modernisation drive - already

                                                                      completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                      ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                      continuous casting techniques A senior SAIL official says Continuous casting and

                                                                      basic oxygen furnaces ensure better quality steel through processes more easily

                                                                      monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                      more automated and permits greater flexibility Continuous casting is more efficient

                                                                      than the traditional ingot casting methods and gives increased yields while enabling

                                                                      better quality standards SAIL is also modernising its finishing mills and is adding

                                                                      secondary refining facilities to improve quality

                                                                      Safety measures

                                                                      A unique feature of safety management in steel industry is that a bipartite forum

                                                                      named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                      was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                      RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                      Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                      workshops training programme safety competitions for member organisations JCSSI

                                                                      with the co-operation and support of Trade Union representatives formulates policies

                                                                      and guidelines for its member plants and monitors the implementation

                                                                      Tata Steel

                                                                      Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                      Safety department and a Safety Trophy helped spread the message all across the

                                                                      company

                                                                      TATA reaffirms its commitment to provide safe working place and clean

                                                                      environment to its employees and other stakeholders as an integral part of its

                                                                      business philosophy and values We will continually enhance our Environmental

                                                                      Occupational Health amp Safety (EHS) performance in our activities products and

                                                                      services through a structured EHS management framework Towards this

                                                                      commitment we shall

                                                                      Establish and achieve EHS objectives and targets

                                                                      Ensure compliance with applicable EHS legislation and other requirement and

                                                                      go beyond

                                                                      Conserve natural resources and energy by constantly seeking to reduce

                                                                      consumption and promoting waste avoidance and recycling measures

                                                                      Eliminate minimize andor control adverse environmental impacts and

                                                                      occupational health and safety risks by adopting appropriate state-of-the-art

                                                                      technology and best EHS management practices at all levels sand functions

                                                                      Enhance awareness skill and competence of our employees and contractors

                                                                      so as to enable them to demonstrate their involvement responsibility and

                                                                      accountability for sound EHS performance

                                                                      Steel Authority of India

                                                                      SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                      monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                      Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                      formulated and review of implementation of APP is done during Heads of

                                                                      Safety meeting

                                                                      Internal and external safety audits of major departments particularly hazardous

                                                                      areas are conducted every year and points arising from these audits are

                                                                      liquidated Safety aspects have been incorporated in standard operating

                                                                      practices (SOP) and standard maintenance practices (SMP)

                                                                      All major capital repairsshut downs are closely monitored round the clock

                                                                      Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                      grass-root level apart from regular inspections as per checklists to identify

                                                                      unsafe conditionsacts

                                                                      Safety training is imparted to target group employees at various levels HRD

                                                                      intervention in the area of safety covers Heads of Departments Line Managers

                                                                      amp Departmental Safety Officers Besides area specific workshops are

                                                                      conducted at different locations on important topics like gas safety railroad

                                                                      safety safety in iron steel amp coke making etc

                                                                      Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                      standards in the company by taking measures like intensive safety drives in works

                                                                      area and conducting safety audits in hazardous departments of different plants and

                                                                      mines In addition specific workshops on safety aspects were organised in various

                                                                      SAIL steel plants

                                                                      Measures taken by Indian government to improve the industry

                                                                      Now letrsquos 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-

                                                                      1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                      among others was removed from the list of industries reserved for the public

                                                                      sector and also exempted from the provisions of compulsory licensing under the

                                                                      Industries (Development and Regulation) Act 1951

                                                                      2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                      of `high priority industries for automatic approval for foreign equity investment up

                                                                      to 51 This limit has been recently increased to 100

                                                                      3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                      time it was ensured that priority continued to be accorded for meeting the

                                                                      requirements of small scale industries exporters of engineering goods and North

                                                                      Eastern Region of the country besides strategic sectors such as Defence and

                                                                      Railways

                                                                      4 The trade policy has been liberalised and import and export of iron and steel is

                                                                      freely allowed There are no quantitative restrictions on import of iron and steel

                                                                      items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                      regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                      steel have drastically come down since 1991-92 levels and the government is

                                                                      committed to bring them down to the international levels In Chapter 72 there are

                                                                      two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                      5 Iron amp Steel are freely importable as per the Extant Policy

                                                                      6 Iron amp Steel are freely exportable

                                                                      7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                      8 The floor price for seconds and defectives continues till date

                                                                      9 Imports of seconds and defectives of steel are allowed only through three

                                                                      designated ports of Mumbai Calcutta and Chennai

                                                                      10Mandatory pre inspection certificate by a reputed international agency for every

                                                                      import consignment of seconds and defectives

                                                                      11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                      10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                      the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                      per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                      15 per cent to 5 per cent

                                                                      12Further customs duty on several raw materials used by the steel sector like

                                                                      noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                      coking coal to zero

                                                                      13To bring down the prices of steel the excise duty on steel products was reduced

                                                                      from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                      that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                      increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                      cut on moderating prices was not achieved

                                                                      14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                      further reduced from 20 to 10

                                                                      Special assistance being provided by Ministry of Steel to Private Sector

                                                                      1 Ministry of Steel is extending all possible support as detailed below for the

                                                                      development of Iron and Steel Sector in the country

                                                                      2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                      new plants and expansion of existing ones wherever applied for

                                                                      3 To ensure an un-interrupted supply of raw materials to the producers

                                                                      4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                      clearance of projects

                                                                      5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                      Plants are held at the level of Secretary

                                                                      6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                      industry so that their absence does not lead to bottlenecks in the future growth of

                                                                      the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                      7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                      Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                      country are members of this Institute which has been set up with the objective of

                                                                      promoting developing and propagating the proper and effective use of steel

                                                                      8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                      major steel plants being implemented Govt has setup a Project Coordination

                                                                      Group under the Chairmanship of Steel Minister

                                                                      NATIONAL STEEL POLICY 2005

                                                                      The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                      development and as such great importance is attached to capacity expansion in line

                                                                      with expected demand at cost and prices which make Indian steel internationally

                                                                      competitive The existing regime of liberalization decontrol and deregulation of

                                                                      industry in the country has opened up new opportunities for the expansion of the steel

                                                                      industry With a view to accelerating the growth of the steel sector and attaining the

                                                                      vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                      formulated a National Steel Policy (NSP) in 2005

                                                                      The following salient features can be derived after analysing the NSP 2005

                                                                      The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                      towards reform restructuring and globalisation

                                                                      The long-term goal of the NSP is that India should have a modern and efficient

                                                                      steel industry of world standards catering to diversified steel demand The focus of

                                                                      the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                      product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                      In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                      NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                      an open globally integrated and competitive environment

                                                                      The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                      policy goal On the demand side the strategy would be to create incremental

                                                                      demand through promotional efforts creation of awareness and strengthening the

                                                                      delivery chain particularly in rural areas On the supply side the strategy would be

                                                                      to facilitate creation of additional capacity remove procedural and policy

                                                                      bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                      investments in RampD and encourage the creation of infrastructure such as roads

                                                                      railways and ports

                                                                      The NSP acknowledges the low per capita consumption of steel in the country

                                                                      especially in the rural areas and the need to boost steel consumption to improve

                                                                      quality of life and help in meeting the growing aspirations of masses

                                                                      In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                      industry would need additional capital In addition funds would be required for

                                                                      technological upgrade of existing facilities In order to mobilize such vast resources

                                                                      NSP seeks to encourage foreign direct investment In addition the policy also

                                                                      seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                      to the steel industry

                                                                      The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                      derivatives to contain price volatility in the steel market

                                                                      The NSP seeks to strengthen the existing training and research facilities available

                                                                      to the domestic steel industry so as to provide suitable training programmes

                                                                      especially for the secondary small-scale units and also to collect and analyse data

                                                                      on important parameters of the industry

                                                                      The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                      capability for special types of steel substitute coking coal use iron ore fines

                                                                      develop new products suited to rural needs enhance material and energy

                                                                      efficiency utilize waste and arrest environmental degradation

                                                                      The NSP acknowledges the important role played by the secondary steel sector in

                                                                      providing employment meeting local demand of steel in rural and semi-urban

                                                                      areas and meeting the countryrsquos demand of some special products and seeks to

                                                                      endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                      from major plants through the existing mechanism of State Small Industries

                                                                      Corporations

                                                                      The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                      global economy requires that the industry should be protected from unfair trade

                                                                      practices The NSP therefore envisages institution of mechanisms for import

                                                                      surveillance and monitoring export subsidies in other countries

                                                                      The present per capita consumption of steel in the country is very low compared to the

                                                                      world average As mentioned above one of the objectives of the NSP is to augment

                                                                      the demand and consumption of steel in the country by conscious promotion of steel

                                                                      usage With a view to create a mass awareness campaign on conscious promotion of

                                                                      steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                      the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                      The Committee is being serviced by Institute for Steel Development and Growth

                                                                      (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                      way of an awareness campaign with particular emphasis on rural sectors The

                                                                      Committee also aims at educating the designers architects builders and planners

                                                                      regarding the qualitative and cost effective applications of steel in various structures

                                                                      including buildings bridges flyovers and airports

                                                                      FUTURE OF INDIAN STEEL INDUSTRY

                                                                      India is amongst a few countries in the world having the dual advantage of fast

                                                                      growing domestic demand coupled with access to raw materials Further the trend

                                                                      that is already discernible is that the axis of global steel production consumption is

                                                                      shifting towards Asia With their large populations China and India already account for

                                                                      35 of the total world steel production - more than double of Europe Asia is

                                                                      expected to outpace other regions of the world to an even greater extent in the coming

                                                                      years

                                                                      Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                      is accepted that China will continue to be the leader However India is slated to

                                                                      emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                      the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                      splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                      China swallowed almost 32 of global steel It is unlikely that future production and

                                                                      consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                      has been the case over the last few years On the other hand it is sun-rise time for

                                                                      India where the demand has increased by 7-8 in the last couple of years In the long

                                                                      run Indian steel is likely to be more cost-effective since unlike China India has

                                                                      relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                      can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                      However the position with coal is not so favourable Though thermal coal

                                                                      reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                      traditional blast furnace route would require coking coal India does not have adequate

                                                                      reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                      Thus the steel industry always had to contend with the dual problems of inadequate

                                                                      availability and poor quality of Indian coking coal This has been partly addressed by

                                                                      adopting alternative iron making processes that are not dependent on coking coal it

                                                                      can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                      in India

                                                                      Because of the shortage of indigenous coal attempts have been made by steel

                                                                      producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                      mines in other countries This is the only long-term solution but with a global shortage

                                                                      of coal it may not remain cost-effective in the long run

                                                                      India is the seventh largest producer of steel and may further improve its position

                                                                      going by the current trends A series of investment decisions by major domestic

                                                                      players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                      POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                      The keen interest shown by various prospective investors is not only due to

                                                                      expectations of strong growth in domestic demand but also due to indigenous

                                                                      availability of key resources like iron ore and skilled workforce

                                                                      After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                      steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                      finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                      2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                      consumption has accelerated to 91 per cent

                                                                      With the likely growth of Indian economy at around 7 per cent per annum

                                                                      demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                      million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                      demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                      is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                      very low level of per capita consumption of steel in India is highlighted further when

                                                                      compared with the consumption levels of its peer group consisting of countries like

                                                                      China Brazil Mexico and Republic of Korea as also with selected developed

                                                                      countries

                                                                      Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                      China there seems to be consensus among analysts that India is likely to witness a

                                                                      growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                      percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                      achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                      more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                      country like India cyclicity is more in terms of prices rather than volumes of production

                                                                      Exports

                                                                      Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                      starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                      2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                      rising domestic demand and low capacity additions Exports now constitute around 17

                                                                      per cent of total production and Indias presence in the developing and developed

                                                                      world is being increasingly felt Indian steel producers have recently been able to

                                                                      supply specialized grades and products used for sophisticated applications like

                                                                      automobiles On the cost front some of our producers are counted amongst the least

                                                                      cost producers of the world For an average reference plant India is competitively

                                                                      placed in the middle of the hierarchy of steel producing nations

                                                                      However we have a long way to go to catch up with the leading exporters of the

                                                                      world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                      2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                      per cent of total projected production The projected export ratio compares well with

                                                                      the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                      The projected production of steel by 2019-20 to meet the domestic and export

                                                                      demand will be around 110 million tonnes Management of resources and

                                                                      infrastructural growth is going to be critical in achievement of the production level

                                                                      envisaged The broad requirements of various resources will increase manifold from

                                                                      the current level The bottlenecks in availability of critical inputs and various facilities

                                                                      need to be removed through concerted efforts of Government and industry The broad

                                                                      strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                      sector has been discussed in the National Steel Policy which has been recently

                                                                      approved by the Government

                                                                      As stated earlier the long-term goal of the National Steel Policy is that India

                                                                      should have a modern and efficient steel industry of world standards catering to a

                                                                      diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                      not only in terms of cost quality and product mix but also in terms of global

                                                                      benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                      pronged strategy to achieve these goals On the demand side the strategy would be

                                                                      to create incremental demand through promotional efforts creation of awareness and

                                                                      strengthening the delivery chain particularly in rural areas On the supply side the

                                                                      strategy would be to facilitate creation of additional capacity remove procedural and

                                                                      policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                      investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                      roads railways and ports

                                                                      The production figures exports and imports of finished carbon steel and pig iron

                                                                      and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                      Steel and SAIL attest to the continuing growth for both the sectors

                                                                      FINDINGS

                                                                      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 increased its profit over the year particularly in 2006-07

                                                                      Both the companies are planning to adopt modern technology which is going to

                                                                      help them to compete in world market but they need to be less dependent on

                                                                      state of art technology and coal for long term prospects

                                                                      Public sector has undergone retrenchment for the employees and improved

                                                                      has its lobour productivity but it is still lacking behind as compared to private

                                                                      sector

                                                                      SAIL has reduced the no of accidents due to improper handling of machinery

                                                                      still no of accidents are more than that of TATA Steel

                                                                      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

                                                                      ie 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 have to be met

                                                                      comprehensively if we are to take our legitimate place in the world as a developed

                                                                      nation by 2020

                                                                      BIBLIOGRAPHY

                                                                      Annual report (2006-07) published by ministry of steel

                                                                      Annual report (2006-07) published by TATA Steel

                                                                      Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                      REPORTrsquo posted by SAIL on its website

                                                                      lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                      held on 07 Nov 2006

                                                                      Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                      wwwsteelnicin (Official website of ministry of industry)

                                                                      wwwtatasteelcom (Official website of TATA Steel)

                                                                      wwwsailcoin (Official website of Steel Authority of India)

                                                                      wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                      wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                      • DATA ANALYSIS
                                                                      • Comparison between TATA Steel and Steel Authority of India
                                                                      • Production
                                                                      • Quantity 000 Tonnes
                                                                      • Financials
                                                                      • Research and Development
                                                                      • (Rs Crore)
                                                                      • TATA Steel
                                                                      • Steel Authority of India
                                                                      • Environment
                                                                      • TATA Steel
                                                                      • Emissions effluents and wastes
                                                                      • Emissions
                                                                      • Waste handling
                                                                      • Effluent Management
                                                                      • Steel Authority of India
                                                                      • Solid Waste Management
                                                                      • Environmental Plantation
                                                                      • Environmental Recognitions
                                                                      • Workforce and Welfare of Society
                                                                      • TATA steel
                                                                      • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                      • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                      • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                      • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                      • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                      • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                      • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                      • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                      • Steel Authority of India
                                                                      • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                      • Technology
                                                                      • Steel Authority of India
                                                                      • Safety measures
                                                                      • Tata Steel
                                                                      • Steel Authority of India
                                                                      • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                      • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                      • Measures taken by Indian government to improve the industry
                                                                      • Now letrsquos 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-
                                                                      • Special assistance being provided by Ministry of Steel to Private Sector
                                                                      • FUTURE OF INDIAN STEEL INDUSTRY

                                                                        Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie

                                                                        Ltd Kolkata and Ms Monarch Electronics Kolkata etc

                                                                        During the year 1998 technical papers were publishedpresented besides filing

                                                                        of 31 patents and 29 copyrights The scientists at the RDCIS won nine national level

                                                                        awards In addition RDCIS won the prestigious ldquoDSIR National Award 2005 for RampD

                                                                        achievements in New Materialsrdquo given by the Ministry of Science and Technology

                                                                        Government of India

                                                                        Environment

                                                                        TATA Steel

                                                                        Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                                        Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                                        has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                                        Jamshedpur is the only town in the country which

                                                                        Significant achievements by the Company include an improvement in

                                                                        environment and resource conservation including a reduction in green house erosion

                                                                        raw materials and water consumption The Company has increased waste re-use and

                                                                        re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                                        the-art pollution control systems being installed to prevent and control pollution The

                                                                        Company has almost doubled its capital investment in Pollution Abatement in the last

                                                                        five years

                                                                        Emissions effluents and wastes

                                                                        Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                                        most relevance to the steel industry Considerable reduction has been effected by

                                                                        Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                                        granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                                        Tata Steelrsquos activities

                                                                        Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                                        tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                                        Hazardous Waste under Basel Convention The Company does not import or export

                                                                        any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                                        generated are handled as per the requirement of the Hazardous Waste Management

                                                                        and Handling Rules 19892000

                                                                        Emissions

                                                                        Tata Steel has undertaken several initiatives which have resulted in

                                                                        considerable reduction in stack emission Emissions are well below the Indian and

                                                                        international standards The emission load including particulate matter Sulphur

                                                                        Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                                        undertaken at the Steel Works

                                                                        Waste handling

                                                                        Most of the solid waste generated from Steel Works is recycled or reused 18

                                                                        of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                                        was used to fill low-lying areas and for peripheral road construction around

                                                                        Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                                        power plants was dumped in a designated dump area

                                                                        Effluent Management

                                                                        Waste water from the steel making process is being treated with best available

                                                                        physio-chemical methods as well as being recycled Waste water from the coke plant

                                                                        is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                                        organisms The Company has reduced the levels of total pollutant discharge in waste

                                                                        water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                                        Steel Authority of India

                                                                        Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                                        environmentally responsible manner to comply with applicable regulations and striving

                                                                        to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                                        efficiency and optimize resource consumption through various measures viz

                                                                        improvement in process technology in the areas of raw materials coke iron and steel

                                                                        making reuserecycle of the by-products generated and conservation of energy and

                                                                        water

                                                                        Solid Waste Management

                                                                        During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                                        and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                                        Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                                        these wastes are being made through internal recycling and selling to outside

                                                                        agencies The wastes generated in the steel plants are being utilized mainly through

                                                                        their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                        during April-September 2006

                                                                        Environmental Plantation

                                                                        Trees have a significant role in protection of environment and ecological balance

                                                                        Extensive afforestation programme are being followed in all the plants and mines The

                                                                        basis of choosing the species of plants mainly depends on local soil characteristics

                                                                        and prevailing meteorological conditions The green belt developed by afforestation

                                                                        adds to the aesthetic environment which becomes dust and noise barriers

                                                                        A total number of 145521 saplings have been planted covering an area of 637

                                                                        hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                        hectare in 2004-05 in and around the steel plants of SAIL

                                                                        Environmental Recognitions

                                                                        SAIL plants have been awarded various prizes for environmental management in

                                                                        their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                        the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                        environmental economic andsocial dimensions of sustainable development and the

                                                                        Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                        Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                        Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                        for 2005 from International Greenland Society

                                                                        Workforce and Welfare of Society

                                                                        TATA steel

                                                                        Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                        and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                        enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                        provide a work environment that will ensure a sense of purpose and personal growth

                                                                        for each individual The wish of the company is to see the smile on every face

                                                                        everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                        people and enriched empowered and enhanced their lives

                                                                        Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                        brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                        Tata Steel were the first of their kind in India and some even in the western countries

                                                                        at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                        source of its competitiveness It focuses on constantly updating and challenging

                                                                        intellectual capabilities to enable them to excel in performance Special efforts are

                                                                        made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                        workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                        available with its people through Knowledge Management and sharing of best

                                                                        practices

                                                                        In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                        mutual co-operation coordination and understanding between the Management and

                                                                        the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                        among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                        transparency fairness and equity in all its interactions with its employees to create an

                                                                        enthused and happy workforce

                                                                        In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                        assistance in the fields of education vocational training self-employment and

                                                                        family welfare

                                                                        Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                        12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                        surgical treatment for preventive and curative interventions to people in

                                                                        inaccessible rural areas

                                                                        Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                        for the 1920 Antwerp Olympics

                                                                        The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                        track was inaugurated in 1991 The complex also houses facilities for handball

                                                                        tennis volleyball hockey basketball boxing table tennis and a modern

                                                                        gymnasium

                                                                        The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                        services for the betterment of the people in and around Jamshedpur

                                                                        At times of natural calamities the company has rushe immediate relief and off

                                                                        ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                        fl ood ravaged Orissa and other such aff ected areas

                                                                        Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                        er a unique environment for the children of Jamshedpur to grow up in

                                                                        In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                        Jamshedpur has emerged as the one of the best cities in India

                                                                        Steel Authority of India

                                                                        The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                        executives and 123005 non-executives The total reduction in manpower achieved

                                                                        during the year stood at 4864 which included separation of 881 employees through

                                                                        voluntary retirement The labour productivity improved by around 12 over previous

                                                                        year to 150 tonne crude steelmanyear

                                                                        Some of the areas of assistance which are available to the weaker sections are the

                                                                        following

                                                                        The company has provided land for construction of school buildings in some of

                                                                        the steel townships as well as in other places for spreading education among

                                                                        the masses

                                                                        The company has constructed roads in remote areas around the steel plants

                                                                        and also where the captive mines are located to improve communication and

                                                                        also increase activities such as organisation of health camps school facilities

                                                                        drinking water etc under the peripheral development schemes

                                                                        Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                        Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                        providing them with education boarding and lodging facilities

                                                                        Construction of bridges by-pass roads metal-morum path waterways

                                                                        levellingdressing area around township pre-mixed roads Installation of hand-

                                                                        pumps tube wells and wells for villagers

                                                                        Construction of school buildings (including for mentally retarded deaf and

                                                                        dumb children) madarsas providing school furniture therein and construction

                                                                        of hostels womenrsquos college building etc

                                                                        Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                        engineering students in various disciplines to encourage technical education

                                                                        among them

                                                                        In many cases tuition fee in company run schools is exempt for SCST

                                                                        students Steps are taken to provide education to more and more tribal children

                                                                        in company schools

                                                                        The unemployed SCST youth are given specialized training in various

                                                                        technical trades to develop skill and knowledge Such training is provided free

                                                                        of cost

                                                                        Adult literacy campaign is carried out in most of the steel townships Every year

                                                                        more and more men and women are being covered in this campaign

                                                                        Development of fishery and cottage industry providing sewing machines to

                                                                        village mahila mandals and promoting other self-employment generation

                                                                        schemes

                                                                        SAIL has established a hockey academy with stadium and hostel facilities at

                                                                        Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                        academy was successful in spotting a number of young talented tribal players

                                                                        and grooms them under expertise of ex-Olympian

                                                                        Technology

                                                                        The biggest boost to efficiency in the steel industry has come from the increased

                                                                        use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                        share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                        now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                        among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                        crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                        suggests there is restructuring potential

                                                                        TATA Steel

                                                                        Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                        with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                        international companies also took part in the exhibition Participating companies from

                                                                        countries all over the world exhibited latest technologies and know-how List of

                                                                        participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                        Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                        companies of national and international repute China was the partner country for the

                                                                        International Trade Fair this year

                                                                        In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                        cutting-edge technology used in iron ore mining pioneering human resource

                                                                        practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                        steel company

                                                                        The 6th International Trade Fair and Conference an institutionalised global

                                                                        event is considered to be one of the most prestigious forums for national as well

                                                                        international participants It is a conclave of the finest minds concerned with the future

                                                                        direction and growth of these sectors The forum provided the worlds most eminent

                                                                        metallurgists manufacturers of metallurgical and mining machinery and related

                                                                        sectors professionals analysts and experts with the opportunity to exchange views on

                                                                        emerging technologies synergy and strengths and open up wider horizons for

                                                                        sectorial development

                                                                        Tata Steel to adopt Corus technology

                                                                        Tata Steel plans to implement alternate technology used by the British steel

                                                                        maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                        production according to Mr B Muthuraman Managing Director Tata Steel

                                                                        ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                        technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                        newspersons on the sidelines of the 34th National Management Convention organised

                                                                        by the All-India Management Association However he declined to give further details

                                                                        on the type of technology the Indian steel giant plans to implement

                                                                        Steel Authority of India

                                                                        Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                        of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                        and productive capacity and in the process become more energy-efficient and

                                                                        improve quality The key component of the ongoing modernisation drive - already

                                                                        completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                        ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                        continuous casting techniques A senior SAIL official says Continuous casting and

                                                                        basic oxygen furnaces ensure better quality steel through processes more easily

                                                                        monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                        more automated and permits greater flexibility Continuous casting is more efficient

                                                                        than the traditional ingot casting methods and gives increased yields while enabling

                                                                        better quality standards SAIL is also modernising its finishing mills and is adding

                                                                        secondary refining facilities to improve quality

                                                                        Safety measures

                                                                        A unique feature of safety management in steel industry is that a bipartite forum

                                                                        named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                        was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                        RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                        Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                        workshops training programme safety competitions for member organisations JCSSI

                                                                        with the co-operation and support of Trade Union representatives formulates policies

                                                                        and guidelines for its member plants and monitors the implementation

                                                                        Tata Steel

                                                                        Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                        Safety department and a Safety Trophy helped spread the message all across the

                                                                        company

                                                                        TATA reaffirms its commitment to provide safe working place and clean

                                                                        environment to its employees and other stakeholders as an integral part of its

                                                                        business philosophy and values We will continually enhance our Environmental

                                                                        Occupational Health amp Safety (EHS) performance in our activities products and

                                                                        services through a structured EHS management framework Towards this

                                                                        commitment we shall

                                                                        Establish and achieve EHS objectives and targets

                                                                        Ensure compliance with applicable EHS legislation and other requirement and

                                                                        go beyond

                                                                        Conserve natural resources and energy by constantly seeking to reduce

                                                                        consumption and promoting waste avoidance and recycling measures

                                                                        Eliminate minimize andor control adverse environmental impacts and

                                                                        occupational health and safety risks by adopting appropriate state-of-the-art

                                                                        technology and best EHS management practices at all levels sand functions

                                                                        Enhance awareness skill and competence of our employees and contractors

                                                                        so as to enable them to demonstrate their involvement responsibility and

                                                                        accountability for sound EHS performance

                                                                        Steel Authority of India

                                                                        SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                        monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                        Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                        formulated and review of implementation of APP is done during Heads of

                                                                        Safety meeting

                                                                        Internal and external safety audits of major departments particularly hazardous

                                                                        areas are conducted every year and points arising from these audits are

                                                                        liquidated Safety aspects have been incorporated in standard operating

                                                                        practices (SOP) and standard maintenance practices (SMP)

                                                                        All major capital repairsshut downs are closely monitored round the clock

                                                                        Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                        grass-root level apart from regular inspections as per checklists to identify

                                                                        unsafe conditionsacts

                                                                        Safety training is imparted to target group employees at various levels HRD

                                                                        intervention in the area of safety covers Heads of Departments Line Managers

                                                                        amp Departmental Safety Officers Besides area specific workshops are

                                                                        conducted at different locations on important topics like gas safety railroad

                                                                        safety safety in iron steel amp coke making etc

                                                                        Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                        standards in the company by taking measures like intensive safety drives in works

                                                                        area and conducting safety audits in hazardous departments of different plants and

                                                                        mines In addition specific workshops on safety aspects were organised in various

                                                                        SAIL steel plants

                                                                        Measures taken by Indian government to improve the industry

                                                                        Now letrsquos 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-

                                                                        1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                        among others was removed from the list of industries reserved for the public

                                                                        sector and also exempted from the provisions of compulsory licensing under the

                                                                        Industries (Development and Regulation) Act 1951

                                                                        2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                        of `high priority industries for automatic approval for foreign equity investment up

                                                                        to 51 This limit has been recently increased to 100

                                                                        3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                        time it was ensured that priority continued to be accorded for meeting the

                                                                        requirements of small scale industries exporters of engineering goods and North

                                                                        Eastern Region of the country besides strategic sectors such as Defence and

                                                                        Railways

                                                                        4 The trade policy has been liberalised and import and export of iron and steel is

                                                                        freely allowed There are no quantitative restrictions on import of iron and steel

                                                                        items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                        regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                        steel have drastically come down since 1991-92 levels and the government is

                                                                        committed to bring them down to the international levels In Chapter 72 there are

                                                                        two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                        5 Iron amp Steel are freely importable as per the Extant Policy

                                                                        6 Iron amp Steel are freely exportable

                                                                        7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                        8 The floor price for seconds and defectives continues till date

                                                                        9 Imports of seconds and defectives of steel are allowed only through three

                                                                        designated ports of Mumbai Calcutta and Chennai

                                                                        10Mandatory pre inspection certificate by a reputed international agency for every

                                                                        import consignment of seconds and defectives

                                                                        11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                        10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                        the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                        per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                        15 per cent to 5 per cent

                                                                        12Further customs duty on several raw materials used by the steel sector like

                                                                        noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                        coking coal to zero

                                                                        13To bring down the prices of steel the excise duty on steel products was reduced

                                                                        from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                        that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                        increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                        cut on moderating prices was not achieved

                                                                        14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                        further reduced from 20 to 10

                                                                        Special assistance being provided by Ministry of Steel to Private Sector

                                                                        1 Ministry of Steel is extending all possible support as detailed below for the

                                                                        development of Iron and Steel Sector in the country

                                                                        2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                        new plants and expansion of existing ones wherever applied for

                                                                        3 To ensure an un-interrupted supply of raw materials to the producers

                                                                        4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                        clearance of projects

                                                                        5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                        Plants are held at the level of Secretary

                                                                        6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                        industry so that their absence does not lead to bottlenecks in the future growth of

                                                                        the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                        7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                        Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                        country are members of this Institute which has been set up with the objective of

                                                                        promoting developing and propagating the proper and effective use of steel

                                                                        8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                        major steel plants being implemented Govt has setup a Project Coordination

                                                                        Group under the Chairmanship of Steel Minister

                                                                        NATIONAL STEEL POLICY 2005

                                                                        The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                        development and as such great importance is attached to capacity expansion in line

                                                                        with expected demand at cost and prices which make Indian steel internationally

                                                                        competitive The existing regime of liberalization decontrol and deregulation of

                                                                        industry in the country has opened up new opportunities for the expansion of the steel

                                                                        industry With a view to accelerating the growth of the steel sector and attaining the

                                                                        vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                        formulated a National Steel Policy (NSP) in 2005

                                                                        The following salient features can be derived after analysing the NSP 2005

                                                                        The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                        towards reform restructuring and globalisation

                                                                        The long-term goal of the NSP is that India should have a modern and efficient

                                                                        steel industry of world standards catering to diversified steel demand The focus of

                                                                        the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                        product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                        In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                        NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                        an open globally integrated and competitive environment

                                                                        The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                        policy goal On the demand side the strategy would be to create incremental

                                                                        demand through promotional efforts creation of awareness and strengthening the

                                                                        delivery chain particularly in rural areas On the supply side the strategy would be

                                                                        to facilitate creation of additional capacity remove procedural and policy

                                                                        bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                        investments in RampD and encourage the creation of infrastructure such as roads

                                                                        railways and ports

                                                                        The NSP acknowledges the low per capita consumption of steel in the country

                                                                        especially in the rural areas and the need to boost steel consumption to improve

                                                                        quality of life and help in meeting the growing aspirations of masses

                                                                        In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                        industry would need additional capital In addition funds would be required for

                                                                        technological upgrade of existing facilities In order to mobilize such vast resources

                                                                        NSP seeks to encourage foreign direct investment In addition the policy also

                                                                        seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                        to the steel industry

                                                                        The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                        derivatives to contain price volatility in the steel market

                                                                        The NSP seeks to strengthen the existing training and research facilities available

                                                                        to the domestic steel industry so as to provide suitable training programmes

                                                                        especially for the secondary small-scale units and also to collect and analyse data

                                                                        on important parameters of the industry

                                                                        The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                        capability for special types of steel substitute coking coal use iron ore fines

                                                                        develop new products suited to rural needs enhance material and energy

                                                                        efficiency utilize waste and arrest environmental degradation

                                                                        The NSP acknowledges the important role played by the secondary steel sector in

                                                                        providing employment meeting local demand of steel in rural and semi-urban

                                                                        areas and meeting the countryrsquos demand of some special products and seeks to

                                                                        endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                        from major plants through the existing mechanism of State Small Industries

                                                                        Corporations

                                                                        The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                        global economy requires that the industry should be protected from unfair trade

                                                                        practices The NSP therefore envisages institution of mechanisms for import

                                                                        surveillance and monitoring export subsidies in other countries

                                                                        The present per capita consumption of steel in the country is very low compared to the

                                                                        world average As mentioned above one of the objectives of the NSP is to augment

                                                                        the demand and consumption of steel in the country by conscious promotion of steel

                                                                        usage With a view to create a mass awareness campaign on conscious promotion of

                                                                        steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                        the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                        The Committee is being serviced by Institute for Steel Development and Growth

                                                                        (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                        way of an awareness campaign with particular emphasis on rural sectors The

                                                                        Committee also aims at educating the designers architects builders and planners

                                                                        regarding the qualitative and cost effective applications of steel in various structures

                                                                        including buildings bridges flyovers and airports

                                                                        FUTURE OF INDIAN STEEL INDUSTRY

                                                                        India is amongst a few countries in the world having the dual advantage of fast

                                                                        growing domestic demand coupled with access to raw materials Further the trend

                                                                        that is already discernible is that the axis of global steel production consumption is

                                                                        shifting towards Asia With their large populations China and India already account for

                                                                        35 of the total world steel production - more than double of Europe Asia is

                                                                        expected to outpace other regions of the world to an even greater extent in the coming

                                                                        years

                                                                        Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                        is accepted that China will continue to be the leader However India is slated to

                                                                        emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                        the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                        splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                        China swallowed almost 32 of global steel It is unlikely that future production and

                                                                        consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                        has been the case over the last few years On the other hand it is sun-rise time for

                                                                        India where the demand has increased by 7-8 in the last couple of years In the long

                                                                        run Indian steel is likely to be more cost-effective since unlike China India has

                                                                        relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                        can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                        However the position with coal is not so favourable Though thermal coal

                                                                        reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                        traditional blast furnace route would require coking coal India does not have adequate

                                                                        reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                        Thus the steel industry always had to contend with the dual problems of inadequate

                                                                        availability and poor quality of Indian coking coal This has been partly addressed by

                                                                        adopting alternative iron making processes that are not dependent on coking coal it

                                                                        can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                        in India

                                                                        Because of the shortage of indigenous coal attempts have been made by steel

                                                                        producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                        mines in other countries This is the only long-term solution but with a global shortage

                                                                        of coal it may not remain cost-effective in the long run

                                                                        India is the seventh largest producer of steel and may further improve its position

                                                                        going by the current trends A series of investment decisions by major domestic

                                                                        players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                        POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                        The keen interest shown by various prospective investors is not only due to

                                                                        expectations of strong growth in domestic demand but also due to indigenous

                                                                        availability of key resources like iron ore and skilled workforce

                                                                        After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                        steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                        finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                        2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                        consumption has accelerated to 91 per cent

                                                                        With the likely growth of Indian economy at around 7 per cent per annum

                                                                        demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                        million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                        demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                        is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                        very low level of per capita consumption of steel in India is highlighted further when

                                                                        compared with the consumption levels of its peer group consisting of countries like

                                                                        China Brazil Mexico and Republic of Korea as also with selected developed

                                                                        countries

                                                                        Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                        China there seems to be consensus among analysts that India is likely to witness a

                                                                        growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                        percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                        achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                        more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                        country like India cyclicity is more in terms of prices rather than volumes of production

                                                                        Exports

                                                                        Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                        starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                        2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                        rising domestic demand and low capacity additions Exports now constitute around 17

                                                                        per cent of total production and Indias presence in the developing and developed

                                                                        world is being increasingly felt Indian steel producers have recently been able to

                                                                        supply specialized grades and products used for sophisticated applications like

                                                                        automobiles On the cost front some of our producers are counted amongst the least

                                                                        cost producers of the world For an average reference plant India is competitively

                                                                        placed in the middle of the hierarchy of steel producing nations

                                                                        However we have a long way to go to catch up with the leading exporters of the

                                                                        world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                        2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                        per cent of total projected production The projected export ratio compares well with

                                                                        the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                        The projected production of steel by 2019-20 to meet the domestic and export

                                                                        demand will be around 110 million tonnes Management of resources and

                                                                        infrastructural growth is going to be critical in achievement of the production level

                                                                        envisaged The broad requirements of various resources will increase manifold from

                                                                        the current level The bottlenecks in availability of critical inputs and various facilities

                                                                        need to be removed through concerted efforts of Government and industry The broad

                                                                        strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                        sector has been discussed in the National Steel Policy which has been recently

                                                                        approved by the Government

                                                                        As stated earlier the long-term goal of the National Steel Policy is that India

                                                                        should have a modern and efficient steel industry of world standards catering to a

                                                                        diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                        not only in terms of cost quality and product mix but also in terms of global

                                                                        benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                        pronged strategy to achieve these goals On the demand side the strategy would be

                                                                        to create incremental demand through promotional efforts creation of awareness and

                                                                        strengthening the delivery chain particularly in rural areas On the supply side the

                                                                        strategy would be to facilitate creation of additional capacity remove procedural and

                                                                        policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                        investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                        roads railways and ports

                                                                        The production figures exports and imports of finished carbon steel and pig iron

                                                                        and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                        Steel and SAIL attest to the continuing growth for both the sectors

                                                                        FINDINGS

                                                                        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 increased its profit over the year particularly in 2006-07

                                                                        Both the companies are planning to adopt modern technology which is going to

                                                                        help them to compete in world market but they need to be less dependent on

                                                                        state of art technology and coal for long term prospects

                                                                        Public sector has undergone retrenchment for the employees and improved

                                                                        has its lobour productivity but it is still lacking behind as compared to private

                                                                        sector

                                                                        SAIL has reduced the no of accidents due to improper handling of machinery

                                                                        still no of accidents are more than that of TATA Steel

                                                                        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

                                                                        ie 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 have to be met

                                                                        comprehensively if we are to take our legitimate place in the world as a developed

                                                                        nation by 2020

                                                                        BIBLIOGRAPHY

                                                                        Annual report (2006-07) published by ministry of steel

                                                                        Annual report (2006-07) published by TATA Steel

                                                                        Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                        REPORTrsquo posted by SAIL on its website

                                                                        lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                        held on 07 Nov 2006

                                                                        Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                        wwwsteelnicin (Official website of ministry of industry)

                                                                        wwwtatasteelcom (Official website of TATA Steel)

                                                                        wwwsailcoin (Official website of Steel Authority of India)

                                                                        wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                        wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                        • DATA ANALYSIS
                                                                        • Comparison between TATA Steel and Steel Authority of India
                                                                        • Production
                                                                        • Quantity 000 Tonnes
                                                                        • Financials
                                                                        • Research and Development
                                                                        • (Rs Crore)
                                                                        • TATA Steel
                                                                        • Steel Authority of India
                                                                        • Environment
                                                                        • TATA Steel
                                                                        • Emissions effluents and wastes
                                                                        • Emissions
                                                                        • Waste handling
                                                                        • Effluent Management
                                                                        • Steel Authority of India
                                                                        • Solid Waste Management
                                                                        • Environmental Plantation
                                                                        • Environmental Recognitions
                                                                        • Workforce and Welfare of Society
                                                                        • TATA steel
                                                                        • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                        • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                        • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                        • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                        • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                        • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                        • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                        • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                        • Steel Authority of India
                                                                        • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                        • Technology
                                                                        • Steel Authority of India
                                                                        • Safety measures
                                                                        • Tata Steel
                                                                        • Steel Authority of India
                                                                        • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                        • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                        • Measures taken by Indian government to improve the industry
                                                                        • Now letrsquos 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-
                                                                        • Special assistance being provided by Ministry of Steel to Private Sector
                                                                        • FUTURE OF INDIAN STEEL INDUSTRY

                                                                          Environment

                                                                          TATA Steel

                                                                          Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel

                                                                          Works in Jamshedpur all its mines collieries and manufacturing divisions in its out

                                                                          has an ISO-14001 certified service providerlocations are certified to ISO-14001

                                                                          Jamshedpur is the only town in the country which

                                                                          Significant achievements by the Company include an improvement in

                                                                          environment and resource conservation including a reduction in green house erosion

                                                                          raw materials and water consumption The Company has increased waste re-use and

                                                                          re-cycling Constant upgradation and modernisation has resulted in several state-of-

                                                                          the-art pollution control systems being installed to prevent and control pollution The

                                                                          Company has almost doubled its capital investment in Pollution Abatement in the last

                                                                          five years

                                                                          Emissions effluents and wastes

                                                                          Greenhouse Gas (GHG) Of the six Greenhouse Gases Carbon Dioxide is of

                                                                          most relevance to the steel industry Considerable reduction has been effected by

                                                                          Tata Steel in the Carbon Dioxide emission rate as is evident when the credit for slag

                                                                          granulation is taken into account Other Greenhouse Gas emissions do not result from

                                                                          Tata Steelrsquos activities

                                                                          Ozone depleting substances The Steel Works reduced use of refrigerants to 7044

                                                                          tonnes in 2003-04 as against 790 tonnes used during the previous year

                                                                          Hazardous Waste under Basel Convention The Company does not import or export

                                                                          any waste deemed hazardous under the Basel Convention All hazardous wastes

                                                                          generated are handled as per the requirement of the Hazardous Waste Management

                                                                          and Handling Rules 19892000

                                                                          Emissions

                                                                          Tata Steel has undertaken several initiatives which have resulted in

                                                                          considerable reduction in stack emission Emissions are well below the Indian and

                                                                          international standards The emission load including particulate matter Sulphur

                                                                          Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                                          undertaken at the Steel Works

                                                                          Waste handling

                                                                          Most of the solid waste generated from Steel Works is recycled or reused 18

                                                                          of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                                          was used to fill low-lying areas and for peripheral road construction around

                                                                          Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                                          power plants was dumped in a designated dump area

                                                                          Effluent Management

                                                                          Waste water from the steel making process is being treated with best available

                                                                          physio-chemical methods as well as being recycled Waste water from the coke plant

                                                                          is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                                          organisms The Company has reduced the levels of total pollutant discharge in waste

                                                                          water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                                          Steel Authority of India

                                                                          Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                                          environmentally responsible manner to comply with applicable regulations and striving

                                                                          to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                                          efficiency and optimize resource consumption through various measures viz

                                                                          improvement in process technology in the areas of raw materials coke iron and steel

                                                                          making reuserecycle of the by-products generated and conservation of energy and

                                                                          water

                                                                          Solid Waste Management

                                                                          During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                                          and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                                          Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                                          these wastes are being made through internal recycling and selling to outside

                                                                          agencies The wastes generated in the steel plants are being utilized mainly through

                                                                          their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                          during April-September 2006

                                                                          Environmental Plantation

                                                                          Trees have a significant role in protection of environment and ecological balance

                                                                          Extensive afforestation programme are being followed in all the plants and mines The

                                                                          basis of choosing the species of plants mainly depends on local soil characteristics

                                                                          and prevailing meteorological conditions The green belt developed by afforestation

                                                                          adds to the aesthetic environment which becomes dust and noise barriers

                                                                          A total number of 145521 saplings have been planted covering an area of 637

                                                                          hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                          hectare in 2004-05 in and around the steel plants of SAIL

                                                                          Environmental Recognitions

                                                                          SAIL plants have been awarded various prizes for environmental management in

                                                                          their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                          the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                          environmental economic andsocial dimensions of sustainable development and the

                                                                          Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                          Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                          Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                          for 2005 from International Greenland Society

                                                                          Workforce and Welfare of Society

                                                                          TATA steel

                                                                          Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                          and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                          enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                          provide a work environment that will ensure a sense of purpose and personal growth

                                                                          for each individual The wish of the company is to see the smile on every face

                                                                          everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                          people and enriched empowered and enhanced their lives

                                                                          Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                          brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                          Tata Steel were the first of their kind in India and some even in the western countries

                                                                          at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                          source of its competitiveness It focuses on constantly updating and challenging

                                                                          intellectual capabilities to enable them to excel in performance Special efforts are

                                                                          made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                          workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                          available with its people through Knowledge Management and sharing of best

                                                                          practices

                                                                          In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                          mutual co-operation coordination and understanding between the Management and

                                                                          the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                          among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                          transparency fairness and equity in all its interactions with its employees to create an

                                                                          enthused and happy workforce

                                                                          In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                          assistance in the fields of education vocational training self-employment and

                                                                          family welfare

                                                                          Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                          12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                          surgical treatment for preventive and curative interventions to people in

                                                                          inaccessible rural areas

                                                                          Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                          for the 1920 Antwerp Olympics

                                                                          The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                          track was inaugurated in 1991 The complex also houses facilities for handball

                                                                          tennis volleyball hockey basketball boxing table tennis and a modern

                                                                          gymnasium

                                                                          The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                          services for the betterment of the people in and around Jamshedpur

                                                                          At times of natural calamities the company has rushe immediate relief and off

                                                                          ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                          fl ood ravaged Orissa and other such aff ected areas

                                                                          Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                          er a unique environment for the children of Jamshedpur to grow up in

                                                                          In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                          Jamshedpur has emerged as the one of the best cities in India

                                                                          Steel Authority of India

                                                                          The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                          executives and 123005 non-executives The total reduction in manpower achieved

                                                                          during the year stood at 4864 which included separation of 881 employees through

                                                                          voluntary retirement The labour productivity improved by around 12 over previous

                                                                          year to 150 tonne crude steelmanyear

                                                                          Some of the areas of assistance which are available to the weaker sections are the

                                                                          following

                                                                          The company has provided land for construction of school buildings in some of

                                                                          the steel townships as well as in other places for spreading education among

                                                                          the masses

                                                                          The company has constructed roads in remote areas around the steel plants

                                                                          and also where the captive mines are located to improve communication and

                                                                          also increase activities such as organisation of health camps school facilities

                                                                          drinking water etc under the peripheral development schemes

                                                                          Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                          Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                          providing them with education boarding and lodging facilities

                                                                          Construction of bridges by-pass roads metal-morum path waterways

                                                                          levellingdressing area around township pre-mixed roads Installation of hand-

                                                                          pumps tube wells and wells for villagers

                                                                          Construction of school buildings (including for mentally retarded deaf and

                                                                          dumb children) madarsas providing school furniture therein and construction

                                                                          of hostels womenrsquos college building etc

                                                                          Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                          engineering students in various disciplines to encourage technical education

                                                                          among them

                                                                          In many cases tuition fee in company run schools is exempt for SCST

                                                                          students Steps are taken to provide education to more and more tribal children

                                                                          in company schools

                                                                          The unemployed SCST youth are given specialized training in various

                                                                          technical trades to develop skill and knowledge Such training is provided free

                                                                          of cost

                                                                          Adult literacy campaign is carried out in most of the steel townships Every year

                                                                          more and more men and women are being covered in this campaign

                                                                          Development of fishery and cottage industry providing sewing machines to

                                                                          village mahila mandals and promoting other self-employment generation

                                                                          schemes

                                                                          SAIL has established a hockey academy with stadium and hostel facilities at

                                                                          Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                          academy was successful in spotting a number of young talented tribal players

                                                                          and grooms them under expertise of ex-Olympian

                                                                          Technology

                                                                          The biggest boost to efficiency in the steel industry has come from the increased

                                                                          use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                          share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                          now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                          among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                          crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                          suggests there is restructuring potential

                                                                          TATA Steel

                                                                          Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                          with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                          international companies also took part in the exhibition Participating companies from

                                                                          countries all over the world exhibited latest technologies and know-how List of

                                                                          participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                          Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                          companies of national and international repute China was the partner country for the

                                                                          International Trade Fair this year

                                                                          In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                          cutting-edge technology used in iron ore mining pioneering human resource

                                                                          practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                          steel company

                                                                          The 6th International Trade Fair and Conference an institutionalised global

                                                                          event is considered to be one of the most prestigious forums for national as well

                                                                          international participants It is a conclave of the finest minds concerned with the future

                                                                          direction and growth of these sectors The forum provided the worlds most eminent

                                                                          metallurgists manufacturers of metallurgical and mining machinery and related

                                                                          sectors professionals analysts and experts with the opportunity to exchange views on

                                                                          emerging technologies synergy and strengths and open up wider horizons for

                                                                          sectorial development

                                                                          Tata Steel to adopt Corus technology

                                                                          Tata Steel plans to implement alternate technology used by the British steel

                                                                          maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                          production according to Mr B Muthuraman Managing Director Tata Steel

                                                                          ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                          technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                          newspersons on the sidelines of the 34th National Management Convention organised

                                                                          by the All-India Management Association However he declined to give further details

                                                                          on the type of technology the Indian steel giant plans to implement

                                                                          Steel Authority of India

                                                                          Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                          of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                          and productive capacity and in the process become more energy-efficient and

                                                                          improve quality The key component of the ongoing modernisation drive - already

                                                                          completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                          ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                          continuous casting techniques A senior SAIL official says Continuous casting and

                                                                          basic oxygen furnaces ensure better quality steel through processes more easily

                                                                          monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                          more automated and permits greater flexibility Continuous casting is more efficient

                                                                          than the traditional ingot casting methods and gives increased yields while enabling

                                                                          better quality standards SAIL is also modernising its finishing mills and is adding

                                                                          secondary refining facilities to improve quality

                                                                          Safety measures

                                                                          A unique feature of safety management in steel industry is that a bipartite forum

                                                                          named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                          was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                          RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                          Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                          workshops training programme safety competitions for member organisations JCSSI

                                                                          with the co-operation and support of Trade Union representatives formulates policies

                                                                          and guidelines for its member plants and monitors the implementation

                                                                          Tata Steel

                                                                          Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                          Safety department and a Safety Trophy helped spread the message all across the

                                                                          company

                                                                          TATA reaffirms its commitment to provide safe working place and clean

                                                                          environment to its employees and other stakeholders as an integral part of its

                                                                          business philosophy and values We will continually enhance our Environmental

                                                                          Occupational Health amp Safety (EHS) performance in our activities products and

                                                                          services through a structured EHS management framework Towards this

                                                                          commitment we shall

                                                                          Establish and achieve EHS objectives and targets

                                                                          Ensure compliance with applicable EHS legislation and other requirement and

                                                                          go beyond

                                                                          Conserve natural resources and energy by constantly seeking to reduce

                                                                          consumption and promoting waste avoidance and recycling measures

                                                                          Eliminate minimize andor control adverse environmental impacts and

                                                                          occupational health and safety risks by adopting appropriate state-of-the-art

                                                                          technology and best EHS management practices at all levels sand functions

                                                                          Enhance awareness skill and competence of our employees and contractors

                                                                          so as to enable them to demonstrate their involvement responsibility and

                                                                          accountability for sound EHS performance

                                                                          Steel Authority of India

                                                                          SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                          monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                          Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                          formulated and review of implementation of APP is done during Heads of

                                                                          Safety meeting

                                                                          Internal and external safety audits of major departments particularly hazardous

                                                                          areas are conducted every year and points arising from these audits are

                                                                          liquidated Safety aspects have been incorporated in standard operating

                                                                          practices (SOP) and standard maintenance practices (SMP)

                                                                          All major capital repairsshut downs are closely monitored round the clock

                                                                          Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                          grass-root level apart from regular inspections as per checklists to identify

                                                                          unsafe conditionsacts

                                                                          Safety training is imparted to target group employees at various levels HRD

                                                                          intervention in the area of safety covers Heads of Departments Line Managers

                                                                          amp Departmental Safety Officers Besides area specific workshops are

                                                                          conducted at different locations on important topics like gas safety railroad

                                                                          safety safety in iron steel amp coke making etc

                                                                          Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                          standards in the company by taking measures like intensive safety drives in works

                                                                          area and conducting safety audits in hazardous departments of different plants and

                                                                          mines In addition specific workshops on safety aspects were organised in various

                                                                          SAIL steel plants

                                                                          Measures taken by Indian government to improve the industry

                                                                          Now letrsquos 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-

                                                                          1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                          among others was removed from the list of industries reserved for the public

                                                                          sector and also exempted from the provisions of compulsory licensing under the

                                                                          Industries (Development and Regulation) Act 1951

                                                                          2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                          of `high priority industries for automatic approval for foreign equity investment up

                                                                          to 51 This limit has been recently increased to 100

                                                                          3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                          time it was ensured that priority continued to be accorded for meeting the

                                                                          requirements of small scale industries exporters of engineering goods and North

                                                                          Eastern Region of the country besides strategic sectors such as Defence and

                                                                          Railways

                                                                          4 The trade policy has been liberalised and import and export of iron and steel is

                                                                          freely allowed There are no quantitative restrictions on import of iron and steel

                                                                          items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                          regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                          steel have drastically come down since 1991-92 levels and the government is

                                                                          committed to bring them down to the international levels In Chapter 72 there are

                                                                          two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                          5 Iron amp Steel are freely importable as per the Extant Policy

                                                                          6 Iron amp Steel are freely exportable

                                                                          7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                          8 The floor price for seconds and defectives continues till date

                                                                          9 Imports of seconds and defectives of steel are allowed only through three

                                                                          designated ports of Mumbai Calcutta and Chennai

                                                                          10Mandatory pre inspection certificate by a reputed international agency for every

                                                                          import consignment of seconds and defectives

                                                                          11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                          10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                          the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                          per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                          15 per cent to 5 per cent

                                                                          12Further customs duty on several raw materials used by the steel sector like

                                                                          noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                          coking coal to zero

                                                                          13To bring down the prices of steel the excise duty on steel products was reduced

                                                                          from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                          that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                          increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                          cut on moderating prices was not achieved

                                                                          14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                          further reduced from 20 to 10

                                                                          Special assistance being provided by Ministry of Steel to Private Sector

                                                                          1 Ministry of Steel is extending all possible support as detailed below for the

                                                                          development of Iron and Steel Sector in the country

                                                                          2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                          new plants and expansion of existing ones wherever applied for

                                                                          3 To ensure an un-interrupted supply of raw materials to the producers

                                                                          4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                          clearance of projects

                                                                          5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                          Plants are held at the level of Secretary

                                                                          6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                          industry so that their absence does not lead to bottlenecks in the future growth of

                                                                          the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                          7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                          Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                          country are members of this Institute which has been set up with the objective of

                                                                          promoting developing and propagating the proper and effective use of steel

                                                                          8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                          major steel plants being implemented Govt has setup a Project Coordination

                                                                          Group under the Chairmanship of Steel Minister

                                                                          NATIONAL STEEL POLICY 2005

                                                                          The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                          development and as such great importance is attached to capacity expansion in line

                                                                          with expected demand at cost and prices which make Indian steel internationally

                                                                          competitive The existing regime of liberalization decontrol and deregulation of

                                                                          industry in the country has opened up new opportunities for the expansion of the steel

                                                                          industry With a view to accelerating the growth of the steel sector and attaining the

                                                                          vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                          formulated a National Steel Policy (NSP) in 2005

                                                                          The following salient features can be derived after analysing the NSP 2005

                                                                          The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                          towards reform restructuring and globalisation

                                                                          The long-term goal of the NSP is that India should have a modern and efficient

                                                                          steel industry of world standards catering to diversified steel demand The focus of

                                                                          the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                          product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                          In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                          NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                          an open globally integrated and competitive environment

                                                                          The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                          policy goal On the demand side the strategy would be to create incremental

                                                                          demand through promotional efforts creation of awareness and strengthening the

                                                                          delivery chain particularly in rural areas On the supply side the strategy would be

                                                                          to facilitate creation of additional capacity remove procedural and policy

                                                                          bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                          investments in RampD and encourage the creation of infrastructure such as roads

                                                                          railways and ports

                                                                          The NSP acknowledges the low per capita consumption of steel in the country

                                                                          especially in the rural areas and the need to boost steel consumption to improve

                                                                          quality of life and help in meeting the growing aspirations of masses

                                                                          In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                          industry would need additional capital In addition funds would be required for

                                                                          technological upgrade of existing facilities In order to mobilize such vast resources

                                                                          NSP seeks to encourage foreign direct investment In addition the policy also

                                                                          seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                          to the steel industry

                                                                          The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                          derivatives to contain price volatility in the steel market

                                                                          The NSP seeks to strengthen the existing training and research facilities available

                                                                          to the domestic steel industry so as to provide suitable training programmes

                                                                          especially for the secondary small-scale units and also to collect and analyse data

                                                                          on important parameters of the industry

                                                                          The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                          capability for special types of steel substitute coking coal use iron ore fines

                                                                          develop new products suited to rural needs enhance material and energy

                                                                          efficiency utilize waste and arrest environmental degradation

                                                                          The NSP acknowledges the important role played by the secondary steel sector in

                                                                          providing employment meeting local demand of steel in rural and semi-urban

                                                                          areas and meeting the countryrsquos demand of some special products and seeks to

                                                                          endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                          from major plants through the existing mechanism of State Small Industries

                                                                          Corporations

                                                                          The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                          global economy requires that the industry should be protected from unfair trade

                                                                          practices The NSP therefore envisages institution of mechanisms for import

                                                                          surveillance and monitoring export subsidies in other countries

                                                                          The present per capita consumption of steel in the country is very low compared to the

                                                                          world average As mentioned above one of the objectives of the NSP is to augment

                                                                          the demand and consumption of steel in the country by conscious promotion of steel

                                                                          usage With a view to create a mass awareness campaign on conscious promotion of

                                                                          steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                          the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                          The Committee is being serviced by Institute for Steel Development and Growth

                                                                          (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                          way of an awareness campaign with particular emphasis on rural sectors The

                                                                          Committee also aims at educating the designers architects builders and planners

                                                                          regarding the qualitative and cost effective applications of steel in various structures

                                                                          including buildings bridges flyovers and airports

                                                                          FUTURE OF INDIAN STEEL INDUSTRY

                                                                          India is amongst a few countries in the world having the dual advantage of fast

                                                                          growing domestic demand coupled with access to raw materials Further the trend

                                                                          that is already discernible is that the axis of global steel production consumption is

                                                                          shifting towards Asia With their large populations China and India already account for

                                                                          35 of the total world steel production - more than double of Europe Asia is

                                                                          expected to outpace other regions of the world to an even greater extent in the coming

                                                                          years

                                                                          Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                          is accepted that China will continue to be the leader However India is slated to

                                                                          emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                          the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                          splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                          China swallowed almost 32 of global steel It is unlikely that future production and

                                                                          consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                          has been the case over the last few years On the other hand it is sun-rise time for

                                                                          India where the demand has increased by 7-8 in the last couple of years In the long

                                                                          run Indian steel is likely to be more cost-effective since unlike China India has

                                                                          relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                          can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                          However the position with coal is not so favourable Though thermal coal

                                                                          reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                          traditional blast furnace route would require coking coal India does not have adequate

                                                                          reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                          Thus the steel industry always had to contend with the dual problems of inadequate

                                                                          availability and poor quality of Indian coking coal This has been partly addressed by

                                                                          adopting alternative iron making processes that are not dependent on coking coal it

                                                                          can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                          in India

                                                                          Because of the shortage of indigenous coal attempts have been made by steel

                                                                          producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                          mines in other countries This is the only long-term solution but with a global shortage

                                                                          of coal it may not remain cost-effective in the long run

                                                                          India is the seventh largest producer of steel and may further improve its position

                                                                          going by the current trends A series of investment decisions by major domestic

                                                                          players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                          POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                          The keen interest shown by various prospective investors is not only due to

                                                                          expectations of strong growth in domestic demand but also due to indigenous

                                                                          availability of key resources like iron ore and skilled workforce

                                                                          After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                          steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                          finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                          2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                          consumption has accelerated to 91 per cent

                                                                          With the likely growth of Indian economy at around 7 per cent per annum

                                                                          demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                          million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                          demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                          is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                          very low level of per capita consumption of steel in India is highlighted further when

                                                                          compared with the consumption levels of its peer group consisting of countries like

                                                                          China Brazil Mexico and Republic of Korea as also with selected developed

                                                                          countries

                                                                          Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                          China there seems to be consensus among analysts that India is likely to witness a

                                                                          growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                          percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                          achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                          more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                          country like India cyclicity is more in terms of prices rather than volumes of production

                                                                          Exports

                                                                          Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                          starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                          2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                          rising domestic demand and low capacity additions Exports now constitute around 17

                                                                          per cent of total production and Indias presence in the developing and developed

                                                                          world is being increasingly felt Indian steel producers have recently been able to

                                                                          supply specialized grades and products used for sophisticated applications like

                                                                          automobiles On the cost front some of our producers are counted amongst the least

                                                                          cost producers of the world For an average reference plant India is competitively

                                                                          placed in the middle of the hierarchy of steel producing nations

                                                                          However we have a long way to go to catch up with the leading exporters of the

                                                                          world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                          2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                          per cent of total projected production The projected export ratio compares well with

                                                                          the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                          The projected production of steel by 2019-20 to meet the domestic and export

                                                                          demand will be around 110 million tonnes Management of resources and

                                                                          infrastructural growth is going to be critical in achievement of the production level

                                                                          envisaged The broad requirements of various resources will increase manifold from

                                                                          the current level The bottlenecks in availability of critical inputs and various facilities

                                                                          need to be removed through concerted efforts of Government and industry The broad

                                                                          strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                          sector has been discussed in the National Steel Policy which has been recently

                                                                          approved by the Government

                                                                          As stated earlier the long-term goal of the National Steel Policy is that India

                                                                          should have a modern and efficient steel industry of world standards catering to a

                                                                          diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                          not only in terms of cost quality and product mix but also in terms of global

                                                                          benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                          pronged strategy to achieve these goals On the demand side the strategy would be

                                                                          to create incremental demand through promotional efforts creation of awareness and

                                                                          strengthening the delivery chain particularly in rural areas On the supply side the

                                                                          strategy would be to facilitate creation of additional capacity remove procedural and

                                                                          policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                          investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                          roads railways and ports

                                                                          The production figures exports and imports of finished carbon steel and pig iron

                                                                          and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                          Steel and SAIL attest to the continuing growth for both the sectors

                                                                          FINDINGS

                                                                          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 increased its profit over the year particularly in 2006-07

                                                                          Both the companies are planning to adopt modern technology which is going to

                                                                          help them to compete in world market but they need to be less dependent on

                                                                          state of art technology and coal for long term prospects

                                                                          Public sector has undergone retrenchment for the employees and improved

                                                                          has its lobour productivity but it is still lacking behind as compared to private

                                                                          sector

                                                                          SAIL has reduced the no of accidents due to improper handling of machinery

                                                                          still no of accidents are more than that of TATA Steel

                                                                          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

                                                                          ie 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 have to be met

                                                                          comprehensively if we are to take our legitimate place in the world as a developed

                                                                          nation by 2020

                                                                          BIBLIOGRAPHY

                                                                          Annual report (2006-07) published by ministry of steel

                                                                          Annual report (2006-07) published by TATA Steel

                                                                          Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                          REPORTrsquo posted by SAIL on its website

                                                                          lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                          held on 07 Nov 2006

                                                                          Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                          wwwsteelnicin (Official website of ministry of industry)

                                                                          wwwtatasteelcom (Official website of TATA Steel)

                                                                          wwwsailcoin (Official website of Steel Authority of India)

                                                                          wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                          wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                          • DATA ANALYSIS
                                                                          • Comparison between TATA Steel and Steel Authority of India
                                                                          • Production
                                                                          • Quantity 000 Tonnes
                                                                          • Financials
                                                                          • Research and Development
                                                                          • (Rs Crore)
                                                                          • TATA Steel
                                                                          • Steel Authority of India
                                                                          • Environment
                                                                          • TATA Steel
                                                                          • Emissions effluents and wastes
                                                                          • Emissions
                                                                          • Waste handling
                                                                          • Effluent Management
                                                                          • Steel Authority of India
                                                                          • Solid Waste Management
                                                                          • Environmental Plantation
                                                                          • Environmental Recognitions
                                                                          • Workforce and Welfare of Society
                                                                          • TATA steel
                                                                          • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                          • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                          • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                          • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                          • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                          • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                          • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                          • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                          • Steel Authority of India
                                                                          • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                          • Technology
                                                                          • Steel Authority of India
                                                                          • Safety measures
                                                                          • Tata Steel
                                                                          • Steel Authority of India
                                                                          • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                          • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                          • Measures taken by Indian government to improve the industry
                                                                          • Now letrsquos 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-
                                                                          • Special assistance being provided by Ministry of Steel to Private Sector
                                                                          • FUTURE OF INDIAN STEEL INDUSTRY

                                                                            Tata Steel has undertaken several initiatives which have resulted in

                                                                            considerable reduction in stack emission Emissions are well below the Indian and

                                                                            international standards The emission load including particulate matter Sulphur

                                                                            Dioxide and Oxides of Nitrogen have dropped as a result of the improvement initiative

                                                                            undertaken at the Steel Works

                                                                            Waste handling

                                                                            Most of the solid waste generated from Steel Works is recycled or reused 18

                                                                            of the solid waste generated amounting to approximately 550000 tonnes in 2003-04

                                                                            was used to fill low-lying areas and for peripheral road construction around

                                                                            Jamshedpur About 200000 tonnes of fly ash and bottom ash generated in the

                                                                            power plants was dumped in a designated dump area

                                                                            Effluent Management

                                                                            Waste water from the steel making process is being treated with best available

                                                                            physio-chemical methods as well as being recycled Waste water from the coke plant

                                                                            is treated biologically where organic pollutants are oxidised and decomposed by micro

                                                                            organisms The Company has reduced the levels of total pollutant discharge in waste

                                                                            water streams from 0211 in 1999-2000 to 0178 in 2003-04

                                                                            Steel Authority of India

                                                                            Corporate environmental policy of SAIL emphasises ldquoconducting operations in an

                                                                            environmentally responsible manner to comply with applicable regulations and striving

                                                                            to go beyondrdquo SAIL recognizes its responsibility to continuously improve its energy

                                                                            efficiency and optimize resource consumption through various measures viz

                                                                            improvement in process technology in the areas of raw materials coke iron and steel

                                                                            making reuserecycle of the by-products generated and conservation of energy and

                                                                            water

                                                                            Solid Waste Management

                                                                            During 2005-06 SAIL produced approximately 134 million tonne of crude steel

                                                                            and generated 56 million tonne of Blast Furnace (BF) slag 13 million tonne Steel

                                                                            Melting Shop (SMS) slag and 06 million tonne of other process wastes Utilisation of

                                                                            these wastes are being made through internal recycling and selling to outside

                                                                            agencies The wastes generated in the steel plants are being utilized mainly through

                                                                            their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                            during April-September 2006

                                                                            Environmental Plantation

                                                                            Trees have a significant role in protection of environment and ecological balance

                                                                            Extensive afforestation programme are being followed in all the plants and mines The

                                                                            basis of choosing the species of plants mainly depends on local soil characteristics

                                                                            and prevailing meteorological conditions The green belt developed by afforestation

                                                                            adds to the aesthetic environment which becomes dust and noise barriers

                                                                            A total number of 145521 saplings have been planted covering an area of 637

                                                                            hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                            hectare in 2004-05 in and around the steel plants of SAIL

                                                                            Environmental Recognitions

                                                                            SAIL plants have been awarded various prizes for environmental management in

                                                                            their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                            the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                            environmental economic andsocial dimensions of sustainable development and the

                                                                            Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                            Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                            Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                            for 2005 from International Greenland Society

                                                                            Workforce and Welfare of Society

                                                                            TATA steel

                                                                            Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                            and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                            enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                            provide a work environment that will ensure a sense of purpose and personal growth

                                                                            for each individual The wish of the company is to see the smile on every face

                                                                            everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                            people and enriched empowered and enhanced their lives

                                                                            Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                            brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                            Tata Steel were the first of their kind in India and some even in the western countries

                                                                            at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                            source of its competitiveness It focuses on constantly updating and challenging

                                                                            intellectual capabilities to enable them to excel in performance Special efforts are

                                                                            made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                            workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                            available with its people through Knowledge Management and sharing of best

                                                                            practices

                                                                            In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                            mutual co-operation coordination and understanding between the Management and

                                                                            the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                            among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                            transparency fairness and equity in all its interactions with its employees to create an

                                                                            enthused and happy workforce

                                                                            In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                            assistance in the fields of education vocational training self-employment and

                                                                            family welfare

                                                                            Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                            12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                            surgical treatment for preventive and curative interventions to people in

                                                                            inaccessible rural areas

                                                                            Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                            for the 1920 Antwerp Olympics

                                                                            The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                            track was inaugurated in 1991 The complex also houses facilities for handball

                                                                            tennis volleyball hockey basketball boxing table tennis and a modern

                                                                            gymnasium

                                                                            The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                            services for the betterment of the people in and around Jamshedpur

                                                                            At times of natural calamities the company has rushe immediate relief and off

                                                                            ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                            fl ood ravaged Orissa and other such aff ected areas

                                                                            Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                            er a unique environment for the children of Jamshedpur to grow up in

                                                                            In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                            Jamshedpur has emerged as the one of the best cities in India

                                                                            Steel Authority of India

                                                                            The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                            executives and 123005 non-executives The total reduction in manpower achieved

                                                                            during the year stood at 4864 which included separation of 881 employees through

                                                                            voluntary retirement The labour productivity improved by around 12 over previous

                                                                            year to 150 tonne crude steelmanyear

                                                                            Some of the areas of assistance which are available to the weaker sections are the

                                                                            following

                                                                            The company has provided land for construction of school buildings in some of

                                                                            the steel townships as well as in other places for spreading education among

                                                                            the masses

                                                                            The company has constructed roads in remote areas around the steel plants

                                                                            and also where the captive mines are located to improve communication and

                                                                            also increase activities such as organisation of health camps school facilities

                                                                            drinking water etc under the peripheral development schemes

                                                                            Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                            Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                            providing them with education boarding and lodging facilities

                                                                            Construction of bridges by-pass roads metal-morum path waterways

                                                                            levellingdressing area around township pre-mixed roads Installation of hand-

                                                                            pumps tube wells and wells for villagers

                                                                            Construction of school buildings (including for mentally retarded deaf and

                                                                            dumb children) madarsas providing school furniture therein and construction

                                                                            of hostels womenrsquos college building etc

                                                                            Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                            engineering students in various disciplines to encourage technical education

                                                                            among them

                                                                            In many cases tuition fee in company run schools is exempt for SCST

                                                                            students Steps are taken to provide education to more and more tribal children

                                                                            in company schools

                                                                            The unemployed SCST youth are given specialized training in various

                                                                            technical trades to develop skill and knowledge Such training is provided free

                                                                            of cost

                                                                            Adult literacy campaign is carried out in most of the steel townships Every year

                                                                            more and more men and women are being covered in this campaign

                                                                            Development of fishery and cottage industry providing sewing machines to

                                                                            village mahila mandals and promoting other self-employment generation

                                                                            schemes

                                                                            SAIL has established a hockey academy with stadium and hostel facilities at

                                                                            Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                            academy was successful in spotting a number of young talented tribal players

                                                                            and grooms them under expertise of ex-Olympian

                                                                            Technology

                                                                            The biggest boost to efficiency in the steel industry has come from the increased

                                                                            use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                            share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                            now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                            among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                            crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                            suggests there is restructuring potential

                                                                            TATA Steel

                                                                            Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                            with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                            international companies also took part in the exhibition Participating companies from

                                                                            countries all over the world exhibited latest technologies and know-how List of

                                                                            participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                            Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                            companies of national and international repute China was the partner country for the

                                                                            International Trade Fair this year

                                                                            In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                            cutting-edge technology used in iron ore mining pioneering human resource

                                                                            practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                            steel company

                                                                            The 6th International Trade Fair and Conference an institutionalised global

                                                                            event is considered to be one of the most prestigious forums for national as well

                                                                            international participants It is a conclave of the finest minds concerned with the future

                                                                            direction and growth of these sectors The forum provided the worlds most eminent

                                                                            metallurgists manufacturers of metallurgical and mining machinery and related

                                                                            sectors professionals analysts and experts with the opportunity to exchange views on

                                                                            emerging technologies synergy and strengths and open up wider horizons for

                                                                            sectorial development

                                                                            Tata Steel to adopt Corus technology

                                                                            Tata Steel plans to implement alternate technology used by the British steel

                                                                            maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                            production according to Mr B Muthuraman Managing Director Tata Steel

                                                                            ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                            technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                            newspersons on the sidelines of the 34th National Management Convention organised

                                                                            by the All-India Management Association However he declined to give further details

                                                                            on the type of technology the Indian steel giant plans to implement

                                                                            Steel Authority of India

                                                                            Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                            of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                            and productive capacity and in the process become more energy-efficient and

                                                                            improve quality The key component of the ongoing modernisation drive - already

                                                                            completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                            ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                            continuous casting techniques A senior SAIL official says Continuous casting and

                                                                            basic oxygen furnaces ensure better quality steel through processes more easily

                                                                            monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                            more automated and permits greater flexibility Continuous casting is more efficient

                                                                            than the traditional ingot casting methods and gives increased yields while enabling

                                                                            better quality standards SAIL is also modernising its finishing mills and is adding

                                                                            secondary refining facilities to improve quality

                                                                            Safety measures

                                                                            A unique feature of safety management in steel industry is that a bipartite forum

                                                                            named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                            was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                            RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                            Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                            workshops training programme safety competitions for member organisations JCSSI

                                                                            with the co-operation and support of Trade Union representatives formulates policies

                                                                            and guidelines for its member plants and monitors the implementation

                                                                            Tata Steel

                                                                            Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                            Safety department and a Safety Trophy helped spread the message all across the

                                                                            company

                                                                            TATA reaffirms its commitment to provide safe working place and clean

                                                                            environment to its employees and other stakeholders as an integral part of its

                                                                            business philosophy and values We will continually enhance our Environmental

                                                                            Occupational Health amp Safety (EHS) performance in our activities products and

                                                                            services through a structured EHS management framework Towards this

                                                                            commitment we shall

                                                                            Establish and achieve EHS objectives and targets

                                                                            Ensure compliance with applicable EHS legislation and other requirement and

                                                                            go beyond

                                                                            Conserve natural resources and energy by constantly seeking to reduce

                                                                            consumption and promoting waste avoidance and recycling measures

                                                                            Eliminate minimize andor control adverse environmental impacts and

                                                                            occupational health and safety risks by adopting appropriate state-of-the-art

                                                                            technology and best EHS management practices at all levels sand functions

                                                                            Enhance awareness skill and competence of our employees and contractors

                                                                            so as to enable them to demonstrate their involvement responsibility and

                                                                            accountability for sound EHS performance

                                                                            Steel Authority of India

                                                                            SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                            monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                            Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                            formulated and review of implementation of APP is done during Heads of

                                                                            Safety meeting

                                                                            Internal and external safety audits of major departments particularly hazardous

                                                                            areas are conducted every year and points arising from these audits are

                                                                            liquidated Safety aspects have been incorporated in standard operating

                                                                            practices (SOP) and standard maintenance practices (SMP)

                                                                            All major capital repairsshut downs are closely monitored round the clock

                                                                            Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                            grass-root level apart from regular inspections as per checklists to identify

                                                                            unsafe conditionsacts

                                                                            Safety training is imparted to target group employees at various levels HRD

                                                                            intervention in the area of safety covers Heads of Departments Line Managers

                                                                            amp Departmental Safety Officers Besides area specific workshops are

                                                                            conducted at different locations on important topics like gas safety railroad

                                                                            safety safety in iron steel amp coke making etc

                                                                            Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                            standards in the company by taking measures like intensive safety drives in works

                                                                            area and conducting safety audits in hazardous departments of different plants and

                                                                            mines In addition specific workshops on safety aspects were organised in various

                                                                            SAIL steel plants

                                                                            Measures taken by Indian government to improve the industry

                                                                            Now letrsquos 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-

                                                                            1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                            among others was removed from the list of industries reserved for the public

                                                                            sector and also exempted from the provisions of compulsory licensing under the

                                                                            Industries (Development and Regulation) Act 1951

                                                                            2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                            of `high priority industries for automatic approval for foreign equity investment up

                                                                            to 51 This limit has been recently increased to 100

                                                                            3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                            time it was ensured that priority continued to be accorded for meeting the

                                                                            requirements of small scale industries exporters of engineering goods and North

                                                                            Eastern Region of the country besides strategic sectors such as Defence and

                                                                            Railways

                                                                            4 The trade policy has been liberalised and import and export of iron and steel is

                                                                            freely allowed There are no quantitative restrictions on import of iron and steel

                                                                            items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                            regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                            steel have drastically come down since 1991-92 levels and the government is

                                                                            committed to bring them down to the international levels In Chapter 72 there are

                                                                            two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                            5 Iron amp Steel are freely importable as per the Extant Policy

                                                                            6 Iron amp Steel are freely exportable

                                                                            7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                            8 The floor price for seconds and defectives continues till date

                                                                            9 Imports of seconds and defectives of steel are allowed only through three

                                                                            designated ports of Mumbai Calcutta and Chennai

                                                                            10Mandatory pre inspection certificate by a reputed international agency for every

                                                                            import consignment of seconds and defectives

                                                                            11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                            10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                            the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                            per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                            15 per cent to 5 per cent

                                                                            12Further customs duty on several raw materials used by the steel sector like

                                                                            noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                            coking coal to zero

                                                                            13To bring down the prices of steel the excise duty on steel products was reduced

                                                                            from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                            that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                            increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                            cut on moderating prices was not achieved

                                                                            14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                            further reduced from 20 to 10

                                                                            Special assistance being provided by Ministry of Steel to Private Sector

                                                                            1 Ministry of Steel is extending all possible support as detailed below for the

                                                                            development of Iron and Steel Sector in the country

                                                                            2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                            new plants and expansion of existing ones wherever applied for

                                                                            3 To ensure an un-interrupted supply of raw materials to the producers

                                                                            4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                            clearance of projects

                                                                            5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                            Plants are held at the level of Secretary

                                                                            6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                            industry so that their absence does not lead to bottlenecks in the future growth of

                                                                            the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                            7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                            Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                            country are members of this Institute which has been set up with the objective of

                                                                            promoting developing and propagating the proper and effective use of steel

                                                                            8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                            major steel plants being implemented Govt has setup a Project Coordination

                                                                            Group under the Chairmanship of Steel Minister

                                                                            NATIONAL STEEL POLICY 2005

                                                                            The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                            development and as such great importance is attached to capacity expansion in line

                                                                            with expected demand at cost and prices which make Indian steel internationally

                                                                            competitive The existing regime of liberalization decontrol and deregulation of

                                                                            industry in the country has opened up new opportunities for the expansion of the steel

                                                                            industry With a view to accelerating the growth of the steel sector and attaining the

                                                                            vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                            formulated a National Steel Policy (NSP) in 2005

                                                                            The following salient features can be derived after analysing the NSP 2005

                                                                            The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                            towards reform restructuring and globalisation

                                                                            The long-term goal of the NSP is that India should have a modern and efficient

                                                                            steel industry of world standards catering to diversified steel demand The focus of

                                                                            the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                            product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                            In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                            NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                            an open globally integrated and competitive environment

                                                                            The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                            policy goal On the demand side the strategy would be to create incremental

                                                                            demand through promotional efforts creation of awareness and strengthening the

                                                                            delivery chain particularly in rural areas On the supply side the strategy would be

                                                                            to facilitate creation of additional capacity remove procedural and policy

                                                                            bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                            investments in RampD and encourage the creation of infrastructure such as roads

                                                                            railways and ports

                                                                            The NSP acknowledges the low per capita consumption of steel in the country

                                                                            especially in the rural areas and the need to boost steel consumption to improve

                                                                            quality of life and help in meeting the growing aspirations of masses

                                                                            In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                            industry would need additional capital In addition funds would be required for

                                                                            technological upgrade of existing facilities In order to mobilize such vast resources

                                                                            NSP seeks to encourage foreign direct investment In addition the policy also

                                                                            seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                            to the steel industry

                                                                            The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                            derivatives to contain price volatility in the steel market

                                                                            The NSP seeks to strengthen the existing training and research facilities available

                                                                            to the domestic steel industry so as to provide suitable training programmes

                                                                            especially for the secondary small-scale units and also to collect and analyse data

                                                                            on important parameters of the industry

                                                                            The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                            capability for special types of steel substitute coking coal use iron ore fines

                                                                            develop new products suited to rural needs enhance material and energy

                                                                            efficiency utilize waste and arrest environmental degradation

                                                                            The NSP acknowledges the important role played by the secondary steel sector in

                                                                            providing employment meeting local demand of steel in rural and semi-urban

                                                                            areas and meeting the countryrsquos demand of some special products and seeks to

                                                                            endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                            from major plants through the existing mechanism of State Small Industries

                                                                            Corporations

                                                                            The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                            global economy requires that the industry should be protected from unfair trade

                                                                            practices The NSP therefore envisages institution of mechanisms for import

                                                                            surveillance and monitoring export subsidies in other countries

                                                                            The present per capita consumption of steel in the country is very low compared to the

                                                                            world average As mentioned above one of the objectives of the NSP is to augment

                                                                            the demand and consumption of steel in the country by conscious promotion of steel

                                                                            usage With a view to create a mass awareness campaign on conscious promotion of

                                                                            steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                            the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                            The Committee is being serviced by Institute for Steel Development and Growth

                                                                            (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                            way of an awareness campaign with particular emphasis on rural sectors The

                                                                            Committee also aims at educating the designers architects builders and planners

                                                                            regarding the qualitative and cost effective applications of steel in various structures

                                                                            including buildings bridges flyovers and airports

                                                                            FUTURE OF INDIAN STEEL INDUSTRY

                                                                            India is amongst a few countries in the world having the dual advantage of fast

                                                                            growing domestic demand coupled with access to raw materials Further the trend

                                                                            that is already discernible is that the axis of global steel production consumption is

                                                                            shifting towards Asia With their large populations China and India already account for

                                                                            35 of the total world steel production - more than double of Europe Asia is

                                                                            expected to outpace other regions of the world to an even greater extent in the coming

                                                                            years

                                                                            Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                            is accepted that China will continue to be the leader However India is slated to

                                                                            emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                            the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                            splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                            China swallowed almost 32 of global steel It is unlikely that future production and

                                                                            consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                            has been the case over the last few years On the other hand it is sun-rise time for

                                                                            India where the demand has increased by 7-8 in the last couple of years In the long

                                                                            run Indian steel is likely to be more cost-effective since unlike China India has

                                                                            relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                            can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                            However the position with coal is not so favourable Though thermal coal

                                                                            reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                            traditional blast furnace route would require coking coal India does not have adequate

                                                                            reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                            Thus the steel industry always had to contend with the dual problems of inadequate

                                                                            availability and poor quality of Indian coking coal This has been partly addressed by

                                                                            adopting alternative iron making processes that are not dependent on coking coal it

                                                                            can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                            in India

                                                                            Because of the shortage of indigenous coal attempts have been made by steel

                                                                            producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                            mines in other countries This is the only long-term solution but with a global shortage

                                                                            of coal it may not remain cost-effective in the long run

                                                                            India is the seventh largest producer of steel and may further improve its position

                                                                            going by the current trends A series of investment decisions by major domestic

                                                                            players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                            POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                            The keen interest shown by various prospective investors is not only due to

                                                                            expectations of strong growth in domestic demand but also due to indigenous

                                                                            availability of key resources like iron ore and skilled workforce

                                                                            After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                            steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                            finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                            2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                            consumption has accelerated to 91 per cent

                                                                            With the likely growth of Indian economy at around 7 per cent per annum

                                                                            demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                            million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                            demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                            is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                            very low level of per capita consumption of steel in India is highlighted further when

                                                                            compared with the consumption levels of its peer group consisting of countries like

                                                                            China Brazil Mexico and Republic of Korea as also with selected developed

                                                                            countries

                                                                            Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                            China there seems to be consensus among analysts that India is likely to witness a

                                                                            growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                            percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                            achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                            more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                            country like India cyclicity is more in terms of prices rather than volumes of production

                                                                            Exports

                                                                            Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                            starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                            2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                            rising domestic demand and low capacity additions Exports now constitute around 17

                                                                            per cent of total production and Indias presence in the developing and developed

                                                                            world is being increasingly felt Indian steel producers have recently been able to

                                                                            supply specialized grades and products used for sophisticated applications like

                                                                            automobiles On the cost front some of our producers are counted amongst the least

                                                                            cost producers of the world For an average reference plant India is competitively

                                                                            placed in the middle of the hierarchy of steel producing nations

                                                                            However we have a long way to go to catch up with the leading exporters of the

                                                                            world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                            2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                            per cent of total projected production The projected export ratio compares well with

                                                                            the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                            The projected production of steel by 2019-20 to meet the domestic and export

                                                                            demand will be around 110 million tonnes Management of resources and

                                                                            infrastructural growth is going to be critical in achievement of the production level

                                                                            envisaged The broad requirements of various resources will increase manifold from

                                                                            the current level The bottlenecks in availability of critical inputs and various facilities

                                                                            need to be removed through concerted efforts of Government and industry The broad

                                                                            strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                            sector has been discussed in the National Steel Policy which has been recently

                                                                            approved by the Government

                                                                            As stated earlier the long-term goal of the National Steel Policy is that India

                                                                            should have a modern and efficient steel industry of world standards catering to a

                                                                            diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                            not only in terms of cost quality and product mix but also in terms of global

                                                                            benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                            pronged strategy to achieve these goals On the demand side the strategy would be

                                                                            to create incremental demand through promotional efforts creation of awareness and

                                                                            strengthening the delivery chain particularly in rural areas On the supply side the

                                                                            strategy would be to facilitate creation of additional capacity remove procedural and

                                                                            policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                            investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                            roads railways and ports

                                                                            The production figures exports and imports of finished carbon steel and pig iron

                                                                            and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                            Steel and SAIL attest to the continuing growth for both the sectors

                                                                            FINDINGS

                                                                            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 increased its profit over the year particularly in 2006-07

                                                                            Both the companies are planning to adopt modern technology which is going to

                                                                            help them to compete in world market but they need to be less dependent on

                                                                            state of art technology and coal for long term prospects

                                                                            Public sector has undergone retrenchment for the employees and improved

                                                                            has its lobour productivity but it is still lacking behind as compared to private

                                                                            sector

                                                                            SAIL has reduced the no of accidents due to improper handling of machinery

                                                                            still no of accidents are more than that of TATA Steel

                                                                            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

                                                                            ie 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 have to be met

                                                                            comprehensively if we are to take our legitimate place in the world as a developed

                                                                            nation by 2020

                                                                            BIBLIOGRAPHY

                                                                            Annual report (2006-07) published by ministry of steel

                                                                            Annual report (2006-07) published by TATA Steel

                                                                            Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                            REPORTrsquo posted by SAIL on its website

                                                                            lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                            held on 07 Nov 2006

                                                                            Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                            wwwsteelnicin (Official website of ministry of industry)

                                                                            wwwtatasteelcom (Official website of TATA Steel)

                                                                            wwwsailcoin (Official website of Steel Authority of India)

                                                                            wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                            wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                            • DATA ANALYSIS
                                                                            • Comparison between TATA Steel and Steel Authority of India
                                                                            • Production
                                                                            • Quantity 000 Tonnes
                                                                            • Financials
                                                                            • Research and Development
                                                                            • (Rs Crore)
                                                                            • TATA Steel
                                                                            • Steel Authority of India
                                                                            • Environment
                                                                            • TATA Steel
                                                                            • Emissions effluents and wastes
                                                                            • Emissions
                                                                            • Waste handling
                                                                            • Effluent Management
                                                                            • Steel Authority of India
                                                                            • Solid Waste Management
                                                                            • Environmental Plantation
                                                                            • Environmental Recognitions
                                                                            • Workforce and Welfare of Society
                                                                            • TATA steel
                                                                            • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                            • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                            • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                            • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                            • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                            • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                            • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                            • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                            • Steel Authority of India
                                                                            • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                            • Technology
                                                                            • Steel Authority of India
                                                                            • Safety measures
                                                                            • Tata Steel
                                                                            • Steel Authority of India
                                                                            • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                            • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                            • Measures taken by Indian government to improve the industry
                                                                            • Now letrsquos 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-
                                                                            • Special assistance being provided by Ministry of Steel to Private Sector
                                                                            • FUTURE OF INDIAN STEEL INDUSTRY

                                                                              these wastes are being made through internal recycling and selling to outside

                                                                              agencies The wastes generated in the steel plants are being utilized mainly through

                                                                              their Sinter plant SAIL plants have achieved 70 utilisation of solid wastes generated

                                                                              during April-September 2006

                                                                              Environmental Plantation

                                                                              Trees have a significant role in protection of environment and ecological balance

                                                                              Extensive afforestation programme are being followed in all the plants and mines The

                                                                              basis of choosing the species of plants mainly depends on local soil characteristics

                                                                              and prevailing meteorological conditions The green belt developed by afforestation

                                                                              adds to the aesthetic environment which becomes dust and noise barriers

                                                                              A total number of 145521 saplings have been planted covering an area of 637

                                                                              hectare in 2005-06 as against 77242 nos of saplings planted in an area of 366

                                                                              hectare in 2004-05 in and around the steel plants of SAIL

                                                                              Environmental Recognitions

                                                                              SAIL plants have been awarded various prizes for environmental management in

                                                                              their plants viz ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by

                                                                              the Confederation of Indian Industries (CII) for exemplary performance in the

                                                                              environmental economic andsocial dimensions of sustainable development and the

                                                                              Greentech Environment Excellence Gold AwardGolden Peacock Environment

                                                                              Excellence Award in the metal sector 2005 instuted by the World Environment

                                                                              Foundation and the Jawaharlal Nehru Memorial Pollution Control Excellence Award

                                                                              for 2005 from International Greenland Society

                                                                              Workforce and Welfare of Society

                                                                              TATA steel

                                                                              Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                              and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                              enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                              provide a work environment that will ensure a sense of purpose and personal growth

                                                                              for each individual The wish of the company is to see the smile on every face

                                                                              everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                              people and enriched empowered and enhanced their lives

                                                                              Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                              brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                              Tata Steel were the first of their kind in India and some even in the western countries

                                                                              at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                              source of its competitiveness It focuses on constantly updating and challenging

                                                                              intellectual capabilities to enable them to excel in performance Special efforts are

                                                                              made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                              workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                              available with its people through Knowledge Management and sharing of best

                                                                              practices

                                                                              In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                              mutual co-operation coordination and understanding between the Management and

                                                                              the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                              among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                              transparency fairness and equity in all its interactions with its employees to create an

                                                                              enthused and happy workforce

                                                                              In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                              assistance in the fields of education vocational training self-employment and

                                                                              family welfare

                                                                              Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                              12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                              surgical treatment for preventive and curative interventions to people in

                                                                              inaccessible rural areas

                                                                              Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                              for the 1920 Antwerp Olympics

                                                                              The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                              track was inaugurated in 1991 The complex also houses facilities for handball

                                                                              tennis volleyball hockey basketball boxing table tennis and a modern

                                                                              gymnasium

                                                                              The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                              services for the betterment of the people in and around Jamshedpur

                                                                              At times of natural calamities the company has rushe immediate relief and off

                                                                              ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                              fl ood ravaged Orissa and other such aff ected areas

                                                                              Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                              er a unique environment for the children of Jamshedpur to grow up in

                                                                              In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                              Jamshedpur has emerged as the one of the best cities in India

                                                                              Steel Authority of India

                                                                              The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                              executives and 123005 non-executives The total reduction in manpower achieved

                                                                              during the year stood at 4864 which included separation of 881 employees through

                                                                              voluntary retirement The labour productivity improved by around 12 over previous

                                                                              year to 150 tonne crude steelmanyear

                                                                              Some of the areas of assistance which are available to the weaker sections are the

                                                                              following

                                                                              The company has provided land for construction of school buildings in some of

                                                                              the steel townships as well as in other places for spreading education among

                                                                              the masses

                                                                              The company has constructed roads in remote areas around the steel plants

                                                                              and also where the captive mines are located to improve communication and

                                                                              also increase activities such as organisation of health camps school facilities

                                                                              drinking water etc under the peripheral development schemes

                                                                              Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                              Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                              providing them with education boarding and lodging facilities

                                                                              Construction of bridges by-pass roads metal-morum path waterways

                                                                              levellingdressing area around township pre-mixed roads Installation of hand-

                                                                              pumps tube wells and wells for villagers

                                                                              Construction of school buildings (including for mentally retarded deaf and

                                                                              dumb children) madarsas providing school furniture therein and construction

                                                                              of hostels womenrsquos college building etc

                                                                              Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                              engineering students in various disciplines to encourage technical education

                                                                              among them

                                                                              In many cases tuition fee in company run schools is exempt for SCST

                                                                              students Steps are taken to provide education to more and more tribal children

                                                                              in company schools

                                                                              The unemployed SCST youth are given specialized training in various

                                                                              technical trades to develop skill and knowledge Such training is provided free

                                                                              of cost

                                                                              Adult literacy campaign is carried out in most of the steel townships Every year

                                                                              more and more men and women are being covered in this campaign

                                                                              Development of fishery and cottage industry providing sewing machines to

                                                                              village mahila mandals and promoting other self-employment generation

                                                                              schemes

                                                                              SAIL has established a hockey academy with stadium and hostel facilities at

                                                                              Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                              academy was successful in spotting a number of young talented tribal players

                                                                              and grooms them under expertise of ex-Olympian

                                                                              Technology

                                                                              The biggest boost to efficiency in the steel industry has come from the increased

                                                                              use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                              share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                              now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                              among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                              crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                              suggests there is restructuring potential

                                                                              TATA Steel

                                                                              Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                              with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                              international companies also took part in the exhibition Participating companies from

                                                                              countries all over the world exhibited latest technologies and know-how List of

                                                                              participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                              Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                              companies of national and international repute China was the partner country for the

                                                                              International Trade Fair this year

                                                                              In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                              cutting-edge technology used in iron ore mining pioneering human resource

                                                                              practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                              steel company

                                                                              The 6th International Trade Fair and Conference an institutionalised global

                                                                              event is considered to be one of the most prestigious forums for national as well

                                                                              international participants It is a conclave of the finest minds concerned with the future

                                                                              direction and growth of these sectors The forum provided the worlds most eminent

                                                                              metallurgists manufacturers of metallurgical and mining machinery and related

                                                                              sectors professionals analysts and experts with the opportunity to exchange views on

                                                                              emerging technologies synergy and strengths and open up wider horizons for

                                                                              sectorial development

                                                                              Tata Steel to adopt Corus technology

                                                                              Tata Steel plans to implement alternate technology used by the British steel

                                                                              maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                              production according to Mr B Muthuraman Managing Director Tata Steel

                                                                              ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                              technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                              newspersons on the sidelines of the 34th National Management Convention organised

                                                                              by the All-India Management Association However he declined to give further details

                                                                              on the type of technology the Indian steel giant plans to implement

                                                                              Steel Authority of India

                                                                              Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                              of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                              and productive capacity and in the process become more energy-efficient and

                                                                              improve quality The key component of the ongoing modernisation drive - already

                                                                              completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                              ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                              continuous casting techniques A senior SAIL official says Continuous casting and

                                                                              basic oxygen furnaces ensure better quality steel through processes more easily

                                                                              monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                              more automated and permits greater flexibility Continuous casting is more efficient

                                                                              than the traditional ingot casting methods and gives increased yields while enabling

                                                                              better quality standards SAIL is also modernising its finishing mills and is adding

                                                                              secondary refining facilities to improve quality

                                                                              Safety measures

                                                                              A unique feature of safety management in steel industry is that a bipartite forum

                                                                              named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                              was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                              RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                              Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                              workshops training programme safety competitions for member organisations JCSSI

                                                                              with the co-operation and support of Trade Union representatives formulates policies

                                                                              and guidelines for its member plants and monitors the implementation

                                                                              Tata Steel

                                                                              Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                              Safety department and a Safety Trophy helped spread the message all across the

                                                                              company

                                                                              TATA reaffirms its commitment to provide safe working place and clean

                                                                              environment to its employees and other stakeholders as an integral part of its

                                                                              business philosophy and values We will continually enhance our Environmental

                                                                              Occupational Health amp Safety (EHS) performance in our activities products and

                                                                              services through a structured EHS management framework Towards this

                                                                              commitment we shall

                                                                              Establish and achieve EHS objectives and targets

                                                                              Ensure compliance with applicable EHS legislation and other requirement and

                                                                              go beyond

                                                                              Conserve natural resources and energy by constantly seeking to reduce

                                                                              consumption and promoting waste avoidance and recycling measures

                                                                              Eliminate minimize andor control adverse environmental impacts and

                                                                              occupational health and safety risks by adopting appropriate state-of-the-art

                                                                              technology and best EHS management practices at all levels sand functions

                                                                              Enhance awareness skill and competence of our employees and contractors

                                                                              so as to enable them to demonstrate their involvement responsibility and

                                                                              accountability for sound EHS performance

                                                                              Steel Authority of India

                                                                              SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                              monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                              Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                              formulated and review of implementation of APP is done during Heads of

                                                                              Safety meeting

                                                                              Internal and external safety audits of major departments particularly hazardous

                                                                              areas are conducted every year and points arising from these audits are

                                                                              liquidated Safety aspects have been incorporated in standard operating

                                                                              practices (SOP) and standard maintenance practices (SMP)

                                                                              All major capital repairsshut downs are closely monitored round the clock

                                                                              Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                              grass-root level apart from regular inspections as per checklists to identify

                                                                              unsafe conditionsacts

                                                                              Safety training is imparted to target group employees at various levels HRD

                                                                              intervention in the area of safety covers Heads of Departments Line Managers

                                                                              amp Departmental Safety Officers Besides area specific workshops are

                                                                              conducted at different locations on important topics like gas safety railroad

                                                                              safety safety in iron steel amp coke making etc

                                                                              Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                              standards in the company by taking measures like intensive safety drives in works

                                                                              area and conducting safety audits in hazardous departments of different plants and

                                                                              mines In addition specific workshops on safety aspects were organised in various

                                                                              SAIL steel plants

                                                                              Measures taken by Indian government to improve the industry

                                                                              Now letrsquos 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-

                                                                              1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                              among others was removed from the list of industries reserved for the public

                                                                              sector and also exempted from the provisions of compulsory licensing under the

                                                                              Industries (Development and Regulation) Act 1951

                                                                              2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                              of `high priority industries for automatic approval for foreign equity investment up

                                                                              to 51 This limit has been recently increased to 100

                                                                              3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                              time it was ensured that priority continued to be accorded for meeting the

                                                                              requirements of small scale industries exporters of engineering goods and North

                                                                              Eastern Region of the country besides strategic sectors such as Defence and

                                                                              Railways

                                                                              4 The trade policy has been liberalised and import and export of iron and steel is

                                                                              freely allowed There are no quantitative restrictions on import of iron and steel

                                                                              items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                              regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                              steel have drastically come down since 1991-92 levels and the government is

                                                                              committed to bring them down to the international levels In Chapter 72 there are

                                                                              two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                              5 Iron amp Steel are freely importable as per the Extant Policy

                                                                              6 Iron amp Steel are freely exportable

                                                                              7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                              8 The floor price for seconds and defectives continues till date

                                                                              9 Imports of seconds and defectives of steel are allowed only through three

                                                                              designated ports of Mumbai Calcutta and Chennai

                                                                              10Mandatory pre inspection certificate by a reputed international agency for every

                                                                              import consignment of seconds and defectives

                                                                              11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                              10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                              the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                              per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                              15 per cent to 5 per cent

                                                                              12Further customs duty on several raw materials used by the steel sector like

                                                                              noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                              coking coal to zero

                                                                              13To bring down the prices of steel the excise duty on steel products was reduced

                                                                              from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                              that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                              increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                              cut on moderating prices was not achieved

                                                                              14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                              further reduced from 20 to 10

                                                                              Special assistance being provided by Ministry of Steel to Private Sector

                                                                              1 Ministry of Steel is extending all possible support as detailed below for the

                                                                              development of Iron and Steel Sector in the country

                                                                              2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                              new plants and expansion of existing ones wherever applied for

                                                                              3 To ensure an un-interrupted supply of raw materials to the producers

                                                                              4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                              clearance of projects

                                                                              5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                              Plants are held at the level of Secretary

                                                                              6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                              industry so that their absence does not lead to bottlenecks in the future growth of

                                                                              the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                              7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                              Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                              country are members of this Institute which has been set up with the objective of

                                                                              promoting developing and propagating the proper and effective use of steel

                                                                              8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                              major steel plants being implemented Govt has setup a Project Coordination

                                                                              Group under the Chairmanship of Steel Minister

                                                                              NATIONAL STEEL POLICY 2005

                                                                              The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                              development and as such great importance is attached to capacity expansion in line

                                                                              with expected demand at cost and prices which make Indian steel internationally

                                                                              competitive The existing regime of liberalization decontrol and deregulation of

                                                                              industry in the country has opened up new opportunities for the expansion of the steel

                                                                              industry With a view to accelerating the growth of the steel sector and attaining the

                                                                              vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                              formulated a National Steel Policy (NSP) in 2005

                                                                              The following salient features can be derived after analysing the NSP 2005

                                                                              The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                              towards reform restructuring and globalisation

                                                                              The long-term goal of the NSP is that India should have a modern and efficient

                                                                              steel industry of world standards catering to diversified steel demand The focus of

                                                                              the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                              product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                              In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                              NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                              an open globally integrated and competitive environment

                                                                              The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                              policy goal On the demand side the strategy would be to create incremental

                                                                              demand through promotional efforts creation of awareness and strengthening the

                                                                              delivery chain particularly in rural areas On the supply side the strategy would be

                                                                              to facilitate creation of additional capacity remove procedural and policy

                                                                              bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                              investments in RampD and encourage the creation of infrastructure such as roads

                                                                              railways and ports

                                                                              The NSP acknowledges the low per capita consumption of steel in the country

                                                                              especially in the rural areas and the need to boost steel consumption to improve

                                                                              quality of life and help in meeting the growing aspirations of masses

                                                                              In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                              industry would need additional capital In addition funds would be required for

                                                                              technological upgrade of existing facilities In order to mobilize such vast resources

                                                                              NSP seeks to encourage foreign direct investment In addition the policy also

                                                                              seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                              to the steel industry

                                                                              The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                              derivatives to contain price volatility in the steel market

                                                                              The NSP seeks to strengthen the existing training and research facilities available

                                                                              to the domestic steel industry so as to provide suitable training programmes

                                                                              especially for the secondary small-scale units and also to collect and analyse data

                                                                              on important parameters of the industry

                                                                              The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                              capability for special types of steel substitute coking coal use iron ore fines

                                                                              develop new products suited to rural needs enhance material and energy

                                                                              efficiency utilize waste and arrest environmental degradation

                                                                              The NSP acknowledges the important role played by the secondary steel sector in

                                                                              providing employment meeting local demand of steel in rural and semi-urban

                                                                              areas and meeting the countryrsquos demand of some special products and seeks to

                                                                              endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                              from major plants through the existing mechanism of State Small Industries

                                                                              Corporations

                                                                              The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                              global economy requires that the industry should be protected from unfair trade

                                                                              practices The NSP therefore envisages institution of mechanisms for import

                                                                              surveillance and monitoring export subsidies in other countries

                                                                              The present per capita consumption of steel in the country is very low compared to the

                                                                              world average As mentioned above one of the objectives of the NSP is to augment

                                                                              the demand and consumption of steel in the country by conscious promotion of steel

                                                                              usage With a view to create a mass awareness campaign on conscious promotion of

                                                                              steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                              the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                              The Committee is being serviced by Institute for Steel Development and Growth

                                                                              (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                              way of an awareness campaign with particular emphasis on rural sectors The

                                                                              Committee also aims at educating the designers architects builders and planners

                                                                              regarding the qualitative and cost effective applications of steel in various structures

                                                                              including buildings bridges flyovers and airports

                                                                              FUTURE OF INDIAN STEEL INDUSTRY

                                                                              India is amongst a few countries in the world having the dual advantage of fast

                                                                              growing domestic demand coupled with access to raw materials Further the trend

                                                                              that is already discernible is that the axis of global steel production consumption is

                                                                              shifting towards Asia With their large populations China and India already account for

                                                                              35 of the total world steel production - more than double of Europe Asia is

                                                                              expected to outpace other regions of the world to an even greater extent in the coming

                                                                              years

                                                                              Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                              is accepted that China will continue to be the leader However India is slated to

                                                                              emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                              the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                              splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                              China swallowed almost 32 of global steel It is unlikely that future production and

                                                                              consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                              has been the case over the last few years On the other hand it is sun-rise time for

                                                                              India where the demand has increased by 7-8 in the last couple of years In the long

                                                                              run Indian steel is likely to be more cost-effective since unlike China India has

                                                                              relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                              can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                              However the position with coal is not so favourable Though thermal coal

                                                                              reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                              traditional blast furnace route would require coking coal India does not have adequate

                                                                              reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                              Thus the steel industry always had to contend with the dual problems of inadequate

                                                                              availability and poor quality of Indian coking coal This has been partly addressed by

                                                                              adopting alternative iron making processes that are not dependent on coking coal it

                                                                              can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                              in India

                                                                              Because of the shortage of indigenous coal attempts have been made by steel

                                                                              producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                              mines in other countries This is the only long-term solution but with a global shortage

                                                                              of coal it may not remain cost-effective in the long run

                                                                              India is the seventh largest producer of steel and may further improve its position

                                                                              going by the current trends A series of investment decisions by major domestic

                                                                              players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                              POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                              The keen interest shown by various prospective investors is not only due to

                                                                              expectations of strong growth in domestic demand but also due to indigenous

                                                                              availability of key resources like iron ore and skilled workforce

                                                                              After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                              steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                              finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                              2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                              consumption has accelerated to 91 per cent

                                                                              With the likely growth of Indian economy at around 7 per cent per annum

                                                                              demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                              million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                              demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                              is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                              very low level of per capita consumption of steel in India is highlighted further when

                                                                              compared with the consumption levels of its peer group consisting of countries like

                                                                              China Brazil Mexico and Republic of Korea as also with selected developed

                                                                              countries

                                                                              Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                              China there seems to be consensus among analysts that India is likely to witness a

                                                                              growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                              percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                              achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                              more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                              country like India cyclicity is more in terms of prices rather than volumes of production

                                                                              Exports

                                                                              Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                              starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                              2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                              rising domestic demand and low capacity additions Exports now constitute around 17

                                                                              per cent of total production and Indias presence in the developing and developed

                                                                              world is being increasingly felt Indian steel producers have recently been able to

                                                                              supply specialized grades and products used for sophisticated applications like

                                                                              automobiles On the cost front some of our producers are counted amongst the least

                                                                              cost producers of the world For an average reference plant India is competitively

                                                                              placed in the middle of the hierarchy of steel producing nations

                                                                              However we have a long way to go to catch up with the leading exporters of the

                                                                              world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                              2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                              per cent of total projected production The projected export ratio compares well with

                                                                              the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                              The projected production of steel by 2019-20 to meet the domestic and export

                                                                              demand will be around 110 million tonnes Management of resources and

                                                                              infrastructural growth is going to be critical in achievement of the production level

                                                                              envisaged The broad requirements of various resources will increase manifold from

                                                                              the current level The bottlenecks in availability of critical inputs and various facilities

                                                                              need to be removed through concerted efforts of Government and industry The broad

                                                                              strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                              sector has been discussed in the National Steel Policy which has been recently

                                                                              approved by the Government

                                                                              As stated earlier the long-term goal of the National Steel Policy is that India

                                                                              should have a modern and efficient steel industry of world standards catering to a

                                                                              diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                              not only in terms of cost quality and product mix but also in terms of global

                                                                              benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                              pronged strategy to achieve these goals On the demand side the strategy would be

                                                                              to create incremental demand through promotional efforts creation of awareness and

                                                                              strengthening the delivery chain particularly in rural areas On the supply side the

                                                                              strategy would be to facilitate creation of additional capacity remove procedural and

                                                                              policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                              investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                              roads railways and ports

                                                                              The production figures exports and imports of finished carbon steel and pig iron

                                                                              and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                              Steel and SAIL attest to the continuing growth for both the sectors

                                                                              FINDINGS

                                                                              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 increased its profit over the year particularly in 2006-07

                                                                              Both the companies are planning to adopt modern technology which is going to

                                                                              help them to compete in world market but they need to be less dependent on

                                                                              state of art technology and coal for long term prospects

                                                                              Public sector has undergone retrenchment for the employees and improved

                                                                              has its lobour productivity but it is still lacking behind as compared to private

                                                                              sector

                                                                              SAIL has reduced the no of accidents due to improper handling of machinery

                                                                              still no of accidents are more than that of TATA Steel

                                                                              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

                                                                              ie 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 have to be met

                                                                              comprehensively if we are to take our legitimate place in the world as a developed

                                                                              nation by 2020

                                                                              BIBLIOGRAPHY

                                                                              Annual report (2006-07) published by ministry of steel

                                                                              Annual report (2006-07) published by TATA Steel

                                                                              Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                              REPORTrsquo posted by SAIL on its website

                                                                              lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                              held on 07 Nov 2006

                                                                              Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                              wwwsteelnicin (Official website of ministry of industry)

                                                                              wwwtatasteelcom (Official website of TATA Steel)

                                                                              wwwsailcoin (Official website of Steel Authority of India)

                                                                              wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                              wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                              • DATA ANALYSIS
                                                                              • Comparison between TATA Steel and Steel Authority of India
                                                                              • Production
                                                                              • Quantity 000 Tonnes
                                                                              • Financials
                                                                              • Research and Development
                                                                              • (Rs Crore)
                                                                              • TATA Steel
                                                                              • Steel Authority of India
                                                                              • Environment
                                                                              • TATA Steel
                                                                              • Emissions effluents and wastes
                                                                              • Emissions
                                                                              • Waste handling
                                                                              • Effluent Management
                                                                              • Steel Authority of India
                                                                              • Solid Waste Management
                                                                              • Environmental Plantation
                                                                              • Environmental Recognitions
                                                                              • Workforce and Welfare of Society
                                                                              • TATA steel
                                                                              • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                              • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                              • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                              • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                              • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                              • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                              • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                              • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                              • Steel Authority of India
                                                                              • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                              • Technology
                                                                              • Steel Authority of India
                                                                              • Safety measures
                                                                              • Tata Steel
                                                                              • Steel Authority of India
                                                                              • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                              • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                              • Measures taken by Indian government to improve the industry
                                                                              • Now letrsquos 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-
                                                                              • Special assistance being provided by Ministry of Steel to Private Sector
                                                                              • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                Workforce and Welfare of Society

                                                                                TATA steel

                                                                                Tata Steel has not lost focus of this philosophy and has adapted it in a broader

                                                                                and modern context in its Vision 2007 A lot is dependent on the individual spirit and

                                                                                enthusiasm of the employees to realise our vision TATA Steel accelerates efforts to

                                                                                provide a work environment that will ensure a sense of purpose and personal growth

                                                                                for each individual The wish of the company is to see the smile on every face

                                                                                everyday A pioneer in employee welfare Tata Steel has invested in the power of its

                                                                                people and enriched empowered and enhanced their lives

                                                                                Even in its nascent years social scientists Sidney and Beatrice Webb were

                                                                                brought in to work on welfare schemes In fact some of the initiatives introduced by

                                                                                Tata Steel were the first of their kind in India and some even in the western countries

                                                                                at that time Tata Steelrsquos Human Resource policy recognises its people as the primary

                                                                                source of its competitiveness It focuses on constantly updating and challenging

                                                                                intellectual capabilities to enable them to excel in performance Special efforts are

                                                                                made for enhancing strategic thinking skills and analytical abilities of its managers and

                                                                                workers As a true lsquoLearning Organisationrsquo Tata Steel has tapped the knowledge

                                                                                available with its people through Knowledge Management and sharing of best

                                                                                practices

                                                                                In the year 2003 Tata Steel celebrated 75 years of industrial harmony and

                                                                                mutual co-operation coordination and understanding between the Management and

                                                                                the Union It has twice emerged as ldquoAsiarsquos Most Admired Knowledge Enterpriserdquo

                                                                                among many other prestigious awards and recognition Tata Steel aims at ensuring

                                                                                transparency fairness and equity in all its interactions with its employees to create an

                                                                                enthused and happy workforce

                                                                                In 1916 Social Welfare Scheme was formed by Tata Steel to provide

                                                                                assistance in the fields of education vocational training self-employment and

                                                                                family welfare

                                                                                Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                                12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                                surgical treatment for preventive and curative interventions to people in

                                                                                inaccessible rural areas

                                                                                Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                                for the 1920 Antwerp Olympics

                                                                                The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                                track was inaugurated in 1991 The complex also houses facilities for handball

                                                                                tennis volleyball hockey basketball boxing table tennis and a modern

                                                                                gymnasium

                                                                                The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                                services for the betterment of the people in and around Jamshedpur

                                                                                At times of natural calamities the company has rushe immediate relief and off

                                                                                ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                                fl ood ravaged Orissa and other such aff ected areas

                                                                                Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                                er a unique environment for the children of Jamshedpur to grow up in

                                                                                In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                                Jamshedpur has emerged as the one of the best cities in India

                                                                                Steel Authority of India

                                                                                The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                                executives and 123005 non-executives The total reduction in manpower achieved

                                                                                during the year stood at 4864 which included separation of 881 employees through

                                                                                voluntary retirement The labour productivity improved by around 12 over previous

                                                                                year to 150 tonne crude steelmanyear

                                                                                Some of the areas of assistance which are available to the weaker sections are the

                                                                                following

                                                                                The company has provided land for construction of school buildings in some of

                                                                                the steel townships as well as in other places for spreading education among

                                                                                the masses

                                                                                The company has constructed roads in remote areas around the steel plants

                                                                                and also where the captive mines are located to improve communication and

                                                                                also increase activities such as organisation of health camps school facilities

                                                                                drinking water etc under the peripheral development schemes

                                                                                Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                                Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                                providing them with education boarding and lodging facilities

                                                                                Construction of bridges by-pass roads metal-morum path waterways

                                                                                levellingdressing area around township pre-mixed roads Installation of hand-

                                                                                pumps tube wells and wells for villagers

                                                                                Construction of school buildings (including for mentally retarded deaf and

                                                                                dumb children) madarsas providing school furniture therein and construction

                                                                                of hostels womenrsquos college building etc

                                                                                Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                                engineering students in various disciplines to encourage technical education

                                                                                among them

                                                                                In many cases tuition fee in company run schools is exempt for SCST

                                                                                students Steps are taken to provide education to more and more tribal children

                                                                                in company schools

                                                                                The unemployed SCST youth are given specialized training in various

                                                                                technical trades to develop skill and knowledge Such training is provided free

                                                                                of cost

                                                                                Adult literacy campaign is carried out in most of the steel townships Every year

                                                                                more and more men and women are being covered in this campaign

                                                                                Development of fishery and cottage industry providing sewing machines to

                                                                                village mahila mandals and promoting other self-employment generation

                                                                                schemes

                                                                                SAIL has established a hockey academy with stadium and hostel facilities at

                                                                                Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                                academy was successful in spotting a number of young talented tribal players

                                                                                and grooms them under expertise of ex-Olympian

                                                                                Technology

                                                                                The biggest boost to efficiency in the steel industry has come from the increased

                                                                                use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                                share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                                now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                                among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                                crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                                suggests there is restructuring potential

                                                                                TATA Steel

                                                                                Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                                with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                                international companies also took part in the exhibition Participating companies from

                                                                                countries all over the world exhibited latest technologies and know-how List of

                                                                                participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                                Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                                companies of national and international repute China was the partner country for the

                                                                                International Trade Fair this year

                                                                                In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                                cutting-edge technology used in iron ore mining pioneering human resource

                                                                                practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                                steel company

                                                                                The 6th International Trade Fair and Conference an institutionalised global

                                                                                event is considered to be one of the most prestigious forums for national as well

                                                                                international participants It is a conclave of the finest minds concerned with the future

                                                                                direction and growth of these sectors The forum provided the worlds most eminent

                                                                                metallurgists manufacturers of metallurgical and mining machinery and related

                                                                                sectors professionals analysts and experts with the opportunity to exchange views on

                                                                                emerging technologies synergy and strengths and open up wider horizons for

                                                                                sectorial development

                                                                                Tata Steel to adopt Corus technology

                                                                                Tata Steel plans to implement alternate technology used by the British steel

                                                                                maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                                production according to Mr B Muthuraman Managing Director Tata Steel

                                                                                ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                                technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                                newspersons on the sidelines of the 34th National Management Convention organised

                                                                                by the All-India Management Association However he declined to give further details

                                                                                on the type of technology the Indian steel giant plans to implement

                                                                                Steel Authority of India

                                                                                Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                                of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                                and productive capacity and in the process become more energy-efficient and

                                                                                improve quality The key component of the ongoing modernisation drive - already

                                                                                completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                                ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                                continuous casting techniques A senior SAIL official says Continuous casting and

                                                                                basic oxygen furnaces ensure better quality steel through processes more easily

                                                                                monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                                more automated and permits greater flexibility Continuous casting is more efficient

                                                                                than the traditional ingot casting methods and gives increased yields while enabling

                                                                                better quality standards SAIL is also modernising its finishing mills and is adding

                                                                                secondary refining facilities to improve quality

                                                                                Safety measures

                                                                                A unique feature of safety management in steel industry is that a bipartite forum

                                                                                named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                                was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                                RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                                Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                                workshops training programme safety competitions for member organisations JCSSI

                                                                                with the co-operation and support of Trade Union representatives formulates policies

                                                                                and guidelines for its member plants and monitors the implementation

                                                                                Tata Steel

                                                                                Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                                Safety department and a Safety Trophy helped spread the message all across the

                                                                                company

                                                                                TATA reaffirms its commitment to provide safe working place and clean

                                                                                environment to its employees and other stakeholders as an integral part of its

                                                                                business philosophy and values We will continually enhance our Environmental

                                                                                Occupational Health amp Safety (EHS) performance in our activities products and

                                                                                services through a structured EHS management framework Towards this

                                                                                commitment we shall

                                                                                Establish and achieve EHS objectives and targets

                                                                                Ensure compliance with applicable EHS legislation and other requirement and

                                                                                go beyond

                                                                                Conserve natural resources and energy by constantly seeking to reduce

                                                                                consumption and promoting waste avoidance and recycling measures

                                                                                Eliminate minimize andor control adverse environmental impacts and

                                                                                occupational health and safety risks by adopting appropriate state-of-the-art

                                                                                technology and best EHS management practices at all levels sand functions

                                                                                Enhance awareness skill and competence of our employees and contractors

                                                                                so as to enable them to demonstrate their involvement responsibility and

                                                                                accountability for sound EHS performance

                                                                                Steel Authority of India

                                                                                SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                                monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                                Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                                formulated and review of implementation of APP is done during Heads of

                                                                                Safety meeting

                                                                                Internal and external safety audits of major departments particularly hazardous

                                                                                areas are conducted every year and points arising from these audits are

                                                                                liquidated Safety aspects have been incorporated in standard operating

                                                                                practices (SOP) and standard maintenance practices (SMP)

                                                                                All major capital repairsshut downs are closely monitored round the clock

                                                                                Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                                grass-root level apart from regular inspections as per checklists to identify

                                                                                unsafe conditionsacts

                                                                                Safety training is imparted to target group employees at various levels HRD

                                                                                intervention in the area of safety covers Heads of Departments Line Managers

                                                                                amp Departmental Safety Officers Besides area specific workshops are

                                                                                conducted at different locations on important topics like gas safety railroad

                                                                                safety safety in iron steel amp coke making etc

                                                                                Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                                standards in the company by taking measures like intensive safety drives in works

                                                                                area and conducting safety audits in hazardous departments of different plants and

                                                                                mines In addition specific workshops on safety aspects were organised in various

                                                                                SAIL steel plants

                                                                                Measures taken by Indian government to improve the industry

                                                                                Now letrsquos 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-

                                                                                1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                among others was removed from the list of industries reserved for the public

                                                                                sector and also exempted from the provisions of compulsory licensing under the

                                                                                Industries (Development and Regulation) Act 1951

                                                                                2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                of `high priority industries for automatic approval for foreign equity investment up

                                                                                to 51 This limit has been recently increased to 100

                                                                                3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                time it was ensured that priority continued to be accorded for meeting the

                                                                                requirements of small scale industries exporters of engineering goods and North

                                                                                Eastern Region of the country besides strategic sectors such as Defence and

                                                                                Railways

                                                                                4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                steel have drastically come down since 1991-92 levels and the government is

                                                                                committed to bring them down to the international levels In Chapter 72 there are

                                                                                two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                6 Iron amp Steel are freely exportable

                                                                                7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                8 The floor price for seconds and defectives continues till date

                                                                                9 Imports of seconds and defectives of steel are allowed only through three

                                                                                designated ports of Mumbai Calcutta and Chennai

                                                                                10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                import consignment of seconds and defectives

                                                                                11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                15 per cent to 5 per cent

                                                                                12Further customs duty on several raw materials used by the steel sector like

                                                                                noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                coking coal to zero

                                                                                13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                cut on moderating prices was not achieved

                                                                                14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                further reduced from 20 to 10

                                                                                Special assistance being provided by Ministry of Steel to Private Sector

                                                                                1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                development of Iron and Steel Sector in the country

                                                                                2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                new plants and expansion of existing ones wherever applied for

                                                                                3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                clearance of projects

                                                                                5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                Plants are held at the level of Secretary

                                                                                6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                country are members of this Institute which has been set up with the objective of

                                                                                promoting developing and propagating the proper and effective use of steel

                                                                                8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                major steel plants being implemented Govt has setup a Project Coordination

                                                                                Group under the Chairmanship of Steel Minister

                                                                                NATIONAL STEEL POLICY 2005

                                                                                The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                development and as such great importance is attached to capacity expansion in line

                                                                                with expected demand at cost and prices which make Indian steel internationally

                                                                                competitive The existing regime of liberalization decontrol and deregulation of

                                                                                industry in the country has opened up new opportunities for the expansion of the steel

                                                                                industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                formulated a National Steel Policy (NSP) in 2005

                                                                                The following salient features can be derived after analysing the NSP 2005

                                                                                The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                towards reform restructuring and globalisation

                                                                                The long-term goal of the NSP is that India should have a modern and efficient

                                                                                steel industry of world standards catering to diversified steel demand The focus of

                                                                                the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                an open globally integrated and competitive environment

                                                                                The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                policy goal On the demand side the strategy would be to create incremental

                                                                                demand through promotional efforts creation of awareness and strengthening the

                                                                                delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                to facilitate creation of additional capacity remove procedural and policy

                                                                                bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                investments in RampD and encourage the creation of infrastructure such as roads

                                                                                railways and ports

                                                                                The NSP acknowledges the low per capita consumption of steel in the country

                                                                                especially in the rural areas and the need to boost steel consumption to improve

                                                                                quality of life and help in meeting the growing aspirations of masses

                                                                                In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                industry would need additional capital In addition funds would be required for

                                                                                technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                to the steel industry

                                                                                The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                derivatives to contain price volatility in the steel market

                                                                                The NSP seeks to strengthen the existing training and research facilities available

                                                                                to the domestic steel industry so as to provide suitable training programmes

                                                                                especially for the secondary small-scale units and also to collect and analyse data

                                                                                on important parameters of the industry

                                                                                The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                capability for special types of steel substitute coking coal use iron ore fines

                                                                                develop new products suited to rural needs enhance material and energy

                                                                                efficiency utilize waste and arrest environmental degradation

                                                                                The NSP acknowledges the important role played by the secondary steel sector in

                                                                                providing employment meeting local demand of steel in rural and semi-urban

                                                                                areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                from major plants through the existing mechanism of State Small Industries

                                                                                Corporations

                                                                                The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                global economy requires that the industry should be protected from unfair trade

                                                                                practices The NSP therefore envisages institution of mechanisms for import

                                                                                surveillance and monitoring export subsidies in other countries

                                                                                The present per capita consumption of steel in the country is very low compared to the

                                                                                world average As mentioned above one of the objectives of the NSP is to augment

                                                                                the demand and consumption of steel in the country by conscious promotion of steel

                                                                                usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                The Committee is being serviced by Institute for Steel Development and Growth

                                                                                (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                way of an awareness campaign with particular emphasis on rural sectors The

                                                                                Committee also aims at educating the designers architects builders and planners

                                                                                regarding the qualitative and cost effective applications of steel in various structures

                                                                                including buildings bridges flyovers and airports

                                                                                FUTURE OF INDIAN STEEL INDUSTRY

                                                                                India is amongst a few countries in the world having the dual advantage of fast

                                                                                growing domestic demand coupled with access to raw materials Further the trend

                                                                                that is already discernible is that the axis of global steel production consumption is

                                                                                shifting towards Asia With their large populations China and India already account for

                                                                                35 of the total world steel production - more than double of Europe Asia is

                                                                                expected to outpace other regions of the world to an even greater extent in the coming

                                                                                years

                                                                                Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                is accepted that China will continue to be the leader However India is slated to

                                                                                emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                has been the case over the last few years On the other hand it is sun-rise time for

                                                                                India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                However the position with coal is not so favourable Though thermal coal

                                                                                reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                traditional blast furnace route would require coking coal India does not have adequate

                                                                                reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                adopting alternative iron making processes that are not dependent on coking coal it

                                                                                can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                in India

                                                                                Because of the shortage of indigenous coal attempts have been made by steel

                                                                                producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                mines in other countries This is the only long-term solution but with a global shortage

                                                                                of coal it may not remain cost-effective in the long run

                                                                                India is the seventh largest producer of steel and may further improve its position

                                                                                going by the current trends A series of investment decisions by major domestic

                                                                                players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                The keen interest shown by various prospective investors is not only due to

                                                                                expectations of strong growth in domestic demand but also due to indigenous

                                                                                availability of key resources like iron ore and skilled workforce

                                                                                After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                consumption has accelerated to 91 per cent

                                                                                With the likely growth of Indian economy at around 7 per cent per annum

                                                                                demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                very low level of per capita consumption of steel in India is highlighted further when

                                                                                compared with the consumption levels of its peer group consisting of countries like

                                                                                China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                countries

                                                                                Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                China there seems to be consensus among analysts that India is likely to witness a

                                                                                growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                Exports

                                                                                Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                per cent of total production and Indias presence in the developing and developed

                                                                                world is being increasingly felt Indian steel producers have recently been able to

                                                                                supply specialized grades and products used for sophisticated applications like

                                                                                automobiles On the cost front some of our producers are counted amongst the least

                                                                                cost producers of the world For an average reference plant India is competitively

                                                                                placed in the middle of the hierarchy of steel producing nations

                                                                                However we have a long way to go to catch up with the leading exporters of the

                                                                                world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                per cent of total projected production The projected export ratio compares well with

                                                                                the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                The projected production of steel by 2019-20 to meet the domestic and export

                                                                                demand will be around 110 million tonnes Management of resources and

                                                                                infrastructural growth is going to be critical in achievement of the production level

                                                                                envisaged The broad requirements of various resources will increase manifold from

                                                                                the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                need to be removed through concerted efforts of Government and industry The broad

                                                                                strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                sector has been discussed in the National Steel Policy which has been recently

                                                                                approved by the Government

                                                                                As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                should have a modern and efficient steel industry of world standards catering to a

                                                                                diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                not only in terms of cost quality and product mix but also in terms of global

                                                                                benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                to create incremental demand through promotional efforts creation of awareness and

                                                                                strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                roads railways and ports

                                                                                The production figures exports and imports of finished carbon steel and pig iron

                                                                                and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                Steel and SAIL attest to the continuing growth for both the sectors

                                                                                FINDINGS

                                                                                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 increased its profit over the year particularly in 2006-07

                                                                                Both the companies are planning to adopt modern technology which is going to

                                                                                help them to compete in world market but they need to be less dependent on

                                                                                state of art technology and coal for long term prospects

                                                                                Public sector has undergone retrenchment for the employees and improved

                                                                                has its lobour productivity but it is still lacking behind as compared to private

                                                                                sector

                                                                                SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                still no of accidents are more than that of TATA Steel

                                                                                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

                                                                                ie 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 have to be met

                                                                                comprehensively if we are to take our legitimate place in the world as a developed

                                                                                nation by 2020

                                                                                BIBLIOGRAPHY

                                                                                Annual report (2006-07) published by ministry of steel

                                                                                Annual report (2006-07) published by TATA Steel

                                                                                Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                REPORTrsquo posted by SAIL on its website

                                                                                lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                held on 07 Nov 2006

                                                                                Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                wwwsteelnicin (Official website of ministry of industry)

                                                                                wwwtatasteelcom (Official website of TATA Steel)

                                                                                wwwsailcoin (Official website of Steel Authority of India)

                                                                                wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                • DATA ANALYSIS
                                                                                • Comparison between TATA Steel and Steel Authority of India
                                                                                • Production
                                                                                • Quantity 000 Tonnes
                                                                                • Financials
                                                                                • Research and Development
                                                                                • (Rs Crore)
                                                                                • TATA Steel
                                                                                • Steel Authority of India
                                                                                • Environment
                                                                                • TATA Steel
                                                                                • Emissions effluents and wastes
                                                                                • Emissions
                                                                                • Waste handling
                                                                                • Effluent Management
                                                                                • Steel Authority of India
                                                                                • Solid Waste Management
                                                                                • Environmental Plantation
                                                                                • Environmental Recognitions
                                                                                • Workforce and Welfare of Society
                                                                                • TATA steel
                                                                                • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                • Steel Authority of India
                                                                                • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                • Technology
                                                                                • Steel Authority of India
                                                                                • Safety measures
                                                                                • Tata Steel
                                                                                • Steel Authority of India
                                                                                • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                • Measures taken by Indian government to improve the industry
                                                                                • Now letrsquos 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-
                                                                                • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                  Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train

                                                                                  12 times This facility provides on-the-spot diagnostic medical and advanced

                                                                                  surgical treatment for preventive and curative interventions to people in

                                                                                  inaccessible rural areas

                                                                                  Sir Dorab Tata personally financed four athletes and two wrestlers from India

                                                                                  for the 1920 Antwerp Olympics

                                                                                  The JRD Sports Complex an international stadium with an 8-lane polyurethane

                                                                                  track was inaugurated in 1991 The complex also houses facilities for handball

                                                                                  tennis volleyball hockey basketball boxing table tennis and a modern

                                                                                  gymnasium

                                                                                  The Tata Steel Family Initiatives Foundation is engaged in off ering health

                                                                                  services for the betterment of the people in and around Jamshedpur

                                                                                  At times of natural calamities the company has rushe immediate relief and off

                                                                                  ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat

                                                                                  fl ood ravaged Orissa and other such aff ected areas

                                                                                  Horse-riding lessons the Jubilee Amusement park the zoological park etc off

                                                                                  er a unique environment for the children of Jamshedpur to grow up in

                                                                                  In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG

                                                                                  Jamshedpur has emerged as the one of the best cities in India

                                                                                  Steel Authority of India

                                                                                  The manpower strength as on 31st March 2006 was 138211 comprising 15206

                                                                                  executives and 123005 non-executives The total reduction in manpower achieved

                                                                                  during the year stood at 4864 which included separation of 881 employees through

                                                                                  voluntary retirement The labour productivity improved by around 12 over previous

                                                                                  year to 150 tonne crude steelmanyear

                                                                                  Some of the areas of assistance which are available to the weaker sections are the

                                                                                  following

                                                                                  The company has provided land for construction of school buildings in some of

                                                                                  the steel townships as well as in other places for spreading education among

                                                                                  the masses

                                                                                  The company has constructed roads in remote areas around the steel plants

                                                                                  and also where the captive mines are located to improve communication and

                                                                                  also increase activities such as organisation of health camps school facilities

                                                                                  drinking water etc under the peripheral development schemes

                                                                                  Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                                  Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                                  providing them with education boarding and lodging facilities

                                                                                  Construction of bridges by-pass roads metal-morum path waterways

                                                                                  levellingdressing area around township pre-mixed roads Installation of hand-

                                                                                  pumps tube wells and wells for villagers

                                                                                  Construction of school buildings (including for mentally retarded deaf and

                                                                                  dumb children) madarsas providing school furniture therein and construction

                                                                                  of hostels womenrsquos college building etc

                                                                                  Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                                  engineering students in various disciplines to encourage technical education

                                                                                  among them

                                                                                  In many cases tuition fee in company run schools is exempt for SCST

                                                                                  students Steps are taken to provide education to more and more tribal children

                                                                                  in company schools

                                                                                  The unemployed SCST youth are given specialized training in various

                                                                                  technical trades to develop skill and knowledge Such training is provided free

                                                                                  of cost

                                                                                  Adult literacy campaign is carried out in most of the steel townships Every year

                                                                                  more and more men and women are being covered in this campaign

                                                                                  Development of fishery and cottage industry providing sewing machines to

                                                                                  village mahila mandals and promoting other self-employment generation

                                                                                  schemes

                                                                                  SAIL has established a hockey academy with stadium and hostel facilities at

                                                                                  Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                                  academy was successful in spotting a number of young talented tribal players

                                                                                  and grooms them under expertise of ex-Olympian

                                                                                  Technology

                                                                                  The biggest boost to efficiency in the steel industry has come from the increased

                                                                                  use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                                  share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                                  now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                                  among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                                  crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                                  suggests there is restructuring potential

                                                                                  TATA Steel

                                                                                  Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                                  with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                                  international companies also took part in the exhibition Participating companies from

                                                                                  countries all over the world exhibited latest technologies and know-how List of

                                                                                  participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                                  Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                                  companies of national and international repute China was the partner country for the

                                                                                  International Trade Fair this year

                                                                                  In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                                  cutting-edge technology used in iron ore mining pioneering human resource

                                                                                  practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                                  steel company

                                                                                  The 6th International Trade Fair and Conference an institutionalised global

                                                                                  event is considered to be one of the most prestigious forums for national as well

                                                                                  international participants It is a conclave of the finest minds concerned with the future

                                                                                  direction and growth of these sectors The forum provided the worlds most eminent

                                                                                  metallurgists manufacturers of metallurgical and mining machinery and related

                                                                                  sectors professionals analysts and experts with the opportunity to exchange views on

                                                                                  emerging technologies synergy and strengths and open up wider horizons for

                                                                                  sectorial development

                                                                                  Tata Steel to adopt Corus technology

                                                                                  Tata Steel plans to implement alternate technology used by the British steel

                                                                                  maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                                  production according to Mr B Muthuraman Managing Director Tata Steel

                                                                                  ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                                  technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                                  newspersons on the sidelines of the 34th National Management Convention organised

                                                                                  by the All-India Management Association However he declined to give further details

                                                                                  on the type of technology the Indian steel giant plans to implement

                                                                                  Steel Authority of India

                                                                                  Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                                  of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                                  and productive capacity and in the process become more energy-efficient and

                                                                                  improve quality The key component of the ongoing modernisation drive - already

                                                                                  completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                                  ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                                  continuous casting techniques A senior SAIL official says Continuous casting and

                                                                                  basic oxygen furnaces ensure better quality steel through processes more easily

                                                                                  monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                                  more automated and permits greater flexibility Continuous casting is more efficient

                                                                                  than the traditional ingot casting methods and gives increased yields while enabling

                                                                                  better quality standards SAIL is also modernising its finishing mills and is adding

                                                                                  secondary refining facilities to improve quality

                                                                                  Safety measures

                                                                                  A unique feature of safety management in steel industry is that a bipartite forum

                                                                                  named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                                  was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                                  RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                                  Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                                  workshops training programme safety competitions for member organisations JCSSI

                                                                                  with the co-operation and support of Trade Union representatives formulates policies

                                                                                  and guidelines for its member plants and monitors the implementation

                                                                                  Tata Steel

                                                                                  Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                                  Safety department and a Safety Trophy helped spread the message all across the

                                                                                  company

                                                                                  TATA reaffirms its commitment to provide safe working place and clean

                                                                                  environment to its employees and other stakeholders as an integral part of its

                                                                                  business philosophy and values We will continually enhance our Environmental

                                                                                  Occupational Health amp Safety (EHS) performance in our activities products and

                                                                                  services through a structured EHS management framework Towards this

                                                                                  commitment we shall

                                                                                  Establish and achieve EHS objectives and targets

                                                                                  Ensure compliance with applicable EHS legislation and other requirement and

                                                                                  go beyond

                                                                                  Conserve natural resources and energy by constantly seeking to reduce

                                                                                  consumption and promoting waste avoidance and recycling measures

                                                                                  Eliminate minimize andor control adverse environmental impacts and

                                                                                  occupational health and safety risks by adopting appropriate state-of-the-art

                                                                                  technology and best EHS management practices at all levels sand functions

                                                                                  Enhance awareness skill and competence of our employees and contractors

                                                                                  so as to enable them to demonstrate their involvement responsibility and

                                                                                  accountability for sound EHS performance

                                                                                  Steel Authority of India

                                                                                  SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                                  monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                                  Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                                  formulated and review of implementation of APP is done during Heads of

                                                                                  Safety meeting

                                                                                  Internal and external safety audits of major departments particularly hazardous

                                                                                  areas are conducted every year and points arising from these audits are

                                                                                  liquidated Safety aspects have been incorporated in standard operating

                                                                                  practices (SOP) and standard maintenance practices (SMP)

                                                                                  All major capital repairsshut downs are closely monitored round the clock

                                                                                  Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                                  grass-root level apart from regular inspections as per checklists to identify

                                                                                  unsafe conditionsacts

                                                                                  Safety training is imparted to target group employees at various levels HRD

                                                                                  intervention in the area of safety covers Heads of Departments Line Managers

                                                                                  amp Departmental Safety Officers Besides area specific workshops are

                                                                                  conducted at different locations on important topics like gas safety railroad

                                                                                  safety safety in iron steel amp coke making etc

                                                                                  Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                                  standards in the company by taking measures like intensive safety drives in works

                                                                                  area and conducting safety audits in hazardous departments of different plants and

                                                                                  mines In addition specific workshops on safety aspects were organised in various

                                                                                  SAIL steel plants

                                                                                  Measures taken by Indian government to improve the industry

                                                                                  Now letrsquos 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-

                                                                                  1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                  among others was removed from the list of industries reserved for the public

                                                                                  sector and also exempted from the provisions of compulsory licensing under the

                                                                                  Industries (Development and Regulation) Act 1951

                                                                                  2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                  of `high priority industries for automatic approval for foreign equity investment up

                                                                                  to 51 This limit has been recently increased to 100

                                                                                  3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                  time it was ensured that priority continued to be accorded for meeting the

                                                                                  requirements of small scale industries exporters of engineering goods and North

                                                                                  Eastern Region of the country besides strategic sectors such as Defence and

                                                                                  Railways

                                                                                  4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                  freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                  items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                  regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                  steel have drastically come down since 1991-92 levels and the government is

                                                                                  committed to bring them down to the international levels In Chapter 72 there are

                                                                                  two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                  5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                  6 Iron amp Steel are freely exportable

                                                                                  7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                  8 The floor price for seconds and defectives continues till date

                                                                                  9 Imports of seconds and defectives of steel are allowed only through three

                                                                                  designated ports of Mumbai Calcutta and Chennai

                                                                                  10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                  import consignment of seconds and defectives

                                                                                  11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                  10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                  the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                  per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                  15 per cent to 5 per cent

                                                                                  12Further customs duty on several raw materials used by the steel sector like

                                                                                  noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                  coking coal to zero

                                                                                  13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                  from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                  that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                  increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                  cut on moderating prices was not achieved

                                                                                  14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                  further reduced from 20 to 10

                                                                                  Special assistance being provided by Ministry of Steel to Private Sector

                                                                                  1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                  development of Iron and Steel Sector in the country

                                                                                  2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                  new plants and expansion of existing ones wherever applied for

                                                                                  3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                  4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                  clearance of projects

                                                                                  5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                  Plants are held at the level of Secretary

                                                                                  6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                  industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                  the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                  7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                  Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                  country are members of this Institute which has been set up with the objective of

                                                                                  promoting developing and propagating the proper and effective use of steel

                                                                                  8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                  major steel plants being implemented Govt has setup a Project Coordination

                                                                                  Group under the Chairmanship of Steel Minister

                                                                                  NATIONAL STEEL POLICY 2005

                                                                                  The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                  development and as such great importance is attached to capacity expansion in line

                                                                                  with expected demand at cost and prices which make Indian steel internationally

                                                                                  competitive The existing regime of liberalization decontrol and deregulation of

                                                                                  industry in the country has opened up new opportunities for the expansion of the steel

                                                                                  industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                  vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                  formulated a National Steel Policy (NSP) in 2005

                                                                                  The following salient features can be derived after analysing the NSP 2005

                                                                                  The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                  towards reform restructuring and globalisation

                                                                                  The long-term goal of the NSP is that India should have a modern and efficient

                                                                                  steel industry of world standards catering to diversified steel demand The focus of

                                                                                  the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                  product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                  In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                  NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                  an open globally integrated and competitive environment

                                                                                  The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                  policy goal On the demand side the strategy would be to create incremental

                                                                                  demand through promotional efforts creation of awareness and strengthening the

                                                                                  delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                  to facilitate creation of additional capacity remove procedural and policy

                                                                                  bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                  investments in RampD and encourage the creation of infrastructure such as roads

                                                                                  railways and ports

                                                                                  The NSP acknowledges the low per capita consumption of steel in the country

                                                                                  especially in the rural areas and the need to boost steel consumption to improve

                                                                                  quality of life and help in meeting the growing aspirations of masses

                                                                                  In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                  industry would need additional capital In addition funds would be required for

                                                                                  technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                  NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                  seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                  to the steel industry

                                                                                  The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                  derivatives to contain price volatility in the steel market

                                                                                  The NSP seeks to strengthen the existing training and research facilities available

                                                                                  to the domestic steel industry so as to provide suitable training programmes

                                                                                  especially for the secondary small-scale units and also to collect and analyse data

                                                                                  on important parameters of the industry

                                                                                  The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                  capability for special types of steel substitute coking coal use iron ore fines

                                                                                  develop new products suited to rural needs enhance material and energy

                                                                                  efficiency utilize waste and arrest environmental degradation

                                                                                  The NSP acknowledges the important role played by the secondary steel sector in

                                                                                  providing employment meeting local demand of steel in rural and semi-urban

                                                                                  areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                  endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                  from major plants through the existing mechanism of State Small Industries

                                                                                  Corporations

                                                                                  The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                  global economy requires that the industry should be protected from unfair trade

                                                                                  practices The NSP therefore envisages institution of mechanisms for import

                                                                                  surveillance and monitoring export subsidies in other countries

                                                                                  The present per capita consumption of steel in the country is very low compared to the

                                                                                  world average As mentioned above one of the objectives of the NSP is to augment

                                                                                  the demand and consumption of steel in the country by conscious promotion of steel

                                                                                  usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                  steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                  the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                  The Committee is being serviced by Institute for Steel Development and Growth

                                                                                  (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                  way of an awareness campaign with particular emphasis on rural sectors The

                                                                                  Committee also aims at educating the designers architects builders and planners

                                                                                  regarding the qualitative and cost effective applications of steel in various structures

                                                                                  including buildings bridges flyovers and airports

                                                                                  FUTURE OF INDIAN STEEL INDUSTRY

                                                                                  India is amongst a few countries in the world having the dual advantage of fast

                                                                                  growing domestic demand coupled with access to raw materials Further the trend

                                                                                  that is already discernible is that the axis of global steel production consumption is

                                                                                  shifting towards Asia With their large populations China and India already account for

                                                                                  35 of the total world steel production - more than double of Europe Asia is

                                                                                  expected to outpace other regions of the world to an even greater extent in the coming

                                                                                  years

                                                                                  Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                  is accepted that China will continue to be the leader However India is slated to

                                                                                  emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                  the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                  splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                  China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                  consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                  has been the case over the last few years On the other hand it is sun-rise time for

                                                                                  India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                  run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                  relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                  can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                  However the position with coal is not so favourable Though thermal coal

                                                                                  reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                  traditional blast furnace route would require coking coal India does not have adequate

                                                                                  reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                  Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                  availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                  adopting alternative iron making processes that are not dependent on coking coal it

                                                                                  can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                  in India

                                                                                  Because of the shortage of indigenous coal attempts have been made by steel

                                                                                  producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                  mines in other countries This is the only long-term solution but with a global shortage

                                                                                  of coal it may not remain cost-effective in the long run

                                                                                  India is the seventh largest producer of steel and may further improve its position

                                                                                  going by the current trends A series of investment decisions by major domestic

                                                                                  players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                  POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                  The keen interest shown by various prospective investors is not only due to

                                                                                  expectations of strong growth in domestic demand but also due to indigenous

                                                                                  availability of key resources like iron ore and skilled workforce

                                                                                  After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                  steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                  finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                  2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                  consumption has accelerated to 91 per cent

                                                                                  With the likely growth of Indian economy at around 7 per cent per annum

                                                                                  demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                  million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                  demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                  is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                  very low level of per capita consumption of steel in India is highlighted further when

                                                                                  compared with the consumption levels of its peer group consisting of countries like

                                                                                  China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                  countries

                                                                                  Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                  China there seems to be consensus among analysts that India is likely to witness a

                                                                                  growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                  percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                  achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                  more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                  country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                  Exports

                                                                                  Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                  starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                  2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                  rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                  per cent of total production and Indias presence in the developing and developed

                                                                                  world is being increasingly felt Indian steel producers have recently been able to

                                                                                  supply specialized grades and products used for sophisticated applications like

                                                                                  automobiles On the cost front some of our producers are counted amongst the least

                                                                                  cost producers of the world For an average reference plant India is competitively

                                                                                  placed in the middle of the hierarchy of steel producing nations

                                                                                  However we have a long way to go to catch up with the leading exporters of the

                                                                                  world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                  2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                  per cent of total projected production The projected export ratio compares well with

                                                                                  the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                  The projected production of steel by 2019-20 to meet the domestic and export

                                                                                  demand will be around 110 million tonnes Management of resources and

                                                                                  infrastructural growth is going to be critical in achievement of the production level

                                                                                  envisaged The broad requirements of various resources will increase manifold from

                                                                                  the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                  need to be removed through concerted efforts of Government and industry The broad

                                                                                  strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                  sector has been discussed in the National Steel Policy which has been recently

                                                                                  approved by the Government

                                                                                  As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                  should have a modern and efficient steel industry of world standards catering to a

                                                                                  diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                  not only in terms of cost quality and product mix but also in terms of global

                                                                                  benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                  pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                  to create incremental demand through promotional efforts creation of awareness and

                                                                                  strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                  strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                  policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                  investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                  roads railways and ports

                                                                                  The production figures exports and imports of finished carbon steel and pig iron

                                                                                  and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                  Steel and SAIL attest to the continuing growth for both the sectors

                                                                                  FINDINGS

                                                                                  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 increased its profit over the year particularly in 2006-07

                                                                                  Both the companies are planning to adopt modern technology which is going to

                                                                                  help them to compete in world market but they need to be less dependent on

                                                                                  state of art technology and coal for long term prospects

                                                                                  Public sector has undergone retrenchment for the employees and improved

                                                                                  has its lobour productivity but it is still lacking behind as compared to private

                                                                                  sector

                                                                                  SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                  still no of accidents are more than that of TATA Steel

                                                                                  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

                                                                                  ie 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 have to be met

                                                                                  comprehensively if we are to take our legitimate place in the world as a developed

                                                                                  nation by 2020

                                                                                  BIBLIOGRAPHY

                                                                                  Annual report (2006-07) published by ministry of steel

                                                                                  Annual report (2006-07) published by TATA Steel

                                                                                  Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                  REPORTrsquo posted by SAIL on its website

                                                                                  lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                  held on 07 Nov 2006

                                                                                  Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                  wwwsteelnicin (Official website of ministry of industry)

                                                                                  wwwtatasteelcom (Official website of TATA Steel)

                                                                                  wwwsailcoin (Official website of Steel Authority of India)

                                                                                  wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                  wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                  • DATA ANALYSIS
                                                                                  • Comparison between TATA Steel and Steel Authority of India
                                                                                  • Production
                                                                                  • Quantity 000 Tonnes
                                                                                  • Financials
                                                                                  • Research and Development
                                                                                  • (Rs Crore)
                                                                                  • TATA Steel
                                                                                  • Steel Authority of India
                                                                                  • Environment
                                                                                  • TATA Steel
                                                                                  • Emissions effluents and wastes
                                                                                  • Emissions
                                                                                  • Waste handling
                                                                                  • Effluent Management
                                                                                  • Steel Authority of India
                                                                                  • Solid Waste Management
                                                                                  • Environmental Plantation
                                                                                  • Environmental Recognitions
                                                                                  • Workforce and Welfare of Society
                                                                                  • TATA steel
                                                                                  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                  • Steel Authority of India
                                                                                  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                  • Technology
                                                                                  • Steel Authority of India
                                                                                  • Safety measures
                                                                                  • Tata Steel
                                                                                  • Steel Authority of India
                                                                                  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                  • Measures taken by Indian government to improve the industry
                                                                                  • Now letrsquos 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-
                                                                                  • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                  • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                    also increase activities such as organisation of health camps school facilities

                                                                                    drinking water etc under the peripheral development schemes

                                                                                    Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and

                                                                                    Bokaro Steel Plant has adopted 12 Birhor tribe children These plants are

                                                                                    providing them with education boarding and lodging facilities

                                                                                    Construction of bridges by-pass roads metal-morum path waterways

                                                                                    levellingdressing area around township pre-mixed roads Installation of hand-

                                                                                    pumps tube wells and wells for villagers

                                                                                    Construction of school buildings (including for mentally retarded deaf and

                                                                                    dumb children) madarsas providing school furniture therein and construction

                                                                                    of hostels womenrsquos college building etc

                                                                                    Fourteen scholarships are awarded to deserving SCST undergraduate

                                                                                    engineering students in various disciplines to encourage technical education

                                                                                    among them

                                                                                    In many cases tuition fee in company run schools is exempt for SCST

                                                                                    students Steps are taken to provide education to more and more tribal children

                                                                                    in company schools

                                                                                    The unemployed SCST youth are given specialized training in various

                                                                                    technical trades to develop skill and knowledge Such training is provided free

                                                                                    of cost

                                                                                    Adult literacy campaign is carried out in most of the steel townships Every year

                                                                                    more and more men and women are being covered in this campaign

                                                                                    Development of fishery and cottage industry providing sewing machines to

                                                                                    village mahila mandals and promoting other self-employment generation

                                                                                    schemes

                                                                                    SAIL has established a hockey academy with stadium and hostel facilities at

                                                                                    Rourkela to tap and nurture the talent scattered in surrounding tribal area The

                                                                                    academy was successful in spotting a number of young talented tribal players

                                                                                    and grooms them under expertise of ex-Olympian

                                                                                    Technology

                                                                                    The biggest boost to efficiency in the steel industry has come from the increased

                                                                                    use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                                    share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                                    now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                                    among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                                    crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                                    suggests there is restructuring potential

                                                                                    TATA Steel

                                                                                    Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                                    with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                                    international companies also took part in the exhibition Participating companies from

                                                                                    countries all over the world exhibited latest technologies and know-how List of

                                                                                    participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                                    Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                                    companies of national and international repute China was the partner country for the

                                                                                    International Trade Fair this year

                                                                                    In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                                    cutting-edge technology used in iron ore mining pioneering human resource

                                                                                    practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                                    steel company

                                                                                    The 6th International Trade Fair and Conference an institutionalised global

                                                                                    event is considered to be one of the most prestigious forums for national as well

                                                                                    international participants It is a conclave of the finest minds concerned with the future

                                                                                    direction and growth of these sectors The forum provided the worlds most eminent

                                                                                    metallurgists manufacturers of metallurgical and mining machinery and related

                                                                                    sectors professionals analysts and experts with the opportunity to exchange views on

                                                                                    emerging technologies synergy and strengths and open up wider horizons for

                                                                                    sectorial development

                                                                                    Tata Steel to adopt Corus technology

                                                                                    Tata Steel plans to implement alternate technology used by the British steel

                                                                                    maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                                    production according to Mr B Muthuraman Managing Director Tata Steel

                                                                                    ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                                    technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                                    newspersons on the sidelines of the 34th National Management Convention organised

                                                                                    by the All-India Management Association However he declined to give further details

                                                                                    on the type of technology the Indian steel giant plans to implement

                                                                                    Steel Authority of India

                                                                                    Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                                    of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                                    and productive capacity and in the process become more energy-efficient and

                                                                                    improve quality The key component of the ongoing modernisation drive - already

                                                                                    completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                                    ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                                    continuous casting techniques A senior SAIL official says Continuous casting and

                                                                                    basic oxygen furnaces ensure better quality steel through processes more easily

                                                                                    monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                                    more automated and permits greater flexibility Continuous casting is more efficient

                                                                                    than the traditional ingot casting methods and gives increased yields while enabling

                                                                                    better quality standards SAIL is also modernising its finishing mills and is adding

                                                                                    secondary refining facilities to improve quality

                                                                                    Safety measures

                                                                                    A unique feature of safety management in steel industry is that a bipartite forum

                                                                                    named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                                    was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                                    RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                                    Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                                    workshops training programme safety competitions for member organisations JCSSI

                                                                                    with the co-operation and support of Trade Union representatives formulates policies

                                                                                    and guidelines for its member plants and monitors the implementation

                                                                                    Tata Steel

                                                                                    Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                                    Safety department and a Safety Trophy helped spread the message all across the

                                                                                    company

                                                                                    TATA reaffirms its commitment to provide safe working place and clean

                                                                                    environment to its employees and other stakeholders as an integral part of its

                                                                                    business philosophy and values We will continually enhance our Environmental

                                                                                    Occupational Health amp Safety (EHS) performance in our activities products and

                                                                                    services through a structured EHS management framework Towards this

                                                                                    commitment we shall

                                                                                    Establish and achieve EHS objectives and targets

                                                                                    Ensure compliance with applicable EHS legislation and other requirement and

                                                                                    go beyond

                                                                                    Conserve natural resources and energy by constantly seeking to reduce

                                                                                    consumption and promoting waste avoidance and recycling measures

                                                                                    Eliminate minimize andor control adverse environmental impacts and

                                                                                    occupational health and safety risks by adopting appropriate state-of-the-art

                                                                                    technology and best EHS management practices at all levels sand functions

                                                                                    Enhance awareness skill and competence of our employees and contractors

                                                                                    so as to enable them to demonstrate their involvement responsibility and

                                                                                    accountability for sound EHS performance

                                                                                    Steel Authority of India

                                                                                    SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                                    monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                                    Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                                    formulated and review of implementation of APP is done during Heads of

                                                                                    Safety meeting

                                                                                    Internal and external safety audits of major departments particularly hazardous

                                                                                    areas are conducted every year and points arising from these audits are

                                                                                    liquidated Safety aspects have been incorporated in standard operating

                                                                                    practices (SOP) and standard maintenance practices (SMP)

                                                                                    All major capital repairsshut downs are closely monitored round the clock

                                                                                    Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                                    grass-root level apart from regular inspections as per checklists to identify

                                                                                    unsafe conditionsacts

                                                                                    Safety training is imparted to target group employees at various levels HRD

                                                                                    intervention in the area of safety covers Heads of Departments Line Managers

                                                                                    amp Departmental Safety Officers Besides area specific workshops are

                                                                                    conducted at different locations on important topics like gas safety railroad

                                                                                    safety safety in iron steel amp coke making etc

                                                                                    Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                                    standards in the company by taking measures like intensive safety drives in works

                                                                                    area and conducting safety audits in hazardous departments of different plants and

                                                                                    mines In addition specific workshops on safety aspects were organised in various

                                                                                    SAIL steel plants

                                                                                    Measures taken by Indian government to improve the industry

                                                                                    Now letrsquos 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-

                                                                                    1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                    among others was removed from the list of industries reserved for the public

                                                                                    sector and also exempted from the provisions of compulsory licensing under the

                                                                                    Industries (Development and Regulation) Act 1951

                                                                                    2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                    of `high priority industries for automatic approval for foreign equity investment up

                                                                                    to 51 This limit has been recently increased to 100

                                                                                    3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                    time it was ensured that priority continued to be accorded for meeting the

                                                                                    requirements of small scale industries exporters of engineering goods and North

                                                                                    Eastern Region of the country besides strategic sectors such as Defence and

                                                                                    Railways

                                                                                    4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                    freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                    items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                    regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                    steel have drastically come down since 1991-92 levels and the government is

                                                                                    committed to bring them down to the international levels In Chapter 72 there are

                                                                                    two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                    5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                    6 Iron amp Steel are freely exportable

                                                                                    7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                    8 The floor price for seconds and defectives continues till date

                                                                                    9 Imports of seconds and defectives of steel are allowed only through three

                                                                                    designated ports of Mumbai Calcutta and Chennai

                                                                                    10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                    import consignment of seconds and defectives

                                                                                    11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                    10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                    the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                    per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                    15 per cent to 5 per cent

                                                                                    12Further customs duty on several raw materials used by the steel sector like

                                                                                    noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                    coking coal to zero

                                                                                    13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                    from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                    that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                    increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                    cut on moderating prices was not achieved

                                                                                    14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                    further reduced from 20 to 10

                                                                                    Special assistance being provided by Ministry of Steel to Private Sector

                                                                                    1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                    development of Iron and Steel Sector in the country

                                                                                    2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                    new plants and expansion of existing ones wherever applied for

                                                                                    3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                    4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                    clearance of projects

                                                                                    5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                    Plants are held at the level of Secretary

                                                                                    6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                    industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                    the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                    7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                    Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                    country are members of this Institute which has been set up with the objective of

                                                                                    promoting developing and propagating the proper and effective use of steel

                                                                                    8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                    major steel plants being implemented Govt has setup a Project Coordination

                                                                                    Group under the Chairmanship of Steel Minister

                                                                                    NATIONAL STEEL POLICY 2005

                                                                                    The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                    development and as such great importance is attached to capacity expansion in line

                                                                                    with expected demand at cost and prices which make Indian steel internationally

                                                                                    competitive The existing regime of liberalization decontrol and deregulation of

                                                                                    industry in the country has opened up new opportunities for the expansion of the steel

                                                                                    industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                    vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                    formulated a National Steel Policy (NSP) in 2005

                                                                                    The following salient features can be derived after analysing the NSP 2005

                                                                                    The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                    towards reform restructuring and globalisation

                                                                                    The long-term goal of the NSP is that India should have a modern and efficient

                                                                                    steel industry of world standards catering to diversified steel demand The focus of

                                                                                    the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                    product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                    In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                    NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                    an open globally integrated and competitive environment

                                                                                    The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                    policy goal On the demand side the strategy would be to create incremental

                                                                                    demand through promotional efforts creation of awareness and strengthening the

                                                                                    delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                    to facilitate creation of additional capacity remove procedural and policy

                                                                                    bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                    investments in RampD and encourage the creation of infrastructure such as roads

                                                                                    railways and ports

                                                                                    The NSP acknowledges the low per capita consumption of steel in the country

                                                                                    especially in the rural areas and the need to boost steel consumption to improve

                                                                                    quality of life and help in meeting the growing aspirations of masses

                                                                                    In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                    industry would need additional capital In addition funds would be required for

                                                                                    technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                    NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                    seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                    to the steel industry

                                                                                    The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                    derivatives to contain price volatility in the steel market

                                                                                    The NSP seeks to strengthen the existing training and research facilities available

                                                                                    to the domestic steel industry so as to provide suitable training programmes

                                                                                    especially for the secondary small-scale units and also to collect and analyse data

                                                                                    on important parameters of the industry

                                                                                    The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                    capability for special types of steel substitute coking coal use iron ore fines

                                                                                    develop new products suited to rural needs enhance material and energy

                                                                                    efficiency utilize waste and arrest environmental degradation

                                                                                    The NSP acknowledges the important role played by the secondary steel sector in

                                                                                    providing employment meeting local demand of steel in rural and semi-urban

                                                                                    areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                    endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                    from major plants through the existing mechanism of State Small Industries

                                                                                    Corporations

                                                                                    The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                    global economy requires that the industry should be protected from unfair trade

                                                                                    practices The NSP therefore envisages institution of mechanisms for import

                                                                                    surveillance and monitoring export subsidies in other countries

                                                                                    The present per capita consumption of steel in the country is very low compared to the

                                                                                    world average As mentioned above one of the objectives of the NSP is to augment

                                                                                    the demand and consumption of steel in the country by conscious promotion of steel

                                                                                    usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                    steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                    the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                    The Committee is being serviced by Institute for Steel Development and Growth

                                                                                    (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                    way of an awareness campaign with particular emphasis on rural sectors The

                                                                                    Committee also aims at educating the designers architects builders and planners

                                                                                    regarding the qualitative and cost effective applications of steel in various structures

                                                                                    including buildings bridges flyovers and airports

                                                                                    FUTURE OF INDIAN STEEL INDUSTRY

                                                                                    India is amongst a few countries in the world having the dual advantage of fast

                                                                                    growing domestic demand coupled with access to raw materials Further the trend

                                                                                    that is already discernible is that the axis of global steel production consumption is

                                                                                    shifting towards Asia With their large populations China and India already account for

                                                                                    35 of the total world steel production - more than double of Europe Asia is

                                                                                    expected to outpace other regions of the world to an even greater extent in the coming

                                                                                    years

                                                                                    Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                    is accepted that China will continue to be the leader However India is slated to

                                                                                    emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                    the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                    splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                    China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                    consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                    has been the case over the last few years On the other hand it is sun-rise time for

                                                                                    India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                    run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                    relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                    can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                    However the position with coal is not so favourable Though thermal coal

                                                                                    reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                    traditional blast furnace route would require coking coal India does not have adequate

                                                                                    reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                    Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                    availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                    adopting alternative iron making processes that are not dependent on coking coal it

                                                                                    can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                    in India

                                                                                    Because of the shortage of indigenous coal attempts have been made by steel

                                                                                    producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                    mines in other countries This is the only long-term solution but with a global shortage

                                                                                    of coal it may not remain cost-effective in the long run

                                                                                    India is the seventh largest producer of steel and may further improve its position

                                                                                    going by the current trends A series of investment decisions by major domestic

                                                                                    players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                    POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                    The keen interest shown by various prospective investors is not only due to

                                                                                    expectations of strong growth in domestic demand but also due to indigenous

                                                                                    availability of key resources like iron ore and skilled workforce

                                                                                    After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                    steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                    finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                    2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                    consumption has accelerated to 91 per cent

                                                                                    With the likely growth of Indian economy at around 7 per cent per annum

                                                                                    demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                    million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                    demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                    is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                    very low level of per capita consumption of steel in India is highlighted further when

                                                                                    compared with the consumption levels of its peer group consisting of countries like

                                                                                    China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                    countries

                                                                                    Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                    China there seems to be consensus among analysts that India is likely to witness a

                                                                                    growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                    percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                    achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                    more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                    country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                    Exports

                                                                                    Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                    starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                    2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                    rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                    per cent of total production and Indias presence in the developing and developed

                                                                                    world is being increasingly felt Indian steel producers have recently been able to

                                                                                    supply specialized grades and products used for sophisticated applications like

                                                                                    automobiles On the cost front some of our producers are counted amongst the least

                                                                                    cost producers of the world For an average reference plant India is competitively

                                                                                    placed in the middle of the hierarchy of steel producing nations

                                                                                    However we have a long way to go to catch up with the leading exporters of the

                                                                                    world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                    2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                    per cent of total projected production The projected export ratio compares well with

                                                                                    the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                    The projected production of steel by 2019-20 to meet the domestic and export

                                                                                    demand will be around 110 million tonnes Management of resources and

                                                                                    infrastructural growth is going to be critical in achievement of the production level

                                                                                    envisaged The broad requirements of various resources will increase manifold from

                                                                                    the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                    need to be removed through concerted efforts of Government and industry The broad

                                                                                    strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                    sector has been discussed in the National Steel Policy which has been recently

                                                                                    approved by the Government

                                                                                    As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                    should have a modern and efficient steel industry of world standards catering to a

                                                                                    diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                    not only in terms of cost quality and product mix but also in terms of global

                                                                                    benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                    pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                    to create incremental demand through promotional efforts creation of awareness and

                                                                                    strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                    strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                    policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                    investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                    roads railways and ports

                                                                                    The production figures exports and imports of finished carbon steel and pig iron

                                                                                    and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                    Steel and SAIL attest to the continuing growth for both the sectors

                                                                                    FINDINGS

                                                                                    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 increased its profit over the year particularly in 2006-07

                                                                                    Both the companies are planning to adopt modern technology which is going to

                                                                                    help them to compete in world market but they need to be less dependent on

                                                                                    state of art technology and coal for long term prospects

                                                                                    Public sector has undergone retrenchment for the employees and improved

                                                                                    has its lobour productivity but it is still lacking behind as compared to private

                                                                                    sector

                                                                                    SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                    still no of accidents are more than that of TATA Steel

                                                                                    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

                                                                                    ie 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 have to be met

                                                                                    comprehensively if we are to take our legitimate place in the world as a developed

                                                                                    nation by 2020

                                                                                    BIBLIOGRAPHY

                                                                                    Annual report (2006-07) published by ministry of steel

                                                                                    Annual report (2006-07) published by TATA Steel

                                                                                    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                    REPORTrsquo posted by SAIL on its website

                                                                                    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                    held on 07 Nov 2006

                                                                                    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                    wwwsteelnicin (Official website of ministry of industry)

                                                                                    wwwtatasteelcom (Official website of TATA Steel)

                                                                                    wwwsailcoin (Official website of Steel Authority of India)

                                                                                    wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                    wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                    • DATA ANALYSIS
                                                                                    • Comparison between TATA Steel and Steel Authority of India
                                                                                    • Production
                                                                                    • Quantity 000 Tonnes
                                                                                    • Financials
                                                                                    • Research and Development
                                                                                    • (Rs Crore)
                                                                                    • TATA Steel
                                                                                    • Steel Authority of India
                                                                                    • Environment
                                                                                    • TATA Steel
                                                                                    • Emissions effluents and wastes
                                                                                    • Emissions
                                                                                    • Waste handling
                                                                                    • Effluent Management
                                                                                    • Steel Authority of India
                                                                                    • Solid Waste Management
                                                                                    • Environmental Plantation
                                                                                    • Environmental Recognitions
                                                                                    • Workforce and Welfare of Society
                                                                                    • TATA steel
                                                                                    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                    • Steel Authority of India
                                                                                    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                    • Technology
                                                                                    • Steel Authority of India
                                                                                    • Safety measures
                                                                                    • Tata Steel
                                                                                    • Steel Authority of India
                                                                                    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                    • Measures taken by Indian government to improve the industry
                                                                                    • Now letrsquos 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-
                                                                                    • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                    • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                      The biggest boost to efficiency in the steel industry has come from the increased

                                                                                      use of continuous casting ndash an indicator of the modernity of the production process Its

                                                                                      share of Indian crude steel output has climbed from 38 in the mid-1990s to 66

                                                                                      now India is thus well on its way to joining the ranks of the leading steelmakers

                                                                                      among the industrial nations (share in EU-25 96) However in India some 6 of

                                                                                      crude steel is still made using the outdated open-hearth process (EU-25 03) which

                                                                                      suggests there is restructuring potential

                                                                                      TATA Steel

                                                                                      Tata Steels stall at the International Trade Fair was adjudged the best along

                                                                                      with SAIL amongst ninety national companies participating in the Trade Fair Thirty

                                                                                      international companies also took part in the exhibition Participating companies from

                                                                                      countries all over the world exhibited latest technologies and know-how List of

                                                                                      participating companies included Baosteel SAIL Heavy Engineering Corporation

                                                                                      Hindustan Copper Jindal Steel amp Power MN Dastur amp Co MECON and other such

                                                                                      companies of national and international repute China was the partner country for the

                                                                                      International Trade Fair this year

                                                                                      In the award winning exhibition Tata Steel showcased its best coal mining practices

                                                                                      cutting-edge technology used in iron ore mining pioneering human resource

                                                                                      practices 78 years of industrial harmony and various other aspects of the worlds best

                                                                                      steel company

                                                                                      The 6th International Trade Fair and Conference an institutionalised global

                                                                                      event is considered to be one of the most prestigious forums for national as well

                                                                                      international participants It is a conclave of the finest minds concerned with the future

                                                                                      direction and growth of these sectors The forum provided the worlds most eminent

                                                                                      metallurgists manufacturers of metallurgical and mining machinery and related

                                                                                      sectors professionals analysts and experts with the opportunity to exchange views on

                                                                                      emerging technologies synergy and strengths and open up wider horizons for

                                                                                      sectorial development

                                                                                      Tata Steel to adopt Corus technology

                                                                                      Tata Steel plans to implement alternate technology used by the British steel

                                                                                      maker Corus which it acquired recently in its greenfield steel plants to reduce cost of

                                                                                      production according to Mr B Muthuraman Managing Director Tata Steel

                                                                                      ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                                      technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                                      newspersons on the sidelines of the 34th National Management Convention organised

                                                                                      by the All-India Management Association However he declined to give further details

                                                                                      on the type of technology the Indian steel giant plans to implement

                                                                                      Steel Authority of India

                                                                                      Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                                      of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                                      and productive capacity and in the process become more energy-efficient and

                                                                                      improve quality The key component of the ongoing modernisation drive - already

                                                                                      completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                                      ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                                      continuous casting techniques A senior SAIL official says Continuous casting and

                                                                                      basic oxygen furnaces ensure better quality steel through processes more easily

                                                                                      monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                                      more automated and permits greater flexibility Continuous casting is more efficient

                                                                                      than the traditional ingot casting methods and gives increased yields while enabling

                                                                                      better quality standards SAIL is also modernising its finishing mills and is adding

                                                                                      secondary refining facilities to improve quality

                                                                                      Safety measures

                                                                                      A unique feature of safety management in steel industry is that a bipartite forum

                                                                                      named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                                      was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                                      RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                                      Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                                      workshops training programme safety competitions for member organisations JCSSI

                                                                                      with the co-operation and support of Trade Union representatives formulates policies

                                                                                      and guidelines for its member plants and monitors the implementation

                                                                                      Tata Steel

                                                                                      Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                                      Safety department and a Safety Trophy helped spread the message all across the

                                                                                      company

                                                                                      TATA reaffirms its commitment to provide safe working place and clean

                                                                                      environment to its employees and other stakeholders as an integral part of its

                                                                                      business philosophy and values We will continually enhance our Environmental

                                                                                      Occupational Health amp Safety (EHS) performance in our activities products and

                                                                                      services through a structured EHS management framework Towards this

                                                                                      commitment we shall

                                                                                      Establish and achieve EHS objectives and targets

                                                                                      Ensure compliance with applicable EHS legislation and other requirement and

                                                                                      go beyond

                                                                                      Conserve natural resources and energy by constantly seeking to reduce

                                                                                      consumption and promoting waste avoidance and recycling measures

                                                                                      Eliminate minimize andor control adverse environmental impacts and

                                                                                      occupational health and safety risks by adopting appropriate state-of-the-art

                                                                                      technology and best EHS management practices at all levels sand functions

                                                                                      Enhance awareness skill and competence of our employees and contractors

                                                                                      so as to enable them to demonstrate their involvement responsibility and

                                                                                      accountability for sound EHS performance

                                                                                      Steel Authority of India

                                                                                      SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                                      monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                                      Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                                      formulated and review of implementation of APP is done during Heads of

                                                                                      Safety meeting

                                                                                      Internal and external safety audits of major departments particularly hazardous

                                                                                      areas are conducted every year and points arising from these audits are

                                                                                      liquidated Safety aspects have been incorporated in standard operating

                                                                                      practices (SOP) and standard maintenance practices (SMP)

                                                                                      All major capital repairsshut downs are closely monitored round the clock

                                                                                      Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                                      grass-root level apart from regular inspections as per checklists to identify

                                                                                      unsafe conditionsacts

                                                                                      Safety training is imparted to target group employees at various levels HRD

                                                                                      intervention in the area of safety covers Heads of Departments Line Managers

                                                                                      amp Departmental Safety Officers Besides area specific workshops are

                                                                                      conducted at different locations on important topics like gas safety railroad

                                                                                      safety safety in iron steel amp coke making etc

                                                                                      Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                                      standards in the company by taking measures like intensive safety drives in works

                                                                                      area and conducting safety audits in hazardous departments of different plants and

                                                                                      mines In addition specific workshops on safety aspects were organised in various

                                                                                      SAIL steel plants

                                                                                      Measures taken by Indian government to improve the industry

                                                                                      Now letrsquos 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-

                                                                                      1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                      among others was removed from the list of industries reserved for the public

                                                                                      sector and also exempted from the provisions of compulsory licensing under the

                                                                                      Industries (Development and Regulation) Act 1951

                                                                                      2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                      of `high priority industries for automatic approval for foreign equity investment up

                                                                                      to 51 This limit has been recently increased to 100

                                                                                      3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                      time it was ensured that priority continued to be accorded for meeting the

                                                                                      requirements of small scale industries exporters of engineering goods and North

                                                                                      Eastern Region of the country besides strategic sectors such as Defence and

                                                                                      Railways

                                                                                      4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                      freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                      items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                      regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                      steel have drastically come down since 1991-92 levels and the government is

                                                                                      committed to bring them down to the international levels In Chapter 72 there are

                                                                                      two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                      5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                      6 Iron amp Steel are freely exportable

                                                                                      7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                      8 The floor price for seconds and defectives continues till date

                                                                                      9 Imports of seconds and defectives of steel are allowed only through three

                                                                                      designated ports of Mumbai Calcutta and Chennai

                                                                                      10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                      import consignment of seconds and defectives

                                                                                      11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                      10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                      the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                      per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                      15 per cent to 5 per cent

                                                                                      12Further customs duty on several raw materials used by the steel sector like

                                                                                      noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                      coking coal to zero

                                                                                      13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                      from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                      that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                      increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                      cut on moderating prices was not achieved

                                                                                      14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                      further reduced from 20 to 10

                                                                                      Special assistance being provided by Ministry of Steel to Private Sector

                                                                                      1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                      development of Iron and Steel Sector in the country

                                                                                      2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                      new plants and expansion of existing ones wherever applied for

                                                                                      3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                      4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                      clearance of projects

                                                                                      5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                      Plants are held at the level of Secretary

                                                                                      6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                      industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                      the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                      7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                      Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                      country are members of this Institute which has been set up with the objective of

                                                                                      promoting developing and propagating the proper and effective use of steel

                                                                                      8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                      major steel plants being implemented Govt has setup a Project Coordination

                                                                                      Group under the Chairmanship of Steel Minister

                                                                                      NATIONAL STEEL POLICY 2005

                                                                                      The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                      development and as such great importance is attached to capacity expansion in line

                                                                                      with expected demand at cost and prices which make Indian steel internationally

                                                                                      competitive The existing regime of liberalization decontrol and deregulation of

                                                                                      industry in the country has opened up new opportunities for the expansion of the steel

                                                                                      industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                      vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                      formulated a National Steel Policy (NSP) in 2005

                                                                                      The following salient features can be derived after analysing the NSP 2005

                                                                                      The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                      towards reform restructuring and globalisation

                                                                                      The long-term goal of the NSP is that India should have a modern and efficient

                                                                                      steel industry of world standards catering to diversified steel demand The focus of

                                                                                      the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                      product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                      In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                      NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                      an open globally integrated and competitive environment

                                                                                      The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                      policy goal On the demand side the strategy would be to create incremental

                                                                                      demand through promotional efforts creation of awareness and strengthening the

                                                                                      delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                      to facilitate creation of additional capacity remove procedural and policy

                                                                                      bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                      investments in RampD and encourage the creation of infrastructure such as roads

                                                                                      railways and ports

                                                                                      The NSP acknowledges the low per capita consumption of steel in the country

                                                                                      especially in the rural areas and the need to boost steel consumption to improve

                                                                                      quality of life and help in meeting the growing aspirations of masses

                                                                                      In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                      industry would need additional capital In addition funds would be required for

                                                                                      technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                      NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                      seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                      to the steel industry

                                                                                      The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                      derivatives to contain price volatility in the steel market

                                                                                      The NSP seeks to strengthen the existing training and research facilities available

                                                                                      to the domestic steel industry so as to provide suitable training programmes

                                                                                      especially for the secondary small-scale units and also to collect and analyse data

                                                                                      on important parameters of the industry

                                                                                      The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                      capability for special types of steel substitute coking coal use iron ore fines

                                                                                      develop new products suited to rural needs enhance material and energy

                                                                                      efficiency utilize waste and arrest environmental degradation

                                                                                      The NSP acknowledges the important role played by the secondary steel sector in

                                                                                      providing employment meeting local demand of steel in rural and semi-urban

                                                                                      areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                      endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                      from major plants through the existing mechanism of State Small Industries

                                                                                      Corporations

                                                                                      The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                      global economy requires that the industry should be protected from unfair trade

                                                                                      practices The NSP therefore envisages institution of mechanisms for import

                                                                                      surveillance and monitoring export subsidies in other countries

                                                                                      The present per capita consumption of steel in the country is very low compared to the

                                                                                      world average As mentioned above one of the objectives of the NSP is to augment

                                                                                      the demand and consumption of steel in the country by conscious promotion of steel

                                                                                      usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                      steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                      the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                      The Committee is being serviced by Institute for Steel Development and Growth

                                                                                      (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                      way of an awareness campaign with particular emphasis on rural sectors The

                                                                                      Committee also aims at educating the designers architects builders and planners

                                                                                      regarding the qualitative and cost effective applications of steel in various structures

                                                                                      including buildings bridges flyovers and airports

                                                                                      FUTURE OF INDIAN STEEL INDUSTRY

                                                                                      India is amongst a few countries in the world having the dual advantage of fast

                                                                                      growing domestic demand coupled with access to raw materials Further the trend

                                                                                      that is already discernible is that the axis of global steel production consumption is

                                                                                      shifting towards Asia With their large populations China and India already account for

                                                                                      35 of the total world steel production - more than double of Europe Asia is

                                                                                      expected to outpace other regions of the world to an even greater extent in the coming

                                                                                      years

                                                                                      Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                      is accepted that China will continue to be the leader However India is slated to

                                                                                      emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                      the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                      splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                      China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                      consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                      has been the case over the last few years On the other hand it is sun-rise time for

                                                                                      India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                      run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                      relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                      can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                      However the position with coal is not so favourable Though thermal coal

                                                                                      reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                      traditional blast furnace route would require coking coal India does not have adequate

                                                                                      reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                      Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                      availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                      adopting alternative iron making processes that are not dependent on coking coal it

                                                                                      can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                      in India

                                                                                      Because of the shortage of indigenous coal attempts have been made by steel

                                                                                      producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                      mines in other countries This is the only long-term solution but with a global shortage

                                                                                      of coal it may not remain cost-effective in the long run

                                                                                      India is the seventh largest producer of steel and may further improve its position

                                                                                      going by the current trends A series of investment decisions by major domestic

                                                                                      players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                      POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                      The keen interest shown by various prospective investors is not only due to

                                                                                      expectations of strong growth in domestic demand but also due to indigenous

                                                                                      availability of key resources like iron ore and skilled workforce

                                                                                      After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                      steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                      finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                      2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                      consumption has accelerated to 91 per cent

                                                                                      With the likely growth of Indian economy at around 7 per cent per annum

                                                                                      demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                      million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                      demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                      is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                      very low level of per capita consumption of steel in India is highlighted further when

                                                                                      compared with the consumption levels of its peer group consisting of countries like

                                                                                      China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                      countries

                                                                                      Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                      China there seems to be consensus among analysts that India is likely to witness a

                                                                                      growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                      percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                      achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                      more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                      country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                      Exports

                                                                                      Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                      starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                      2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                      rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                      per cent of total production and Indias presence in the developing and developed

                                                                                      world is being increasingly felt Indian steel producers have recently been able to

                                                                                      supply specialized grades and products used for sophisticated applications like

                                                                                      automobiles On the cost front some of our producers are counted amongst the least

                                                                                      cost producers of the world For an average reference plant India is competitively

                                                                                      placed in the middle of the hierarchy of steel producing nations

                                                                                      However we have a long way to go to catch up with the leading exporters of the

                                                                                      world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                      2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                      per cent of total projected production The projected export ratio compares well with

                                                                                      the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                      The projected production of steel by 2019-20 to meet the domestic and export

                                                                                      demand will be around 110 million tonnes Management of resources and

                                                                                      infrastructural growth is going to be critical in achievement of the production level

                                                                                      envisaged The broad requirements of various resources will increase manifold from

                                                                                      the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                      need to be removed through concerted efforts of Government and industry The broad

                                                                                      strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                      sector has been discussed in the National Steel Policy which has been recently

                                                                                      approved by the Government

                                                                                      As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                      should have a modern and efficient steel industry of world standards catering to a

                                                                                      diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                      not only in terms of cost quality and product mix but also in terms of global

                                                                                      benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                      pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                      to create incremental demand through promotional efforts creation of awareness and

                                                                                      strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                      strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                      policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                      investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                      roads railways and ports

                                                                                      The production figures exports and imports of finished carbon steel and pig iron

                                                                                      and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                      Steel and SAIL attest to the continuing growth for both the sectors

                                                                                      FINDINGS

                                                                                      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 increased its profit over the year particularly in 2006-07

                                                                                      Both the companies are planning to adopt modern technology which is going to

                                                                                      help them to compete in world market but they need to be less dependent on

                                                                                      state of art technology and coal for long term prospects

                                                                                      Public sector has undergone retrenchment for the employees and improved

                                                                                      has its lobour productivity but it is still lacking behind as compared to private

                                                                                      sector

                                                                                      SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                      still no of accidents are more than that of TATA Steel

                                                                                      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

                                                                                      ie 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 have to be met

                                                                                      comprehensively if we are to take our legitimate place in the world as a developed

                                                                                      nation by 2020

                                                                                      BIBLIOGRAPHY

                                                                                      Annual report (2006-07) published by ministry of steel

                                                                                      Annual report (2006-07) published by TATA Steel

                                                                                      Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                      REPORTrsquo posted by SAIL on its website

                                                                                      lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                      held on 07 Nov 2006

                                                                                      Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                      wwwsteelnicin (Official website of ministry of industry)

                                                                                      wwwtatasteelcom (Official website of TATA Steel)

                                                                                      wwwsailcoin (Official website of Steel Authority of India)

                                                                                      wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                      wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                      • DATA ANALYSIS
                                                                                      • Comparison between TATA Steel and Steel Authority of India
                                                                                      • Production
                                                                                      • Quantity 000 Tonnes
                                                                                      • Financials
                                                                                      • Research and Development
                                                                                      • (Rs Crore)
                                                                                      • TATA Steel
                                                                                      • Steel Authority of India
                                                                                      • Environment
                                                                                      • TATA Steel
                                                                                      • Emissions effluents and wastes
                                                                                      • Emissions
                                                                                      • Waste handling
                                                                                      • Effluent Management
                                                                                      • Steel Authority of India
                                                                                      • Solid Waste Management
                                                                                      • Environmental Plantation
                                                                                      • Environmental Recognitions
                                                                                      • Workforce and Welfare of Society
                                                                                      • TATA steel
                                                                                      • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                      • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                      • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                      • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                      • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                      • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                      • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                      • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                      • Steel Authority of India
                                                                                      • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                      • Technology
                                                                                      • Steel Authority of India
                                                                                      • Safety measures
                                                                                      • Tata Steel
                                                                                      • Steel Authority of India
                                                                                      • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                      • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                      • Measures taken by Indian government to improve the industry
                                                                                      • Now letrsquos 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-
                                                                                      • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                      • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                        ldquoWe are looking at alternate technology Corus has developed an alternate

                                                                                        technology which could be implemented in our greenfield plantsrdquo Mr Muthuraman told

                                                                                        newspersons on the sidelines of the 34th National Management Convention organised

                                                                                        by the All-India Management Association However he declined to give further details

                                                                                        on the type of technology the Indian steel giant plans to implement

                                                                                        Steel Authority of India

                                                                                        Modernisation holds the key to SAILs fortunes in the near future The objective

                                                                                        of the Rs15000-crore modernisation drive is to upgrade steel-making technologies

                                                                                        and productive capacity and in the process become more energy-efficient and

                                                                                        improve quality The key component of the ongoing modernisation drive - already

                                                                                        completed at Rourkela and Bokaro - is the replacement of open hearth furnaces and

                                                                                        ingot casting facilities with basic oxygen furnaces for steel-making and employing

                                                                                        continuous casting techniques A senior SAIL official says Continuous casting and

                                                                                        basic oxygen furnaces ensure better quality steel through processes more easily

                                                                                        monitored for quality control The basic oxygen surfaces method is significantly faster

                                                                                        more automated and permits greater flexibility Continuous casting is more efficient

                                                                                        than the traditional ingot casting methods and gives increased yields while enabling

                                                                                        better quality standards SAIL is also modernising its finishing mills and is adding

                                                                                        secondary refining facilities to improve quality

                                                                                        Safety measures

                                                                                        A unique feature of safety management in steel industry is that a bipartite forum

                                                                                        named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                                        was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                                        RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                                        Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                                        workshops training programme safety competitions for member organisations JCSSI

                                                                                        with the co-operation and support of Trade Union representatives formulates policies

                                                                                        and guidelines for its member plants and monitors the implementation

                                                                                        Tata Steel

                                                                                        Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                                        Safety department and a Safety Trophy helped spread the message all across the

                                                                                        company

                                                                                        TATA reaffirms its commitment to provide safe working place and clean

                                                                                        environment to its employees and other stakeholders as an integral part of its

                                                                                        business philosophy and values We will continually enhance our Environmental

                                                                                        Occupational Health amp Safety (EHS) performance in our activities products and

                                                                                        services through a structured EHS management framework Towards this

                                                                                        commitment we shall

                                                                                        Establish and achieve EHS objectives and targets

                                                                                        Ensure compliance with applicable EHS legislation and other requirement and

                                                                                        go beyond

                                                                                        Conserve natural resources and energy by constantly seeking to reduce

                                                                                        consumption and promoting waste avoidance and recycling measures

                                                                                        Eliminate minimize andor control adverse environmental impacts and

                                                                                        occupational health and safety risks by adopting appropriate state-of-the-art

                                                                                        technology and best EHS management practices at all levels sand functions

                                                                                        Enhance awareness skill and competence of our employees and contractors

                                                                                        so as to enable them to demonstrate their involvement responsibility and

                                                                                        accountability for sound EHS performance

                                                                                        Steel Authority of India

                                                                                        SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                                        monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                                        Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                                        formulated and review of implementation of APP is done during Heads of

                                                                                        Safety meeting

                                                                                        Internal and external safety audits of major departments particularly hazardous

                                                                                        areas are conducted every year and points arising from these audits are

                                                                                        liquidated Safety aspects have been incorporated in standard operating

                                                                                        practices (SOP) and standard maintenance practices (SMP)

                                                                                        All major capital repairsshut downs are closely monitored round the clock

                                                                                        Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                                        grass-root level apart from regular inspections as per checklists to identify

                                                                                        unsafe conditionsacts

                                                                                        Safety training is imparted to target group employees at various levels HRD

                                                                                        intervention in the area of safety covers Heads of Departments Line Managers

                                                                                        amp Departmental Safety Officers Besides area specific workshops are

                                                                                        conducted at different locations on important topics like gas safety railroad

                                                                                        safety safety in iron steel amp coke making etc

                                                                                        Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                                        standards in the company by taking measures like intensive safety drives in works

                                                                                        area and conducting safety audits in hazardous departments of different plants and

                                                                                        mines In addition specific workshops on safety aspects were organised in various

                                                                                        SAIL steel plants

                                                                                        Measures taken by Indian government to improve the industry

                                                                                        Now letrsquos 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-

                                                                                        1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                        among others was removed from the list of industries reserved for the public

                                                                                        sector and also exempted from the provisions of compulsory licensing under the

                                                                                        Industries (Development and Regulation) Act 1951

                                                                                        2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                        of `high priority industries for automatic approval for foreign equity investment up

                                                                                        to 51 This limit has been recently increased to 100

                                                                                        3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                        time it was ensured that priority continued to be accorded for meeting the

                                                                                        requirements of small scale industries exporters of engineering goods and North

                                                                                        Eastern Region of the country besides strategic sectors such as Defence and

                                                                                        Railways

                                                                                        4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                        freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                        items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                        regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                        steel have drastically come down since 1991-92 levels and the government is

                                                                                        committed to bring them down to the international levels In Chapter 72 there are

                                                                                        two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                        5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                        6 Iron amp Steel are freely exportable

                                                                                        7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                        8 The floor price for seconds and defectives continues till date

                                                                                        9 Imports of seconds and defectives of steel are allowed only through three

                                                                                        designated ports of Mumbai Calcutta and Chennai

                                                                                        10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                        import consignment of seconds and defectives

                                                                                        11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                        10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                        the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                        per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                        15 per cent to 5 per cent

                                                                                        12Further customs duty on several raw materials used by the steel sector like

                                                                                        noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                        coking coal to zero

                                                                                        13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                        from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                        that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                        increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                        cut on moderating prices was not achieved

                                                                                        14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                        further reduced from 20 to 10

                                                                                        Special assistance being provided by Ministry of Steel to Private Sector

                                                                                        1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                        development of Iron and Steel Sector in the country

                                                                                        2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                        new plants and expansion of existing ones wherever applied for

                                                                                        3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                        4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                        clearance of projects

                                                                                        5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                        Plants are held at the level of Secretary

                                                                                        6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                        industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                        the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                        7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                        Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                        country are members of this Institute which has been set up with the objective of

                                                                                        promoting developing and propagating the proper and effective use of steel

                                                                                        8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                        major steel plants being implemented Govt has setup a Project Coordination

                                                                                        Group under the Chairmanship of Steel Minister

                                                                                        NATIONAL STEEL POLICY 2005

                                                                                        The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                        development and as such great importance is attached to capacity expansion in line

                                                                                        with expected demand at cost and prices which make Indian steel internationally

                                                                                        competitive The existing regime of liberalization decontrol and deregulation of

                                                                                        industry in the country has opened up new opportunities for the expansion of the steel

                                                                                        industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                        vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                        formulated a National Steel Policy (NSP) in 2005

                                                                                        The following salient features can be derived after analysing the NSP 2005

                                                                                        The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                        towards reform restructuring and globalisation

                                                                                        The long-term goal of the NSP is that India should have a modern and efficient

                                                                                        steel industry of world standards catering to diversified steel demand The focus of

                                                                                        the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                        product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                        In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                        NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                        an open globally integrated and competitive environment

                                                                                        The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                        policy goal On the demand side the strategy would be to create incremental

                                                                                        demand through promotional efforts creation of awareness and strengthening the

                                                                                        delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                        to facilitate creation of additional capacity remove procedural and policy

                                                                                        bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                        investments in RampD and encourage the creation of infrastructure such as roads

                                                                                        railways and ports

                                                                                        The NSP acknowledges the low per capita consumption of steel in the country

                                                                                        especially in the rural areas and the need to boost steel consumption to improve

                                                                                        quality of life and help in meeting the growing aspirations of masses

                                                                                        In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                        industry would need additional capital In addition funds would be required for

                                                                                        technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                        NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                        seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                        to the steel industry

                                                                                        The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                        derivatives to contain price volatility in the steel market

                                                                                        The NSP seeks to strengthen the existing training and research facilities available

                                                                                        to the domestic steel industry so as to provide suitable training programmes

                                                                                        especially for the secondary small-scale units and also to collect and analyse data

                                                                                        on important parameters of the industry

                                                                                        The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                        capability for special types of steel substitute coking coal use iron ore fines

                                                                                        develop new products suited to rural needs enhance material and energy

                                                                                        efficiency utilize waste and arrest environmental degradation

                                                                                        The NSP acknowledges the important role played by the secondary steel sector in

                                                                                        providing employment meeting local demand of steel in rural and semi-urban

                                                                                        areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                        endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                        from major plants through the existing mechanism of State Small Industries

                                                                                        Corporations

                                                                                        The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                        global economy requires that the industry should be protected from unfair trade

                                                                                        practices The NSP therefore envisages institution of mechanisms for import

                                                                                        surveillance and monitoring export subsidies in other countries

                                                                                        The present per capita consumption of steel in the country is very low compared to the

                                                                                        world average As mentioned above one of the objectives of the NSP is to augment

                                                                                        the demand and consumption of steel in the country by conscious promotion of steel

                                                                                        usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                        steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                        the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                        The Committee is being serviced by Institute for Steel Development and Growth

                                                                                        (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                        way of an awareness campaign with particular emphasis on rural sectors The

                                                                                        Committee also aims at educating the designers architects builders and planners

                                                                                        regarding the qualitative and cost effective applications of steel in various structures

                                                                                        including buildings bridges flyovers and airports

                                                                                        FUTURE OF INDIAN STEEL INDUSTRY

                                                                                        India is amongst a few countries in the world having the dual advantage of fast

                                                                                        growing domestic demand coupled with access to raw materials Further the trend

                                                                                        that is already discernible is that the axis of global steel production consumption is

                                                                                        shifting towards Asia With their large populations China and India already account for

                                                                                        35 of the total world steel production - more than double of Europe Asia is

                                                                                        expected to outpace other regions of the world to an even greater extent in the coming

                                                                                        years

                                                                                        Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                        is accepted that China will continue to be the leader However India is slated to

                                                                                        emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                        the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                        splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                        China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                        consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                        has been the case over the last few years On the other hand it is sun-rise time for

                                                                                        India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                        run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                        relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                        can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                        However the position with coal is not so favourable Though thermal coal

                                                                                        reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                        traditional blast furnace route would require coking coal India does not have adequate

                                                                                        reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                        Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                        availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                        adopting alternative iron making processes that are not dependent on coking coal it

                                                                                        can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                        in India

                                                                                        Because of the shortage of indigenous coal attempts have been made by steel

                                                                                        producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                        mines in other countries This is the only long-term solution but with a global shortage

                                                                                        of coal it may not remain cost-effective in the long run

                                                                                        India is the seventh largest producer of steel and may further improve its position

                                                                                        going by the current trends A series of investment decisions by major domestic

                                                                                        players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                        POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                        The keen interest shown by various prospective investors is not only due to

                                                                                        expectations of strong growth in domestic demand but also due to indigenous

                                                                                        availability of key resources like iron ore and skilled workforce

                                                                                        After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                        steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                        finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                        2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                        consumption has accelerated to 91 per cent

                                                                                        With the likely growth of Indian economy at around 7 per cent per annum

                                                                                        demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                        million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                        demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                        is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                        very low level of per capita consumption of steel in India is highlighted further when

                                                                                        compared with the consumption levels of its peer group consisting of countries like

                                                                                        China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                        countries

                                                                                        Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                        China there seems to be consensus among analysts that India is likely to witness a

                                                                                        growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                        percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                        achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                        more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                        country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                        Exports

                                                                                        Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                        starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                        2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                        rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                        per cent of total production and Indias presence in the developing and developed

                                                                                        world is being increasingly felt Indian steel producers have recently been able to

                                                                                        supply specialized grades and products used for sophisticated applications like

                                                                                        automobiles On the cost front some of our producers are counted amongst the least

                                                                                        cost producers of the world For an average reference plant India is competitively

                                                                                        placed in the middle of the hierarchy of steel producing nations

                                                                                        However we have a long way to go to catch up with the leading exporters of the

                                                                                        world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                        2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                        per cent of total projected production The projected export ratio compares well with

                                                                                        the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                        The projected production of steel by 2019-20 to meet the domestic and export

                                                                                        demand will be around 110 million tonnes Management of resources and

                                                                                        infrastructural growth is going to be critical in achievement of the production level

                                                                                        envisaged The broad requirements of various resources will increase manifold from

                                                                                        the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                        need to be removed through concerted efforts of Government and industry The broad

                                                                                        strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                        sector has been discussed in the National Steel Policy which has been recently

                                                                                        approved by the Government

                                                                                        As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                        should have a modern and efficient steel industry of world standards catering to a

                                                                                        diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                        not only in terms of cost quality and product mix but also in terms of global

                                                                                        benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                        pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                        to create incremental demand through promotional efforts creation of awareness and

                                                                                        strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                        strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                        policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                        investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                        roads railways and ports

                                                                                        The production figures exports and imports of finished carbon steel and pig iron

                                                                                        and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                        Steel and SAIL attest to the continuing growth for both the sectors

                                                                                        FINDINGS

                                                                                        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 increased its profit over the year particularly in 2006-07

                                                                                        Both the companies are planning to adopt modern technology which is going to

                                                                                        help them to compete in world market but they need to be less dependent on

                                                                                        state of art technology and coal for long term prospects

                                                                                        Public sector has undergone retrenchment for the employees and improved

                                                                                        has its lobour productivity but it is still lacking behind as compared to private

                                                                                        sector

                                                                                        SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                        still no of accidents are more than that of TATA Steel

                                                                                        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

                                                                                        ie 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 have to be met

                                                                                        comprehensively if we are to take our legitimate place in the world as a developed

                                                                                        nation by 2020

                                                                                        BIBLIOGRAPHY

                                                                                        Annual report (2006-07) published by ministry of steel

                                                                                        Annual report (2006-07) published by TATA Steel

                                                                                        Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                        REPORTrsquo posted by SAIL on its website

                                                                                        lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                        held on 07 Nov 2006

                                                                                        Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                        wwwsteelnicin (Official website of ministry of industry)

                                                                                        wwwtatasteelcom (Official website of TATA Steel)

                                                                                        wwwsailcoin (Official website of Steel Authority of India)

                                                                                        wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                        wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                        • DATA ANALYSIS
                                                                                        • Comparison between TATA Steel and Steel Authority of India
                                                                                        • Production
                                                                                        • Quantity 000 Tonnes
                                                                                        • Financials
                                                                                        • Research and Development
                                                                                        • (Rs Crore)
                                                                                        • TATA Steel
                                                                                        • Steel Authority of India
                                                                                        • Environment
                                                                                        • TATA Steel
                                                                                        • Emissions effluents and wastes
                                                                                        • Emissions
                                                                                        • Waste handling
                                                                                        • Effluent Management
                                                                                        • Steel Authority of India
                                                                                        • Solid Waste Management
                                                                                        • Environmental Plantation
                                                                                        • Environmental Recognitions
                                                                                        • Workforce and Welfare of Society
                                                                                        • TATA steel
                                                                                        • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                        • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                        • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                        • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                        • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                        • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                        • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                        • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                        • Steel Authority of India
                                                                                        • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                        • Technology
                                                                                        • Steel Authority of India
                                                                                        • Safety measures
                                                                                        • Tata Steel
                                                                                        • Steel Authority of India
                                                                                        • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                        • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                        • Measures taken by Indian government to improve the industry
                                                                                        • Now letrsquos 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-
                                                                                        • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                        • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                          A unique feature of safety management in steel industry is that a bipartite forum

                                                                                          named Joint Committee on Safety Health and Environment in Steel Industry (JCSSI)

                                                                                          was formed in 1973 at national level having representatives from steel plants in SAIL

                                                                                          RINL TISCO and Ispat Group All the Central Trade Unions are represented on this

                                                                                          Committee With a view to inculcate safety consciousness JCSSI organises seminars

                                                                                          workshops training programme safety competitions for member organisations JCSSI

                                                                                          with the co-operation and support of Trade Union representatives formulates policies

                                                                                          and guidelines for its member plants and monitors the implementation

                                                                                          Tata Steel

                                                                                          Safety has always been a prime focus at Tata Steel A Safety Committee a

                                                                                          Safety department and a Safety Trophy helped spread the message all across the

                                                                                          company

                                                                                          TATA reaffirms its commitment to provide safe working place and clean

                                                                                          environment to its employees and other stakeholders as an integral part of its

                                                                                          business philosophy and values We will continually enhance our Environmental

                                                                                          Occupational Health amp Safety (EHS) performance in our activities products and

                                                                                          services through a structured EHS management framework Towards this

                                                                                          commitment we shall

                                                                                          Establish and achieve EHS objectives and targets

                                                                                          Ensure compliance with applicable EHS legislation and other requirement and

                                                                                          go beyond

                                                                                          Conserve natural resources and energy by constantly seeking to reduce

                                                                                          consumption and promoting waste avoidance and recycling measures

                                                                                          Eliminate minimize andor control adverse environmental impacts and

                                                                                          occupational health and safety risks by adopting appropriate state-of-the-art

                                                                                          technology and best EHS management practices at all levels sand functions

                                                                                          Enhance awareness skill and competence of our employees and contractors

                                                                                          so as to enable them to demonstrate their involvement responsibility and

                                                                                          accountability for sound EHS performance

                                                                                          Steel Authority of India

                                                                                          SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                                          monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                                          Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                                          formulated and review of implementation of APP is done during Heads of

                                                                                          Safety meeting

                                                                                          Internal and external safety audits of major departments particularly hazardous

                                                                                          areas are conducted every year and points arising from these audits are

                                                                                          liquidated Safety aspects have been incorporated in standard operating

                                                                                          practices (SOP) and standard maintenance practices (SMP)

                                                                                          All major capital repairsshut downs are closely monitored round the clock

                                                                                          Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                                          grass-root level apart from regular inspections as per checklists to identify

                                                                                          unsafe conditionsacts

                                                                                          Safety training is imparted to target group employees at various levels HRD

                                                                                          intervention in the area of safety covers Heads of Departments Line Managers

                                                                                          amp Departmental Safety Officers Besides area specific workshops are

                                                                                          conducted at different locations on important topics like gas safety railroad

                                                                                          safety safety in iron steel amp coke making etc

                                                                                          Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                                          standards in the company by taking measures like intensive safety drives in works

                                                                                          area and conducting safety audits in hazardous departments of different plants and

                                                                                          mines In addition specific workshops on safety aspects were organised in various

                                                                                          SAIL steel plants

                                                                                          Measures taken by Indian government to improve the industry

                                                                                          Now letrsquos 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-

                                                                                          1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                          among others was removed from the list of industries reserved for the public

                                                                                          sector and also exempted from the provisions of compulsory licensing under the

                                                                                          Industries (Development and Regulation) Act 1951

                                                                                          2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                          of `high priority industries for automatic approval for foreign equity investment up

                                                                                          to 51 This limit has been recently increased to 100

                                                                                          3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                          time it was ensured that priority continued to be accorded for meeting the

                                                                                          requirements of small scale industries exporters of engineering goods and North

                                                                                          Eastern Region of the country besides strategic sectors such as Defence and

                                                                                          Railways

                                                                                          4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                          freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                          items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                          regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                          steel have drastically come down since 1991-92 levels and the government is

                                                                                          committed to bring them down to the international levels In Chapter 72 there are

                                                                                          two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                          5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                          6 Iron amp Steel are freely exportable

                                                                                          7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                          8 The floor price for seconds and defectives continues till date

                                                                                          9 Imports of seconds and defectives of steel are allowed only through three

                                                                                          designated ports of Mumbai Calcutta and Chennai

                                                                                          10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                          import consignment of seconds and defectives

                                                                                          11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                          10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                          the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                          per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                          15 per cent to 5 per cent

                                                                                          12Further customs duty on several raw materials used by the steel sector like

                                                                                          noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                          coking coal to zero

                                                                                          13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                          from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                          that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                          increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                          cut on moderating prices was not achieved

                                                                                          14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                          further reduced from 20 to 10

                                                                                          Special assistance being provided by Ministry of Steel to Private Sector

                                                                                          1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                          development of Iron and Steel Sector in the country

                                                                                          2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                          new plants and expansion of existing ones wherever applied for

                                                                                          3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                          4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                          clearance of projects

                                                                                          5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                          Plants are held at the level of Secretary

                                                                                          6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                          industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                          the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                          7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                          Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                          country are members of this Institute which has been set up with the objective of

                                                                                          promoting developing and propagating the proper and effective use of steel

                                                                                          8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                          major steel plants being implemented Govt has setup a Project Coordination

                                                                                          Group under the Chairmanship of Steel Minister

                                                                                          NATIONAL STEEL POLICY 2005

                                                                                          The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                          development and as such great importance is attached to capacity expansion in line

                                                                                          with expected demand at cost and prices which make Indian steel internationally

                                                                                          competitive The existing regime of liberalization decontrol and deregulation of

                                                                                          industry in the country has opened up new opportunities for the expansion of the steel

                                                                                          industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                          vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                          formulated a National Steel Policy (NSP) in 2005

                                                                                          The following salient features can be derived after analysing the NSP 2005

                                                                                          The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                          towards reform restructuring and globalisation

                                                                                          The long-term goal of the NSP is that India should have a modern and efficient

                                                                                          steel industry of world standards catering to diversified steel demand The focus of

                                                                                          the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                          product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                          In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                          NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                          an open globally integrated and competitive environment

                                                                                          The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                          policy goal On the demand side the strategy would be to create incremental

                                                                                          demand through promotional efforts creation of awareness and strengthening the

                                                                                          delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                          to facilitate creation of additional capacity remove procedural and policy

                                                                                          bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                          investments in RampD and encourage the creation of infrastructure such as roads

                                                                                          railways and ports

                                                                                          The NSP acknowledges the low per capita consumption of steel in the country

                                                                                          especially in the rural areas and the need to boost steel consumption to improve

                                                                                          quality of life and help in meeting the growing aspirations of masses

                                                                                          In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                          industry would need additional capital In addition funds would be required for

                                                                                          technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                          NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                          seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                          to the steel industry

                                                                                          The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                          derivatives to contain price volatility in the steel market

                                                                                          The NSP seeks to strengthen the existing training and research facilities available

                                                                                          to the domestic steel industry so as to provide suitable training programmes

                                                                                          especially for the secondary small-scale units and also to collect and analyse data

                                                                                          on important parameters of the industry

                                                                                          The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                          capability for special types of steel substitute coking coal use iron ore fines

                                                                                          develop new products suited to rural needs enhance material and energy

                                                                                          efficiency utilize waste and arrest environmental degradation

                                                                                          The NSP acknowledges the important role played by the secondary steel sector in

                                                                                          providing employment meeting local demand of steel in rural and semi-urban

                                                                                          areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                          endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                          from major plants through the existing mechanism of State Small Industries

                                                                                          Corporations

                                                                                          The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                          global economy requires that the industry should be protected from unfair trade

                                                                                          practices The NSP therefore envisages institution of mechanisms for import

                                                                                          surveillance and monitoring export subsidies in other countries

                                                                                          The present per capita consumption of steel in the country is very low compared to the

                                                                                          world average As mentioned above one of the objectives of the NSP is to augment

                                                                                          the demand and consumption of steel in the country by conscious promotion of steel

                                                                                          usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                          steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                          the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                          The Committee is being serviced by Institute for Steel Development and Growth

                                                                                          (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                          way of an awareness campaign with particular emphasis on rural sectors The

                                                                                          Committee also aims at educating the designers architects builders and planners

                                                                                          regarding the qualitative and cost effective applications of steel in various structures

                                                                                          including buildings bridges flyovers and airports

                                                                                          FUTURE OF INDIAN STEEL INDUSTRY

                                                                                          India is amongst a few countries in the world having the dual advantage of fast

                                                                                          growing domestic demand coupled with access to raw materials Further the trend

                                                                                          that is already discernible is that the axis of global steel production consumption is

                                                                                          shifting towards Asia With their large populations China and India already account for

                                                                                          35 of the total world steel production - more than double of Europe Asia is

                                                                                          expected to outpace other regions of the world to an even greater extent in the coming

                                                                                          years

                                                                                          Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                          is accepted that China will continue to be the leader However India is slated to

                                                                                          emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                          the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                          splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                          China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                          consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                          has been the case over the last few years On the other hand it is sun-rise time for

                                                                                          India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                          run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                          relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                          can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                          However the position with coal is not so favourable Though thermal coal

                                                                                          reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                          traditional blast furnace route would require coking coal India does not have adequate

                                                                                          reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                          Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                          availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                          adopting alternative iron making processes that are not dependent on coking coal it

                                                                                          can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                          in India

                                                                                          Because of the shortage of indigenous coal attempts have been made by steel

                                                                                          producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                          mines in other countries This is the only long-term solution but with a global shortage

                                                                                          of coal it may not remain cost-effective in the long run

                                                                                          India is the seventh largest producer of steel and may further improve its position

                                                                                          going by the current trends A series of investment decisions by major domestic

                                                                                          players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                          POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                          The keen interest shown by various prospective investors is not only due to

                                                                                          expectations of strong growth in domestic demand but also due to indigenous

                                                                                          availability of key resources like iron ore and skilled workforce

                                                                                          After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                          steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                          finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                          2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                          consumption has accelerated to 91 per cent

                                                                                          With the likely growth of Indian economy at around 7 per cent per annum

                                                                                          demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                          million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                          demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                          is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                          very low level of per capita consumption of steel in India is highlighted further when

                                                                                          compared with the consumption levels of its peer group consisting of countries like

                                                                                          China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                          countries

                                                                                          Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                          China there seems to be consensus among analysts that India is likely to witness a

                                                                                          growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                          percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                          achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                          more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                          country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                          Exports

                                                                                          Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                          starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                          2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                          rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                          per cent of total production and Indias presence in the developing and developed

                                                                                          world is being increasingly felt Indian steel producers have recently been able to

                                                                                          supply specialized grades and products used for sophisticated applications like

                                                                                          automobiles On the cost front some of our producers are counted amongst the least

                                                                                          cost producers of the world For an average reference plant India is competitively

                                                                                          placed in the middle of the hierarchy of steel producing nations

                                                                                          However we have a long way to go to catch up with the leading exporters of the

                                                                                          world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                          2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                          per cent of total projected production The projected export ratio compares well with

                                                                                          the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                          The projected production of steel by 2019-20 to meet the domestic and export

                                                                                          demand will be around 110 million tonnes Management of resources and

                                                                                          infrastructural growth is going to be critical in achievement of the production level

                                                                                          envisaged The broad requirements of various resources will increase manifold from

                                                                                          the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                          need to be removed through concerted efforts of Government and industry The broad

                                                                                          strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                          sector has been discussed in the National Steel Policy which has been recently

                                                                                          approved by the Government

                                                                                          As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                          should have a modern and efficient steel industry of world standards catering to a

                                                                                          diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                          not only in terms of cost quality and product mix but also in terms of global

                                                                                          benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                          pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                          to create incremental demand through promotional efforts creation of awareness and

                                                                                          strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                          strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                          policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                          investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                          roads railways and ports

                                                                                          The production figures exports and imports of finished carbon steel and pig iron

                                                                                          and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                          Steel and SAIL attest to the continuing growth for both the sectors

                                                                                          FINDINGS

                                                                                          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 increased its profit over the year particularly in 2006-07

                                                                                          Both the companies are planning to adopt modern technology which is going to

                                                                                          help them to compete in world market but they need to be less dependent on

                                                                                          state of art technology and coal for long term prospects

                                                                                          Public sector has undergone retrenchment for the employees and improved

                                                                                          has its lobour productivity but it is still lacking behind as compared to private

                                                                                          sector

                                                                                          SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                          still no of accidents are more than that of TATA Steel

                                                                                          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

                                                                                          ie 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 have to be met

                                                                                          comprehensively if we are to take our legitimate place in the world as a developed

                                                                                          nation by 2020

                                                                                          BIBLIOGRAPHY

                                                                                          Annual report (2006-07) published by ministry of steel

                                                                                          Annual report (2006-07) published by TATA Steel

                                                                                          Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                          REPORTrsquo posted by SAIL on its website

                                                                                          lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                          held on 07 Nov 2006

                                                                                          Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                          wwwsteelnicin (Official website of ministry of industry)

                                                                                          wwwtatasteelcom (Official website of TATA Steel)

                                                                                          wwwsailcoin (Official website of Steel Authority of India)

                                                                                          wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                          wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                          • DATA ANALYSIS
                                                                                          • Comparison between TATA Steel and Steel Authority of India
                                                                                          • Production
                                                                                          • Quantity 000 Tonnes
                                                                                          • Financials
                                                                                          • Research and Development
                                                                                          • (Rs Crore)
                                                                                          • TATA Steel
                                                                                          • Steel Authority of India
                                                                                          • Environment
                                                                                          • TATA Steel
                                                                                          • Emissions effluents and wastes
                                                                                          • Emissions
                                                                                          • Waste handling
                                                                                          • Effluent Management
                                                                                          • Steel Authority of India
                                                                                          • Solid Waste Management
                                                                                          • Environmental Plantation
                                                                                          • Environmental Recognitions
                                                                                          • Workforce and Welfare of Society
                                                                                          • TATA steel
                                                                                          • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                          • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                          • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                          • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                          • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                          • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                          • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                          • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                          • Steel Authority of India
                                                                                          • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                          • Technology
                                                                                          • Steel Authority of India
                                                                                          • Safety measures
                                                                                          • Tata Steel
                                                                                          • Steel Authority of India
                                                                                          • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                          • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                          • Measures taken by Indian government to improve the industry
                                                                                          • Now letrsquos 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-
                                                                                          • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                          • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                            SAIL has a separate corporate unit called the SAIL Safety Organisation to

                                                                                            monitor safety system amp activities- SAIL also has a comprehensive safety policy

                                                                                            Annual Performance Plans (APP) for the areas of safety and fire services are

                                                                                            formulated and review of implementation of APP is done during Heads of

                                                                                            Safety meeting

                                                                                            Internal and external safety audits of major departments particularly hazardous

                                                                                            areas are conducted every year and points arising from these audits are

                                                                                            liquidated Safety aspects have been incorporated in standard operating

                                                                                            practices (SOP) and standard maintenance practices (SMP)

                                                                                            All major capital repairsshut downs are closely monitored round the clock

                                                                                            Periodic drives are conducted to inculcate safety awarenessculture up to

                                                                                            grass-root level apart from regular inspections as per checklists to identify

                                                                                            unsafe conditionsacts

                                                                                            Safety training is imparted to target group employees at various levels HRD

                                                                                            intervention in the area of safety covers Heads of Departments Line Managers

                                                                                            amp Departmental Safety Officers Besides area specific workshops are

                                                                                            conducted at different locations on important topics like gas safety railroad

                                                                                            safety safety in iron steel amp coke making etc

                                                                                            Consistent efforts were made by SAIL Safety Organisation for improving safety

                                                                                            standards in the company by taking measures like intensive safety drives in works

                                                                                            area and conducting safety audits in hazardous departments of different plants and

                                                                                            mines In addition specific workshops on safety aspects were organised in various

                                                                                            SAIL steel plants

                                                                                            Measures taken by Indian government to improve the industry

                                                                                            Now letrsquos 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-

                                                                                            1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                            among others was removed from the list of industries reserved for the public

                                                                                            sector and also exempted from the provisions of compulsory licensing under the

                                                                                            Industries (Development and Regulation) Act 1951

                                                                                            2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                            of `high priority industries for automatic approval for foreign equity investment up

                                                                                            to 51 This limit has been recently increased to 100

                                                                                            3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                            time it was ensured that priority continued to be accorded for meeting the

                                                                                            requirements of small scale industries exporters of engineering goods and North

                                                                                            Eastern Region of the country besides strategic sectors such as Defence and

                                                                                            Railways

                                                                                            4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                            freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                            items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                            regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                            steel have drastically come down since 1991-92 levels and the government is

                                                                                            committed to bring them down to the international levels In Chapter 72 there are

                                                                                            two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                            5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                            6 Iron amp Steel are freely exportable

                                                                                            7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                            8 The floor price for seconds and defectives continues till date

                                                                                            9 Imports of seconds and defectives of steel are allowed only through three

                                                                                            designated ports of Mumbai Calcutta and Chennai

                                                                                            10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                            import consignment of seconds and defectives

                                                                                            11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                            10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                            the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                            per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                            15 per cent to 5 per cent

                                                                                            12Further customs duty on several raw materials used by the steel sector like

                                                                                            noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                            coking coal to zero

                                                                                            13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                            from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                            that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                            increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                            cut on moderating prices was not achieved

                                                                                            14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                            further reduced from 20 to 10

                                                                                            Special assistance being provided by Ministry of Steel to Private Sector

                                                                                            1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                            development of Iron and Steel Sector in the country

                                                                                            2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                            new plants and expansion of existing ones wherever applied for

                                                                                            3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                            4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                            clearance of projects

                                                                                            5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                            Plants are held at the level of Secretary

                                                                                            6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                            industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                            the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                            7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                            Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                            country are members of this Institute which has been set up with the objective of

                                                                                            promoting developing and propagating the proper and effective use of steel

                                                                                            8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                            major steel plants being implemented Govt has setup a Project Coordination

                                                                                            Group under the Chairmanship of Steel Minister

                                                                                            NATIONAL STEEL POLICY 2005

                                                                                            The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                            development and as such great importance is attached to capacity expansion in line

                                                                                            with expected demand at cost and prices which make Indian steel internationally

                                                                                            competitive The existing regime of liberalization decontrol and deregulation of

                                                                                            industry in the country has opened up new opportunities for the expansion of the steel

                                                                                            industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                            vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                            formulated a National Steel Policy (NSP) in 2005

                                                                                            The following salient features can be derived after analysing the NSP 2005

                                                                                            The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                            towards reform restructuring and globalisation

                                                                                            The long-term goal of the NSP is that India should have a modern and efficient

                                                                                            steel industry of world standards catering to diversified steel demand The focus of

                                                                                            the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                            product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                            In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                            NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                            an open globally integrated and competitive environment

                                                                                            The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                            policy goal On the demand side the strategy would be to create incremental

                                                                                            demand through promotional efforts creation of awareness and strengthening the

                                                                                            delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                            to facilitate creation of additional capacity remove procedural and policy

                                                                                            bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                            investments in RampD and encourage the creation of infrastructure such as roads

                                                                                            railways and ports

                                                                                            The NSP acknowledges the low per capita consumption of steel in the country

                                                                                            especially in the rural areas and the need to boost steel consumption to improve

                                                                                            quality of life and help in meeting the growing aspirations of masses

                                                                                            In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                            industry would need additional capital In addition funds would be required for

                                                                                            technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                            NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                            seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                            to the steel industry

                                                                                            The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                            derivatives to contain price volatility in the steel market

                                                                                            The NSP seeks to strengthen the existing training and research facilities available

                                                                                            to the domestic steel industry so as to provide suitable training programmes

                                                                                            especially for the secondary small-scale units and also to collect and analyse data

                                                                                            on important parameters of the industry

                                                                                            The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                            capability for special types of steel substitute coking coal use iron ore fines

                                                                                            develop new products suited to rural needs enhance material and energy

                                                                                            efficiency utilize waste and arrest environmental degradation

                                                                                            The NSP acknowledges the important role played by the secondary steel sector in

                                                                                            providing employment meeting local demand of steel in rural and semi-urban

                                                                                            areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                            endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                            from major plants through the existing mechanism of State Small Industries

                                                                                            Corporations

                                                                                            The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                            global economy requires that the industry should be protected from unfair trade

                                                                                            practices The NSP therefore envisages institution of mechanisms for import

                                                                                            surveillance and monitoring export subsidies in other countries

                                                                                            The present per capita consumption of steel in the country is very low compared to the

                                                                                            world average As mentioned above one of the objectives of the NSP is to augment

                                                                                            the demand and consumption of steel in the country by conscious promotion of steel

                                                                                            usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                            steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                            the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                            The Committee is being serviced by Institute for Steel Development and Growth

                                                                                            (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                            way of an awareness campaign with particular emphasis on rural sectors The

                                                                                            Committee also aims at educating the designers architects builders and planners

                                                                                            regarding the qualitative and cost effective applications of steel in various structures

                                                                                            including buildings bridges flyovers and airports

                                                                                            FUTURE OF INDIAN STEEL INDUSTRY

                                                                                            India is amongst a few countries in the world having the dual advantage of fast

                                                                                            growing domestic demand coupled with access to raw materials Further the trend

                                                                                            that is already discernible is that the axis of global steel production consumption is

                                                                                            shifting towards Asia With their large populations China and India already account for

                                                                                            35 of the total world steel production - more than double of Europe Asia is

                                                                                            expected to outpace other regions of the world to an even greater extent in the coming

                                                                                            years

                                                                                            Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                            is accepted that China will continue to be the leader However India is slated to

                                                                                            emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                            the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                            splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                            China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                            consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                            has been the case over the last few years On the other hand it is sun-rise time for

                                                                                            India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                            run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                            relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                            can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                            However the position with coal is not so favourable Though thermal coal

                                                                                            reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                            traditional blast furnace route would require coking coal India does not have adequate

                                                                                            reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                            Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                            availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                            adopting alternative iron making processes that are not dependent on coking coal it

                                                                                            can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                            in India

                                                                                            Because of the shortage of indigenous coal attempts have been made by steel

                                                                                            producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                            mines in other countries This is the only long-term solution but with a global shortage

                                                                                            of coal it may not remain cost-effective in the long run

                                                                                            India is the seventh largest producer of steel and may further improve its position

                                                                                            going by the current trends A series of investment decisions by major domestic

                                                                                            players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                            POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                            The keen interest shown by various prospective investors is not only due to

                                                                                            expectations of strong growth in domestic demand but also due to indigenous

                                                                                            availability of key resources like iron ore and skilled workforce

                                                                                            After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                            steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                            finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                            2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                            consumption has accelerated to 91 per cent

                                                                                            With the likely growth of Indian economy at around 7 per cent per annum

                                                                                            demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                            million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                            demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                            is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                            very low level of per capita consumption of steel in India is highlighted further when

                                                                                            compared with the consumption levels of its peer group consisting of countries like

                                                                                            China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                            countries

                                                                                            Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                            China there seems to be consensus among analysts that India is likely to witness a

                                                                                            growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                            percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                            achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                            more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                            country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                            Exports

                                                                                            Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                            starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                            2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                            rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                            per cent of total production and Indias presence in the developing and developed

                                                                                            world is being increasingly felt Indian steel producers have recently been able to

                                                                                            supply specialized grades and products used for sophisticated applications like

                                                                                            automobiles On the cost front some of our producers are counted amongst the least

                                                                                            cost producers of the world For an average reference plant India is competitively

                                                                                            placed in the middle of the hierarchy of steel producing nations

                                                                                            However we have a long way to go to catch up with the leading exporters of the

                                                                                            world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                            2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                            per cent of total projected production The projected export ratio compares well with

                                                                                            the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                            The projected production of steel by 2019-20 to meet the domestic and export

                                                                                            demand will be around 110 million tonnes Management of resources and

                                                                                            infrastructural growth is going to be critical in achievement of the production level

                                                                                            envisaged The broad requirements of various resources will increase manifold from

                                                                                            the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                            need to be removed through concerted efforts of Government and industry The broad

                                                                                            strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                            sector has been discussed in the National Steel Policy which has been recently

                                                                                            approved by the Government

                                                                                            As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                            should have a modern and efficient steel industry of world standards catering to a

                                                                                            diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                            not only in terms of cost quality and product mix but also in terms of global

                                                                                            benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                            pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                            to create incremental demand through promotional efforts creation of awareness and

                                                                                            strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                            strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                            policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                            investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                            roads railways and ports

                                                                                            The production figures exports and imports of finished carbon steel and pig iron

                                                                                            and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                            Steel and SAIL attest to the continuing growth for both the sectors

                                                                                            FINDINGS

                                                                                            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 increased its profit over the year particularly in 2006-07

                                                                                            Both the companies are planning to adopt modern technology which is going to

                                                                                            help them to compete in world market but they need to be less dependent on

                                                                                            state of art technology and coal for long term prospects

                                                                                            Public sector has undergone retrenchment for the employees and improved

                                                                                            has its lobour productivity but it is still lacking behind as compared to private

                                                                                            sector

                                                                                            SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                            still no of accidents are more than that of TATA Steel

                                                                                            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

                                                                                            ie 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 have to be met

                                                                                            comprehensively if we are to take our legitimate place in the world as a developed

                                                                                            nation by 2020

                                                                                            BIBLIOGRAPHY

                                                                                            Annual report (2006-07) published by ministry of steel

                                                                                            Annual report (2006-07) published by TATA Steel

                                                                                            Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                            REPORTrsquo posted by SAIL on its website

                                                                                            lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                            held on 07 Nov 2006

                                                                                            Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                            wwwsteelnicin (Official website of ministry of industry)

                                                                                            wwwtatasteelcom (Official website of TATA Steel)

                                                                                            wwwsailcoin (Official website of Steel Authority of India)

                                                                                            wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                            wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                            • DATA ANALYSIS
                                                                                            • Comparison between TATA Steel and Steel Authority of India
                                                                                            • Production
                                                                                            • Quantity 000 Tonnes
                                                                                            • Financials
                                                                                            • Research and Development
                                                                                            • (Rs Crore)
                                                                                            • TATA Steel
                                                                                            • Steel Authority of India
                                                                                            • Environment
                                                                                            • TATA Steel
                                                                                            • Emissions effluents and wastes
                                                                                            • Emissions
                                                                                            • Waste handling
                                                                                            • Effluent Management
                                                                                            • Steel Authority of India
                                                                                            • Solid Waste Management
                                                                                            • Environmental Plantation
                                                                                            • Environmental Recognitions
                                                                                            • Workforce and Welfare of Society
                                                                                            • TATA steel
                                                                                            • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                            • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                            • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                            • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                            • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                            • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                            • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                            • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                            • Steel Authority of India
                                                                                            • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                            • Technology
                                                                                            • Steel Authority of India
                                                                                            • Safety measures
                                                                                            • Tata Steel
                                                                                            • Steel Authority of India
                                                                                            • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                            • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                            • Measures taken by Indian government to improve the industry
                                                                                            • Now letrsquos 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-
                                                                                            • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                            • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                              Now letrsquos 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-

                                                                                              1 In the new Industrial Policy announced in July 1991 Iron and Steel industry

                                                                                              among others was removed from the list of industries reserved for the public

                                                                                              sector and also exempted from the provisions of compulsory licensing under the

                                                                                              Industries (Development and Regulation) Act 1951

                                                                                              2 With effect from 24th May 1992 Iron and Steel industry has been included in the list

                                                                                              of `high priority industries for automatic approval for foreign equity investment up

                                                                                              to 51 This limit has been recently increased to 100

                                                                                              3 Price and distribution of steel were deregulated from January 1992 At the same

                                                                                              time it was ensured that priority continued to be accorded for meeting the

                                                                                              requirements of small scale industries exporters of engineering goods and North

                                                                                              Eastern Region of the country besides strategic sectors such as Defence and

                                                                                              Railways

                                                                                              4 The trade policy has been liberalised and import and export of iron and steel is

                                                                                              freely allowed There are no quantitative restrictions on import of iron and steel

                                                                                              items covered under Chapter No 72 of the ITC(HS) Code The only mechanism

                                                                                              regulating the imports is the tariff mechanism Tariffs on various items of iron and

                                                                                              steel have drastically come down since 1991-92 levels and the government is

                                                                                              committed to bring them down to the international levels In Chapter 72 there are

                                                                                              two items viz 72042110 and 72042910 which fall in the restricted list of imports

                                                                                              5 Iron amp Steel are freely importable as per the Extant Policy

                                                                                              6 Iron amp Steel are freely exportable

                                                                                              7 Advance Licensing Scheme allows duty free import of raw materials for exports

                                                                                              8 The floor price for seconds and defectives continues till date

                                                                                              9 Imports of seconds and defectives of steel are allowed only through three

                                                                                              designated ports of Mumbai Calcutta and Chennai

                                                                                              10Mandatory pre inspection certificate by a reputed international agency for every

                                                                                              import consignment of seconds and defectives

                                                                                              11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to

                                                                                              10 per cent and on alloy steel from 20 per cent to 15 per cent In August 2004

                                                                                              the customs duty on non-alloy steel was further reduced from 10 per cent to 5

                                                                                              per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                              15 per cent to 5 per cent

                                                                                              12Further customs duty on several raw materials used by the steel sector like

                                                                                              noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                              coking coal to zero

                                                                                              13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                              from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                              that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                              increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                              cut on moderating prices was not achieved

                                                                                              14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                              further reduced from 20 to 10

                                                                                              Special assistance being provided by Ministry of Steel to Private Sector

                                                                                              1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                              development of Iron and Steel Sector in the country

                                                                                              2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                              new plants and expansion of existing ones wherever applied for

                                                                                              3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                              4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                              clearance of projects

                                                                                              5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                              Plants are held at the level of Secretary

                                                                                              6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                              industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                              the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                              7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                              Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                              country are members of this Institute which has been set up with the objective of

                                                                                              promoting developing and propagating the proper and effective use of steel

                                                                                              8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                              major steel plants being implemented Govt has setup a Project Coordination

                                                                                              Group under the Chairmanship of Steel Minister

                                                                                              NATIONAL STEEL POLICY 2005

                                                                                              The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                              development and as such great importance is attached to capacity expansion in line

                                                                                              with expected demand at cost and prices which make Indian steel internationally

                                                                                              competitive The existing regime of liberalization decontrol and deregulation of

                                                                                              industry in the country has opened up new opportunities for the expansion of the steel

                                                                                              industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                              vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                              formulated a National Steel Policy (NSP) in 2005

                                                                                              The following salient features can be derived after analysing the NSP 2005

                                                                                              The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                              towards reform restructuring and globalisation

                                                                                              The long-term goal of the NSP is that India should have a modern and efficient

                                                                                              steel industry of world standards catering to diversified steel demand The focus of

                                                                                              the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                              product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                              In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                              NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                              an open globally integrated and competitive environment

                                                                                              The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                              policy goal On the demand side the strategy would be to create incremental

                                                                                              demand through promotional efforts creation of awareness and strengthening the

                                                                                              delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                              to facilitate creation of additional capacity remove procedural and policy

                                                                                              bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                              investments in RampD and encourage the creation of infrastructure such as roads

                                                                                              railways and ports

                                                                                              The NSP acknowledges the low per capita consumption of steel in the country

                                                                                              especially in the rural areas and the need to boost steel consumption to improve

                                                                                              quality of life and help in meeting the growing aspirations of masses

                                                                                              In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                              industry would need additional capital In addition funds would be required for

                                                                                              technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                              NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                              seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                              to the steel industry

                                                                                              The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                              derivatives to contain price volatility in the steel market

                                                                                              The NSP seeks to strengthen the existing training and research facilities available

                                                                                              to the domestic steel industry so as to provide suitable training programmes

                                                                                              especially for the secondary small-scale units and also to collect and analyse data

                                                                                              on important parameters of the industry

                                                                                              The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                              capability for special types of steel substitute coking coal use iron ore fines

                                                                                              develop new products suited to rural needs enhance material and energy

                                                                                              efficiency utilize waste and arrest environmental degradation

                                                                                              The NSP acknowledges the important role played by the secondary steel sector in

                                                                                              providing employment meeting local demand of steel in rural and semi-urban

                                                                                              areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                              endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                              from major plants through the existing mechanism of State Small Industries

                                                                                              Corporations

                                                                                              The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                              global economy requires that the industry should be protected from unfair trade

                                                                                              practices The NSP therefore envisages institution of mechanisms for import

                                                                                              surveillance and monitoring export subsidies in other countries

                                                                                              The present per capita consumption of steel in the country is very low compared to the

                                                                                              world average As mentioned above one of the objectives of the NSP is to augment

                                                                                              the demand and consumption of steel in the country by conscious promotion of steel

                                                                                              usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                              steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                              the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                              The Committee is being serviced by Institute for Steel Development and Growth

                                                                                              (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                              way of an awareness campaign with particular emphasis on rural sectors The

                                                                                              Committee also aims at educating the designers architects builders and planners

                                                                                              regarding the qualitative and cost effective applications of steel in various structures

                                                                                              including buildings bridges flyovers and airports

                                                                                              FUTURE OF INDIAN STEEL INDUSTRY

                                                                                              India is amongst a few countries in the world having the dual advantage of fast

                                                                                              growing domestic demand coupled with access to raw materials Further the trend

                                                                                              that is already discernible is that the axis of global steel production consumption is

                                                                                              shifting towards Asia With their large populations China and India already account for

                                                                                              35 of the total world steel production - more than double of Europe Asia is

                                                                                              expected to outpace other regions of the world to an even greater extent in the coming

                                                                                              years

                                                                                              Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                              is accepted that China will continue to be the leader However India is slated to

                                                                                              emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                              the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                              splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                              China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                              consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                              has been the case over the last few years On the other hand it is sun-rise time for

                                                                                              India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                              run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                              relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                              can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                              However the position with coal is not so favourable Though thermal coal

                                                                                              reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                              traditional blast furnace route would require coking coal India does not have adequate

                                                                                              reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                              Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                              availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                              adopting alternative iron making processes that are not dependent on coking coal it

                                                                                              can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                              in India

                                                                                              Because of the shortage of indigenous coal attempts have been made by steel

                                                                                              producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                              mines in other countries This is the only long-term solution but with a global shortage

                                                                                              of coal it may not remain cost-effective in the long run

                                                                                              India is the seventh largest producer of steel and may further improve its position

                                                                                              going by the current trends A series of investment decisions by major domestic

                                                                                              players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                              POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                              The keen interest shown by various prospective investors is not only due to

                                                                                              expectations of strong growth in domestic demand but also due to indigenous

                                                                                              availability of key resources like iron ore and skilled workforce

                                                                                              After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                              steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                              finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                              2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                              consumption has accelerated to 91 per cent

                                                                                              With the likely growth of Indian economy at around 7 per cent per annum

                                                                                              demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                              million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                              demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                              is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                              very low level of per capita consumption of steel in India is highlighted further when

                                                                                              compared with the consumption levels of its peer group consisting of countries like

                                                                                              China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                              countries

                                                                                              Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                              China there seems to be consensus among analysts that India is likely to witness a

                                                                                              growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                              percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                              achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                              more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                              country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                              Exports

                                                                                              Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                              starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                              2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                              rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                              per cent of total production and Indias presence in the developing and developed

                                                                                              world is being increasingly felt Indian steel producers have recently been able to

                                                                                              supply specialized grades and products used for sophisticated applications like

                                                                                              automobiles On the cost front some of our producers are counted amongst the least

                                                                                              cost producers of the world For an average reference plant India is competitively

                                                                                              placed in the middle of the hierarchy of steel producing nations

                                                                                              However we have a long way to go to catch up with the leading exporters of the

                                                                                              world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                              2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                              per cent of total projected production The projected export ratio compares well with

                                                                                              the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                              The projected production of steel by 2019-20 to meet the domestic and export

                                                                                              demand will be around 110 million tonnes Management of resources and

                                                                                              infrastructural growth is going to be critical in achievement of the production level

                                                                                              envisaged The broad requirements of various resources will increase manifold from

                                                                                              the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                              need to be removed through concerted efforts of Government and industry The broad

                                                                                              strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                              sector has been discussed in the National Steel Policy which has been recently

                                                                                              approved by the Government

                                                                                              As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                              should have a modern and efficient steel industry of world standards catering to a

                                                                                              diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                              not only in terms of cost quality and product mix but also in terms of global

                                                                                              benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                              pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                              to create incremental demand through promotional efforts creation of awareness and

                                                                                              strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                              strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                              policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                              investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                              roads railways and ports

                                                                                              The production figures exports and imports of finished carbon steel and pig iron

                                                                                              and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                              Steel and SAIL attest to the continuing growth for both the sectors

                                                                                              FINDINGS

                                                                                              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 increased its profit over the year particularly in 2006-07

                                                                                              Both the companies are planning to adopt modern technology which is going to

                                                                                              help them to compete in world market but they need to be less dependent on

                                                                                              state of art technology and coal for long term prospects

                                                                                              Public sector has undergone retrenchment for the employees and improved

                                                                                              has its lobour productivity but it is still lacking behind as compared to private

                                                                                              sector

                                                                                              SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                              still no of accidents are more than that of TATA Steel

                                                                                              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

                                                                                              ie 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 have to be met

                                                                                              comprehensively if we are to take our legitimate place in the world as a developed

                                                                                              nation by 2020

                                                                                              BIBLIOGRAPHY

                                                                                              Annual report (2006-07) published by ministry of steel

                                                                                              Annual report (2006-07) published by TATA Steel

                                                                                              Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                              REPORTrsquo posted by SAIL on its website

                                                                                              lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                              held on 07 Nov 2006

                                                                                              Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                              wwwsteelnicin (Official website of ministry of industry)

                                                                                              wwwtatasteelcom (Official website of TATA Steel)

                                                                                              wwwsailcoin (Official website of Steel Authority of India)

                                                                                              wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                              wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                              • DATA ANALYSIS
                                                                                              • Comparison between TATA Steel and Steel Authority of India
                                                                                              • Production
                                                                                              • Quantity 000 Tonnes
                                                                                              • Financials
                                                                                              • Research and Development
                                                                                              • (Rs Crore)
                                                                                              • TATA Steel
                                                                                              • Steel Authority of India
                                                                                              • Environment
                                                                                              • TATA Steel
                                                                                              • Emissions effluents and wastes
                                                                                              • Emissions
                                                                                              • Waste handling
                                                                                              • Effluent Management
                                                                                              • Steel Authority of India
                                                                                              • Solid Waste Management
                                                                                              • Environmental Plantation
                                                                                              • Environmental Recognitions
                                                                                              • Workforce and Welfare of Society
                                                                                              • TATA steel
                                                                                              • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                              • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                              • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                              • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                              • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                              • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                              • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                              • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                              • Steel Authority of India
                                                                                              • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                              • Technology
                                                                                              • Steel Authority of India
                                                                                              • Safety measures
                                                                                              • Tata Steel
                                                                                              • Steel Authority of India
                                                                                              • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                              • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                              • Measures taken by Indian government to improve the industry
                                                                                              • Now letrsquos 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-
                                                                                              • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                              • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                per cent on meltingscrap from 5 per cent to zero and on ships for breaking from

                                                                                                15 per cent to 5 per cent

                                                                                                12Further customs duty on several raw materials used by the steel sector like

                                                                                                noncoking coal metcoke and nickel has been reduced to 5 per cent and on

                                                                                                coking coal to zero

                                                                                                13To bring down the prices of steel the excise duty on steel products was reduced

                                                                                                from 16 per cent to 8 per cent with effect from February 28 2004 with a caveat

                                                                                                that the duty regime will be reviewed Budget 2004-05 revised this partially by

                                                                                                increasing the duty from 8 per cent to 12 per cent as the intended impact of duty

                                                                                                cut on moderating prices was not achieved

                                                                                                14The union Budget 2007-08 the import duty on seconds and defective has been

                                                                                                further reduced from 20 to 10

                                                                                                Special assistance being provided by Ministry of Steel to Private Sector

                                                                                                1 Ministry of Steel is extending all possible support as detailed below for the

                                                                                                development of Iron and Steel Sector in the country

                                                                                                2 The Ministry is providing linkage for raw materials rail movement clearance etc for

                                                                                                new plants and expansion of existing ones wherever applied for

                                                                                                3 To ensure an un-interrupted supply of raw materials to the producers

                                                                                                4 The Ministry has been interacting with All India Financial institutions to expedite

                                                                                                clearance of projects

                                                                                                5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel

                                                                                                Plants are held at the level of Secretary

                                                                                                6 Ministry of Steel identifies infra-structural and related facilities required by steel

                                                                                                industry so that their absence does not lead to bottlenecks in the future growth of

                                                                                                the Iron and Steel Sector and takes up these issues with the concerned ministries

                                                                                                7 The Ministry has encouraged the setting up of Institute for Steel Development and

                                                                                                Growth (INSDAG) in Calcutta in August 1996 The leading steel producers in the

                                                                                                country are members of this Institute which has been set up with the objective of

                                                                                                promoting developing and propagating the proper and effective use of steel

                                                                                                8 In order to resolve the problems faced by existing amp new steel plants amp to assist

                                                                                                major steel plants being implemented Govt has setup a Project Coordination

                                                                                                Group under the Chairmanship of Steel Minister

                                                                                                NATIONAL STEEL POLICY 2005

                                                                                                The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                                development and as such great importance is attached to capacity expansion in line

                                                                                                with expected demand at cost and prices which make Indian steel internationally

                                                                                                competitive The existing regime of liberalization decontrol and deregulation of

                                                                                                industry in the country has opened up new opportunities for the expansion of the steel

                                                                                                industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                                vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                                formulated a National Steel Policy (NSP) in 2005

                                                                                                The following salient features can be derived after analysing the NSP 2005

                                                                                                The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                                towards reform restructuring and globalisation

                                                                                                The long-term goal of the NSP is that India should have a modern and efficient

                                                                                                steel industry of world standards catering to diversified steel demand The focus of

                                                                                                the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                                product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                                In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                                NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                                an open globally integrated and competitive environment

                                                                                                The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                                policy goal On the demand side the strategy would be to create incremental

                                                                                                demand through promotional efforts creation of awareness and strengthening the

                                                                                                delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                                to facilitate creation of additional capacity remove procedural and policy

                                                                                                bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                investments in RampD and encourage the creation of infrastructure such as roads

                                                                                                railways and ports

                                                                                                The NSP acknowledges the low per capita consumption of steel in the country

                                                                                                especially in the rural areas and the need to boost steel consumption to improve

                                                                                                quality of life and help in meeting the growing aspirations of masses

                                                                                                In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                                industry would need additional capital In addition funds would be required for

                                                                                                technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                                NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                                seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                                to the steel industry

                                                                                                The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                                derivatives to contain price volatility in the steel market

                                                                                                The NSP seeks to strengthen the existing training and research facilities available

                                                                                                to the domestic steel industry so as to provide suitable training programmes

                                                                                                especially for the secondary small-scale units and also to collect and analyse data

                                                                                                on important parameters of the industry

                                                                                                The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                                capability for special types of steel substitute coking coal use iron ore fines

                                                                                                develop new products suited to rural needs enhance material and energy

                                                                                                efficiency utilize waste and arrest environmental degradation

                                                                                                The NSP acknowledges the important role played by the secondary steel sector in

                                                                                                providing employment meeting local demand of steel in rural and semi-urban

                                                                                                areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                                endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                                from major plants through the existing mechanism of State Small Industries

                                                                                                Corporations

                                                                                                The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                                global economy requires that the industry should be protected from unfair trade

                                                                                                practices The NSP therefore envisages institution of mechanisms for import

                                                                                                surveillance and monitoring export subsidies in other countries

                                                                                                The present per capita consumption of steel in the country is very low compared to the

                                                                                                world average As mentioned above one of the objectives of the NSP is to augment

                                                                                                the demand and consumption of steel in the country by conscious promotion of steel

                                                                                                usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                                steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                                the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                                The Committee is being serviced by Institute for Steel Development and Growth

                                                                                                (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                                way of an awareness campaign with particular emphasis on rural sectors The

                                                                                                Committee also aims at educating the designers architects builders and planners

                                                                                                regarding the qualitative and cost effective applications of steel in various structures

                                                                                                including buildings bridges flyovers and airports

                                                                                                FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                India is amongst a few countries in the world having the dual advantage of fast

                                                                                                growing domestic demand coupled with access to raw materials Further the trend

                                                                                                that is already discernible is that the axis of global steel production consumption is

                                                                                                shifting towards Asia With their large populations China and India already account for

                                                                                                35 of the total world steel production - more than double of Europe Asia is

                                                                                                expected to outpace other regions of the world to an even greater extent in the coming

                                                                                                years

                                                                                                Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                                is accepted that China will continue to be the leader However India is slated to

                                                                                                emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                                the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                                splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                                China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                                consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                                has been the case over the last few years On the other hand it is sun-rise time for

                                                                                                India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                                run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                                relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                                can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                                However the position with coal is not so favourable Though thermal coal

                                                                                                reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                                traditional blast furnace route would require coking coal India does not have adequate

                                                                                                reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                                Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                                availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                                adopting alternative iron making processes that are not dependent on coking coal it

                                                                                                can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                                in India

                                                                                                Because of the shortage of indigenous coal attempts have been made by steel

                                                                                                producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                                mines in other countries This is the only long-term solution but with a global shortage

                                                                                                of coal it may not remain cost-effective in the long run

                                                                                                India is the seventh largest producer of steel and may further improve its position

                                                                                                going by the current trends A series of investment decisions by major domestic

                                                                                                players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                                POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                                The keen interest shown by various prospective investors is not only due to

                                                                                                expectations of strong growth in domestic demand but also due to indigenous

                                                                                                availability of key resources like iron ore and skilled workforce

                                                                                                After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                                steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                                finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                                2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                                consumption has accelerated to 91 per cent

                                                                                                With the likely growth of Indian economy at around 7 per cent per annum

                                                                                                demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                                million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                                demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                                is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                                very low level of per capita consumption of steel in India is highlighted further when

                                                                                                compared with the consumption levels of its peer group consisting of countries like

                                                                                                China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                                countries

                                                                                                Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                                China there seems to be consensus among analysts that India is likely to witness a

                                                                                                growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                                percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                                achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                                more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                                country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                                Exports

                                                                                                Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                                starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                                2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                                rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                                per cent of total production and Indias presence in the developing and developed

                                                                                                world is being increasingly felt Indian steel producers have recently been able to

                                                                                                supply specialized grades and products used for sophisticated applications like

                                                                                                automobiles On the cost front some of our producers are counted amongst the least

                                                                                                cost producers of the world For an average reference plant India is competitively

                                                                                                placed in the middle of the hierarchy of steel producing nations

                                                                                                However we have a long way to go to catch up with the leading exporters of the

                                                                                                world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                                2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                                per cent of total projected production The projected export ratio compares well with

                                                                                                the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                                The projected production of steel by 2019-20 to meet the domestic and export

                                                                                                demand will be around 110 million tonnes Management of resources and

                                                                                                infrastructural growth is going to be critical in achievement of the production level

                                                                                                envisaged The broad requirements of various resources will increase manifold from

                                                                                                the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                                need to be removed through concerted efforts of Government and industry The broad

                                                                                                strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                                sector has been discussed in the National Steel Policy which has been recently

                                                                                                approved by the Government

                                                                                                As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                                should have a modern and efficient steel industry of world standards catering to a

                                                                                                diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                                not only in terms of cost quality and product mix but also in terms of global

                                                                                                benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                                pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                                to create incremental demand through promotional efforts creation of awareness and

                                                                                                strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                                strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                roads railways and ports

                                                                                                The production figures exports and imports of finished carbon steel and pig iron

                                                                                                and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                FINDINGS

                                                                                                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 increased its profit over the year particularly in 2006-07

                                                                                                Both the companies are planning to adopt modern technology which is going to

                                                                                                help them to compete in world market but they need to be less dependent on

                                                                                                state of art technology and coal for long term prospects

                                                                                                Public sector has undergone retrenchment for the employees and improved

                                                                                                has its lobour productivity but it is still lacking behind as compared to private

                                                                                                sector

                                                                                                SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                still no of accidents are more than that of TATA Steel

                                                                                                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

                                                                                                ie 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 have to be met

                                                                                                comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                nation by 2020

                                                                                                BIBLIOGRAPHY

                                                                                                Annual report (2006-07) published by ministry of steel

                                                                                                Annual report (2006-07) published by TATA Steel

                                                                                                Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                REPORTrsquo posted by SAIL on its website

                                                                                                lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                held on 07 Nov 2006

                                                                                                Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                wwwsteelnicin (Official website of ministry of industry)

                                                                                                wwwtatasteelcom (Official website of TATA Steel)

                                                                                                wwwsailcoin (Official website of Steel Authority of India)

                                                                                                wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                • DATA ANALYSIS
                                                                                                • Comparison between TATA Steel and Steel Authority of India
                                                                                                • Production
                                                                                                • Quantity 000 Tonnes
                                                                                                • Financials
                                                                                                • Research and Development
                                                                                                • (Rs Crore)
                                                                                                • TATA Steel
                                                                                                • Steel Authority of India
                                                                                                • Environment
                                                                                                • TATA Steel
                                                                                                • Emissions effluents and wastes
                                                                                                • Emissions
                                                                                                • Waste handling
                                                                                                • Effluent Management
                                                                                                • Steel Authority of India
                                                                                                • Solid Waste Management
                                                                                                • Environmental Plantation
                                                                                                • Environmental Recognitions
                                                                                                • Workforce and Welfare of Society
                                                                                                • TATA steel
                                                                                                • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                • Steel Authority of India
                                                                                                • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                • Technology
                                                                                                • Steel Authority of India
                                                                                                • Safety measures
                                                                                                • Tata Steel
                                                                                                • Steel Authority of India
                                                                                                • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                • Measures taken by Indian government to improve the industry
                                                                                                • Now letrsquos 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-
                                                                                                • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                  NATIONAL STEEL POLICY 2005

                                                                                                  The progress of the steel industry has a critical influence on the pace of Indiarsquos

                                                                                                  development and as such great importance is attached to capacity expansion in line

                                                                                                  with expected demand at cost and prices which make Indian steel internationally

                                                                                                  competitive The existing regime of liberalization decontrol and deregulation of

                                                                                                  industry in the country has opened up new opportunities for the expansion of the steel

                                                                                                  industry With a view to accelerating the growth of the steel sector and attaining the

                                                                                                  vision of India becoming a developed economy by 2020 the Ministry of Steel

                                                                                                  formulated a National Steel Policy (NSP) in 2005

                                                                                                  The following salient features can be derived after analysing the NSP 2005

                                                                                                  The NSP sets out a broad roadmap for the Indian Steel Industry in its journey

                                                                                                  towards reform restructuring and globalisation

                                                                                                  The long-term goal of the NSP is that India should have a modern and efficient

                                                                                                  steel industry of world standards catering to diversified steel demand The focus of

                                                                                                  the policy is to achieve global competitiveness not only in terms of cost quality and

                                                                                                  product-mix but also in terms of global benchmarks of efficiency and productivity

                                                                                                  In order to achieve the goal of 110 million tones of steel production by 2019-20 the

                                                                                                  NSP seeks to remove the supply-side constraints to the growth of this industry in

                                                                                                  an open globally integrated and competitive environment

                                                                                                  The NSP seeks to adopt a multi-pronged strategy to move towards the long-term

                                                                                                  policy goal On the demand side the strategy would be to create incremental

                                                                                                  demand through promotional efforts creation of awareness and strengthening the

                                                                                                  delivery chain particularly in rural areas On the supply side the strategy would be

                                                                                                  to facilitate creation of additional capacity remove procedural and policy

                                                                                                  bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                  investments in RampD and encourage the creation of infrastructure such as roads

                                                                                                  railways and ports

                                                                                                  The NSP acknowledges the low per capita consumption of steel in the country

                                                                                                  especially in the rural areas and the need to boost steel consumption to improve

                                                                                                  quality of life and help in meeting the growing aspirations of masses

                                                                                                  In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                                  industry would need additional capital In addition funds would be required for

                                                                                                  technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                                  NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                                  seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                                  to the steel industry

                                                                                                  The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                                  derivatives to contain price volatility in the steel market

                                                                                                  The NSP seeks to strengthen the existing training and research facilities available

                                                                                                  to the domestic steel industry so as to provide suitable training programmes

                                                                                                  especially for the secondary small-scale units and also to collect and analyse data

                                                                                                  on important parameters of the industry

                                                                                                  The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                                  capability for special types of steel substitute coking coal use iron ore fines

                                                                                                  develop new products suited to rural needs enhance material and energy

                                                                                                  efficiency utilize waste and arrest environmental degradation

                                                                                                  The NSP acknowledges the important role played by the secondary steel sector in

                                                                                                  providing employment meeting local demand of steel in rural and semi-urban

                                                                                                  areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                                  endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                                  from major plants through the existing mechanism of State Small Industries

                                                                                                  Corporations

                                                                                                  The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                                  global economy requires that the industry should be protected from unfair trade

                                                                                                  practices The NSP therefore envisages institution of mechanisms for import

                                                                                                  surveillance and monitoring export subsidies in other countries

                                                                                                  The present per capita consumption of steel in the country is very low compared to the

                                                                                                  world average As mentioned above one of the objectives of the NSP is to augment

                                                                                                  the demand and consumption of steel in the country by conscious promotion of steel

                                                                                                  usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                                  steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                                  the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                                  The Committee is being serviced by Institute for Steel Development and Growth

                                                                                                  (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                                  way of an awareness campaign with particular emphasis on rural sectors The

                                                                                                  Committee also aims at educating the designers architects builders and planners

                                                                                                  regarding the qualitative and cost effective applications of steel in various structures

                                                                                                  including buildings bridges flyovers and airports

                                                                                                  FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                  India is amongst a few countries in the world having the dual advantage of fast

                                                                                                  growing domestic demand coupled with access to raw materials Further the trend

                                                                                                  that is already discernible is that the axis of global steel production consumption is

                                                                                                  shifting towards Asia With their large populations China and India already account for

                                                                                                  35 of the total world steel production - more than double of Europe Asia is

                                                                                                  expected to outpace other regions of the world to an even greater extent in the coming

                                                                                                  years

                                                                                                  Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                                  is accepted that China will continue to be the leader However India is slated to

                                                                                                  emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                                  the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                                  splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                                  China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                                  consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                                  has been the case over the last few years On the other hand it is sun-rise time for

                                                                                                  India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                                  run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                                  relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                                  can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                                  However the position with coal is not so favourable Though thermal coal

                                                                                                  reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                                  traditional blast furnace route would require coking coal India does not have adequate

                                                                                                  reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                                  Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                                  availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                                  adopting alternative iron making processes that are not dependent on coking coal it

                                                                                                  can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                                  in India

                                                                                                  Because of the shortage of indigenous coal attempts have been made by steel

                                                                                                  producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                                  mines in other countries This is the only long-term solution but with a global shortage

                                                                                                  of coal it may not remain cost-effective in the long run

                                                                                                  India is the seventh largest producer of steel and may further improve its position

                                                                                                  going by the current trends A series of investment decisions by major domestic

                                                                                                  players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                                  POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                                  The keen interest shown by various prospective investors is not only due to

                                                                                                  expectations of strong growth in domestic demand but also due to indigenous

                                                                                                  availability of key resources like iron ore and skilled workforce

                                                                                                  After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                                  steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                                  finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                                  2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                                  consumption has accelerated to 91 per cent

                                                                                                  With the likely growth of Indian economy at around 7 per cent per annum

                                                                                                  demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                                  million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                                  demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                                  is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                                  very low level of per capita consumption of steel in India is highlighted further when

                                                                                                  compared with the consumption levels of its peer group consisting of countries like

                                                                                                  China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                                  countries

                                                                                                  Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                                  China there seems to be consensus among analysts that India is likely to witness a

                                                                                                  growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                                  percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                                  achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                                  more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                                  country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                                  Exports

                                                                                                  Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                                  starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                                  2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                                  rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                                  per cent of total production and Indias presence in the developing and developed

                                                                                                  world is being increasingly felt Indian steel producers have recently been able to

                                                                                                  supply specialized grades and products used for sophisticated applications like

                                                                                                  automobiles On the cost front some of our producers are counted amongst the least

                                                                                                  cost producers of the world For an average reference plant India is competitively

                                                                                                  placed in the middle of the hierarchy of steel producing nations

                                                                                                  However we have a long way to go to catch up with the leading exporters of the

                                                                                                  world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                                  2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                                  per cent of total projected production The projected export ratio compares well with

                                                                                                  the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                                  The projected production of steel by 2019-20 to meet the domestic and export

                                                                                                  demand will be around 110 million tonnes Management of resources and

                                                                                                  infrastructural growth is going to be critical in achievement of the production level

                                                                                                  envisaged The broad requirements of various resources will increase manifold from

                                                                                                  the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                                  need to be removed through concerted efforts of Government and industry The broad

                                                                                                  strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                                  sector has been discussed in the National Steel Policy which has been recently

                                                                                                  approved by the Government

                                                                                                  As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                                  should have a modern and efficient steel industry of world standards catering to a

                                                                                                  diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                                  not only in terms of cost quality and product mix but also in terms of global

                                                                                                  benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                                  pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                                  to create incremental demand through promotional efforts creation of awareness and

                                                                                                  strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                                  strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                  policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                  investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                  roads railways and ports

                                                                                                  The production figures exports and imports of finished carbon steel and pig iron

                                                                                                  and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                  Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                  FINDINGS

                                                                                                  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 increased its profit over the year particularly in 2006-07

                                                                                                  Both the companies are planning to adopt modern technology which is going to

                                                                                                  help them to compete in world market but they need to be less dependent on

                                                                                                  state of art technology and coal for long term prospects

                                                                                                  Public sector has undergone retrenchment for the employees and improved

                                                                                                  has its lobour productivity but it is still lacking behind as compared to private

                                                                                                  sector

                                                                                                  SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                  still no of accidents are more than that of TATA Steel

                                                                                                  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

                                                                                                  ie 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 have to be met

                                                                                                  comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                  nation by 2020

                                                                                                  BIBLIOGRAPHY

                                                                                                  Annual report (2006-07) published by ministry of steel

                                                                                                  Annual report (2006-07) published by TATA Steel

                                                                                                  Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                  REPORTrsquo posted by SAIL on its website

                                                                                                  lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                  held on 07 Nov 2006

                                                                                                  Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                  wwwsteelnicin (Official website of ministry of industry)

                                                                                                  wwwtatasteelcom (Official website of TATA Steel)

                                                                                                  wwwsailcoin (Official website of Steel Authority of India)

                                                                                                  wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                  wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                  • DATA ANALYSIS
                                                                                                  • Comparison between TATA Steel and Steel Authority of India
                                                                                                  • Production
                                                                                                  • Quantity 000 Tonnes
                                                                                                  • Financials
                                                                                                  • Research and Development
                                                                                                  • (Rs Crore)
                                                                                                  • TATA Steel
                                                                                                  • Steel Authority of India
                                                                                                  • Environment
                                                                                                  • TATA Steel
                                                                                                  • Emissions effluents and wastes
                                                                                                  • Emissions
                                                                                                  • Waste handling
                                                                                                  • Effluent Management
                                                                                                  • Steel Authority of India
                                                                                                  • Solid Waste Management
                                                                                                  • Environmental Plantation
                                                                                                  • Environmental Recognitions
                                                                                                  • Workforce and Welfare of Society
                                                                                                  • TATA steel
                                                                                                  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                  • Steel Authority of India
                                                                                                  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                  • Technology
                                                                                                  • Steel Authority of India
                                                                                                  • Safety measures
                                                                                                  • Tata Steel
                                                                                                  • Steel Authority of India
                                                                                                  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                  • Measures taken by Indian government to improve the industry
                                                                                                  • Now letrsquos 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-
                                                                                                  • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                  • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                    In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the

                                                                                                    industry would need additional capital In addition funds would be required for

                                                                                                    technological upgrade of existing facilities In order to mobilize such vast resources

                                                                                                    NSP seeks to encourage foreign direct investment In addition the policy also

                                                                                                    seeks to make the fiscal incentives available to infrastructure projects accessible

                                                                                                    to the steel industry

                                                                                                    The NSP seeks to support developing of risk-hedging instruments like futures and

                                                                                                    derivatives to contain price volatility in the steel market

                                                                                                    The NSP seeks to strengthen the existing training and research facilities available

                                                                                                    to the domestic steel industry so as to provide suitable training programmes

                                                                                                    especially for the secondary small-scale units and also to collect and analyse data

                                                                                                    on important parameters of the industry

                                                                                                    The NSP seeks to mount aggressive RampD efforts to create manufacturing

                                                                                                    capability for special types of steel substitute coking coal use iron ore fines

                                                                                                    develop new products suited to rural needs enhance material and energy

                                                                                                    efficiency utilize waste and arrest environmental degradation

                                                                                                    The NSP acknowledges the important role played by the secondary steel sector in

                                                                                                    providing employment meeting local demand of steel in rural and semi-urban

                                                                                                    areas and meeting the countryrsquos demand of some special products and seeks to

                                                                                                    endeavour to provide the necessary feedstock to these units at reasonable prices

                                                                                                    from major plants through the existing mechanism of State Small Industries

                                                                                                    Corporations

                                                                                                    The NSP recognizes the fact that integration of the Indian steel industry with the

                                                                                                    global economy requires that the industry should be protected from unfair trade

                                                                                                    practices The NSP therefore envisages institution of mechanisms for import

                                                                                                    surveillance and monitoring export subsidies in other countries

                                                                                                    The present per capita consumption of steel in the country is very low compared to the

                                                                                                    world average As mentioned above one of the objectives of the NSP is to augment

                                                                                                    the demand and consumption of steel in the country by conscious promotion of steel

                                                                                                    usage With a view to create a mass awareness campaign on conscious promotion of

                                                                                                    steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under

                                                                                                    the Chairmanship of Secretary Ministry of Steel consisting of major steel producers

                                                                                                    The Committee is being serviced by Institute for Steel Development and Growth

                                                                                                    (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                                    way of an awareness campaign with particular emphasis on rural sectors The

                                                                                                    Committee also aims at educating the designers architects builders and planners

                                                                                                    regarding the qualitative and cost effective applications of steel in various structures

                                                                                                    including buildings bridges flyovers and airports

                                                                                                    FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                    India is amongst a few countries in the world having the dual advantage of fast

                                                                                                    growing domestic demand coupled with access to raw materials Further the trend

                                                                                                    that is already discernible is that the axis of global steel production consumption is

                                                                                                    shifting towards Asia With their large populations China and India already account for

                                                                                                    35 of the total world steel production - more than double of Europe Asia is

                                                                                                    expected to outpace other regions of the world to an even greater extent in the coming

                                                                                                    years

                                                                                                    Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                                    is accepted that China will continue to be the leader However India is slated to

                                                                                                    emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                                    the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                                    splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                                    China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                                    consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                                    has been the case over the last few years On the other hand it is sun-rise time for

                                                                                                    India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                                    run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                                    relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                                    can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                                    However the position with coal is not so favourable Though thermal coal

                                                                                                    reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                                    traditional blast furnace route would require coking coal India does not have adequate

                                                                                                    reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                                    Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                                    availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                                    adopting alternative iron making processes that are not dependent on coking coal it

                                                                                                    can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                                    in India

                                                                                                    Because of the shortage of indigenous coal attempts have been made by steel

                                                                                                    producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                                    mines in other countries This is the only long-term solution but with a global shortage

                                                                                                    of coal it may not remain cost-effective in the long run

                                                                                                    India is the seventh largest producer of steel and may further improve its position

                                                                                                    going by the current trends A series of investment decisions by major domestic

                                                                                                    players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                                    POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                                    The keen interest shown by various prospective investors is not only due to

                                                                                                    expectations of strong growth in domestic demand but also due to indigenous

                                                                                                    availability of key resources like iron ore and skilled workforce

                                                                                                    After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                                    steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                                    finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                                    2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                                    consumption has accelerated to 91 per cent

                                                                                                    With the likely growth of Indian economy at around 7 per cent per annum

                                                                                                    demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                                    million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                                    demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                                    is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                                    very low level of per capita consumption of steel in India is highlighted further when

                                                                                                    compared with the consumption levels of its peer group consisting of countries like

                                                                                                    China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                                    countries

                                                                                                    Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                                    China there seems to be consensus among analysts that India is likely to witness a

                                                                                                    growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                                    percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                                    achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                                    more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                                    country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                                    Exports

                                                                                                    Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                                    starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                                    2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                                    rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                                    per cent of total production and Indias presence in the developing and developed

                                                                                                    world is being increasingly felt Indian steel producers have recently been able to

                                                                                                    supply specialized grades and products used for sophisticated applications like

                                                                                                    automobiles On the cost front some of our producers are counted amongst the least

                                                                                                    cost producers of the world For an average reference plant India is competitively

                                                                                                    placed in the middle of the hierarchy of steel producing nations

                                                                                                    However we have a long way to go to catch up with the leading exporters of the

                                                                                                    world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                                    2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                                    per cent of total projected production The projected export ratio compares well with

                                                                                                    the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                                    The projected production of steel by 2019-20 to meet the domestic and export

                                                                                                    demand will be around 110 million tonnes Management of resources and

                                                                                                    infrastructural growth is going to be critical in achievement of the production level

                                                                                                    envisaged The broad requirements of various resources will increase manifold from

                                                                                                    the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                                    need to be removed through concerted efforts of Government and industry The broad

                                                                                                    strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                                    sector has been discussed in the National Steel Policy which has been recently

                                                                                                    approved by the Government

                                                                                                    As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                                    should have a modern and efficient steel industry of world standards catering to a

                                                                                                    diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                                    not only in terms of cost quality and product mix but also in terms of global

                                                                                                    benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                                    pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                                    to create incremental demand through promotional efforts creation of awareness and

                                                                                                    strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                                    strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                    policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                    investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                    roads railways and ports

                                                                                                    The production figures exports and imports of finished carbon steel and pig iron

                                                                                                    and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                    Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                    FINDINGS

                                                                                                    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 increased its profit over the year particularly in 2006-07

                                                                                                    Both the companies are planning to adopt modern technology which is going to

                                                                                                    help them to compete in world market but they need to be less dependent on

                                                                                                    state of art technology and coal for long term prospects

                                                                                                    Public sector has undergone retrenchment for the employees and improved

                                                                                                    has its lobour productivity but it is still lacking behind as compared to private

                                                                                                    sector

                                                                                                    SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                    still no of accidents are more than that of TATA Steel

                                                                                                    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

                                                                                                    ie 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 have to be met

                                                                                                    comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                    nation by 2020

                                                                                                    BIBLIOGRAPHY

                                                                                                    Annual report (2006-07) published by ministry of steel

                                                                                                    Annual report (2006-07) published by TATA Steel

                                                                                                    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                    REPORTrsquo posted by SAIL on its website

                                                                                                    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                    held on 07 Nov 2006

                                                                                                    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                    wwwsteelnicin (Official website of ministry of industry)

                                                                                                    wwwtatasteelcom (Official website of TATA Steel)

                                                                                                    wwwsailcoin (Official website of Steel Authority of India)

                                                                                                    wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                    wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                    • DATA ANALYSIS
                                                                                                    • Comparison between TATA Steel and Steel Authority of India
                                                                                                    • Production
                                                                                                    • Quantity 000 Tonnes
                                                                                                    • Financials
                                                                                                    • Research and Development
                                                                                                    • (Rs Crore)
                                                                                                    • TATA Steel
                                                                                                    • Steel Authority of India
                                                                                                    • Environment
                                                                                                    • TATA Steel
                                                                                                    • Emissions effluents and wastes
                                                                                                    • Emissions
                                                                                                    • Waste handling
                                                                                                    • Effluent Management
                                                                                                    • Steel Authority of India
                                                                                                    • Solid Waste Management
                                                                                                    • Environmental Plantation
                                                                                                    • Environmental Recognitions
                                                                                                    • Workforce and Welfare of Society
                                                                                                    • TATA steel
                                                                                                    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                    • Steel Authority of India
                                                                                                    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                    • Technology
                                                                                                    • Steel Authority of India
                                                                                                    • Safety measures
                                                                                                    • Tata Steel
                                                                                                    • Steel Authority of India
                                                                                                    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                    • Measures taken by Indian government to improve the industry
                                                                                                    • Now letrsquos 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-
                                                                                                    • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                    • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                      (INSDAG) The objective of the Committee is to promote steel usage in the country by

                                                                                                      way of an awareness campaign with particular emphasis on rural sectors The

                                                                                                      Committee also aims at educating the designers architects builders and planners

                                                                                                      regarding the qualitative and cost effective applications of steel in various structures

                                                                                                      including buildings bridges flyovers and airports

                                                                                                      FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                      India is amongst a few countries in the world having the dual advantage of fast

                                                                                                      growing domestic demand coupled with access to raw materials Further the trend

                                                                                                      that is already discernible is that the axis of global steel production consumption is

                                                                                                      shifting towards Asia With their large populations China and India already account for

                                                                                                      35 of the total world steel production - more than double of Europe Asia is

                                                                                                      expected to outpace other regions of the world to an even greater extent in the coming

                                                                                                      years

                                                                                                      Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                                      is accepted that China will continue to be the leader However India is slated to

                                                                                                      emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                                      the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                                      splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                                      China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                                      consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                                      has been the case over the last few years On the other hand it is sun-rise time for

                                                                                                      India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                                      run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                                      relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                                      can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                                      However the position with coal is not so favourable Though thermal coal

                                                                                                      reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                                      traditional blast furnace route would require coking coal India does not have adequate

                                                                                                      reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                                      Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                                      availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                                      adopting alternative iron making processes that are not dependent on coking coal it

                                                                                                      can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                                      in India

                                                                                                      Because of the shortage of indigenous coal attempts have been made by steel

                                                                                                      producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                                      mines in other countries This is the only long-term solution but with a global shortage

                                                                                                      of coal it may not remain cost-effective in the long run

                                                                                                      India is the seventh largest producer of steel and may further improve its position

                                                                                                      going by the current trends A series of investment decisions by major domestic

                                                                                                      players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                                      POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                                      The keen interest shown by various prospective investors is not only due to

                                                                                                      expectations of strong growth in domestic demand but also due to indigenous

                                                                                                      availability of key resources like iron ore and skilled workforce

                                                                                                      After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                                      steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                                      finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                                      2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                                      consumption has accelerated to 91 per cent

                                                                                                      With the likely growth of Indian economy at around 7 per cent per annum

                                                                                                      demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                                      million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                                      demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                                      is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                                      very low level of per capita consumption of steel in India is highlighted further when

                                                                                                      compared with the consumption levels of its peer group consisting of countries like

                                                                                                      China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                                      countries

                                                                                                      Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                                      China there seems to be consensus among analysts that India is likely to witness a

                                                                                                      growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                                      percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                                      achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                                      more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                                      country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                                      Exports

                                                                                                      Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                                      starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                                      2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                                      rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                                      per cent of total production and Indias presence in the developing and developed

                                                                                                      world is being increasingly felt Indian steel producers have recently been able to

                                                                                                      supply specialized grades and products used for sophisticated applications like

                                                                                                      automobiles On the cost front some of our producers are counted amongst the least

                                                                                                      cost producers of the world For an average reference plant India is competitively

                                                                                                      placed in the middle of the hierarchy of steel producing nations

                                                                                                      However we have a long way to go to catch up with the leading exporters of the

                                                                                                      world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                                      2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                                      per cent of total projected production The projected export ratio compares well with

                                                                                                      the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                                      The projected production of steel by 2019-20 to meet the domestic and export

                                                                                                      demand will be around 110 million tonnes Management of resources and

                                                                                                      infrastructural growth is going to be critical in achievement of the production level

                                                                                                      envisaged The broad requirements of various resources will increase manifold from

                                                                                                      the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                                      need to be removed through concerted efforts of Government and industry The broad

                                                                                                      strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                                      sector has been discussed in the National Steel Policy which has been recently

                                                                                                      approved by the Government

                                                                                                      As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                                      should have a modern and efficient steel industry of world standards catering to a

                                                                                                      diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                                      not only in terms of cost quality and product mix but also in terms of global

                                                                                                      benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                                      pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                                      to create incremental demand through promotional efforts creation of awareness and

                                                                                                      strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                                      strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                      policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                      investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                      roads railways and ports

                                                                                                      The production figures exports and imports of finished carbon steel and pig iron

                                                                                                      and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                      Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                      FINDINGS

                                                                                                      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 increased its profit over the year particularly in 2006-07

                                                                                                      Both the companies are planning to adopt modern technology which is going to

                                                                                                      help them to compete in world market but they need to be less dependent on

                                                                                                      state of art technology and coal for long term prospects

                                                                                                      Public sector has undergone retrenchment for the employees and improved

                                                                                                      has its lobour productivity but it is still lacking behind as compared to private

                                                                                                      sector

                                                                                                      SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                      still no of accidents are more than that of TATA Steel

                                                                                                      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

                                                                                                      ie 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 have to be met

                                                                                                      comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                      nation by 2020

                                                                                                      BIBLIOGRAPHY

                                                                                                      Annual report (2006-07) published by ministry of steel

                                                                                                      Annual report (2006-07) published by TATA Steel

                                                                                                      Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                      REPORTrsquo posted by SAIL on its website

                                                                                                      lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                      held on 07 Nov 2006

                                                                                                      Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                      wwwsteelnicin (Official website of ministry of industry)

                                                                                                      wwwtatasteelcom (Official website of TATA Steel)

                                                                                                      wwwsailcoin (Official website of Steel Authority of India)

                                                                                                      wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                      wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                      • DATA ANALYSIS
                                                                                                      • Comparison between TATA Steel and Steel Authority of India
                                                                                                      • Production
                                                                                                      • Quantity 000 Tonnes
                                                                                                      • Financials
                                                                                                      • Research and Development
                                                                                                      • (Rs Crore)
                                                                                                      • TATA Steel
                                                                                                      • Steel Authority of India
                                                                                                      • Environment
                                                                                                      • TATA Steel
                                                                                                      • Emissions effluents and wastes
                                                                                                      • Emissions
                                                                                                      • Waste handling
                                                                                                      • Effluent Management
                                                                                                      • Steel Authority of India
                                                                                                      • Solid Waste Management
                                                                                                      • Environmental Plantation
                                                                                                      • Environmental Recognitions
                                                                                                      • Workforce and Welfare of Society
                                                                                                      • TATA steel
                                                                                                      • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                      • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                      • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                      • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                      • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                      • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                      • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                      • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                      • Steel Authority of India
                                                                                                      • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                      • Technology
                                                                                                      • Steel Authority of India
                                                                                                      • Safety measures
                                                                                                      • Tata Steel
                                                                                                      • Steel Authority of India
                                                                                                      • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                      • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                      • Measures taken by Indian government to improve the industry
                                                                                                      • Now letrsquos 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-
                                                                                                      • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                      • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                        India is amongst a few countries in the world having the dual advantage of fast

                                                                                                        growing domestic demand coupled with access to raw materials Further the trend

                                                                                                        that is already discernible is that the axis of global steel production consumption is

                                                                                                        shifting towards Asia With their large populations China and India already account for

                                                                                                        35 of the total world steel production - more than double of Europe Asia is

                                                                                                        expected to outpace other regions of the world to an even greater extent in the coming

                                                                                                        years

                                                                                                        Amongst the Asian nations China has established a huge unbridgeable lead It

                                                                                                        is accepted that China will continue to be the leader However India is slated to

                                                                                                        emerge as the second Asian giant in the next eight years Figuratively speaking while

                                                                                                        the Dragon has reached maturity the Lotus is about to bloom in resplendent

                                                                                                        splendour In 2005 Chinese steel consumption was around 320 million tonnes ie

                                                                                                        China swallowed almost 32 of global steel It is unlikely that future production and

                                                                                                        consumption would continue to flourish at growth rates of 8 and 18 respectively as

                                                                                                        has been the case over the last few years On the other hand it is sun-rise time for

                                                                                                        India where the demand has increased by 7-8 in the last couple of years In the long

                                                                                                        run Indian steel is likely to be more cost-effective since unlike China India has

                                                                                                        relatively large reserves of iron ore (14 billion tonnes) which if strategically exploited

                                                                                                        can sustain domestic production of 120-130 million tonnes for at least 25-30 years

                                                                                                        However the position with coal is not so favourable Though thermal coal

                                                                                                        reserves of over 92 billion tonnes can fuel industry large-scale iron making using the

                                                                                                        traditional blast furnace route would require coking coal India does not have adequate

                                                                                                        reserves of coking coal nor is the meagre amount available of appropriate quality

                                                                                                        Thus the steel industry always had to contend with the dual problems of inadequate

                                                                                                        availability and poor quality of Indian coking coal This has been partly addressed by

                                                                                                        adopting alternative iron making processes that are not dependent on coking coal it

                                                                                                        can not be denied that coal is the biggest cause for concern for bulk steel production

                                                                                                        in India

                                                                                                        Because of the shortage of indigenous coal attempts have been made by steel

                                                                                                        producers to ensure long-term supplies by tying up with global majors or by acquiring

                                                                                                        mines in other countries This is the only long-term solution but with a global shortage

                                                                                                        of coal it may not remain cost-effective in the long run

                                                                                                        India is the seventh largest producer of steel and may further improve its position

                                                                                                        going by the current trends A series of investment decisions by major domestic

                                                                                                        players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                                        POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                                        The keen interest shown by various prospective investors is not only due to

                                                                                                        expectations of strong growth in domestic demand but also due to indigenous

                                                                                                        availability of key resources like iron ore and skilled workforce

                                                                                                        After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                                        steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                                        finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                                        2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                                        consumption has accelerated to 91 per cent

                                                                                                        With the likely growth of Indian economy at around 7 per cent per annum

                                                                                                        demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                                        million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                                        demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                                        is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                                        very low level of per capita consumption of steel in India is highlighted further when

                                                                                                        compared with the consumption levels of its peer group consisting of countries like

                                                                                                        China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                                        countries

                                                                                                        Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                                        China there seems to be consensus among analysts that India is likely to witness a

                                                                                                        growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                                        percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                                        achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                                        more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                                        country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                                        Exports

                                                                                                        Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                                        starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                                        2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                                        rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                                        per cent of total production and Indias presence in the developing and developed

                                                                                                        world is being increasingly felt Indian steel producers have recently been able to

                                                                                                        supply specialized grades and products used for sophisticated applications like

                                                                                                        automobiles On the cost front some of our producers are counted amongst the least

                                                                                                        cost producers of the world For an average reference plant India is competitively

                                                                                                        placed in the middle of the hierarchy of steel producing nations

                                                                                                        However we have a long way to go to catch up with the leading exporters of the

                                                                                                        world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                                        2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                                        per cent of total projected production The projected export ratio compares well with

                                                                                                        the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                                        The projected production of steel by 2019-20 to meet the domestic and export

                                                                                                        demand will be around 110 million tonnes Management of resources and

                                                                                                        infrastructural growth is going to be critical in achievement of the production level

                                                                                                        envisaged The broad requirements of various resources will increase manifold from

                                                                                                        the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                                        need to be removed through concerted efforts of Government and industry The broad

                                                                                                        strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                                        sector has been discussed in the National Steel Policy which has been recently

                                                                                                        approved by the Government

                                                                                                        As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                                        should have a modern and efficient steel industry of world standards catering to a

                                                                                                        diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                                        not only in terms of cost quality and product mix but also in terms of global

                                                                                                        benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                                        pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                                        to create incremental demand through promotional efforts creation of awareness and

                                                                                                        strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                                        strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                        policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                        investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                        roads railways and ports

                                                                                                        The production figures exports and imports of finished carbon steel and pig iron

                                                                                                        and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                        Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                        FINDINGS

                                                                                                        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 increased its profit over the year particularly in 2006-07

                                                                                                        Both the companies are planning to adopt modern technology which is going to

                                                                                                        help them to compete in world market but they need to be less dependent on

                                                                                                        state of art technology and coal for long term prospects

                                                                                                        Public sector has undergone retrenchment for the employees and improved

                                                                                                        has its lobour productivity but it is still lacking behind as compared to private

                                                                                                        sector

                                                                                                        SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                        still no of accidents are more than that of TATA Steel

                                                                                                        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

                                                                                                        ie 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 have to be met

                                                                                                        comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                        nation by 2020

                                                                                                        BIBLIOGRAPHY

                                                                                                        Annual report (2006-07) published by ministry of steel

                                                                                                        Annual report (2006-07) published by TATA Steel

                                                                                                        Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                        REPORTrsquo posted by SAIL on its website

                                                                                                        lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                        held on 07 Nov 2006

                                                                                                        Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                        wwwsteelnicin (Official website of ministry of industry)

                                                                                                        wwwtatasteelcom (Official website of TATA Steel)

                                                                                                        wwwsailcoin (Official website of Steel Authority of India)

                                                                                                        wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                        wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                        • DATA ANALYSIS
                                                                                                        • Comparison between TATA Steel and Steel Authority of India
                                                                                                        • Production
                                                                                                        • Quantity 000 Tonnes
                                                                                                        • Financials
                                                                                                        • Research and Development
                                                                                                        • (Rs Crore)
                                                                                                        • TATA Steel
                                                                                                        • Steel Authority of India
                                                                                                        • Environment
                                                                                                        • TATA Steel
                                                                                                        • Emissions effluents and wastes
                                                                                                        • Emissions
                                                                                                        • Waste handling
                                                                                                        • Effluent Management
                                                                                                        • Steel Authority of India
                                                                                                        • Solid Waste Management
                                                                                                        • Environmental Plantation
                                                                                                        • Environmental Recognitions
                                                                                                        • Workforce and Welfare of Society
                                                                                                        • TATA steel
                                                                                                        • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                        • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                        • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                        • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                        • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                        • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                        • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                        • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                        • Steel Authority of India
                                                                                                        • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                        • Technology
                                                                                                        • Steel Authority of India
                                                                                                        • Safety measures
                                                                                                        • Tata Steel
                                                                                                        • Steel Authority of India
                                                                                                        • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                        • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                        • Measures taken by Indian government to improve the industry
                                                                                                        • Now letrsquos 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-
                                                                                                        • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                        • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                          India is the seventh largest producer of steel and may further improve its position

                                                                                                          going by the current trends A series of investment decisions by major domestic

                                                                                                          players and international steel giants such as Steel Authority of India Ltd Tata Steel

                                                                                                          POSCO the LN Mittal Group etc clearly establish that such hopes are well founded

                                                                                                          The keen interest shown by various prospective investors is not only due to

                                                                                                          expectations of strong growth in domestic demand but also due to indigenous

                                                                                                          availability of key resources like iron ore and skilled workforce

                                                                                                          After deregulation (from 1991-92 to 2004-05) domestic consumption of finished

                                                                                                          steel has grown at a CAGR of 67 per cent In absolute terms the consumption of

                                                                                                          finished steel expanded from 148 million tonnes in 1991-92 to 344 million tonnes in

                                                                                                          2004-05 During the recent upturn (from 2002-03 to 2005-06) the growth in

                                                                                                          consumption has accelerated to 91 per cent

                                                                                                          With the likely growth of Indian economy at around 7 per cent per annum

                                                                                                          demand for steel is expected to remain strong and is projected to reach a level of 90

                                                                                                          million tonnes by 2019-20 as envisaged in the National Steel Policy This growth in

                                                                                                          demand is sustainable considering the fact that Indias per capita consumption of steel

                                                                                                          is still very low at 31 kgs per head compared to the world average of 145 kgs The

                                                                                                          very low level of per capita consumption of steel in India is highlighted further when

                                                                                                          compared with the consumption levels of its peer group consisting of countries like

                                                                                                          China Brazil Mexico and Republic of Korea as also with selected developed

                                                                                                          countries

                                                                                                          Though there are realistic constraints in India to achieving as rapid a growth as in

                                                                                                          China there seems to be consensus among analysts that India is likely to witness a

                                                                                                          growth rate in steel consumption higher than the historically observed rate of 6 to 7

                                                                                                          percent If the growth rate (9 per cent) of last three years is maintained then we will

                                                                                                          achieve the 110 million tonnes landmark even by 2018 Though some analysts are

                                                                                                          more conservative due to cyclicity of steel business it may be mentioned that in a

                                                                                                          country like India cyclicity is more in terms of prices rather than volumes of production

                                                                                                          Exports

                                                                                                          Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                                          starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                                          2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                                          rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                                          per cent of total production and Indias presence in the developing and developed

                                                                                                          world is being increasingly felt Indian steel producers have recently been able to

                                                                                                          supply specialized grades and products used for sophisticated applications like

                                                                                                          automobiles On the cost front some of our producers are counted amongst the least

                                                                                                          cost producers of the world For an average reference plant India is competitively

                                                                                                          placed in the middle of the hierarchy of steel producing nations

                                                                                                          However we have a long way to go to catch up with the leading exporters of the

                                                                                                          world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                                          2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                                          per cent of total projected production The projected export ratio compares well with

                                                                                                          the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                                          The projected production of steel by 2019-20 to meet the domestic and export

                                                                                                          demand will be around 110 million tonnes Management of resources and

                                                                                                          infrastructural growth is going to be critical in achievement of the production level

                                                                                                          envisaged The broad requirements of various resources will increase manifold from

                                                                                                          the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                                          need to be removed through concerted efforts of Government and industry The broad

                                                                                                          strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                                          sector has been discussed in the National Steel Policy which has been recently

                                                                                                          approved by the Government

                                                                                                          As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                                          should have a modern and efficient steel industry of world standards catering to a

                                                                                                          diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                                          not only in terms of cost quality and product mix but also in terms of global

                                                                                                          benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                                          pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                                          to create incremental demand through promotional efforts creation of awareness and

                                                                                                          strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                                          strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                          policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                          investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                          roads railways and ports

                                                                                                          The production figures exports and imports of finished carbon steel and pig iron

                                                                                                          and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                          Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                          FINDINGS

                                                                                                          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 increased its profit over the year particularly in 2006-07

                                                                                                          Both the companies are planning to adopt modern technology which is going to

                                                                                                          help them to compete in world market but they need to be less dependent on

                                                                                                          state of art technology and coal for long term prospects

                                                                                                          Public sector has undergone retrenchment for the employees and improved

                                                                                                          has its lobour productivity but it is still lacking behind as compared to private

                                                                                                          sector

                                                                                                          SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                          still no of accidents are more than that of TATA Steel

                                                                                                          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

                                                                                                          ie 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 have to be met

                                                                                                          comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                          nation by 2020

                                                                                                          BIBLIOGRAPHY

                                                                                                          Annual report (2006-07) published by ministry of steel

                                                                                                          Annual report (2006-07) published by TATA Steel

                                                                                                          Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                          REPORTrsquo posted by SAIL on its website

                                                                                                          lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                          held on 07 Nov 2006

                                                                                                          Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                          wwwsteelnicin (Official website of ministry of industry)

                                                                                                          wwwtatasteelcom (Official website of TATA Steel)

                                                                                                          wwwsailcoin (Official website of Steel Authority of India)

                                                                                                          wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                          wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                          • DATA ANALYSIS
                                                                                                          • Comparison between TATA Steel and Steel Authority of India
                                                                                                          • Production
                                                                                                          • Quantity 000 Tonnes
                                                                                                          • Financials
                                                                                                          • Research and Development
                                                                                                          • (Rs Crore)
                                                                                                          • TATA Steel
                                                                                                          • Steel Authority of India
                                                                                                          • Environment
                                                                                                          • TATA Steel
                                                                                                          • Emissions effluents and wastes
                                                                                                          • Emissions
                                                                                                          • Waste handling
                                                                                                          • Effluent Management
                                                                                                          • Steel Authority of India
                                                                                                          • Solid Waste Management
                                                                                                          • Environmental Plantation
                                                                                                          • Environmental Recognitions
                                                                                                          • Workforce and Welfare of Society
                                                                                                          • TATA steel
                                                                                                          • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                          • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                          • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                          • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                          • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                          • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                          • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                          • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                          • Steel Authority of India
                                                                                                          • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                          • Technology
                                                                                                          • Steel Authority of India
                                                                                                          • Safety measures
                                                                                                          • Tata Steel
                                                                                                          • Steel Authority of India
                                                                                                          • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                          • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                          • Measures taken by Indian government to improve the industry
                                                                                                          • Now letrsquos 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-
                                                                                                          • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                          • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                            Similar optimism prevails with regard to export of iron and steel Export of steel

                                                                                                            starting from a negligible amount in 1991-92 has increased to 55 million tonnes in

                                                                                                            2003-04 Exports in 2004-05 were lower at 46 million tonnes primarily because of

                                                                                                            rising domestic demand and low capacity additions Exports now constitute around 17

                                                                                                            per cent of total production and Indias presence in the developing and developed

                                                                                                            world is being increasingly felt Indian steel producers have recently been able to

                                                                                                            supply specialized grades and products used for sophisticated applications like

                                                                                                            automobiles On the cost front some of our producers are counted amongst the least

                                                                                                            cost producers of the world For an average reference plant India is competitively

                                                                                                            placed in the middle of the hierarchy of steel producing nations

                                                                                                            However we have a long way to go to catch up with the leading exporters of the

                                                                                                            world such as Japan the CIS countries Brazil etc It is however expected that by

                                                                                                            2019-20 India will be able to export around 26 million tonnes of steel representing 24

                                                                                                            per cent of total projected production The projected export ratio compares well with

                                                                                                            the current worldwide export ratio of 27 per cent (excluding intra-regional trade)

                                                                                                            The projected production of steel by 2019-20 to meet the domestic and export

                                                                                                            demand will be around 110 million tonnes Management of resources and

                                                                                                            infrastructural growth is going to be critical in achievement of the production level

                                                                                                            envisaged The broad requirements of various resources will increase manifold from

                                                                                                            the current level The bottlenecks in availability of critical inputs and various facilities

                                                                                                            need to be removed through concerted efforts of Government and industry The broad

                                                                                                            strategy to overcome these constraints as well as meet the strategic goals of the steel

                                                                                                            sector has been discussed in the National Steel Policy which has been recently

                                                                                                            approved by the Government

                                                                                                            As stated earlier the long-term goal of the National Steel Policy is that India

                                                                                                            should have a modern and efficient steel industry of world standards catering to a

                                                                                                            diversified steel demand The focus of the policy is to achieve global competitiveness

                                                                                                            not only in terms of cost quality and product mix but also in terms of global

                                                                                                            benchmarks of efficiency and productivity The policy envisages adopting a multi-

                                                                                                            pronged strategy to achieve these goals On the demand side the strategy would be

                                                                                                            to create incremental demand through promotional efforts creation of awareness and

                                                                                                            strengthening the delivery chain particularly in rural areas On the supply side the

                                                                                                            strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                            policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                            investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                            roads railways and ports

                                                                                                            The production figures exports and imports of finished carbon steel and pig iron

                                                                                                            and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                            Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                            FINDINGS

                                                                                                            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 increased its profit over the year particularly in 2006-07

                                                                                                            Both the companies are planning to adopt modern technology which is going to

                                                                                                            help them to compete in world market but they need to be less dependent on

                                                                                                            state of art technology and coal for long term prospects

                                                                                                            Public sector has undergone retrenchment for the employees and improved

                                                                                                            has its lobour productivity but it is still lacking behind as compared to private

                                                                                                            sector

                                                                                                            SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                            still no of accidents are more than that of TATA Steel

                                                                                                            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

                                                                                                            ie 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 have to be met

                                                                                                            comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                            nation by 2020

                                                                                                            BIBLIOGRAPHY

                                                                                                            Annual report (2006-07) published by ministry of steel

                                                                                                            Annual report (2006-07) published by TATA Steel

                                                                                                            Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                            REPORTrsquo posted by SAIL on its website

                                                                                                            lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                            held on 07 Nov 2006

                                                                                                            Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                            wwwsteelnicin (Official website of ministry of industry)

                                                                                                            wwwtatasteelcom (Official website of TATA Steel)

                                                                                                            wwwsailcoin (Official website of Steel Authority of India)

                                                                                                            wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                            wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                            • DATA ANALYSIS
                                                                                                            • Comparison between TATA Steel and Steel Authority of India
                                                                                                            • Production
                                                                                                            • Quantity 000 Tonnes
                                                                                                            • Financials
                                                                                                            • Research and Development
                                                                                                            • (Rs Crore)
                                                                                                            • TATA Steel
                                                                                                            • Steel Authority of India
                                                                                                            • Environment
                                                                                                            • TATA Steel
                                                                                                            • Emissions effluents and wastes
                                                                                                            • Emissions
                                                                                                            • Waste handling
                                                                                                            • Effluent Management
                                                                                                            • Steel Authority of India
                                                                                                            • Solid Waste Management
                                                                                                            • Environmental Plantation
                                                                                                            • Environmental Recognitions
                                                                                                            • Workforce and Welfare of Society
                                                                                                            • TATA steel
                                                                                                            • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                            • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                            • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                            • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                            • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                            • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                            • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                            • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                            • Steel Authority of India
                                                                                                            • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                            • Technology
                                                                                                            • Steel Authority of India
                                                                                                            • Safety measures
                                                                                                            • Tata Steel
                                                                                                            • Steel Authority of India
                                                                                                            • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                            • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                            • Measures taken by Indian government to improve the industry
                                                                                                            • Now letrsquos 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-
                                                                                                            • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                            • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                              strategy would be to facilitate creation of additional capacity remove procedural and

                                                                                                              policy bottlenecks in the availability of inputs such as iron ore and coal make higher

                                                                                                              investments in RampD and HRD and encourage the creation of infrastructure such as

                                                                                                              roads railways and ports

                                                                                                              The production figures exports and imports of finished carbon steel and pig iron

                                                                                                              and apparent consumption patterns of finished carbon steel as indicated by TATA

                                                                                                              Steel and SAIL attest to the continuing growth for both the sectors

                                                                                                              FINDINGS

                                                                                                              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 increased its profit over the year particularly in 2006-07

                                                                                                              Both the companies are planning to adopt modern technology which is going to

                                                                                                              help them to compete in world market but they need to be less dependent on

                                                                                                              state of art technology and coal for long term prospects

                                                                                                              Public sector has undergone retrenchment for the employees and improved

                                                                                                              has its lobour productivity but it is still lacking behind as compared to private

                                                                                                              sector

                                                                                                              SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                              still no of accidents are more than that of TATA Steel

                                                                                                              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

                                                                                                              ie 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 have to be met

                                                                                                              comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                              nation by 2020

                                                                                                              BIBLIOGRAPHY

                                                                                                              Annual report (2006-07) published by ministry of steel

                                                                                                              Annual report (2006-07) published by TATA Steel

                                                                                                              Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                              REPORTrsquo posted by SAIL on its website

                                                                                                              lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                              held on 07 Nov 2006

                                                                                                              Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                              wwwsteelnicin (Official website of ministry of industry)

                                                                                                              wwwtatasteelcom (Official website of TATA Steel)

                                                                                                              wwwsailcoin (Official website of Steel Authority of India)

                                                                                                              wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                              wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                              • DATA ANALYSIS
                                                                                                              • Comparison between TATA Steel and Steel Authority of India
                                                                                                              • Production
                                                                                                              • Quantity 000 Tonnes
                                                                                                              • Financials
                                                                                                              • Research and Development
                                                                                                              • (Rs Crore)
                                                                                                              • TATA Steel
                                                                                                              • Steel Authority of India
                                                                                                              • Environment
                                                                                                              • TATA Steel
                                                                                                              • Emissions effluents and wastes
                                                                                                              • Emissions
                                                                                                              • Waste handling
                                                                                                              • Effluent Management
                                                                                                              • Steel Authority of India
                                                                                                              • Solid Waste Management
                                                                                                              • Environmental Plantation
                                                                                                              • Environmental Recognitions
                                                                                                              • Workforce and Welfare of Society
                                                                                                              • TATA steel
                                                                                                              • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                              • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                              • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                              • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                              • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                              • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                              • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                              • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                              • Steel Authority of India
                                                                                                              • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                              • Technology
                                                                                                              • Steel Authority of India
                                                                                                              • Safety measures
                                                                                                              • Tata Steel
                                                                                                              • Steel Authority of India
                                                                                                              • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                              • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                              • Measures taken by Indian government to improve the industry
                                                                                                              • Now letrsquos 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-
                                                                                                              • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                              • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                                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 increased its profit over the year particularly in 2006-07

                                                                                                                Both the companies are planning to adopt modern technology which is going to

                                                                                                                help them to compete in world market but they need to be less dependent on

                                                                                                                state of art technology and coal for long term prospects

                                                                                                                Public sector has undergone retrenchment for the employees and improved

                                                                                                                has its lobour productivity but it is still lacking behind as compared to private

                                                                                                                sector

                                                                                                                SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                                still no of accidents are more than that of TATA Steel

                                                                                                                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

                                                                                                                ie 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 have to be met

                                                                                                                comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                                nation by 2020

                                                                                                                BIBLIOGRAPHY

                                                                                                                Annual report (2006-07) published by ministry of steel

                                                                                                                Annual report (2006-07) published by TATA Steel

                                                                                                                Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                                REPORTrsquo posted by SAIL on its website

                                                                                                                lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                                held on 07 Nov 2006

                                                                                                                Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                                wwwsteelnicin (Official website of ministry of industry)

                                                                                                                wwwtatasteelcom (Official website of TATA Steel)

                                                                                                                wwwsailcoin (Official website of Steel Authority of India)

                                                                                                                wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                                wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                                • DATA ANALYSIS
                                                                                                                • Comparison between TATA Steel and Steel Authority of India
                                                                                                                • Production
                                                                                                                • Quantity 000 Tonnes
                                                                                                                • Financials
                                                                                                                • Research and Development
                                                                                                                • (Rs Crore)
                                                                                                                • TATA Steel
                                                                                                                • Steel Authority of India
                                                                                                                • Environment
                                                                                                                • TATA Steel
                                                                                                                • Emissions effluents and wastes
                                                                                                                • Emissions
                                                                                                                • Waste handling
                                                                                                                • Effluent Management
                                                                                                                • Steel Authority of India
                                                                                                                • Solid Waste Management
                                                                                                                • Environmental Plantation
                                                                                                                • Environmental Recognitions
                                                                                                                • Workforce and Welfare of Society
                                                                                                                • TATA steel
                                                                                                                • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                                • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                                • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                                • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                                • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                                • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                                • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                                • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                                • Steel Authority of India
                                                                                                                • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                                • Technology
                                                                                                                • Steel Authority of India
                                                                                                                • Safety measures
                                                                                                                • Tata Steel
                                                                                                                • Steel Authority of India
                                                                                                                • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                                • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                                • Measures taken by Indian government to improve the industry
                                                                                                                • Now letrsquos 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-
                                                                                                                • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                                • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                                  SAIL has reduced the no of accidents due to improper handling of machinery

                                                                                                                  still no of accidents are more than that of TATA Steel

                                                                                                                  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

                                                                                                                  ie 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 have to be met

                                                                                                                  comprehensively if we are to take our legitimate place in the world as a developed

                                                                                                                  nation by 2020

                                                                                                                  BIBLIOGRAPHY

                                                                                                                  Annual report (2006-07) published by ministry of steel

                                                                                                                  Annual report (2006-07) published by TATA Steel

                                                                                                                  Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                                  REPORTrsquo posted by SAIL on its website

                                                                                                                  lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                                  held on 07 Nov 2006

                                                                                                                  Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                                  wwwsteelnicin (Official website of ministry of industry)

                                                                                                                  wwwtatasteelcom (Official website of TATA Steel)

                                                                                                                  wwwsailcoin (Official website of Steel Authority of India)

                                                                                                                  wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                                  wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                                  • DATA ANALYSIS
                                                                                                                  • Comparison between TATA Steel and Steel Authority of India
                                                                                                                  • Production
                                                                                                                  • Quantity 000 Tonnes
                                                                                                                  • Financials
                                                                                                                  • Research and Development
                                                                                                                  • (Rs Crore)
                                                                                                                  • TATA Steel
                                                                                                                  • Steel Authority of India
                                                                                                                  • Environment
                                                                                                                  • TATA Steel
                                                                                                                  • Emissions effluents and wastes
                                                                                                                  • Emissions
                                                                                                                  • Waste handling
                                                                                                                  • Effluent Management
                                                                                                                  • Steel Authority of India
                                                                                                                  • Solid Waste Management
                                                                                                                  • Environmental Plantation
                                                                                                                  • Environmental Recognitions
                                                                                                                  • Workforce and Welfare of Society
                                                                                                                  • TATA steel
                                                                                                                  • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                                  • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                                  • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                                  • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                                  • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                                  • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                                  • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                                  • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                                  • Steel Authority of India
                                                                                                                  • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                                  • Technology
                                                                                                                  • Steel Authority of India
                                                                                                                  • Safety measures
                                                                                                                  • Tata Steel
                                                                                                                  • Steel Authority of India
                                                                                                                  • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                                  • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                                  • Measures taken by Indian government to improve the industry
                                                                                                                  • Now letrsquos 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-
                                                                                                                  • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                                  • FUTURE OF INDIAN STEEL INDUSTRY

                                                                                                                    BIBLIOGRAPHY

                                                                                                                    Annual report (2006-07) published by ministry of steel

                                                                                                                    Annual report (2006-07) published by TATA Steel

                                                                                                                    Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS

                                                                                                                    REPORTrsquo posted by SAIL on its website

                                                                                                                    lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo

                                                                                                                    held on 07 Nov 2006

                                                                                                                    Article published in magazine lsquoFRONTLINErsquo in December 2006 edition

                                                                                                                    wwwsteelnicin (Official website of ministry of industry)

                                                                                                                    wwwtatasteelcom (Official website of TATA Steel)

                                                                                                                    wwwsailcoin (Official website of Steel Authority of India)

                                                                                                                    wwwworldsteelorg (official website of International Iron amp Steel Institute)

                                                                                                                    wwwjpcindiansteelnicin (Website of joint planning committee)

                                                                                                                    • DATA ANALYSIS
                                                                                                                    • Comparison between TATA Steel and Steel Authority of India
                                                                                                                    • Production
                                                                                                                    • Quantity 000 Tonnes
                                                                                                                    • Financials
                                                                                                                    • Research and Development
                                                                                                                    • (Rs Crore)
                                                                                                                    • TATA Steel
                                                                                                                    • Steel Authority of India
                                                                                                                    • Environment
                                                                                                                    • TATA Steel
                                                                                                                    • Emissions effluents and wastes
                                                                                                                    • Emissions
                                                                                                                    • Waste handling
                                                                                                                    • Effluent Management
                                                                                                                    • Steel Authority of India
                                                                                                                    • Solid Waste Management
                                                                                                                    • Environmental Plantation
                                                                                                                    • Environmental Recognitions
                                                                                                                    • Workforce and Welfare of Society
                                                                                                                    • TATA steel
                                                                                                                    • In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of education vocational training self-employment and family welfare
                                                                                                                    • Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative interventions to people in inaccessible rural areas
                                                                                                                    • Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp Olympics
                                                                                                                    • The JRD Sports Complex an international stadium with an 8-lane polyurethane track was inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey basketball boxing table tennis and a modern gymnasium
                                                                                                                    • The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the betterment of the people in and around Jamshedpur
                                                                                                                    • At times of natural calamities the company has rushe immediate relief and off ered long-term assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such aff ected areas
                                                                                                                    • Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique environment for the children of Jamshedpur to grow up in
                                                                                                                    • In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has emerged as the one of the best cities in India
                                                                                                                    • Steel Authority of India
                                                                                                                    • The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and 123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which included separation of 881 employees through voluntary retirement The labour productivity improved by around 12 over previous year to 150 tonne crude steelmanyear
                                                                                                                    • Technology
                                                                                                                    • Steel Authority of India
                                                                                                                    • Safety measures
                                                                                                                    • Tata Steel
                                                                                                                    • Steel Authority of India
                                                                                                                    • SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp activities- SAIL also has a comprehensive safety policy
                                                                                                                    • Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the company by taking measures like intensive safety drives in works area and conducting safety audits in hazardous departments of different plants and mines In addition specific workshops on safety aspects were organised in various SAIL steel plants
                                                                                                                    • Measures taken by Indian government to improve the industry
                                                                                                                    • Now letrsquos 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-
                                                                                                                    • Special assistance being provided by Ministry of Steel to Private Sector
                                                                                                                    • FUTURE OF INDIAN STEEL INDUSTRY

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