TITLE “Comparative analysis of Private and Public sector steel companies with special reference to TATA Steel and SAIL.” Prepared and Submitted by:
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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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