Steel Industry

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 :-
 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 :-
 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 :-
 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 :-
 The wage rate of the laborers working in the steel industries are low
 The base for production of steel is a matured one
 The automobile industry in India, one of the main demander of steel, has a steep
upward moving slope.
 The construction as well as the infrastructure industry, big demander of steel, are
also on an upward slope due to the government policy regarding emphasis on
developmental works.
 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. Ultimately, 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. This deal is a highly expensive one and comes only after the
Mittal-Arcelor deal of thirty eight billion US Dollars. The finalization of TATA-Corus deal
has catapulted TATA Steel from 65th position to 5th position in terms of productive
capacity. 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. Some of the
relevant and striking facts about Indian Steel Industry are :-
 Capital base of Indian Steel Industry revolves around a whooping ninety

thousand crore rupees.
 The contribution of this industry to GNP of India is almost six percent.
 The weightage assigned to Indian Steel Industry in the Industrial Production is
5.13.
According to the 11th Five Year Plan (2007-2008 to 2011-2012), some of the
projections related to Indian Steel Industry are mentioned below :-
 Domestic Supply of steel would reach a whooping target of seventy seven million
tonnes which is approximately 66 % higher from 2007-08.
 Domestic demand for steel would touch a milestone of seventy million tonnes
which is approximately 4 % higher from 2007-08.
It has been noticed as well as observed that the correlation between the growth
of Indian Steel Industryand the economy is very high. As the Indian economy is
regularly reaching new highs, so the steel industry is also expected to reach new
production levels. Speculation and research works are on a record high regarding
the Indian Steel Industry. 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.
Steel Industry Mergers

Steel Industry Mergers have become inevitable in the steel industry in the entire world.
The need for such an action has arisen due to the accumulation of excess capacity in
the steel industry. 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. But this
pursuit for more and more profit led them towards over production which consequently
led to glut and remained unsold. Thus, the need of the hour is to dispense off this
excess produce. That is why Steel Industry Mergers have become that much more
important.
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. 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. 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. Thus,
the rest 80 % steel market is being fed by the small and largely fragmented local steel
firms. Hence, 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.
That is why, Steel Industry Mergers have become so rampant in these days especially
in the European as well as in the United States Of America. 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.
The most fragmented steel industry is in China and India. 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. 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.
World Steel Industries

World Steel Industries are undergoing a booming phase with all sorts of Mergers and
Acquisitions taking place all around the world. The key market players are now
subjected to fierce competition from the new companies from developing economies.
From the early 1990s, China and South Korea have emerged significantly in the World
Steel Industries. In the very recent years India is also on a winning streak in terms of
M&A. First of all, it was NRI Laxmi Mittal's Mittal Steel (listed in Netherlands) to acquire
Arcelor, many times greater than it. Then came the Indian big shot TATA Steel to
acquire Corus, the fifth largest steel company in terms of production capacity. Thus, it is
being observed that World Steel Industries is going at a very competitive pace and time
where the OECD (Organization for Economic Cooperation and Development) countries
don't have their monopoly on the steel market.
The main demand for World Steel Industries comes from the construction industry.
With the developmental works on a rise in both the developed and developing countries,
the infrastructure industry along with real estate boom, the demand for steel is rising like
anything. For example, more and more real estate companies are using steel frames for
building houses. In USA, 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. 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, Oil and
Gas industries and container industries.
On the technological front, the World Steel Industries are making rapid improvement

with the implementation of cutting-edge technologies like steel making through the
utilization of electric furnace, continuous annealing, casting of thin slabs, and vacuum
degassing.
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. Steel is nothing
but the alloy of iron and carbon. 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). The initiator of it was a person named Mr. Henry Bessemer of England. At the
same time, another person named Mr. William Kelly, a resident of United States, has
also started the production of steel and was completely an independent approach from
Mr. Bessemer. The process in which the first ever production of steel was carried out
came to be known asBessemer Process. This helped the steel industries to produce
steel in large quantities and also at comparatively low costs.
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. 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, railway industry, automobile industry, industry involved
in construction of bridges, etc. During this time period, the enhanced demand as well as
supply of steel pushed the ranking of USA to the first position, in terms of the steel
production.
The utilization of the Open-Hearth system of steel production continued approximately
from the year 1910 to the year 1960. After this, a new process called Basic Oxygen
Process came into existence which produces steel in a more quick and efficient
manner.
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.
In the History Of The Steel Industry it can be observed that the with the passage of
time, the quantity of production by USA has decreased with relation to total world
production of steel. After the 1980s, China came strongly enough and became the
largest producer of steel. India is also showing good performance in this sector in the
recent times.

Steel Industry

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Indian Steel Industry

 Infrastructure industry (both private and government projects)

In terms of quantity of production, the Indian Steel Industryhas a world ranking of

The organization structure of Indian Steel Industry can be categorized in the following

 Main Producer of steel

The first two categories have an integrated system of steel production with a productive

The third category, namely, Secondary Producer, include :-

 Producers of sponge iron

 Capital base of Indian Steel Industry revolves around a whooping ninety

Steel Industry Mergers

World Steel Industries

On the technological front, the World Steel Industries are making rapid improvement

History Of The Steel Industry

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