Topic:-Evaluation of Performance of private sector compared with public sector steel companies with special reference to TATA steel

and SAIL Subject:-Managerial Economics(ECO515)

Submitted To:Mr.Baljeet singh

Submitted By:Gagandeep Kaur B.Tech.MBA.Biotech Roll No.R77B1B47 Reg.3440070143

ACKNOWLEGMENT
I would like to express my gratitude to all those who help me a lot to complete my Term Paper. I have been greatly benefited from my teacher and friends. I am highly thankful to respected Sir Baljeet Singh for their encouragement. I like to thanks my friends who contribute immensely in my term Paper.

Contents
1.World Steel Industry:An overview....................................................................................4 2.Indian Steel Industry.........................................................................................................5 2.1 Size of the industry 2.2 Structural characteristics of Indian steel industry 3.Difference between Private limited and public limited....................................................6 4.Private Sector Companies in India....................................................................................7 4.1 Tata steel ltd. 4.2 Essar steel ltd. 4.3 JSW steel ltd. 4.4 Jindal Steel and power ltd.(JSPL) 5.Public Sector companies in India...................................................................................10 5.1 Steel authority of India ltd.(SAIL) 5.2 Maharashtra elektrosmelt ltd 5.3 Rashtriya ispat nigam ltd(RINL) 5.4 National mineral development corporation ltd, 5.5 MSTC ltd. 5.6 Bird group of companies 6.Comparison between Tata steel and SAIL......................................................................14 6.1 Production 6.2 R&D 6.3 Environment 6.4 Technology 7.Future of Indian steel Industry........................................................................................20
8.Conclusion..................................................................................................................................21 9.References..................................................................................................................................22

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 & Acquisitions deals to take place: The Mittal Steel, listed in Holland, has acquired the world's largest steel company called Arcelor Steel to become the world's largest producer of Steel named ArcelorMittal. Tata Steel of India or TISCO (as listed in BSE) has acquired the world's 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 5.5 %. 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 playersIntegrated steel producers (ISPs) and mini-mills/secondary 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 3.4% of the estimated world steel production of 1,129 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 49.350 million tonnes (Prov). Production of Pig Iron in 2006-07 is estimated to be 4.960 Million Tonnes (Prov). The share of Main Producers (i.e 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 Industry1.India is among the top 10 global suppliers of steel in the world. 2.More than 35 million tonnes of steel is produced in India per annum. 3.India is also the largest producer of sponge iron in the world. 4.This sector represents around Rs. 1 trillion of capital investments, and directly provides employment to around 0.5 million, with the integrated steel plants accounting for a 40% share.

5.The iron and steel sector also contributes around 6.2% of Indias manufactured goods exports and 4.6% 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 Indias installed capacity of crude steel. Tata Steel and Essar Steel are the major private players in the industry. The industrys 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 falling/rising prices and industry losses/profits. Integrated steel producers (ISPs)Tata Steel and SAILface 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.

Difference Between Private Limited and Public limited

The term Private Company refers to ownership of a business company in two different ways First, referring to ownership by non-governmental organizations; and second, referring to ownership of the company's 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 and/or 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), 20.5 million tonne of steel was produced by Private Sector steel units, out of the total production of 33.15 million tonne in the country.The private sector units consist of major steel producers in one hand and relatively smaller & 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.

1.TATA Steel:
Tata Steel is India's 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 4.1 million tonne is 8.2% more compared to the last year in the corresponding period and crude steel production at 3.7 million tonne is higher by 7.9% compared to the last year in first three quarters.Tata Steel is continuing with its programme of expansion of steel making capacity by 1.8 million tonne to reach the rated capacity of 6.8 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal 2010.Tata Steels 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 & R policy of the state Government. The construction work of ferrochrome project in South Africa is in full swing.The steel major has won the Prime Minister's Trophy four times. This award iinstituted by the Indian ministry of steel and awarded to the country's 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 Group's Tata Business Excellence Model.

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,The Indian Steel and Wire Products(ISWP), Lanka Special Steel, Sila Eastern Company etc

2.Essar Steel Ltd.

Essar Steel is an integrated steel producer, with operations all along the value chain. Essar Steel produces some of the worlds best steel at its state-of-the-art steel complex at Hazira, Gujarat. It is also Indias 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 Steels core manufacturing facilities are located at its steel complex in Hazira, Gujarat. The Hazira complex includes a 5.5 million tonne per annum Hot Briquetted Iron (HBI) plant, a 4.6 mtpa continuous caster slab facility, a 3.6 million tonne per annum Hot Rolled Coils (HRC) and a 1.2 mtpa cold roll mill complex with all down stream

facilities. The facilities are complemented by its own 8.0 mtpa pellet plant at Vishakapatnam and 0.4 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 4.6 million tonne per annum to 7.6 million tonne per annum. The capacity expansion programme will consist of 2 units of Corex units of 1.5 million tonne per annum each. Further value addition will be carried out by Continuous Strip Caster Mill, conventional Slab Caster Mill and a 5.2 meter Wide Plate Mill. Products All Essar Steels products are world class, meeting the highest international standards, supported by excellent marketing and service. 3.JSW Steel Ltd. JSW Steel Ltd. is a 3.8 million tonne per annum integrated steel plant, having a process route consisting broadly of iron ore beneficiation pelletisation sintering coke making iron making through blast furnace as well as Corex process steel making through BOF continuous casting of slabs hot strip rolling. The production facilities include 3.0 million tonne per annum iron ore beneficiation unit, 5.0 million tonne per annum pellet plant, 3.2 million tonne per annum sinter plant, 1.2 million tonne per annum coke ovens, 0.9 + 1.3 million tonne per annum blast furnaces, two Corex units of 0.8 million tonne per annum each, 3 X 130 t converters, three slab casters, and a 2.5 million tonne per annum hot strip mill with state-of-the-art coil box technology.JSW Steel has a distinction of being certified to ISO9001:2000 Quality management system, ISO-14001:1996 environment management system and OHSAS 18001:1999 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 Pellets Hot metal Slabs Hot Rolled coils 2003-04 3.25 1.63 1.61 1.54 2004-05 3.61 1.96 1.87 1.78 2005-06 3.80 2.40 2.25 2.10 April-dec.06 2.93 2.19 1.95 1.48

4.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 exploration/mining. The current turnover of the company is over Rs. 3,000 crore.JSPL is the worlds 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. 10,000 crore. The company is also setting up a 6 million tonne steel plant in Orissa with an investment of Rs. 13,500 crore and a 5 million tonne steel plant in Jharkhand with an investment of Rs 11,500 crore.Jindal Power Ltd., wholly-owned subsidiary of JSPL, is setting up a 1000 mega watt O.P. Jindal super thermal power plant at Raigarh, with an investment of over Rs.4,500 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.

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 etc.

Public Sector companies in India

1.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 SAIL's equity and retains voting control of the Company. However, SAIL, by virtue of its Navratna 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 Company's iron ore, limestone and dolomite mines. The company has the distinction of being Indias largest producer of iron ore and of having the countrys 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.SAIL's 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 SAIL's 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, SAIL's 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 ecommerce. NTPC SAIL Power Company Pvt. Ltd Bokaro Power Supply Company Pvt. Limited Mjunction Services Limited SAIL-Bansal Service Centre Ltd. Bhilai JP Cement Ltd

2.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 31.3.2006 was Rs. 30 crore and Rs. 24 crore respectively. SAILs holding is approximately 99.12% of the paid-up capital. Financial Performance During the year 2005-06 the company recorded a turnover of Rs. 247.33 crore (including conversion income of Rs. 171.10 crore) and made a net profit after tax of Rs. 20.97 crore. The turnover and net profit after tax of the company during April,2006 to December, 2006 were Rs. 220.26 crore (provisional) and Rs. 17.48 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 49493 32921 164

High carbon ferro manganese 51525 Silco manganese Medium manganese carbon 46712 ferro 2344

3.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 9001:2000, ISO 14001:1996 and OHSAS 18001:1999. The company has taken significant strides in the area of Corporate Social Responsibility.

Production Performance (in million tonne)

Items Hot metal Liquid state 2004-05 3.920 3.560 2005-06 4.153 3603 2006-07(april-dec06) 3.040 2.676

Saleable Steel

3.173

3.237

2.419

4.National Mineral Development CorporationLtd.(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). Iron Ore NMDC produced 17.27 million tonne of iron ore during the year 2006-07 (up to December 2006). Domestic sales of iron ore was 15.50 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 1.78 million tonne of iron ore valued at approximately Rs. 429.80 crore. Capital Structure The authorised share capital of the company is Rs. 150 crore. The paid up equity share capital was Rs. 132.16 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(aprildec.06)

Sales/Turnover Gross Margin Profit Before Tax

2226.55 1287.49 1223.65

3710.92 2889 2770.13

2790 2455 2410

5.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 decanalised 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.2.20 crore as on 31.12.2006 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. 2.20 crore includes bonus shares issued in the year 1993-94 in the ratio 1:1.

6.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 & Saxby Limited (SSL) (e) Eastern Investments Limited (EIL) (f) Burrakar Coal Company Limited (Burrakar) (g) Borrea Coal Company Limited (Borrea)

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. 5,568 crore in fiscal 2003-04 to Rs. 11,497 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 (AprilDecember 2006) amounting to Rs.10,566.40 crore as against a combined profit before tax of Rs.8,368.75 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. 5,761 crore in 2003-04 to Rs.13,110 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), 20.5 million tonne of steel was produced by Private Sector steel units, out of the total production of 33.15 million tonne in the country. The private sector units consist of major steel producers in one hand and relatively smaller & 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 i.e. Tata Steel and SAIL lets analyse both the companies on following parameters:

(a)Production
Chart showing production of both the companies: 2007-08 APRAPRDEC07 DEC06 ACTUAL %OF %CAPACITY CURRENT UTILIZATION PRODUCTION OVER

TARGET TARGET ACTUAL TENTATIVE SAIL (i)BSP (ii)DSP (iii)RSP (iv)BSL (v)ISP (vi)ASP (vii)VISL TATA

APRAPRAPRAPRDEC07 DEC06 DEC07 DEC06 TARGET ACTUAL 3578.0 1345.0 1512.0 3001.0 345.0 113.0 119.0 3738.0 100.6 105.5 114.2 94.9 93.6 106.5 110.5 99.1 104.3 106.5 101.6 103.2 102.0 100.9 97.5 99.2 127.0 106.0 108.0 95.0 94.0 65.0 130.0 99.0 121.0 99.0 106.0 91.0 92.0 64.0 134.0 100.0

4950.0 1840.0 1813.0 4350.0 500.0 147.0 139.0 5000.0

3711.0 1358.0 1345.0 3263.0 376.0 107.0 105.0 3744.0

3732.0 1433.0 1536.0 3097.0 352.0 114.0 116.0 3709.0

TATA Steel :
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce only 4.93 (mT). For the first 3 quarters of the years company set a target of 3.744 (mT) but could produce 3.709. However for the same period in last year company produced 3.738 (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 13.739 (mT) for the year 2007-08 but it could produce only 12.6 (mT) a growth of 4% over the previous year. However for the first 3

quarters of the years company set a target of 10.265 (mT) and produced 10.380 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.

(b)Research and Development

Chart showing production of both the companies: (Rs. Crore) Name of 2004 R&D %o 2005 R&D the -05 investme f -06 investme compani Turn nt tur Turn nt es Over n over ove r 1.Steel 3180 60.55 0.1 3228 62.38 authority 0 9 0 of india ltd. 2.Tata 1603 33.72 0.2 2039 24.97 steel ltd. 3 1 9 %o f tur n ove r 0.1 9 200607(upto sept.06 ) Turnov er 17998 R&D %o investme f nt tur n ove r 34.01 0.1 9

0.1 2

11772

16.92

0.1 4

TATA Steel :
The R & 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 R&D 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 M/s Power Grid Corporation of India, Gurgaon; M/s Refcom (India) Pvt Ltd., Purulia (West Bengal); M/s Sarvesh Refractories, Rourkela; M/s Balmer Lawrie Ltd., Kolkata, and M/s Monarch Electronics, Kolkata, etc.During the year, 1998 technical papers were published/presented, besides filing of 31 patents and 29 copyrights. The scientists at the RDCIS won nine national level awards. In addition, RDCIS won the prestigious DSIR National Award 2005 for R&D achievements in New Materials given by the Ministry of Science and Technology,Government of India.

(c)Environment

TATA Steel:
Tata Steels efforts at Environment Management are well recognised. Its Steel Works in Jamshedpur, all its mines, collieries and manufacturing divisions in its out has an ISO-14001 certified service provider.locations 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.

(i)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 Steels activities. Ozone depleting substances: The Steel Works reduced use of refrigerants to 7.044 tonnes in 2003-04 as against 7.90 tonnes used during the previous year.

(ii)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.

(iii)Waste handling
Most of the solid waste generated from Steel Works is recycled or reused. 18% of the solid waste generated, amounting to approximately 5,50,000 tonnes in 2003-04 was used to fill low-lying areas and for peripheral road construction around Jamshedpur. About 2,00,000

tonnes of fly ash and bottom ash, generated in the power plants was dumped in a designated dump area.

Steel Authority of India :

Corporate environmental policy of SAIL emphasises conducting operations in an environmentally responsible manner to comply with applicable regulations and striving to go beyond. 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, reuse/recycle of the byproducts generated and conservation of energy and water. (i)Solid Waste Management During 2005-06, SAIL produced approximately 13.4 million tonne of crude steel and generated 5.6 million tonne of Blast Furnace (BF) slag, 1.3 million tonne Steel Melting Shop (SMS) slag and 0.6 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. (ii)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 1,45,521 saplings have been planted covering an area of 63.7 hectare in 2005-06 as against 77,242 nos of saplings planted in an area of 36.6 hectare in 2004-05 in and around the steel plants of SAIL.

(d)Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous casting 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: 0.3%), which suggests there is restructuring potential. TATA Steel

Tata Steel's 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 & Power, M.N. Dastur & 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 world's 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 world's most eminent metallurgist's, manufacturers of metallurgical and mining machinery and related sector's 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.We are looking at alternate technology. Corus has developed an alternate technology, which could be implemented in our greenfield plants, 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 SAIL's fortunes in the near future.The objective of the Rs.15,000-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.

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; i.e 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 200405) domestic consumption of finished steel has grown at a CAGR of 6.7 per cent. In absolute terms the consumption of finished steel expanded from 14.8 million tonnes in 1991-92 to 34.4 million tonnes in 2004-05. During the recent upturn (from 2002-03 to 2005-06) the growth in consumption has accelerated to 9.1 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.

Conclusion
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.In the final analysis, the industry scenario is expected to radically alter in the coming years. 1.However, the public sector is expanding its capacities but, it has more potential lies within to perform more than that. 2.Utilization of capacities in public sector is more than that of private sector but the performance still has to be improved. 3.Public sector has increased its profit over the year particularly in 2006-07.

4.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. 5.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. 6.SAIL has reduced the no. of accidents due to improper handling of machinery still no of accidents are more than that of TATA Steel. 7.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 i.e. 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.

References
http://www.steel.nic.in http://www.tatasteel.com http://www.sail.co.in http://www.worldsteel.org http://www.jpcindiansteel.nic.in http://www.scribd.com http://www.wikipedia.org