INDUSTRY PROFILE

Indian steel Industry:India is the eighth largest producer of crude steel in the world, accounting for 3.37% of the global steel production in 2005. Indias finished carbon steel production grew to reach an estimated 42. 3mmt in 2005!0 " primar# producers alone contributed about 3$% whereas secondar# producers contributed the rest. %ith reference in changes in econom# Indian steel industr# is poised for massi&e e'pansion. (ramatic consumption growth o&er the last few #ears has stimulated enormous e'pansion plans, facilitated b# a relati&el# une'ploited iron ore raw material base. India is now being hailed as the new )hina, where crude steel production soared from less than *00m tonnes in *++5 to o&er 400m tonnes in 200 .,his report focuses on detailed stud# about the Indian -teel Industr#. -teel became an integral part of de&elopment. It discusses basic steel manufacturing processes li.e /last 0urnace and, 1lectric arc 0urnace, industr# &alue chain with a special reference to ma2or raw material trends and price trends of steel products. (emand 3suppl# d#namics has been discussed along with .e# growth dri&ers and 1'port!Import scenario. It also tal.s about Issues 4 challenges of the steel industr#, mergers and ac5uisitions, go&ernment policies and regulations. ,op *0 6eading 7la#ers in steel Industr# ha&e been profiled namel# -teel 8uthorit# of India 9-8I6:, ,ata -teel, 1--8; -teel and <-% -teel in this report and anal#=ed on the basis of financial and operational performance and compares their )ompetiti&e 7ositioning along with future in the domestic outloo. in the light of increasing trend in in&estments

industr# .-teel Industr# in India is on an upswing because of the strong global and domestic demand. India>s rapid economic growth and soaring demand b# sectors li.e infrastructure, real estate and automobiles, at home and abroad, has put Indian steel industr# on the global map. 8ccording to the latest report b# International Iron and -teel Institute 9II-I:, India is the se&enth largest steel producer in the world. %ith reference to de&elopment which re&ised Indian infrastructure, the origin of the modern Indian steel industr# can be traced bac. to *+53 *

when a contract for the construction of an integrated steelwor.s in ;our.ela, ?rissa was signed between the Indian go&ernment and the @erman companies 0ried Arupp und (emag 8@. ,he initial plan was an annual capacit# of 500,000 tonnes, but this was subse5uentl# raised to * million tonnes. ,he capacit# of ;our.ela -teel 7lant 9;-7:, which belongs to the -8I6 9-teel 8uthorit# of India 6td.: group, is presentl# about 2 million tonnes. 8t a &er# earl# stage the former B--; and a /ritish consortium also showed an interest in establishing a modern steel industr# in India. ,his resulted in the -o&iet!aided building of a steel mill with a capacit# of * million tonnes in /hilai and the /ritish!bac.ed construction in (urgapur of a foundr# which also has a million tonne capacit#. ,he Indian steel industr# is organi=ed in three categories i.e., main producers, other ma2or producers and the secondar# producers. ,he main producers and other ma2or producers ha&e integrated steel ma.ing facilit# with plant capacities o&er 0.5 m, and utili=e iron ore and coalCgas for production of steel. ,he main producers are ,ata -teel, -8I6, and ;ID6, while the other ma2or producers are 1--8;, I-78, and <E-6. ,he secondar# sector is dispersed and consists ofF 9*: /ac.ward lin.age from about *20 sponge iron producers that use iron ore and non!co.ing coal, pro&iding feedstoc. for steel producers" 92: 8ppro'imatel# 50 mini blast furnaces, electric arc furnaces, induction furnaces and energ# optimi=ing furnaces that use iron ore, sponge iron and melting scrap to produce steel" and 93: 0orward lin.age with about *,200 re!rollers that roll out semis into finished steel products for consumer use. ,he histor# of steel ma.ing in India can be traced bac. to 400 /) when the @ree. emperors used recruit Indian archers for their arm# who used arrowstipped with steel. Gan# more e&idences are there of Indians perfect .nowledge of steel!ma.ing long before the ad&ent of)hrist. 8rcheological finds in Gesopotamia and 1g#pt testif# to the fact that of iron and steel was .nown to man.ind for more than si' thousand #ears and that some of the best products were made in India. 8mong the widel# ! .nown relics is the iron pillar near Hutb Ginar in(elhi.,he pillar, built between 350 and 3$0 8(, did not rust so far an engineering mar&el that baffles the scientist e&en toda#. Iet another engineering feat is the famous sun temple at .onar. in ?rissa, built around *2008(, where steel structural were used for the first time in the

world. ,hese were the halc#on da#s when India flourished in all direction and when its prosperit# was a matter of en&# for the foreigners. /ut as ill luc. would ha&e it. India s prosperit# ga&e wa# to po&ert# after the ad&ent of the foreign rule. India s indigenous industr# languished because of a deliberate polic# of the colonial rulers to ma.e countr# onl# a supplier of raw materials. -teel ;ole pla#s a &ital role on the de&elopment of an# modern econom#. ,he per capita consumption of steel is generall# accepted as #ardstic. to measure the le&el of social!economic de&elopment and li&ing standards of the people. 8s such, no de&eloping countr# can afford to ignore the steel industr#

WORLD STEEL PRODUCTION IN THE 2 t! CENTUTY

?&er the course of the 20th centur#, production of crude steel has risen at an astounding rate, now fast approaching a production le&el of $00 million tons per #ear. ,oda#, it is difficult to imagine a world without steel. (uring the 20th centur#, the consumption of steel increased at an a&erage annual rate of 3.3%. In *+00, the B-8 was producing 37% of the worlds steel. %ith post war industrial de&elopment in 8sia that region now 9at the turn of the centur#: accounts for almost 40%, with 1urope 9including the former -o&iet Bnion: producing 3 % and Dorth 8merica *4.5%. -teel consumption increases when economies are growing, as go&ernments in&est in infrastructure and transport, and build new factories and houses. 1conomic recession meets with a dip in steel production as such in&estments falter. If #ou were to o&erla# the abo&e graph with a time sheet showing ma2or historical e&ents, the pea.s and dips become meaningful. Dote for e'ample the pea.s corresponding to the #ears of the two %orld %ars, followed each time b# a dip, and soon after b# strong climbs as the ma2or economies reco&ered from the war and entered new periods of prosperit# and growth, most notabl# in the *+50s and *+ 0s. ,he trend o&er the past three decades can also be seen to be in line with c#clical economic trends, with alternating periods of prosperit# and recession.JCrefK.:,hat was the period when the steel industr# de&eloped in %estern 1urope and the B-8 followed b# the -o&iet Bnion, 1astern 1urope and <apan. Lowe&er, 3

steel consumption in the de&eloped countries has reached a high stable le&el and growth has tapered off. 8fter being in the focus in the de&eloped world for more than a centur#, attention has now shifted to the de&eloping regions. In the %est, steel is referred to as a sunset industr#. In the de&eloping countries, the sun is still rising, for most it is onl# a dawn. ,owards the end of the last centur#, growth of steel production was in the de&eloping countries such as )hina, /ra=il and India, as well as newl# de&eloped -outh Aorea. -teel production and consumption grew steadil# in )hina in the initial #ears but later it pic.ed up momentum and the closing #ears of the centur# saw it racing ahead of the rest of the world. )hina produced 220.* million tonnes in 2003, 272.2 million tonnes in 2004 and 34+.3 million tonnes in 2005. ,hat is much abo&e the production in 2005 of <apan at **2.47 million tonnes, the B-8 at +3.+0 million tonnes and ;ussia at tonnes. .*5 million

"ROWTH #ND DE$ELOP%ENT OF INDUSTRY

8mongst the other newl# steel!producing countries, -outh Aorea has stabilised at around 4 !4$ million tonnes, and /ra=il at around 30 plus million tonnes. ,his brings the focus of the industr# to India. )onsidering a steel consumption of 300 .g per man per #ear to be a fair le&el of economic de&elopment, India will ha&e to come up to somewhere around 300 million tonnes, if it is to fulfil its ambitions of being a de&eloped countr#. ,hat of course is a long 2ourne# from the present production le&el of around 50 million tonnes but one must consider its past before coming to a conclusion about its potential. India was producing onl# around a million tonnes of steel at the time of its independence in *+47. /# *++*, when the econom# was opened up steel production grew to around *4 million tonnes. ,hereafter, it doubled in the ne't *0 #ears, and then it is doubling again, ma#be o&er a slightl# longer span. -teel 7roduction in India is e'pected to reach *24 million tons b# 20*2 and 275 million tons b# 2020 which could ma.e it the second largest steel ma.er. In the de&eloped countries, the trend is on consolidation of industr#. )ross!border mergers ha&e been ta.ing place for se&eral #ears. ,he focus is on technological impro&ements and new products. @loball#, the steel industr# became a billion tonne industr# in 2004. Low much more it will grow will depend primaril# on how much more steel is consumed in the de&eloping countries.

STEEL %#NUF#CTURIN" CO%P#NIES IN INDI#

,here are se&eral )ompanies who are continuousl# wor.ing in this sector and are continuousl# meeting the growing demand all o&er the countr#. M -8I6C-teel 8uthorit# of India 6imited M ,8,8 3 ,I-)? M ;DI6 M 1ssar -teel M <indal -teel M I-78, M -aesa @oa M Dippon (enro Ispat M Bsha Ispat M 6anco Industries 6imited

"O$ERN%ENT POLICIES FOR STEEL INDUSTRY

-ome of the important polic# measures ha&e been framed b# the Ginistr# of -teel and the# assist about these policies to the pri&ate companies. Important 7olic# Geasures i. In the new Industrial 7olic# announced in <ul#, *++* Iron and -teelindustr#, among others, was remo&ed from the list of industries reser&ed for the public sector and also e'empted from the pro&isions of compulsor# licensing under the Industries 9(e&elopment and ;egulation: 8ct, *+5*. ii. %ith effect from 24.5.+2, Iron and -teel industr# has been included in the list of Nhigh priorit#> industries for automatic appro&al for foreign e5uit# in&estment upto 5*%. ,his limit has been recentl# increased to *00%. iii. 7rice and distribution of steel were deregulated from <anuar# *++2. 8t the same time, it was ensured that priorit# continued to be accorded for meeting the re5uirements of small scale industries, e'porters of engineering goods and Dorth 1astern ;egion of the countr#, besides strategic sectors such as (efence and ;ailwa#s. i&.,he trade polic# has been liberalised and import and e'port of iron and steel is freel# allowed. ,here are no 5uantitati&e restrictions on import of iron and steel items, co&ered under )hapter Do. 72 of the I,)9L-: )ode. ,he onl# mechanism regulating the imports is the tariff mechanism. ,ariffs on &arious items of iron and steel ha&e drasticall# come down since *++*!+2 le&els and the go&ernment is committed to bring them down to the international le&els. In )hapter 72 there are two items &i=. 72042**0 and 72042+*0, which fall in the restricted list of imports. &. Iron 4 -teel are freel# importable as per the 1'tant 7olic#. &i. Iron 4 -teel are freel# e'portable. &ii. 8d&ance 6icensing -cheme allows dut# free import of raw materials for e'ports

. &iii. ,he floor price for seconds and defecti&es continues till date. i'. Imports of seconds and defecti&es of steel are allowed onl# through three designated ports of Gumbai, )alcutta and )hennai. '. Gandator# pre inspection certificate b# a reputed international agenc# for e&er# import consignment of seconds and defecti&es. 'i. In the union /udget 2007!0$ the import dut# on seconds and defecti&e has been further reduced from 20% to *0%.

STRUCTU#L WE#&NESSES OF INDI#N STEEL INDUSTRY

8lthough India has moderni=ed its steelma.ing considerabl#, howe&er, nearl# % of its crude steel is still produced using the outdated open!hearth process.6abour producti&it# in India is still &er# low. 8ccording to an estimate crudesteel output at the biggest Indian steelma.er is roughl# *44 tonnes per wor.erper #ear, whereas in %estern 1urope the figure is around 00 tonnes India is deficient in raw materials re5uired b# the steel industr#. Iron ore deposits are finite and there are problems in mining sufficient amounts of it. India>s hard coal deposits are of low 5ualit#. Insufficient freight capacit# and transport infrastructure impediments too hamper the growth of Indian steel industr#.

STREN"HTS OF INDI#N STEEL INDUSTRY

M M M M M 6ow labour wage rates 8bundance of 5ualit# manpower Gature production base 7ositi&e stimuli from construction industr# /ooming automobile industr#

OUTLOO&
,he outloo. for Indian steel industr# is &er# bright. India>s lower wages and fa&ourable energ# prices will continue to promise substantial costad&antages compared to production facilities in 9%estern: 1urope or the B-. It is also e'pected that steel industr# will undergo a process of consolidation since industr# pla#ers are engaged in an unfettered rush for scale. ,his is e&ident from the recent ac5uisition of )orus b# ,ata. ,he deplo#ment of modern production s#stems is also enabling Indian steel companies to impro&e the 5ualit# of their steel products and thus enhance their e'port prospects.

Ty'eF!

-tate!owned enterprise 7ublic 9D-1F -8I6:

Industry F! -teel F(unded F! *+54 Head)uarters F! Ispat /hawan, Dew (elhi, India &ey 'e('leF! ).-. Eerma 9)hairman: Re*enue :! Net in+(,eF! T(tal assetsF! E,'l(yees:We-site:4*,35 .50 crore 9B-O +.3+ billion: ,7+*.0+ crore 9B-O *.54 billion: 4 ,44+.7$ crore 9B-O *0.54 billion: *3*,+*0 9200 : www.sail.co.in

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CO%P#NY PROFILE
-teel 8uthorit# of India 6imited 9-8I6: is the leading steel!ma.ing compan# in India. It is a full# integrated iron and steel ma.er, producing both basic and special steels for domestic construction, engineering, power, railwa#, automoti&e and defense industries and for sale in e'port mar.ets. (uring struggle for independence, 7t. <awaharlal Dehru, our first 7rime

Ginister, had a &er# clear &ision about the role of -teel in the de&elopment of our countr#. 8lthough ,8,8 Iron 4 -teel )ompan# 9,I-)?: has been establishment in *+07 mar.ing the beginning of Indian -teel Industr# followed b# Indian -teel )o. 9*+*$:, the# were too small to meet the de&elopment re5uirements of a big countr# li.e ours. ,herefore, in the *st Industrial 7olic# ;esolution of the @o&t., soon after independence, @o&t. decided to establish -teel 7lants in 7ublic -ector. Lowe&er, wor. could be started at fast pace onl# in *+54, when Lindustan -teel 6td., was formed and three -teel 7lants of * G, capacit# each, were established with pro&ision of further e'pansion at /o.aro, ;our.ela and (urgapur with assistance from B--;, %est @erman# and B.A. respecti&el#. ,o impro&e the functioning of -teel Industr#, @o&t. decided to form a holding compan# during *+72, which was named as -teel 8uthorit# of India 6td., 9-8I6: and the same was incorporated on <anuar# 24, *+73, with an authori=ed capital of ;s.2000 crores. -8I6 was formed b# registration of a compan# under the companies 8ct andnot b# the 8ct of 7arliament. @o&t., decided to abandon the holding compan#concept in *+7$ and a bill was presented to the 6o. -abha. 8ccordingl#, -8I6 was again recogni=ed in the following manner

**

Lindustan -teel 6td., /o.aro -teel 6td., -alem -teel 6td., -8I6 International6td., /hilai Ispat 6td., ;our.ela Ispat 6td., (urgapur Ispat 6td., wholl# ownedsubsidiaries of -8I6 merged into it and started functioning as Bnits of -8I6 G1)?D, L-)6 and DG() become independent )ompanies and started functioning under Ginistr# of -teel. Lowe&er, Airiburu and Geghatuburu Iron ?re Gines were attached with /-6 as their )apti&e Gines. /harat ;efectories 6td. also became independent under the Ginistr# of -teeland refractor# units also came under them. ,hus, -8I6, at present, is ha&ing capacit# of *2 G, of crude steel through itsfour integrated -teel 7lants, at /o.aro, /hilai, (urgapur and ;our.ela. ,wospecial steel plants at (urgapur and -alem produce a wide range of allo# andspecial steels. Gar.eting of the products from these plants is done through acountr# wide distribution networ. consisting of a chain of -toc. Iards anddistribution networ.. -8I6 toda# is one of the largest industrial entities in India. Its strength has beenthe di&ersified range of 5ualit# steel products catering to the domestic as well asthe 1'port mar.ets and a large pool of technical and professional e'pertise. ;an.ed amongst the top ten public sector companies in India in terms of turno&er, -8I6 manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, gal&ani=ed sheets, electrical sheets, structural, railwa# products, plates, bars and rods, stainless steel and other allo# steels. -8I6 produces iron and steel at four integrated plants and three special steel plants, located principall# in the eastern and central regions of India and situated close to domestic sources of raw materials, including the )ompan#s iron ore, limestone and dolomite mines. -8I6s wide range of long and flat steel products are much in demand in the domestic as well as the international mar.et. ,his &ital responsibilit# is carried out b# -8I6s own )entral Gar.eting ?rgani=ation 9)G?: and the International ,rade (i&ision. )G? encompasses a wide networ. of 3$ branch offices and 47 stoc.#ards located in ma2or cities and towns throughout India. %ith technical and managerial e'pertise and .now!how in steel ma.ing gained

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o&er four decades, -8I6s )onsultanc# (i&ision 9-8I6)?D: at Dew (elhi offers ser&ices and consultanc# to clients world!wide. 8I6 has a well!e5uipped ;esearch and (e&elopment )entre for Iron and -teel 9;()I-: at ;anchi which helps to produce 5ualit# steel and de&elop new technologies for the steel industr#. /esides, -8I6 has its own in!house )entre for 1ngineering and ,echnolog# 9)1,:, Ganagement ,raining Institute 9G,I: and -afet# ?rgani=ation at ;anchi. -8I6s capti&e mines are under the control of the ;aw Gaterials (i&ision in )alcutta. ,he 1n&ironment Ganagement(i&ision and @rowth (i&ision of -8I6 operate from their head5uarters in)alcutta. 8lmost all -8I6s plants and ma2or units are I-? )ertified. -teel 8uthorit# of India6imited 9-8I6: is one of the largest state!owned steel ma.ers in India. %ith a turno&er of ;s.4$, $* crore, the compan# is among the top fi&e highest profit earning corporates of the countr#. It is a public sector underta.ing which trades publicl# in the mar.et is wholl# owned b# @o&ernment of India and acts li.e an operating compan#. Incorporated on <anuar# 24, *+73, -8I6 has more than *3*,+*0 emplo#ees. ,he compan#>s current chairman is ).- Eerma. %ith an annual production of *3.5 million metric tons, -8I6 is the *
th

largest steel producer in the world. -8I6 is a public sector

compan#,owned and operated b# the @o&ernment of India. 8ccording to a recent sur&e#, -8I6 is one of India>s fastest growing 7ublic -ector Bnits

OWNERSHIP #ND %#N#"E%ENT

,he @o&ernment of India owns about $ % of -8I6>s e5uit# and retains &oting control of the )ompan#. Lowe&er, -8I6, b# &irtue of its PDa&ratnaP status, en2o#s significant operational and financial autonom#

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INTE"R#TED STEEL PL#NTS

./0(1ar( Steel Plant 20SL3 in 4!ar1!and /o.aro -teel 7lant ! the fourth integrated plant in the 7ublic -ector ! started ta.ing shape in *+ 5 in collaboration with the -o&iet Bnion. It was originall# incorporated as a limited compan# on 2+th <anuar# *+ 4, and was later merged with -8I6, first as a susidiar# and then as a unit, through the 7ublic -ector Iron 4 -teel )ompanies 9;estructuring 4 Giscellaneous 7ro&isions: 8ct *+7$. ,he construction wor. started on th 8pril *+ $. ,he 7lant is hailed as the countr#s first -wadeshi steel plant, built with ma'imum indigenous content in terms of e5uipment, material and .now!how. Its first /last 0urnace started on 2nd ?ctober *+72 and the first phase of *.7 G, ingot steel was completed on 2 th 0ebruar# *+7$ with the commissioning of the third /last 0urnace. 8ll units of 4 G, stage ha&e alread# been commissioned and the +0s> modernisation has further upgraded this to 4.5 G, of li5uid steel. ,he new features added in modernisation of -G-!II include two twin!strand slab casters along with a -teel ;efining Bnit. ,he -teel ;efining Bnit was inaugurated on *+th -eptember, *++7 and the )ontinuous )asting Gachine on 25th 8pril, *++$. ,he modernisation of the Lot -trip Gill saw addition of new features li.e high pressure de! scalers, wor. roll bending, h#draulic automatic gauge control, 5uic. wor. roll change, laminar cooling etc. Dew wal.ing beam reheating furnaces are replacing the less efficient pusher t#pe furnaces. 8 new h#draulic coiler has been added and two of the e'isting ones re&amped. %ith the completion of Lot -trip Gill modernisation, /o.aro is producing top 5ualit# hot rolled products that are well accepted in the global mar.et. /o.aro is designed to produce flat products li.e Lot ;olled )oils, Lot ;olled 7lates, Lot ;olled -heets, )old ;olled )oils, )old ;olled -heets, ,in Gill /lac. 7lates 9,G/7: and @al&anised 7lain and )orrugated 9@7C@): -heets. /o.aro has pro&ided a strong raw

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material base for a &ariet# of modern engineering industries including automobile, pipe and tube, 67@ c#linder, barrel and drum producing industries. Pe('le - T!e ,(*in5 6(r+e /o.aro -teel &alues its people as the fulcrum of all organisational acti&ities. ,he saga of /o.aro -teel is the stor# of /o.aroans erecting a gigantic plant in the wilderness of )hhotanagpur, reaching milestones one after another, sta&ing off stiff challenges in the liberalised era, modernising its facilities and inno&ating their wa# to the top of the heap Dire+ti(ns /o.aro -teel is wor.ing towards becoming a one!stop!shop for world!class flat steel in India. ,he modernisation plans are aimed at increasing the li5uid steel production capacit#, coupled with fresh rolling and coating facilities. ,he new facilities will be capable of producing the most premium grades re5uired b# the most discerning customer segments./rand /o.aro will signif# assured 5ualit# and deli&er#, offering &alue for mone# to the customers.

2/Dur5a'ur Steel Plant 2DSP3 in West 0en5al -et up in the late 50>s with an initial annual capacit# of one million tonnes of crude steel per #ear, the capacit# of (urgapur -teel 7lant 9(-7: was later e'panded to *. million tonnes in the 70>s. 8 massi&e modernisation programme was underta.en in the plant in earl# +0>s, which, while bringing numerous technological de&elopments in the plant, enhanced the capacit# of the plant to 2.0$$ million tonnes of hot metal,*.$ million tonnes crude steel and *.5$ million tonnes saleable steel. ,he entire plant is co&ered under I-? +00*F 2000 5ualit# management s#stem. ,he moderni=ed (-7 now has state!of 3the!art technolog# for 5ualit# steel ma.ing. ,he moderni=ed units ha&e brought about impro&ed producti&it#, substantial impro&ement in energ# conser&ation and better 5ualit# products. (-7s -teel Ga.ing comple' and the entire mills =one, comprising its /looming 4 /illet Gill, Gerchant Gill, -.elp Gill,

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-ection Gill and %heel 4 8'le 7lant, are co&ered under I-?F +002 5ualit# assurance certification. %ith the successful commissioning of the moderni=ed units, (-7 is all set to produce 2.0$$ million tones of hot metal, *.$ million tones of crude steel and *.5$ million tones of saleable steel annuall#.

7;?(B),!GIQ Gerchant 7roducts -tructural -.elp %heels 4 8'les -emis ,otal -aleable steel L(+ati(n

,?DD1-C8DDBG 2,$0,000 2,07,000 *,$0,000 5$,000 $, *,000 *5,$ ,000

-ituated at a distance of *5$ .m from )alcutta, its geographical location is defined as 230 27> Dorth and $$0 2+> 1ast. It is situated on the ban.s of the (amodar ri&er. ,he @rand ,run. ;oad and the main )alcutta!(elhi railwa# line pass through (urgapur. En*ir(n,ent +(ntr(l (urgapur -teel 7lant has alwa#s made relentless efforts to maintaining a health# and clean en&ironment. ,he units in (-7 are pro&ided with necessar# pollution control facilities and the li5uid effluents and chimne# emissions from the plant are well within norms. (-7 has underta.en massi&e afforestation to maintain clean en&ironment. -ome 3,2 acres of land ha&e been co&ered with *4 la.h plantations. In order to de&elop health# awareness about the en&ironment amongst the #ounger generation, eco!clubs ha&e been formed in (-7 schools

Centre 6(r Hu,an Res(ur+e De*el(',ent

(-7 has alwa#s attached ma'imum importance on proper training and de&elopment of its emplo#ees. Its )entre for Luman ;esource (e&elopment has all modern facilities including the state!of!the!art 1lectrical and 1lectronics laborator#, L#draulics and 7neumatics laborator# and wor.shop for effecti&e training and de&elopment of its emplo#ees. C(,,uni+ati(n ,he 7ublic ;elations (epartment publishes monthl# house 2ournals in 1nglish, /engali and Lindi for e'tensi&e information of compan# affairs to the emplo#ees. (-7 also has an in!house ,E studio 9(-,E: along with all modern facilities, which telecast news and a gamut of other programs co&ering &arious aspects of plant and township acti&ities

7/R(ur1ela Steel Plant 2RSP3 in Orissa ;our.ela -teel 7lant 9;-7:, the first integrated steel plant in the public sector in India, was set up with @erman collaboration with an installed capacit# of * million tonnes. -ubse5uentl#, its capacit# was enhanced to *.+ million tonnes. ,he plant was modernised in the mid!*++0s with a number of new units ha&ing state!of! the!art facilities. Gost of the old units were also re&amped for effecting substantial impro&ement in the 5ualit# of products, reducing cost and ensuring cleaner en&ironment. ;-7 was the first plant in India to incorporate 6( technolog# of steel ma.ing. It is also the first steel plant in -8I6 and the onl# one presentl# where *00% of slabs are produced through the cost!effecti&e and 5ualit#!centeric continuous casting route.

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;-7 presentl# has the capacit# to produce 2 million tonnes of hot metal, *.+ million tonnes of crude steel and *. 7 million tonnes of saleable steel. It is -8I6s onl# plant that produce silicon steels for the power sector, high 5ualit# pipes for the oil 4 gas sector and tin plates for the pac.aging industr#. Its wide and sophisticated product range includes &arious flat, tubular and coated products 8lmost all ma2or units of the plant, including its 7ersonnel (epartment and -teel ,ownship, are certified to I-?F+00* standards. ;-7s -ilicon -teel Gill, -intering 7lant II, 1n&ironment 1ngineering (epartment, 7late Gill, Lot -trip Gill, 1;% and -% 7ipe 7lants, -pecial 7late 7lant as well as -teel ,ownship ha&e been awarded I-?F*400* certification for 1n&ironment Ganagement.

L(+ati(n

;our.ela -teel 7lant is located in the north!western tip of ?rissa and at the heart of a rich mineral belt. /eing situated on the Lowrah!Gumbai rail mainline, ;our.ela is &er# well connected with most of the important cities of India. ,he nearb# airports are ;anchi 9*73 .m:, /hubaneswar 937$ .m: and Aol.ata 94*3 .m:. ;our.ela also has an airstrip maintained b# ;-7.

8/0!ilai Steel Plant 20SP3 in C!!attis5ar! Dine ! times winner of 7rime Ginister>s ,roph# for best Integrated -teel 7lant in the countr#, /hilai -teel 7lant 9/-7: is India>s sole producer of rails and hea&# steel plates and ma2or producer of structural. ,he plant is the sole supplier of the countr#>s longest rail trac.s of 2 0 metres. %ith an annual production capacit# of 3.*53 G, of saleable

*$

steel, the plant also speciali=es in other products such as wire rods and merchant products. -ince /-7 is accredited with I-? +00*F2000 Hualit# Ganagement -#stem -tandard, all saleable products of /hilai -teel 7lant come under the I-? umbrella. 8t /hilai I-0F*400* has been awarded for 1n&ironment Ganagement -#stem in the 7lant, ,ownship and (alli Gines. It is the onl# steel plant to get certification in all these areas. ,he 7lant is accredited with -8F $000 certification for social accountabilit# and the ?L-8-!*$00* certification for ?ccupational health and safet#. ,hese internationall# recognised certifications add &alue to /hilai>s products and helps create a place among the best organisations in the steel industr#. 8mong the long list of national awards it has won, /hilai has bagged the )II!I,) -ustainabilit# award for three consecuti&e #ears. PRODUCT-%I9 -emis ;ail 4 Lea&# -tructural Gerchant7roducts 98ngles, )hannels, ;ound 4 ,G, bars: %ire ;ods 9,G,, 7lain 4 ;ibbed: 7lates 9up to 3 00 mm wide: ,otal -aleable steel TONNES:#NNU% 5,33,000 7,50,000 5,00,000 4,20,000 +,50,000 3*,53,000

SPECI#L STEEL PL#NTS *.8llo# -teel 7lant 98-7: in %est /engal 2.-alem -teel 7lant 9--7: in ,amil Dadu

*+

3.Eis&es&ara#a Iron 4 -teel 7lant 9EI-6: in Aarnata.a SU0SIDI#RIES *.Indian Iron 4 -teel )ompan# 6imited 9II-)?: in %est /engal 2.Gaharashtra 1lectrosmelt 6imited 9G16: in Gaharashtra OTHER UNITS ;aw Gaterial (i&ision 9;G(: at Aol.ata, %est /engal )entral Gar.eting ?rgani=ation 9)G?: at Aol.ata, %est /engal -8I6 )onsultanc# (i&ision 9-8I6)?D: at Dew (elhi ;esearch 4 (e&elopment )entre for Iron 4 -teel 9;()I-: at ;anchi, <har.hand )entre for 1ngineering 4 ,echnolog# 9)1,: at ;anchi, <har.hand Ganagement ,raining Institute 9G,I: at ;anchi, <har.hand )entral 7ower ,raining Institute 9)7,I: at ;our.ela, ?rissa -8I6 -afet# ?rgani=ation 9--?: at ;anchi, <har.hand 1n&ironment Ganagement (i&ision 91G(: at Aol.ata, %est /engal @rowth (i&ision 9@(: at Aol.ata, %est /engal )entral )oal -uppl# ?rgani=ation 9))-?: at (hanbad, <har.hand

4OINT $ENTURE:-

20

-8I6 has promoted 2oint &entures in different areas ranging from power plants to 1!commerce. N(rt! 0en5al D(l(,ite Li,ited 8 2oint &enture between -8I6 and %est /engal Gineral (e&elopment)orporation ltd on 50F50 basis was formed for de&elopment of <a#anti(olomite (eposit, <alpaiguri for suppl# of (olomite to (-7 and otherplants. R(,elt-S#IL 2India3 Ltd ;omelt ,echnolog# de&eloped b# ;ussia for reducing of iron bearingmaterials, which is carried out with carbon in single 8 2oint &enture between-8I6, Dational Gineral (e&elopment )orporation 9DG(): and ;ussianpromoters for mar.eting stage reactor with the use of o'#gen. 0!ilai 4P Ce,ent Ltd -8I6 has also incorporated a 2oint &enture compan# with GCs <aipra.ash8ssociates 6td to set up a 2.2 G, cement plant at /hilai. 6i.el# tocommence operations b# Garch>20*0.

S#IL-PRODUCTS
H(t r(lled +(ils;s!eets; and s1el'

2*

Lot rolled coils, sheets and s.elp 9narrow coil: are thelargest product categor# of the compan#in terms of both sales &olume and re&enue. Lot rolled coils are primaril# used for ma.ing pipes and ha&e man# direct industrial and manufacturing applications, including the construction of tan.s, railwa# cars, bic#cle frames, ships, engineering and militar# e5uipment and automobile and truc. wheels, frames and bod# parts. Lot rolled coils are also used as feedstoc. for cold rolling mills where the#undergo further processing. Lot rolled coils are also deli&ered to the compan#s onw cold rolling mills and silicon sheet mill and pipe plantin awide range of widths and thic.nesses as the feedstoc. for higher &alue !added steel products.,he compan#is the largest producer of hot rolled coils, sheets and s.elpin India Se,i Finis!ed Pr(du+ts ,he compan# produces semi!finished products, including blooms, billets and slabs, which are con&ertedinto finished productsin the compan#s processing plant and to alesser e'tent, sold to re!rollers for con&ersion to finished products Plates -teel plates are used mainl# for the manufacturer of bridges, steel structures, ships,large diameter pipes, storage tan.s, boilers, railwa# wagons and pressure &essels.,he compan#is also produces weather proof steel plates for the construction of railcars.,he compan# currentl# the largest producer of steelplates in India w ith a domestic mar.et share of more than $0 per cent for these products.,he compan#is the onl# producer of wide and hea&# plate production in india

C(ls r(lled Pr(du+ts )old rolling of hot rolled products produces a superior surface finish, impro&es the ph#sicalproperties of the steel, such as tensile strength, and reducesits thic.ness to

22

precise gauges. 8s a result, cold rolled products generall# command higher prices than hot rolled products.,he products of the cold rolling mill include cold rolled sheets and coils, which are used primaril# for precision tubes, containers, bic#cles, furniture and for use b# the automobileindustr# to produce car bod# panels. )old rolled products are also used for further processing,including for colour coating, gal&aniing and tinning. ,he compan# also produces further processed cold rolled products,including gal&anied sheets and tin plates.

Rail<ay Pr(du+ts ;ailwa# productsincluding rails, wheels and a'les, sleeper and fish plates 9which are used to connect and strengthen rails: are produced through a process of hot rolling bloomsin the finishing mills and forgingingots and bloomsin the finishing mills and forgingingots and bloomsin the forging press or hammer. ;ailwa# products are used primaril# to upgrade and e'pand the e'isting railwa# networ.ing India.

0ars and R(ds ,he compan# produces steel bars and rods through a process of hot rolling billets in the finishing mills. ;einforcement steel and wire rods are primaril# used b# the construction industr#. ,he compan# is one of the largest producers of reinforcement bars in India which are primaril# sold to the construction industr#

S#IL = INTO THE FUTURE

%(dernisati(n > E?'ansi(n

23

-8I6, is in the process of moderni=ing and e'panding its production units, raw material resources and other facilities to maintain its dominant position in the Indian steel mar.et. ,he ob2ecti&e is to achie&e a production capacit# of 2 .2 G,78 of Lot Getal from the base le&el production of *4. G,78 9200 !07 3 8ctual:.

# ne< unit +(,in5 u' at ISP ?rders for all ma2or pac.ages of I-7 4 --7 and part pac.ages of /-6, /-7, ;-7 4 (-7 1'pansion ha&e been placed and these pac.ages are in &arious stages of implementation O-@e+ti*e (6 E?'ansi(n Plan

*00% production of steel through /asic ?'#gen 0urnace 9/?0: route *00% processing of steel through continuous casting Ealue addition b# reduction of semi!finished steel 8u'iliar# fuel in2ection s#stem in all the /last 0urnaces -tate!of!art process control computeri=ation C automation -tate!of!art online testing and 5ualit# control 1nerg# sa&ing schemes -econdar# refining 8dherence to en&ironment norms

Pr(du+ti(n Tar5et ,he production target of hot metal, crude steel and saleable steel after 1'pansion is indicated belowF

24

2%illi(n t(nne 'er annu,3 /ase )ase Item Lot Getal )rude -teel -aleable -teel 9200 !07: 8ctual *4. *3.5 *2. 8fter 1'pansion 2 .2 923.5: 24. 92*.4: 23.* 920.2:

0igures in brac.et indicate capacit# after implementation of ongoing phase of modernisation and e'pansion to be completed b# 20*2!20*3

Ca'ital E?'enditure8mount spent on 1'pansion 7lan and other )apital -chemes of -8I6 9incl. subsidiar#: during last 3 #ears are as followsF Year 2007!0$ 200$!0+ 200+!*0 T(tal 2*$* 5233 *0 0 2Rs/:Cr(re3

$ISION

R,o be a respected world class corporation and the leader in Indian steel business in 5ualit#, producti&it#, profitabilit# and customer satisfactionS

25

CREDO %e build lasting relationships with customers based on trust and mutual benefit %e uphold highest ethical standards in conduct of our business. %e create and nurture a culture that supports fle'ibilit#, learning and is proacti&e to change %e chart a challenging career for emplo#ees with opportunities for ad&ancement and rewards. %e &alue the opportunit# and responsibilit# to ma.e a meaningful difference in people>s li&es.

S#IL - %#R&ETIN" Fun+ti(ns (6 ,ar1etin5 De'art,ent

*. ,o monitor the orders issued b# )G?, -o that these orders can fulfilled in time. 2.7ut pressure on )G?, to get orders for an underutili=ed mill.

3.,o sell all the secondar# products directl# i.e. directl# b# /-6 and b# )G?. 4. ?n da# to da# basis it ta.es care of the dispatches i.e. dail# dispatch are chec.ed.

P(li+ies (6 %ar1etin5
Gar.eting 7lanning has responsible function in the wor.ing of mar.eting department. 8ll the ris.# de&elopments, ta.ing out solution to cripple Nsituations, this section carries out product pricing and related acti&ities, some of the programmes, policies and procedures are as followsF! I: 7ositioning the product a &alue based place in customer mind. II: 0inali=e annual sales plan and 5uantit#, monthl#, wee.l#, and dail# rolling programme of ;olling mills in consultation with )G? and mills. ,his planis based on the sales forecast recei&e from <7B -76C Iron and steel controller. III:?ptimi=ing the product!mi' b# proper utili=ation of a&ailable stoc.s. IE:;ecei&ing 1n5uiries and complaints, cancellation of orders etc. E:)oordinating the wor.s of mills and traffic department so as to ma'imi=e dispatches. EI:)o!ordinations with )G? from stages of en5uir#, for e'ports, de&elopment of new 7rofiles, sections, modification of product scheduling till the orders are completed. EII:(e&elopment of new 5ualities of steel EIII:7eriodical mar.et sur&e#s of products to anal#=e the mar.et position

S#IL-STEEL E9PORTS Internati(nal Trade Di*isi(n

International ,rade (i&ision 9I,(: of -8I6 at Dew (elhi 3 an I-? +00*F2000 accredited unit of )G?, underta.es e'ports of Gild -teel products and 7ig Iron from -8I6s fi&e 27

integrated steel plants. 1&er read# to meet the e'acting demands of its global customers, I,( maintains a close liaison with customers and the production units to cater to the customi=ed re5uirements of its customers both in terms of 5ualit# and si=es. -8I6s product bas.et includes products such as ;ails, -tructurals, Gerchant 7roducts, %ire ;ods, ;e!bars, 7late Gill 7lates, Lot ;olled )oils, Lot ;olled 7lates C -heets, )old ;olled steels, @al&anised steels, )old ;olled Don ?riented 9);D?: coils, )he5uered 7lates, -labs, /illets and 7ig Iron besides cut!to!si=e Lot ;olled 8nd )old ;olled materials through its <oint Eenture -er&ice )entre. ?ur ma2or products are also co&ered b# stringent certifications such as )1 mar.ing, ,BE and TB mar. re5uired b# sophisticated end uses in 1uropean mar.ets. I,( has successfull# established -8I6s brand name globall#. 8mong the notable destinations for -8I6 products are <apan, 7.;. of )hina, Aorea, ,aiwan, Eietnam, 7hilippines, -ingapore, Gala#sia, ,hailand, Indonesia, 8ustralia, Ge'ico, 1urope 9BA, @erman#, 0rance, /elgium, Ital#, -pain, Detherlands, 7ortugal:, -udan, ?man, B81 and the neighbouring countries such as G#anmar, /angladesh, -ri 6an.a and Depal. ,he critical function of ensuring efficient shipment of e'port materials is performed b# ,ransport 4 -hipping (i&ision 9,4-: Lead5uartered at Aol.ata. ,4- has branch offices at Laldia, 7aradip and Ei=ag ports

S#IL - RE#CHIN" OUT TO "LO0#L %#R&ETS

-teel 8uthorit# of India 6imited 9-8I6: is Indias largest steelma.er and one of the worlds leading steel producer with an annual turno&er of ;s 45, 555 crore in 07!0$. 8nnuall# it produces o&er *2 million tonnes of &arious steel products, to meet the

2$

e'acting re5uirements of both domestic as well as o&erseas customers. Its &ision for the future, encompasses a presence in ma2or mar.ets of the world /eing a manufacturer of world!class steel products, -8I6 offers to its customers a wide product profile matched with e'cellent ser&ice, and a choice ranging from widel# traded items li.e Lot ;olled )oils to specialt# products li.e );D? steel -8I6s products ha&e found read# acceptance in about 75 countries the world o&er. 7roducts e'ported to &arious countries include Gild -teel /illets, -labs, %ire rods, -tructurals, Lot!rolled 7latesC)oilsC-heets, )old!rolled )oilsC-heets, ;ails, );D? -teels and 7ig Iron. -8I6s Gild -teel and 7ig Iron e'ports are underta.en b# its International ,rade (i&ision 9I,(: based in Dew (elhi

PERFOR%#NCE #PPR#IS#L OF S#IL

8lmost e&er# organi=ation in one wa# or another goes through a periodic ritual, formall# or informall#, .nown as performance appraisal. ,he formal performance appraisal has been called a tool of management, a control process, an acti&it# and a critical element in

2+

human resources allocation. Bses for performance appraisal ha&e included e5ual emplo#ment opportunit# considerations, promotions, transfer and salar# increases. 7rimaril# performance appraisal has been considered an o&erall s#stem for controlling an organi=ation. 7erformance appraisal has also been called an audit function of an organi=ation regarding the performance of indi&iduals, groups and entire di&isions. 7erformance appraisal ma# be defined as a structured formal interaction between a subordinate and super&isor, that usuall# ta.es the form of a periodic inter&iew 9annual or semi!annual:, in which the wor. performance of the subordinate is e'amined and discussed, with a &iew to identif#ing wea.nesses and strengths as well as opportunities for impro&ement and s.ills de&elopment. 8lmost e&er# organi=ation in one wa# or another goes through a periodic ritual, formall# or informall#, .nown as performance appraisal.7erformance appraisal has been called man# things. ,he formal performance appraisal has been called a tool of management, a control process, an acti&it# and a critical element in human resources allocation. Bses for performance appraisal ha&e included e5ual emplo#ment opportunit# considerations, promotions, transfer and salar# increases. 7rimaril# performance appraisal has been considered an o&erall s#stem for controlling an organi=ation. 7erformance appraisal has also been called an audit function of an organi=ation regarding the performance of indi&iduals, groups and entire di&isions.

)?D)6B-I?D
,hroughout this term paper I find the details about steel authorit# of India limited9-8I6: and about -teel production, @rowth,retail and all about the imports and e'ports.-8I6 is

30

the leading steel!ma.ing compan# in India and it produce steel in large 5uantit# for domestic construction, engineering, power, railwa#, automoti&e and defense uses @o&ernment also set the policies for this limited authorit#.It /uilds a large amount of steel production with all its itegrated Bnits li.e wise /o.aro -teel 7lant 9/-6: in <har.hand, .(urgapur -teel 7lant 9(-7: in %est /engal, .;our.ela -teel 7lant 9;-7: in ?rissa, and /hilai -teel 7lant 9/-7: in )hhattisgarh.It also lin. up with some 2oint &entures.

0I0LIO"R#PHY

0((1s re6erred:Aotler 7hilip, 3*

Aeller Ael&in, Aosh# 8braham, <ha Githileshwar"

C(,'any 'r(6ile www.sail.co.in www.metal2unction.com

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