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STEEL INDUSTRY
Content
Introduction Economic Trait Competition Analysis Driving Force Competitive Position Competitive Moves Success Factors Prospects
Introduction
Initial phase, - the Tata Iron & Steel Company, the Indian Iron and Steel Company and Visveswaraya Iron & Steel Ltd. India is the 5th largest producer of crude steel in the world and is expected to become the 2nd largest producer by 2015-16. Total finished steel during April - December 2010 :
Production for sale was at 47.30MT growth of 7.9 per cent
Steel exports increased by 17.3 per cent as it reached an estimated 2.46 million tonne while steel imports were at an estimated 5.36 million tonne, a growth of 2.8 per cent. India is net importer of steel
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Competition Analysis
Threat from new entrantLow to Moderate
- Industry is Capital Intensive - Regulatory Environment
Driving forces
Total investment in infrastructure sector in the Eleventh Five-Year Plan will be around Rs 20.6 trillion Approximately INR 45 trillion will be invested in Twelfth Five-Year Plan Automobile grew by 26% in FY10-Low cost passenger car Many automobile manufacturers increasing capacity & (or) establishing manufacturing operations in India International steel majors are expanding their presence in India
Arcelor Mittal acquired large stake in Uttam Galva JFE acquired 15% equity of JSW Steel
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Driving forces
Companies are increasing their focus on downstream and solutions driven products for their higher value add.
Example: SAIL produce 40% value added steel
Technology improvement
Boiler project expected to generate 350000 pounds of steam/Hour, produce 38 mw on site. COREX: don t require coking coal use thermal coal directly (coking & sintering plant not required) FINEX :molten iron is produced directly using iron ore fines and non-coking coal (sintering and coke making not required)
The ministry of steel has approved 59 R&D projects costing Rs.408 crores Merger and Acquisition has evolved to be one of the major growth drivers in the industry leading to economic of scale.
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Competitive position
Company Name Tata Steel Steel Authority of India JSW Steel Jindal Steel & Power Essar Steels Limited Ispat Industries Ltd Rashtriya Ispat Nigam Limited Bhushan Steel Total Asset in Crores INR 127242 81484 29176 20804 20000 8706 9569 22489 Sales Turnover in Crores INR 118753 33905 23368 9534 8851 8226 7755 7000 1805 1432.6 1033 Net Profit in Crores INR 8983 3374.13 2010 2064
Competitive moves
Tata Steel
Annual crude steel making capacity of 6.8 million tonne TATA Steel is continuing with its program of expansion of hot metal and steel making capacity by 3 million tonne to reach 10 million tonne Massive expansion of its capacities through various greenfield projects at Saraikela (Jharkhand), Kalinganagar (Orissa) and Bastar(Chhattisgarh)
Competitive moves
SAIL and M/s Rail India Technical and Economic Services (RITES) have entered into a Joint Venture Agreement for setting up of a wagon manufacturing facility in Kulti, Bardhman Dist. of West Bengal
Competitive moves
JSW Steel
One of the lowest cost steel producers in the world Formed a joint venture for setting up a steel plant in Georgia Acquired a controlling stake in Ispat Industries Ltd. Acquired mining assets in Chile, USA and Mozambique Entire gamut of steel products - Hot Rolled, Cold Rolled, Galvanized, Galvalume, Pre-paintedGalvanised, Pre-painted Galvalume, TMT Rebars, Wire Rods & Special Steel Bars, Rounds & Blooms
Competitive moves
Jindal Steel & Power Ltd
One of the fast growing major steel units in the country Raigarh plant of JSPL has a present capacity of
1.37 MTPA sponge iron plant 2.40 MTPA Steel Melting Shop (SMS), 1.0 MTPA Plant Mill, 2.30 sinter plant, 0.8 MTPA coke oven and a 330 MW captive power plant
Capacity addition plan at Raigarh to enhancement the present steel capacity from 2.4 million tonne to 6.0 MT in a phased manner by 2011 The Company has also commenced hot trials of its 0.6 MTPA Wire Rod Mill at Patratu, Jharkhand
Competitive moves
Essar Steel Ltd
Essar produced 3.39 MT flat product and achieved a sales of 3.24 MT showing an improvement of 8% and 6% respectively over the last fiscal Transportation by the slurry pipe line from Kirandul to Vizag Expanding its production capacity at its Hazira plant to a capacity of nearly 10 million tonnes Essar has plans to set up steel units in other parts of the country for
6.0 million tonnes at Paradip in Orissa 3.0 million tonnes in Jharkhand 3.2 million tonnes in Chhattisgarh and 6.0 million tonnes in Karnataka
Competitive moves
Ispat Industries Ltd
IIL has set up one of the largest integrated steel plants with a capacity to manufacture 3 million TPA of Hot Rolled Steel Coils The integrated steel plant uses the Converter cum Electric Arc Furnace Route (CONARC process) for producing steel IIL has the state-of-the art technology called compact strip production (CSP) process, installed for the first time in India Produces high quality and specifically very thin gauges of Hot Rolled Coil
Competitive moves
Rashtriya Ispat Nigam Ltd
First shore based integrated steel plant at Visakhapatnam in Andhra Pradesh Started with a capacity of 3 million tonnes per annum (MTPA) of liquid steel International standards with state-of-the-art technology, incorporating extensive energy saving and pollution control measures Doubled it's capacity to 6.3 MTPA of liquid steel and the new units are set to come on stream progressively from 2011-12 RINL-VSP is the first PSE & first in Steel sector in India to get BS EN 16001 (Energy Management system) certification on 28.12.10
Competitive moves
Bhushan Power & Steel Ltd
Units in Chandigarh & Derabassi, one in Kolkata and the group owns three overseas plants in Nepal, Nigeria & Sudan The company is further expanding the capacity from 1.80 MTPA to 2.30 MTPA The Company is also setting up Galvanising, Galvolume, Colour Coating, Precision Tube, Black Pipe & GI Pipe The company is going one step backward and planning to set up Iron Ore Beneficiation Plant of 6.50 MTPA, Pellet Plant of 3.8 MTPA and further value added products both flat and long
Success factors