Major Achievements in the Steel Sector during the last four years of UPA Government
The
Minister for Steel and Chemicals & Fertlisers Shri Ram Vilas Paswan has said
that the likely capacity achievable by 2019-20 will be over 290 million tonnes.
Addressing a Press Conference here today, he said, total investment in
the sector is expected to be Rs. 2,76,880 crore by 2012.
Minister of State for Steel Shri Jitin Prasada, Secretary Ministry of Steel
Shri R.S. Pandey, Chairman, Steel Authority of India Shri R.S. Roongta and other
senior officials were present.
I.
TRENDS IN THE STEEL SECTOR
·
India attained the position of the 5th largest crude steel producing
country in the world in 2006, as per the yearly benchmarking surveys conducted
by the International Iron & Steel Institute (IISI), an improvement over India’s international ranking of 8th position in 2003.
·
India retained its position as the World's Largest Producer of Sponge Iron.
·
Steel production
capacity in the country by the year 2012 will be nearly 124 million tonnes. India is expected to become the second largest steel producing nation
in the world by 2015.
·
Crude Steel Production grew at more than 10 % annually from 34.71 million
tonnes in 2002-03 to 53.90 million tonnes in 2007-08.
·
Production of finished steel at 55.27 million tonnes during 2007-08 as against 40.71 million tonnes in
2003-04.
·
Sponge iron grew at a CAGR of 22 % to reach a level of 18.35 million
tonnes in 2006-07 compared to 7.68 million tonnes in 2002-03.
·
Improved Capacity Utilization of Public Sector Steel Plants in from
86% in 2002-03 to 91% in 2007-08.
II.
ATTRACTING FOREIGN INVESTMENTS AND
PRIVATE SECTOR PARTICIPATION
·
Domestic
and foreign investors have shown a great deal of interest in setting up steel
capacities in the country. 193 MOUs
have been signed in various States with total planned capacity of around 243 million
tonnes and a total proposed investment of over Rs. 5.14 lakh crore. Major
investment plans in the States of Orissa, Jharkhand, Karnataka, Chhattisgarh and
West Bengal.
·
The likely
capacity achievable by 2019-20 will be over 290 million tonnes. Going by estimate of Rs. 4,000 crores investment
per million tonne of additional capacity, the sector is likely to see investment
of Rs. 2,76,880 crore by 2012 and Rs.
8,70,640 crores by 2020.
III. PERFORMANCE OF THE
PSUs UNDER THE MINISTRY OF STEEL
·
The consolidated Profit Before Tax (PBT) of PSUs under Ministry of
Steel has increased nearly four times
from Rs. 5,298 crore in 2003-04 to Rs. 20,624 crore in 2007-08.
·
Combined
contribution of Steel Ministry PSU’s and companies to
the Central and State Government Exchequers has gone up by 237% from Rs. 5,829 crore
in 2003-04 to Rs. 19,649 crore in 2007-08.
·
SAIL has become virtually debt free. Borrowings have reduced
from Rs. 8690 crore as on 1st
April 2004 to Rs. 3045 crores as on 31.03.08. Wealth of more
than Rs. 76,536 crores has been created by the company as on 31.03.2008 (through
market capitalization) as against Rs. 13,321 crores as on 31.03.2004.
·
RINL became a debt free company in October ’03 and wiped out
all accumulated losses in Jan 2006.
·
MECON became a net profit making company in 2004-05 from a loss making situation
in 2003-04. The net loss of Rs. 10.72
crore in 2003-04 became a net profit of Rs.
28.30 crore in 2007-08, representing
a 364 % turnaround in the position
from 2003-04.
·
NMDC-second PSU under Ministry of Steel to be accorded
the Navratna status in January 2008;
one of the top ten companies listed on the Bombay Stock Exchange by Market Capitalization.
·
MOIL became a Rs. 1000 crore company and a
Miniratna category–I company in 2007.
·
MSTC, a zero debt company became a Miniratna in 2005-06 became a Schedule B company in 2007-08.
IV.
EXPANSION PLANS OF THE PSUs
· SAIL and RINL are in the
midst of ambitious expansions to adopt the best technology and double their production
capacities.
· SAIL’s Rs.54000 crore expansion plan is expected
to raise its capacity to 26.2 million
tonnes per annum of crude steel production by 2010 from its present production
level of 14.6 million tones per annum.
· RINL’s expansion plan is expected to
take it present capacity of 3 Million tonnes
per annum of liquid steel production
to 6.3 Million tonnes and is expected to be completed by February
2010 at an estimated cost of around Rs. 9000 crores.
· NMDC plans to expand its present iron
ore production capacity of 30 million tonnes
to 50 million tonnes per annum by 2014-15 through-Capacity expansion of existing
mines; opening of new mines; value addition into sponge iron, pellets and steel.
Green field steel plant to be set up in Chhattisgarh.
V.
REVIVALS, RESTRUCTURING, MERGERS AND
ACQUISITIONS
Mergers
·
Merger of Indian Iron and Steel Company (IISCO) with SAIL completed
in February 2006
·
Merger of Kudremukh Iron & Steel Company (KISCO) with Kudremukh
Iron Ore Company Ltd. (KIOCL) completed during 2007.
·
Merger of Bharat Refractories Limited (BRL) with SAIL approved by
the Government on 24.04.2008.
·
Merger of Sponge Iron India Limited (SIIL) with NMDC likely to be
completed during 2008.
·
Merger of
MEL with SAIL in progress.
Revival and re-structuring
·
Kulti works of the erstwhile IISCO revived as ‘SAIL Growth Works’-
a separate unit of Steel Authority of India Limited.
·
Restructuring and revival proposal of MECON Ltd. approved at a total cost of Rs.100.72 crores during February 2007; enhancement of retirement age
of MECON employees from 58 to 60 years.
Acquitions
·
MOU signed with Steel Complex Ltd.,
Calicut, Kerala for its revival. SAIL will acquire 50% shares in SCL.
·
Following
under process and likely to be completed shortly:
·
Acquisition
and merger of Neelachal Ispat Nigam Ltd.(NINL) by SAIL =
·
Acquisition of National Iron &
Steel Company Ltd. (NISCO) by SAIL
Financial aid for PSUs
·
Rs. 30.46 crore as Non –plan Assistance for clearing
outstanding wages/salaries and statutory
dues to BRL and Rs. 21.44 crore to HSCL released by the Ministry in December 2006.
·
Rs. 35 crore and Rs. 1 crore respectively
provided for restructuring and revival of HSCL and Bird Group of Companies
in the Budget for 2008-09
VI.
RURAL DISTRIBUTION NETWORK OF STEEL
·
A decision
was taken to have at least one dealer in
each district in order to make available steel items to common man. SAIL and
RINL are expanding their distribution networks at a fast pace.
·
SAIL has 1897 dealers
as on 31.03.2008 in place covering 602
districts in the country. RINL has appointed 141 district level dealers so far.
·
To safeguard
the interests of the common man in
accordance with the UPA’s Common Minimum Programme, the steel PSUs have made available
items of common steel consumption in the rural areas through their dealer network
at the same price as applicable in Metros.
This is providing relief of about Rs.
600 – 1000 per tonne to the individual customer in the rural areas.
VII.
CORPORATE SOCIAL RESPONSIBILITY
·
All profitable Steel PSU’s have earmarked at least 2% of their distributable
surplus for CSR activities.
·
Steel plants
to adopt villages around their plant and as part of CSR, help develop these villages
as model steel villages. SAIL has selected
16 villages as Steel Villages in the
vicinity of the steel plants, RINL has adopted one village as a model steel village.
·
CSR identified
as an important parameter in the MOUs
drawn up by all the PSUs with the Ministry for 2007-08 , CSR activities monitored
closely by the Ministry.
·
Total Budget of Rs. 230 crore
allocated for carrying out CSR activities by the Steel Ministry PSUs during 2007-08.
·
155 villages are being developed as
‘Model Villages’ under CSR activities
by SAIL, SAIL (79), NMDC(66),
MOIL(5) & RINL(5). These villages will be developed and provided with facilities
like roads, electricity, water, schools, community centers etc.
·
More than
400 Health/Medical camps organized by SAIL
and other PSUs covering more than 5 lakh people in
11 states (Bihar, Jharkhand, Chattisgarh, Orissa, West Bengal, Tamil Nadu, Karnataka,
Maharashtra, Madhya Pradesh, Haryana, Himachal Pradesh) providing free health check-up, pathological laboratory treatment,
common medicine, immunization, etc.
·
SAIL, NMDC and RINL contributed Rs. 5 crore, Rs. 4 crore and Rs.
2 crore respectively towards the flood relief measures in 2007.
VIII.
PROMOTING STEEL USAGE, FACILITATING
GROWTH OF THE STEEL SECTOR
·
A National Steel Promotion Campaign
has been launched by the Hon’ble Steel Minister on 20th March, 2007 to create
mass awareness about common uses of steel and raise per capita consumption of
Steel to International Standards. This promotion campaign is supported
by SAIL, RINL, TATA Steel, JSW Ltd., Jindal Steel, Essar Steel and Ispat Limited.
·
Forum of
Steel Consumer
Council to facilitate regular interaction
of producers and consumers.
·
Constitution of Steel Pricing Monitoring
Committee (SPMC): A Steel Price Monitoring
Committee has been constituted in the Ministry of Steel. The Committee monitors price movements of various
categories of steel product; discuss and analyze the variations; formulate strategy
regarding future price, based on an adaptive model; and recommend strategies vis-à-vis
steel production, consumption and trading.
·
Constitution of IMG: In order to coordinate and facilitate
speedy implementation of major steel investments in the country by way of a better
coordination mechanism, the Government have approved constitution of an Inter
Ministerial Group (IMG) to monitor and coordinate issues concerning major steel
investments in the country. The IMG was constituted on 19.07.2007 and is
chaired by Secretary Steel with Secretaries of DIPP, Mines, Environment &
Forest, Road Transport & Highways, Shipping, Member (Traffic) – Railway Board
and Chief Secretaries of concerned State Government as its members. The first
meeting of the IMG took place on 30.10.2007 and thereafter it has been conducting
regular interactions through Inter-Ministerial Group as well as separately with
the various State Governments. Pursuance to the decisions held in the IMG meetings,
a number of railway projects have been sanctioned during the Railway Budget 2008-09,
particularly concerning the iron ore and steel investment regions in Orissa, Jharkhand,
Chhattisgarh and Karnataka.
·
Quality Control Order on 17 selected
steel products issued
on 12.11.2007 under which production, sale or distribution and
storage of sub-standard products would be an offence after 12 August 2008.
·
Report on ‘Utilization of Iron Ore fines’, brought out by the Ministry in September
2007. Ministry will encourage usage of iron ore fines in the country and outline
steps to promote its use.
·
Study on infrastructural deficiencies and requirements in the major steel
producing areas, particularly with reference to Orissa, Jharkhand
and Chhattisgarh has been completed.
·
For resolving Infrastructure Bottlenecks-Coordination
Committee, consisting of representatives from steel industry, Ministry of Steel
and Railway Board has been constituted.
IX.
ENSURING RAW MATERIAL SECURITY
·
The Ministry
of Steel had proposed for a Special Purpose
Vehicle (SPV) that would be promoted jointly by several public sector companies
to acquire coal mines and assets abroad. The SPV would involve the participation
of SAIL, RINL, NMDC, NTPC and Coal India Ltd.
·
SAIL, RINL,
CIL, NTPC and NMDC signed an MoU on 3rd August,
2007 for Coal
SPV. Cabinet approved this proposal on
08.11.2007. The SPV has been set up as Coal Ventures International (CVI).
The SPV’ s initial equity capital of Rs. 3,500 crores Equity contributions : SAIL – Rs. 1,000 cr.,
CIL – Rs. 1,000 cr., RINL – Rs. 500 cr., NMDC – Rs. 500 cr., NTPC – Rs. 500 cr.
X.
RESEARCH AND DEVELOPMENT
·
Financial
Assistance provided to encourage R & D activity in Iron & Steel Sector.
59 research projects of approved so far at a cost of Rs. 500 crore. Results of the completed R&D projects were gainfully
utilized by the industry wherever applicable.
·
Rs. 118
crores allocated during the 11th five year plan for promotion of R & D in
Steel Sector 11th Plan for steel sector- ‘Scheme for promotion of R&D in the Iron & Steel Sector’ with
budgetary provision of Rs. 118.00 crore.
·
‘Steel Research & Development Mission (SRDM)’ to be set up
where path breaking R&D will be
done. All major producers will fund the mission.
·
Steel Technology
Centre at IIT, Kharagpur to promote R&D in iron & steel sector approved,
at a cost of Rs.22.26 crores for 5 years.
·
Initiatives
under Clean Development Mechanism (CDM)-Host Country Approval (HCA) to 60 proposals
from the iron and steel plants in India accorded which will result in Green
House Gas abatement worth 66 million tonnes of CO2 equivalent and earn
Certified Emission Reduction(CER) units .
DNM/AT/CC
(Release ID :39111)