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Indian Steel Industry

Indian Steel Industry is going gaga in the world steel market because of the demand for steel generated around the world especially by the developing countries. There are mainly four industry types which are generating the domestic demand for Indian Steel Industry :y y y y

Infrastructure industry (both private and government projects) Construction Industry Automobile Industry Real Estate Industry In terms of quantity of production, the Indian Steel Industryhas a world ranking of seven. The first steel industry was established in the year 1953 in Rourkela in Orissa with a production capacity of one million tonnes per annum. The organization structure of Indian Steel Industry can be categorized in the following manner :-

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Main Producer of steel Other major producers of steel Secondary Producer The first two categories have an integrated system of steel production with a productive capacity of more than 0.5 metric ton. Some of the main players included in this category are TATA Steel, SAIL, etc. The third category, namely, Secondary Producer, include :-

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Producers of sponge iron Furnaces meant for induction Furnaces meant for energy optimization Electric Arc Furnace Mini Blast Furnace Re-rolling Firms Indian Steel Industry has some advantages that give it the extra sought after mileage over its peers from other countries which can be summed up as follows :-

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The wage rate of the laborers working in the steel industries are low The base for production of steel is a matured one

It has been noticed as well as observed that the correlation between the growth of Indian Steel Industryand the economy is very high. The construction as well as the infrastructure industry. According to the 11th Five Year Plan (2007-2008 to 2011-2012). As the Indian economy is regularly reaching new highs. one of the main demander of steel. TATA Steel was able to buy Corus at eight billion US dollars which makes the deal to be fixed at 455 pence per share which are needed to be paid in cash by the TATA Steel to the shareholders of Corus. are also on an upward slope due to the government policy regarding emphasis on developmental works. The weightage assigned to Indian Steel Industry in the Industrial Production is 5. big demander of steel. has a steep upward moving slope. Domestic demand for steel would touch a milestone of seventy million tonnes which is approximately 4 % higher from 2007-08. The contribution of this industry to GNP of India is almost six percent. This deal is a highly expensive one and comes only after the Mittal-Arcelor deal of thirty eight billion US Dollars.13. Some of the relevant and striking facts about Indian Steel Industry are :- y y y Capital base of Indian Steel Industry revolves around a whooping ninety thousand crore rupees. The workforce associated with the Indian Steel Industry are highly knowledgeable and experienced The most significant news regarding Indian Steel Industry is TATA Steel's acquisition of the Corus group after going through a strenuous bidding. This has not only strengthened the Indian Steel Industry's position in the Asian market but also on the productive capacity of the whole world.y y y The automobile industry in India. A metal consultancy firm based in UK has projected that the domestic production of crude steel in 2020 would reach the hundred million tonnes mark. some of the projections related to Indian Steel Industry are mentioned below :- y y Domestic Supply of steel would reach a whooping target of seventy seven million tonnes which is approximately 66 % higher from 2007-08. Steel Industry Mergers . Ultimately. Speculation and research works are on a record high regarding the Indian Steel Industry. The finalization of TATA-Corus deal has catapulted TATA Steel from 65th position to 5th position in terms of productive capacity. so the steel industry is also expected to reach new production levels.

That is why. the need of the hour is to dispense off this excess produce. it is being observed that World Steel Industries is going at a very competitive pace and time . The need for such an action has arisen due to the accumulation of excess capacity in the steel industry. First of all. The basic reason for Steel Industry Mergers has been access to latest technologies for driving down the cost of production and at the same time producing qualitative product. Thus. The most fragmented steel industry is in China and India. Thus. Then came the Indian big shot TATA Steel to acquire Corus. The main reason behind this is to decrease the cost of production of steel so that they would be able to supply steel at lower competitive prices to the world market. Steel Industry Mergers have become so rampant in these days especially in the European as well as in the United States Of America. One of the biggest deals that has taken place in the recent past is that of the acquisition of Corus by Indian heavyweight player named TATA Steel. it was NRI Laxmi Mittal's Mittal Steel (listed in Netherlands) to acquire Arcelor. many times greater than it. In the very recent years India is also on a winning streak in terms of M&A. It has been observed that the fragmentation in the steel industry all over the world is a highly fragmented one where the first five top most steelcompanies have market share of only twenty percent. World Steel Industries World Steel Industries are undergoing a booming phase with all sorts of Mergers and Acquisitions taking place all around the world. That is why Steel Industry Mergers have become that much more important. Hence. the fifth largest steel company in terms of production capacity. Thus. The real heat of this over production is being faced by the small players in the market who are finding it difficult to remain viable. But this pursuit for more and more profit led them towards over production which consequently led to glut and remained unsold. China and South Korea have emerged significantly in the World Steel Industries. the consolidation of the steel market has become the need of the hour for the steel companies especially the ones from USA to take on the Asian steel market. This is bringing huge opportunity for the big players to acquire these small players at most cost effective prices. MThe most important fact that has come into the fore is the market share that has been controlled by the first five top most companies. the rest 80 % steel market is being fed by the small and largely fragmented local steel firms.Steel Industry Mergers have become inevitable in the steel industry in the entire world. This over capacity has taken place after the most rewarding years to the steel industry when the percentage of profit rose to around ninety percent. The key market players are now subjected to fierce competition from the new companies from developing economies. From the early 1990s.

On the technological front. automobile industry. Bessemer. etc. Henry Bessemer of England.where the OECD (Organization for Economic Cooperation and Development) countries don't have their monopoly on the steel market. But the History Of The Steel Industry in the modern times was initiated during the medium half of nineteenth century (during 1850s to be precise). in terms of the steel production. the infrastructure industry along with real estate boom. it had been observed in the early 1990s that the use of steel for house building has increased by nearly five times in just one year. . Steel is nothing but the alloy of iron and carbon. the demand for steel is rising like anything. industry involved in construction of bridges. a resident of United States. railway industry. Oil and Gas industries and container industries. History Of The Steel Industry was enriched and modernized through the introduction of Open-Hearth process of steel production which made the industries to produce steel out of domestic iron ores. This process was first adopted by the steel industries situated in United States Of America in the year 1888. another person named Mr. During this time period. has also started the production of steel and was completely an independent approach from Mr. History Of The Steel Industry History Of The Steel Industry dates back to the ancient times in Armenia which is approximately around three thousand and five hundred Before Christ. William Kelly. This helped the steel industries to produce steel in large quantities and also at comparatively low costs. For example. the World Steel Industries are making rapid improvement with the implementation of cutting-edge technologies like steel making through the utilization of electric furnace. casting of thin slabs. The automobile industry is also coming up fast as a potential demander for World Steel Industries because from a research it has been found out that the use of steel in the vehicles would cause the weight of the same to lessen by almost twenty five percent. The other industries who demand steel industries involve appliance industries. continuous annealing. At the same time. the enhanced demand as well as supply of steel pushed the ranking of USA to the first position. In USA. This time saw rapid innovations in the processes of steel production which got its impetus from the increased want for steel from various industries namely. The process in which the first ever production of steel was carried out came to be known asBessemer Process. and vacuum degassing. The initiator of it was a person named Mr. With the developmental works on a rise in both the developed and developing countries. more and more real estate companies are using steel frames for building houses. The main demand for World Steel Industries comes from the construction industry.

. the quantity of production by USA has decreased with relation to total world production of steel. India is also showing good performance in this sector in the recent times. If someone goes through the History Of The Steel Industry then he or she would find out that from the early 1960s a new process was incepted by the steel industry for the production of steel known as the Process of Electric ArcFurnace. This process helps these industries in production of stainless steels and also in recycling of scrap steel items. a new process called Basic Oxygen Process came into existence which produces steel in a more quick and efficient manner. China came strongly enough and became the largest producer of steel. In the History Of The Steel Industry it can be observed that the with the passage of time.The utilization of the Open-Hearth system of steel production continued approximately from the year 1910 to the year 1960. After this. After the 1980s.