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A
PROJECT REPORT
ON
ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo
IN PARTIAL FULFILLMENT OF REQUIREMENT FOR AWARD OF
BACHELOR OF MANAGEMENT STUDIES
OF UNIVERSITY OF MUMBAI
BY
SUPRIYA KIRATKAR
GUIDED BY
PROFKHUSHBOO BHATIA
SUBMITTED TO
KM AGRAWAL COLLEGE
A
PROJECT REPORT
ON
ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo
IN PARTIAL FULFILLMENT OF REQUIREMENT FOR AWARD OF
BACHELOR OF MANAGEMENT STUDIES
OF UNIVERSITY OF MUMBAI
BY
SUPRIYA KIRATKAR
GUIDED BY
PROFKHUSHBOO BHATIA
SUBMITTED TO
KM AGRAWAL COLLEGE
KM AGRAWAL COLLEGE OF ARTS SCIENCE amp COMMERCE KALYAN
BACHELOR OF MANAGEMENT STUDIES
CERTIFICATE
This is to certify that MS SUPRIYA S KIRATKAR Roll No 40 has satisfactorily carried out the
project work on the topic ldquoComparative analysis of Indian private and Public sectors with
special reference to TATA Steel and SAILrdquo of TYBMS in the academic year 2012-2013
Place-Kalyan
Date-________
________________ _______________
Signature of Examiner BMS Coordinator
CERTIFICATE
I PROF Khushboo Bhatia hereby certify that Ms SUPRIYA S KIRATKAR of TYBMS
ROLL NO 40 has completed project on ldquordquo in the academic year 2012-2013 ldquoComparative analysis of
Indian private and Public sectors with special reference to TATA Steel and SAIL
The information submitted is true and original to the best of my knowledge
Place Kalyan
Date
___________________
Signature of Project Guide
DECLARATION
I hereby declare that the project entitled ldquoComparative analysis of Private and Public sector steel
companies with special reference to TATA Steel and SAILrdquo submitted to KMAGRAWAL college of
Management in partial fulfillment for the Award of Master of Management Studies of University of Mumbai
is my Original work and does not form any part of previously conducted projects
This information has been used purely for academic purpose
SUPRIYA KIRATKAR
BMS (Marketing Management)
Date
Place Mumbai
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide PROF Khushboo Bhatia for his exemplary guidance monitoring and constant encouragement throughout the course of this thesis The blessing help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark
I also take this opportunity to express a deep sense of gratitude to TATA STEEL for their her cordial support valuable information and guidance which helped me in completing this task through various stages
I am obliged to staff members of TATA STEEL for the valuable information provided by them in their respective fields I am grateful for their cooperation during the period of my assignment
Lastly I thank almighty my parents brother sisters and friends for their constant encouragement without which this assignment would not be possible
Name
SUPRIYA KIRATKAR
CONTENTS
1) SUMMARY
2) INTRODUCTION
a) What is Private limited and Public limitedb) Indian steel Industry c) World Steel Industry An Overviewd) Private sector companies in Indiae) Public sector companies in India
3) OBJECTIVES
4) RESEARCH METHODOLOGY
a) Research designb) Data collection method
5) DATA ANALYSIS
Comparison between TATA Steel and Steel Authority of Indiaa) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures
Measures taken by Indian government to improve the industryNational Steel Policy 2005
6) FINDINGS
7) CONCLUSION
8) BIBLIOGRAPHY
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
A
PROJECT REPORT
ON
ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo
IN PARTIAL FULFILLMENT OF REQUIREMENT FOR AWARD OF
BACHELOR OF MANAGEMENT STUDIES
OF UNIVERSITY OF MUMBAI
BY
SUPRIYA KIRATKAR
GUIDED BY
PROFKHUSHBOO BHATIA
SUBMITTED TO
KM AGRAWAL COLLEGE
KM AGRAWAL COLLEGE OF ARTS SCIENCE amp COMMERCE KALYAN
BACHELOR OF MANAGEMENT STUDIES
CERTIFICATE
This is to certify that MS SUPRIYA S KIRATKAR Roll No 40 has satisfactorily carried out the
project work on the topic ldquoComparative analysis of Indian private and Public sectors with
special reference to TATA Steel and SAILrdquo of TYBMS in the academic year 2012-2013
Place-Kalyan
Date-________
________________ _______________
Signature of Examiner BMS Coordinator
CERTIFICATE
I PROF Khushboo Bhatia hereby certify that Ms SUPRIYA S KIRATKAR of TYBMS
ROLL NO 40 has completed project on ldquordquo in the academic year 2012-2013 ldquoComparative analysis of
Indian private and Public sectors with special reference to TATA Steel and SAIL
The information submitted is true and original to the best of my knowledge
Place Kalyan
Date
___________________
Signature of Project Guide
DECLARATION
I hereby declare that the project entitled ldquoComparative analysis of Private and Public sector steel
companies with special reference to TATA Steel and SAILrdquo submitted to KMAGRAWAL college of
Management in partial fulfillment for the Award of Master of Management Studies of University of Mumbai
is my Original work and does not form any part of previously conducted projects
This information has been used purely for academic purpose
SUPRIYA KIRATKAR
BMS (Marketing Management)
Date
Place Mumbai
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide PROF Khushboo Bhatia for his exemplary guidance monitoring and constant encouragement throughout the course of this thesis The blessing help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark
I also take this opportunity to express a deep sense of gratitude to TATA STEEL for their her cordial support valuable information and guidance which helped me in completing this task through various stages
I am obliged to staff members of TATA STEEL for the valuable information provided by them in their respective fields I am grateful for their cooperation during the period of my assignment
Lastly I thank almighty my parents brother sisters and friends for their constant encouragement without which this assignment would not be possible
Name
SUPRIYA KIRATKAR
CONTENTS
1) SUMMARY
2) INTRODUCTION
a) What is Private limited and Public limitedb) Indian steel Industry c) World Steel Industry An Overviewd) Private sector companies in Indiae) Public sector companies in India
3) OBJECTIVES
4) RESEARCH METHODOLOGY
a) Research designb) Data collection method
5) DATA ANALYSIS
Comparison between TATA Steel and Steel Authority of Indiaa) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures
Measures taken by Indian government to improve the industryNational Steel Policy 2005
6) FINDINGS
7) CONCLUSION
8) BIBLIOGRAPHY
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
KM AGRAWAL COLLEGE OF ARTS SCIENCE amp COMMERCE KALYAN
BACHELOR OF MANAGEMENT STUDIES
CERTIFICATE
This is to certify that MS SUPRIYA S KIRATKAR Roll No 40 has satisfactorily carried out the
project work on the topic ldquoComparative analysis of Indian private and Public sectors with
special reference to TATA Steel and SAILrdquo of TYBMS in the academic year 2012-2013
Place-Kalyan
Date-________
________________ _______________
Signature of Examiner BMS Coordinator
CERTIFICATE
I PROF Khushboo Bhatia hereby certify that Ms SUPRIYA S KIRATKAR of TYBMS
ROLL NO 40 has completed project on ldquordquo in the academic year 2012-2013 ldquoComparative analysis of
Indian private and Public sectors with special reference to TATA Steel and SAIL
The information submitted is true and original to the best of my knowledge
Place Kalyan
Date
___________________
Signature of Project Guide
DECLARATION
I hereby declare that the project entitled ldquoComparative analysis of Private and Public sector steel
companies with special reference to TATA Steel and SAILrdquo submitted to KMAGRAWAL college of
Management in partial fulfillment for the Award of Master of Management Studies of University of Mumbai
is my Original work and does not form any part of previously conducted projects
This information has been used purely for academic purpose
SUPRIYA KIRATKAR
BMS (Marketing Management)
Date
Place Mumbai
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide PROF Khushboo Bhatia for his exemplary guidance monitoring and constant encouragement throughout the course of this thesis The blessing help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark
I also take this opportunity to express a deep sense of gratitude to TATA STEEL for their her cordial support valuable information and guidance which helped me in completing this task through various stages
I am obliged to staff members of TATA STEEL for the valuable information provided by them in their respective fields I am grateful for their cooperation during the period of my assignment
Lastly I thank almighty my parents brother sisters and friends for their constant encouragement without which this assignment would not be possible
Name
SUPRIYA KIRATKAR
CONTENTS
1) SUMMARY
2) INTRODUCTION
a) What is Private limited and Public limitedb) Indian steel Industry c) World Steel Industry An Overviewd) Private sector companies in Indiae) Public sector companies in India
3) OBJECTIVES
4) RESEARCH METHODOLOGY
a) Research designb) Data collection method
5) DATA ANALYSIS
Comparison between TATA Steel and Steel Authority of Indiaa) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures
Measures taken by Indian government to improve the industryNational Steel Policy 2005
6) FINDINGS
7) CONCLUSION
8) BIBLIOGRAPHY
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
CERTIFICATE
I PROF Khushboo Bhatia hereby certify that Ms SUPRIYA S KIRATKAR of TYBMS
ROLL NO 40 has completed project on ldquordquo in the academic year 2012-2013 ldquoComparative analysis of
Indian private and Public sectors with special reference to TATA Steel and SAIL
The information submitted is true and original to the best of my knowledge
Place Kalyan
Date
___________________
Signature of Project Guide
DECLARATION
I hereby declare that the project entitled ldquoComparative analysis of Private and Public sector steel
companies with special reference to TATA Steel and SAILrdquo submitted to KMAGRAWAL college of
Management in partial fulfillment for the Award of Master of Management Studies of University of Mumbai
is my Original work and does not form any part of previously conducted projects
This information has been used purely for academic purpose
SUPRIYA KIRATKAR
BMS (Marketing Management)
Date
Place Mumbai
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide PROF Khushboo Bhatia for his exemplary guidance monitoring and constant encouragement throughout the course of this thesis The blessing help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark
I also take this opportunity to express a deep sense of gratitude to TATA STEEL for their her cordial support valuable information and guidance which helped me in completing this task through various stages
I am obliged to staff members of TATA STEEL for the valuable information provided by them in their respective fields I am grateful for their cooperation during the period of my assignment
Lastly I thank almighty my parents brother sisters and friends for their constant encouragement without which this assignment would not be possible
Name
SUPRIYA KIRATKAR
CONTENTS
1) SUMMARY
2) INTRODUCTION
a) What is Private limited and Public limitedb) Indian steel Industry c) World Steel Industry An Overviewd) Private sector companies in Indiae) Public sector companies in India
3) OBJECTIVES
4) RESEARCH METHODOLOGY
a) Research designb) Data collection method
5) DATA ANALYSIS
Comparison between TATA Steel and Steel Authority of Indiaa) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures
Measures taken by Indian government to improve the industryNational Steel Policy 2005
6) FINDINGS
7) CONCLUSION
8) BIBLIOGRAPHY
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
DECLARATION
I hereby declare that the project entitled ldquoComparative analysis of Private and Public sector steel
companies with special reference to TATA Steel and SAILrdquo submitted to KMAGRAWAL college of
Management in partial fulfillment for the Award of Master of Management Studies of University of Mumbai
is my Original work and does not form any part of previously conducted projects
This information has been used purely for academic purpose
SUPRIYA KIRATKAR
BMS (Marketing Management)
Date
Place Mumbai
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide PROF Khushboo Bhatia for his exemplary guidance monitoring and constant encouragement throughout the course of this thesis The blessing help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark
I also take this opportunity to express a deep sense of gratitude to TATA STEEL for their her cordial support valuable information and guidance which helped me in completing this task through various stages
I am obliged to staff members of TATA STEEL for the valuable information provided by them in their respective fields I am grateful for their cooperation during the period of my assignment
Lastly I thank almighty my parents brother sisters and friends for their constant encouragement without which this assignment would not be possible
Name
SUPRIYA KIRATKAR
CONTENTS
1) SUMMARY
2) INTRODUCTION
a) What is Private limited and Public limitedb) Indian steel Industry c) World Steel Industry An Overviewd) Private sector companies in Indiae) Public sector companies in India
3) OBJECTIVES
4) RESEARCH METHODOLOGY
a) Research designb) Data collection method
5) DATA ANALYSIS
Comparison between TATA Steel and Steel Authority of Indiaa) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures
Measures taken by Indian government to improve the industryNational Steel Policy 2005
6) FINDINGS
7) CONCLUSION
8) BIBLIOGRAPHY
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide PROF Khushboo Bhatia for his exemplary guidance monitoring and constant encouragement throughout the course of this thesis The blessing help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark
I also take this opportunity to express a deep sense of gratitude to TATA STEEL for their her cordial support valuable information and guidance which helped me in completing this task through various stages
I am obliged to staff members of TATA STEEL for the valuable information provided by them in their respective fields I am grateful for their cooperation during the period of my assignment
Lastly I thank almighty my parents brother sisters and friends for their constant encouragement without which this assignment would not be possible
Name
SUPRIYA KIRATKAR
CONTENTS
1) SUMMARY
2) INTRODUCTION
a) What is Private limited and Public limitedb) Indian steel Industry c) World Steel Industry An Overviewd) Private sector companies in Indiae) Public sector companies in India
3) OBJECTIVES
4) RESEARCH METHODOLOGY
a) Research designb) Data collection method
5) DATA ANALYSIS
Comparison between TATA Steel and Steel Authority of Indiaa) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures
Measures taken by Indian government to improve the industryNational Steel Policy 2005
6) FINDINGS
7) CONCLUSION
8) BIBLIOGRAPHY
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
CONTENTS
1) SUMMARY
2) INTRODUCTION
a) What is Private limited and Public limitedb) Indian steel Industry c) World Steel Industry An Overviewd) Private sector companies in Indiae) Public sector companies in India
3) OBJECTIVES
4) RESEARCH METHODOLOGY
a) Research designb) Data collection method
5) DATA ANALYSIS
Comparison between TATA Steel and Steel Authority of Indiaa) Productionb) Financialsc) Research and Developmentd) Environmente) Workforce and Welfare of Societyf) Technologyg) Safety measures
Measures taken by Indian government to improve the industryNational Steel Policy 2005
6) FINDINGS
7) CONCLUSION
8) BIBLIOGRAPHY
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
EXECUTIVE SUMMARY
The research ldquoComparative analysis of Indian private and Public sectors with special reference to
TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics of a
particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore 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 labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
5 Public sector has undergone retrenchment for the employees and improved has its labor
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 ie 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
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
INTRODUCTION
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
amp Acquisitions deals to take place-
The Mittal Steel listed in Holland has acquired the worlds largest steel company called Arcelor
Steel to become the worlds largest producer of Steel named Arcelor-Mittal
Tata Steel of India or TISCO (as listed in BSE) has acquired the worlds 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 55 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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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 playersmdashIntegrated steel producers (ISPs)
and mini-millssecondary 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
34 of the estimated world steel production of 1129 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 49350 million tonnes (Prov) Production of Pig
Iron in 2006-07 is estimated to be 4960 Million Tonnes (Prov) The share of Main Producers (ie 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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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 Industry-
India is among the top 10 global suppliers of steel in the world
More than 35 million tonnes of steel is produced in India per annum
India is also the largest producer of sponge iron in the world
This sector represents around Rs 1 trillion of capital investments and directly provides employment
to around 05 million with the integrated steel plants accounting for a 40 share
The iron and steel sector also contributes around 62 of Indiarsquos manufactured goods exports and
46 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 Indiarsquos installed capacity of crude steel
Tata Steel and Essar Steel are the major private players in the industry
The industryrsquos 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 fallingrising prices and industry lossesprofits
Integrated steel producers (ISPs)mdashTata Steel and SAILmdashface 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
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
OBJECTIVES
To compare Private and Public steel sector with refrence to TATA Steel and Steel Authority Of
India
To analyse potential of both the companies ie TATA Steel and SAIL
To analyse measures taken by Indian government to improve the industry and study the National
Steel Policy 2005
To analyse the future of Indian steel industry
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
What is Private Limited and Public limited
Now letrsquos first understand the meaning and difference between Public Sector Company and Private
Sector Company The term ldquoPrivate Companyrdquo refers to ownership of a business company in two different
waysmdash First referring to ownership by non-governmental organizations and second referring to
ownership of the companys 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 andor 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
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
REASON FOR GROWTH OF PRIVATE SECTOR
Political will towards Privatisation
Financial Performance
Usage of more Advanced Technology
Young amp large English Speaking class
Opening up of Indian Economy has led to free flow of FDIs along with modern cutting edge
technology
REASON FOR GROWTH OF PUBLIC SECTOR
The Industrial Policy Resolution of 1956 enlarge the role of Public sector
SCHEDULE A to the Resolution enumerated 17 industries the future development of
which would be the exclusive right of the state
SCHEDULE B to the Resolution contained a list of 12 industries which would be
progressively state owned amp in which the state would therefore generally take the initiative
in establishing new units
The industrial Policy of 1956 is the basic policy of India It was more of a restrictive in
nature of new Private industries The Public Sector flourished in the time being before the
introduction of new industrial policy of 1991 which was more liberal in nature
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
I 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) 205
million tonne of steel was produced by Private Sector steel units out of the total production of 3315 million
tonne in the country The private sector units consist of major steel producers in one hand and relatively
smaller amp 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 Indias 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 41 million tonne is 82 more compared to the
last year in the corresponding period and crude steel production at 37 million tonne is higher by 79
compared to the last year in first three quarters
The saleable steel production at 37 million tonne registered a significant increase of 11 The total
sales of 353 million tonne has grown by 117 over last financial year in the corresponding period The
domestic sale of long products has increased by 30
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Tata Steel is continuing with its programme of expansion of steel making capacity by 18 million tonne
to reach the rated capacity of 68 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal
2010
Tata Steelrsquos 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 amp R policy of the state Government The construction work
of ferrochrome project in South Africa is in full swing
Acquisition of Corus Recently Tata Steel acquired the Anglo-Dutch steel maker Corus thus emerging
as the fifth largest steel producer in the world
The steel major has won the Prime Ministers Trophy four times This award is instituted by the Indian
ministry of steel and awarded to the countrys 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
Groups Tata Business Excellence Model
Areas of business
Apart from the main steel division Tata Steels operations are grouped under strategic profit centres
like tubes growth shop (for its steel plant and material handling equipment) bearings ferro alloys and
minerals rings agrico and wires
Tata Steels products include hot and cold rolled coils and sheets tubes wire rods construction bars
structurals forging quality steel rings and bearings In an attempt to decommoditise steel the company has
recently introduced brands like Tata Steelium (Indias first branded cold rolled steel) Tata Shaktee
(galvanised corrugated sheets) Tata Tiscon (re-rolled bars) Tata pipes Tata bearings Tata Wiron
(galvanised wire products) and Tata Agrico (hand tools and implements)
Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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
TRF
Jamshedpur Utility and Service Company (JUSCO)
The Indian Steel and Wire Products(ISWP)
Lanka Special Steel
Sila Eastern Company
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
2 ESSAR STEEL LTD
Essar Steel is an integrated steel producer with operations all along the value chain Essar Steel
produces some of the worldrsquos best steel at its state-of-the-art steel complex at Hazira Gujarat It is also
Indiarsquos 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 Steelrsquos core manufacturing facilities are located at its steel complex in Hazira Gujarat The
Hazira complex includes a 55 million tonne per annum Hot Briquetted Iron (HBI) plant a 46 mtpa
continuous caster slab facility a 36 million tonne per annum Hot Rolled Coils (HRC) and a 12 mtpa cold
roll mill complex with all down stream facilities The facilities are complemented by its own 80 mtpa pellet
plant at Vishakapatnam and 04 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 46 million tonne per annum to 76 million tonne per annum The capacity expansion
programme will consist of 2 units of Corex units of 15 million tonne per annum each Further value addition
will be carried out by Continuous Strip Caster Mill conventional Slab Caster Mill and a 52 meter Wide
Plate Mill
Products
All Essar Steelrsquos products are world class meeting the highest international standards supported by
excellent marketing and service
3 JSW STEEL LTD
JSW Steel Ltd is a 38 million tonne per annum integrated steel plant having a process route
consisting broadly of iron ore beneficiation ndash pelletisation ndash sintering ndash coke making ndash iron making through
blast furnace as well as Corex process ndash steel making through BOFndashcontinuous casting of slabs ndash hot strip
rolling The production facilities include 30 million tonne per annum iron ore beneficiation unit 50 million
tonne per annum pellet plant 32 million tonne per annum sinter plant 12 million tonne per annum coke
ovens 09 + 13 million tonne per annum blast furnaces two Corex units of 08 million tonne per annum
each 3 X 130 t converters three slab casters and a 25 million tonne per annum hot strip mill with state-of-
the-art coil box technology
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
JSW Steel has a distinction of being certified to ISO-90012000 Quality management system ISO-
140011996 environment management system and OHSAS 180011999 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 2003-04 2004-05 2005-06 April-Dec06
Pellets 325 361 380 293
Hot Metal 163 196 240 219
Slabs 161 187 225 195
Hot Rolled Coils 154 178 210 148
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 explorationmining The current turnover of the
company is over Rs 3000 crore JSPL is the worldrsquos 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 10000 crore The company is also setting
up a 6 million tonne steel plant in Orissa with an investment of Rs 13500 crore and a 5 million tonne steel
plant in Jharkhand with an investment of Rs 11500 crore
Jindal Power Ltd wholly-owned subsidiary of JSPL is setting up a 1000 mega watt OP Jindal super
thermal power plant at Raigarh with an investment of over Rs 4500 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
5 ISPAT INDUSTRIES LTD (IIL)
Ispat Industries Ltd (IIL) has set up integrated steel plants at Dolvi (district Raigad) a backward
region of Maharashtra with a capacity of 3 million tonne of hot rolled coils per annum The plant has got a
224 million tonne per annum sintering plant 2 million tonne per annum blast furnace and 16 million tonne
per annum gas based sponge iron plant IIL have uniquely combined the usage of hot metal and sponge iron
in the electric arc furnace for production of liquid steel for the first time in India IIL have also adopted the
state-of-art technology called Compact Strip Production (CSP) process which has been installed for the first
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC) The IILrsquos products
are accepted in the domestic and international market
The production performance of IIL during last three years has been as follows
(in million tonne)
Items 2003-04 2004-05 2005-062006-07
(Up to Dec06)
Hot Metal 129 140 142 114
Sponge Iron 106 105 089 085
Hot Rolled Coils 162 197 215 197
The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core
Reduction (LCR) features available Ispatrsquos casters have achieved global benchmark in annual production as
confirmed by Steel Melting Shop (SMS) Demag the technology supplier
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
Lloyds SteeI Industries Ltd
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
II 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 SAILs equity and retains voting control of the Company
However SAIL by virtue of its lsquoNavratnarsquo 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
Companys iron ore limestone and dolomite mines The company has the distinction of being Indiarsquos largest
producer of iron ore and of having the countryrsquos 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
SAILs 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 SAILs 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
SAILs 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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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 e-commerce
NTPC SAIL Power Company Pvt Ltd
Bokaro Power Supply Company Pvt Limited
Mjunction Services Limited
SAIL-Bansal Service Centre Ltd
Bhilai JP Cement Ltd
SAIL has signed an MOU with Manganese Ore India Ltd (MOIL) to set up a joint venture company
to produce ferro-manganese and silico-manganese at Bhilai
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 3132006 was Rs 30 crore and Rs 24 crore respectively SAILrsquos holding is
approximately 9912 of the paid-up capital
Financial Performance
During the year 2005-06 the company recorded a turnover of Rs 24733 crore (including conversion income
of Rs 17110 crore) and made a net profit after tax of Rs 2097 crore The turnover and net profit after tax
of the company during April 2006 to December 2006 were Rs 22026 crore (provisional) and Rs 1748
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
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Production Performance
The production of all grades of ferro alloys during 2005-06 is as under
(in tonne)
Materials 2005-06 April- Dec 2006
High Carbon Ferro Manganese 51525 49493
Silco Manganese 46712 32921
Medium Carbon Ferro Manganse 2344 164
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 90012000 ISO 140011996 and OHSAS 180011999 The company has taken
significant strides in the area of Corporate Social Responsibility
Production Performance
(in million tonne)
Items 2004-05 2005-06 2006-07 (April-Dec06)
Hot Metal 3920 4153 3040
Liquid Steel 3560 3603 2676
Saleable Steel 3173 3237 2419
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
4 NATIONAL MINERAL DEVELOPMENT CORPORATION LTD (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) The silica sand project is at Lallapur Allahabad and the diamond mine is situated at
Panna (Madhya Pradesh) Mining activities at DMP Panna were stopped with effect from 22082005 on
receipt of notice from Madhya Pradesh Pollution Control Board The case is pending with Honrsquoble Supreme
Court of India NMDC is following up the case for early hearing
All the iron ore production units have been accredited with ISO 90012000 and ISO 140012004
certifications RampD Centre of NMDC was also accredited with ISO 90012000 certification
Iron Ore
NMDC produced 1727 million tonne of iron ore during the year 2006-07 (up to December 2006) Domestic
sales of iron ore was 1550 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 178 million tonne of iron ore valued at approximately Rs 42980 crore
Capital Structure
The authorised share capital of the company is Rs 150 crore The paid up equity share capital was Rs
13216 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 (April-Dec06)
SalesTurnover222655 371092 2790
Gross Margin128749 2889 2455
Profit Before Tax122365 277013 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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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
de-canalised 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 220 crore as on
31122006 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 220 crore includes bonus shares issued in the year 1993-94 in the ratio 11
6 FERRO SCRAP NIGAM LTD (FSNL)
Ferro Scrap Nigam Ltd (FSNL) is a wholly owned subsidiary of MSTC Ltd with a paid up capital of Rs 2
lakh The company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine
steel plants at Rourkela Burnpur Bhilai Bokaro Visakhapatnam Durgapur Dolvi Duburi and Raigarh
The scrap recovered is returned to the steel plants for recyclingdisposal and the company is paid processing
charges on the quantity recovered at varying rates depending on the category of scrap Scrap is generated
during iron and steel making and also in the rolling mills In addition the company is also providing steel
mill services such as scarfing of slabs handling of BOF slag etc
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Financial Performance
Particulars 2004-05 2005-06 2006-07 (Apr-
Dec2006)
Total Turnover ie Service charges realised including miscellaneous Incomeetc
981822 1067937 765557
Gross Margin before Interest amp Depreciation 167879 186514 105284
Interest amp Depreciation 83014 100970 84728
Profit before Tax 84865 85544 20556
7 MANGANESE ORE (INDIA) LTD (MOIL)
Manganese Ore (India) Ltd (MOIL) was established in 1962 It is the largest producer of manganese ore in
India At the time of inception 49 of its shares were held by the Central Province Manganese Ore Co Ltd
(CPMO) and the remaining 51 in equal proportion by Government of India and the State Governments of
Madhya Pradesh 17 and Maharashtra Subsequently in 1977 the Government of India acquired the shares
held by CPMO in MOIL and MOIL became a wholly owned Government company with effect from
October 1977 As on 30112006 Government of India held 8157 shares in MOIL with State
Governments of Maharashtra and Madhya Pradesh holding 961 and 882 shares respectively
MOIL Produces and Sells following Grades of Manganese Ore
1048708 High grade ores for production of ferro manganese
1048708 Medium grade ores for production of silico manganese
1048708 Blast furnace grade ore required for production of hot metal
1048708 Dioxide ore for dry battery cells and chemical industries
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Production and Financial Performance
The physical and financial performance of the Company during 2004-05 2005-06 and 2006-07 (April-Dec
2006) are given below in the table
8 KUDREMUKH IRON ORE COMPANY LTD (KIOCL)
Kudremukh Iron Ore Company Ltd (KIOCL) an 100 Export Oriented Unit ISO 90012000 and ISO
14001 company was established in April 1976 to meet the long term requirements of Iran An iron ore
concentrate plant of 75 million tonne capacity was set up at Kudremukh This project was to be financed in
full by Iran However as Iran stopped further loan disbursements after paying US $ 255 million the project
was completed as per schedule with the funds provided by Government of India While the project was
commissioned on schedule consequent upon the political developments in Iran they did not lift any quantity
of concentrate As a diversification measure the Government approved the construction of a 3 million tonne
per year capacity pellet plant in Mangalore in May 1981 The capacity of the pellet plant was increased to
35 million tonne with additionsmodifications The plant went into commercial production in 1987 and is
now exporting blast furnace grade pellets to China and also to domestic units such as Ispat Industries Ltd
and Rastriya Ispat Nigam Ltd Aerial view of Pellet Plant Mangalore
Items 2004-05 2005-06 2006-07 (up to Dec2006)
1 Production
a) Manganese Ore (thousand tonne) 94300 86500 82533
b) Electrolytic Manganese Dioxide(tonne) 112300 130100 46000
c) Ferro Manganese (tonne) 1032500 617000 829400
2 Turnover (Rupees in crore) 37878 33409 29463
3 Profit before Tax (Rupees in crore) 20227 16900 12087
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Production
A target of 31 million tonne and 305 million tonne was set for production of iron ore concentrate and iron
oxide pellets respectively during the year 2005-06 Actual production was 2922 million tonne of concentrate
and 2834 million tonne of pellets
The target set for production during the year 2006-07 is 305 million tonne of pellets In pursuance of
directive of Honrsquoble Supreme Court dated 30-09-2005 the mining activities at Kudremukh were stopped on
31-12-2005 Therefore there is no production of iron ore concentrate during the year 2006-07 As against a
target of 188 million tonne of pellets fixed for the period April to November 2006 the actual production
was 0275 million tonne which represents 15 target fulfilment There is shortfall in production of pellets up
to November 2006 during 2006-07 The shortfall in production of pellets is on account of operational
problems being encountered in the pellet plant after switching over to usage of 100 hematite ore from
magnetite ore There was excessive generation of su er fines (slimes) affecting filtration clogging of filters
overflow and contamination of process water due to filling of cooling pond affecting production While
efforts are continuing to rectify the problems the operation of pellet plant is yet to stabilize and normal
production is yet to commence
The sales revenue during the last five years and up to November 2006 during 2006-07 is detailed below
(Rs in lakh)
Years Concentrate Pellets Total
2006-07 (up to December 2006) - 12427 12427
2005-06 12091 111137 123228
2004-05 16050 169327 185377
2003-04 20209 82729 102938
2002-03 21135 51579 72714
2001-02 21571 50598 72169
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Financial Performance
An overview of the performance of KIOCL during the year 2006-07 (up to November 2006) together with
actuals for the previous three years is indicated below
(Rs in lakh)
Particulars 2006-07(up to December 2006)
2005-06 2004-05 2003-04
Total value of Sales 12427 123228 185377 102938
Gross Margin 2620 68706 120863 45945
Profit after Tax 1029 35630 64984 30070
Inventories(excluding finished stock)
20417 15843 8720 7616
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 amp Saxby Limited (SSL)
(e) Eastern Investments Limited (EIL)
(f) Burrakar Coal Company Limited (Burrakar)
(g) Borrea Coal Company Limited (Borrea)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
The status of the companies is as under
a) Burrakar and Borrea coal companies became non-operational after nationalisation of coal mines The two
companies are in the process of liquidation The official liquidator has already taken over the assets and
liabilities of these two companies
b) EIL being an investment company is having a major stake in the equity shares of operating companies
under the Bird Group
c) OMDC BSLC KDCL amp SSL are operating companies under the Group
Status of the Companies at the Time of Nationalisation
At the time when the Bird Group of Companies came under the administrative control of the Ministry of
Steel Government of India all of them were financially sick and burdened with various problems With the
financial support from the Government of India problems relating mainly to excessive manpower erosion
of working capital and outstanding liabilities could be settled to a considerable extent
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Research Methodology
This section deals with the research design used and data collection method used
a) Research design-
In case of my research ldquoComparative analysis of Indian private and Public sectors with special
reference to TATA Steel and SAILrdquo the descriptive research is found to be more appropriate
Descriptive research studies are those studies which are concerned with describing the characteristics
of a particular individual or a group This study is concerned with specific prediction narration of facts and
characteristics concerning individual group of situation are all examples of descriptive research studies
b) Data collection method-
According to my topic of research I found that the use of secondary data is the only right choice For
that I mainly used Internet and collective various data from government and private websites
I visited to the library and went through various books and journals for collection of the relevant data
for the research
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
DATA ANALYSIS
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 5568 crore in fiscal 2003-04 to Rs 11497 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 (April-December 2006) amounting to Rs1056640 crore as against a combined profit
before tax of Rs836875 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 5761 crore in 2003-04 to Rs13110 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) 205 million tonne of steel was produced by Private Sector steel units out of the total production of
3315 million tonne in the country The private sector units consist of major steel producers in one hand and
relatively smaller amp 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 ie Tata Steel and SAIL lets analyse both the companies on
following parameters
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Production
Chart showing production of both the companies
Quantity 000 Tonnes
2007-08 APR-DEC07 APR-DEC06 ACTUA
L
AGE OF CURRENT
PRODUCTION OVER
CAPACITY UTILISATION
TARGET TENTATIVE
TARGET ACTUALAPR-
DEC07 TARGET
APR-DEC06
ACTUAL
APR-DEC
07APR-DEC06
SAIL
i)BSP49500 37110 37320 35780 1006 1043 1270 1210
ii)DSP18400 13580 14330 13450 1055 1065 1060 990
iii)RSP18130 13450 15360 15120 1142 1016 1080 1060
iv)BSL43500 32630 30970 30010 949 1032 950 910
v)ISP5000 3760 3520 3450 936 1020 940 920
vi)ASP1470 1070 1140 1130 1065 1009 650 640
vii)VISL1390 1050 1160 1190 1105 975 1300 1340
TATA 50000 37440 37090 37380 991 992 990 1000
TATA Steel
The company had a Production target for the year 2007-08 was 5 million tonnes (mT) but it could produce
only 493 (mT) For the first 3 quarters of the years company set a target of 3744 (mT) but could produce
3709 However for the same period in last year company produced 3738 (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 13739 (mT) for the year 2007-08 but it could produce
only 126 (mT) a growth of 4 over the previous year However for the first 3 quarters of the years company
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
set a target of 10265 (mT) and produced 10380 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
Financials
TATA Steel
The year 2006-07 has seen the highest turnover and profits continuing the trend of the past four years
The Company achieved the best ever sales turnover and profitability during the year under review A robust
Indian economy firm steel prices higher volumes and several improvement initiatives contributed to the
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
record performance Finished steel sales were higher by 1133 at 451 million tonnes over the previous
year Export turnover was lower by about 5 due to lower volumes Average price realisation improved
mainly due to higher prices of hot rolled coilssheets Operating profit was higher by over Rs 1000 crores at
Rs 6973 crores (2005-06 Rs 5938 crores) an increase of 17 over the previous year
Net interest charges were higher at Rs 174 crores (2005-06 Rs 125 crores) due to additional
borrowings for the Companyrsquos domestic expansion programs and funding Companyrsquos contribution for
financing the acquisition of Corus Group plc After providing for Rs 819 crores for depreciation (2005-06
Rs 775 crores) and Rs 152 crores towards employee separation scheme (2005-06 Rs 53 crores) the profit
before tax rose by 20 to Rs 6262 crores (2005-06 Rs 5240 crores) Net Profit after taxes was higher at
Rs 4222 crores (2005-06 Rs 3506 crores) an increase of 20 compared to the previous year
The record financial results would not have been possible without a matching performance by the
operating departments including the raw materials division The year witnessed the best ever crude steel
production by the Company at 505 million tonnes an increase of 67 over the previous year Jamshedpur
Plant became the first plant in India to produce more than 5 million tonnes of crude steel in a year The
upgraded ldquoGrdquo Blast Furnace produced over 2 million tonnes of hot metal as against its rated capacity of 18
million tonnes Among the Finishing Mills the output at the Cold Rolling Mill and the Hot Strip Mill
exceeded their rated capacities The all-round increase in production was backed by improvements in
operating practices and productivity resulting in a reduction in consumption of raw materials energy
refractories etc
Steel Authority of India
Financial Year 2006-07 has been eventful year for the company with further momentum in improving
operational efficiencies laying strong foundation and building road map for modernisation and expansion of
SAIL Plants with several new initiatives undertaken with its human resource at the core During the year
the company got the distinction of first metal company in the country to reach a market capitalization of Rs
50000 crore
There have been improvements in all financial parameters which are shown in the table given below-
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
SAIL set new record in achieving the turnover of Rs39189 crore and profit before tax of Rs9423
crore registering growth of 21 amp 65 respectively over previous year The company recorded net profit
after tax (PAT) of Rs6202 crore an increase of 55
Research and Development
Chart showing production of both the companies
(Rs Crore)
TATA Steel
The R amp 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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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
RampD 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 Ms Power Grid Corporation of India Gurgaon Ms
Refcom (India) Pvt Ltd Purulia (West Bengal) Ms Sarvesh Refractories Rourkela Ms Balmer Lawrie
Ltd Kolkata and Ms Monarch Electronics Kolkata etc
During the year 1998 technical papers were publishedpresented besides filing of 31 patents and 29
copyrights The scientists at the RDCIS won nine national level awards In addition RDCIS won the
prestigious ldquoDSIR National Award 2005 for RampD achievements in New Materialsrdquo given by the Ministry of
Science and Technology Government of India
Environment
TATA Steel
Tata Steelrsquos efforts at Environment Management are well recognised Itrsquos Steel Works in Jamshedpur
all its mines collieries and manufacturing divisions in its out has an ISO-14001 certified service
providerlocations 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 Constant upgradation and modernisation has resulted in
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
several state-of-the-art pollution control systems being installed to prevent and control pollution The
Company has almost doubled its capital investment in Pollution Abatement in the last five years
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 Steelrsquos activities
Ozone depleting substances The Steel Works reduced use of refrigerants to 7044 tonnes in 2003-04 as
against 790 tonnes used during the previous year
Hazardous Waste under Basel Convention The Company does not import or export any waste deemed
hazardous under the Basel Convention All hazardous wastes generated are handled as per the requirement
of the Hazardous Waste Management and Handling Rules 19892000
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
Waste handling
Most of the solid waste generated from Steel Works is recycled or reused 18 of the solid waste
generated amounting to approximately 550000 tonnes in 2003-04 was used to fill low-lying areas and for
peripheral road construction around Jamshedpur About 200000 tonnes of fly ash and bottom ash
generated in the power plants was dumped in a designated dump area
Effluent Management
Waste water from the steel making process is being treated with best available physio-chemical
methods as well as being recycled Waste water from the coke plant is treated biologically where organic
pollutants are oxidised and decomposed by micro organisms The Company has reduced the levels of total
pollutant discharge in waste water streams from 0211 in 1999-2000 to 0178 in 2003-04
Steel Authority of India
Corporate environmental policy of SAIL emphasises ldquoconducting operations in an environmentally
responsible manner to comply with applicable regulations and striving to go beyondrdquo 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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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 reuserecycle of the by-products generated and conservation of energy and water
Solid Waste Management
During 2005-06 SAIL produced approximately 134 million tonne of crude steel and generated 56
million tonne of Blast Furnace (BF) slag 13 million tonne Steel Melting Shop (SMS) slag and 06 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
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 145521 saplings have been planted covering an area of 637 hectare in 2005-06 as
against 77242 nos of saplings planted in an area of 366 hectare in 2004-05 in and around the steel plants of
SAIL
Environmental Recognitions
SAIL plants have been awarded various prizes for environmental management in their plants viz
ldquoSustainability prize in independent unit categoryrdquo 2006 instuted by the Confederation of Indian Industries
(CII) for exemplary performance in the environmental economic andsocial dimensions of sustainable
development and the Greentech Environment Excellence Gold AwardGolden Peacock Environment
Excellence Award in the metal sector 2005 instuted by the World Environment Foundation and the
Jawaharlal Nehru Memorial Pollution Control Excellence Award for 2005 from International Greenland
Society
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Workforce and Welfare of Society
TATA steel
Tata Steel has not lost focus of this philosophy and has adapted it in a broader and modern context in
its Vision 2007 A lot is dependent on the individual spirit and enthusiasm of the employees to realise our
vision TATA Steel accelerates efforts to provide a work environment that will ensure a sense of purpose
and personal growth for each individual The wish of the company is to see the smile on every face
everyday A pioneer in employee welfare Tata Steel has invested in the power of its people and enriched
empowered and enhanced their lives
Even in its nascent years social scientists Sidney and Beatrice Webb were brought in to work on
welfare schemes In fact some of the initiatives introduced by Tata Steel were the first of their kind in India
and some even in the western countries at that time Tata Steelrsquos Human Resource policy recognises its
people as the primary source of its competitiveness It focuses on constantly updating and challenging
intellectual capabilities to enable them to excel in performance Special efforts are made for enhancing
strategic thinking skills and analytical abilities of its managers and workers As a true lsquoLearning
Organisationrsquo Tata Steel has tapped the knowledge available with its people through Knowledge
Management and sharing of best practices
In the year 2003 Tata Steel celebrated 75 years of industrial harmony and mutual co-operation
coordination and understanding between the Management and the Union It has twice emerged as ldquoAsiarsquos
Most Admired Knowledge Enterpriserdquo among many other prestigious awards and recognition Tata Steel
aims at ensuring transparency fairness and equity in all its interactions with its employees to create an
enthused and happy workforce
1 In 1916 Social Welfare Scheme was formed by Tata Steel to provide assistance in the fields of
education vocational training self-employment and family welfare
2 Tata Steel has hosted the Lifeline Express the worldrsquos fi rst hospital on a train 12 times This facility
provides on-the-spot diagnostic medical and advanced surgical treatment for preventive and curative
interventions to people in inaccessible rural areas
3 Sir Dorab Tata personally financed four athletes and two wrestlers from India for the 1920 Antwerp
Olympics
4 The JRD Sports Complex an international stadium with an 8-lane polyurethane track was
inaugurated in 1991 The complex also houses facilities for handball tennis volleyball hockey
basketball boxing table tennis and a modern gymnasium
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
5 The Tata Steel Family Initiatives Foundation is engaged in off ering health services for the
betterment of the people in and around Jamshedpur
6 At times of natural calamities the company has rushe immediate relief and off ered long-term
assistance to tsunami-hit Tamil Nadu earthquake-torn Gujarat fl ood ravaged Orissa and other such
aff ected areas
7 Horse-riding lessons the Jubilee Amusement park the zoological park etc off er a unique
environment for the children of Jamshedpur to grow up in
8 In a recent survey conducted on lsquoQuality of Lifersquo by AC Nielsen ORG-MARG Jamshedpur has
emerged as the one of the best cities in India
Steel Authority of India
The manpower strength as on 31st March 2006 was 138211 comprising 15206 executives and
123005 non-executives The total reduction in manpower achieved during the year stood at 4864 which
included separation of 881 employees through voluntary retirement The labour productivity improved by
around 12 over previous year to 150 tonne crude steelmanyear
Some of the areas of assistance which are available to the weaker sections are the following
The company has provided land for construction of school buildings in some of the steel townships as
well as in other places for spreading education among the masses
1 The company has constructed roads in remote areas around the steel plants and also where the
captive mines are located to improve communication and also increase activities such as organisation
of health camps school facilities drinking water etc under the peripheral development schemes
Bhilai Steel Plant has adopted 36 tribal children of Chattisgarh region and Bokaro Steel Plant has
adopted 12 Birhor tribe children These plants are providing them with education boarding and
lodging facilities
2 Construction of bridges by-pass roads metal-morum path waterways levellingdressing area around
township pre-mixed roads Installation of hand-pumps tube wells and wells for villagers
3 Construction of school buildings (including for mentally retarded deaf and dumb children)
madarsas providing school furniture therein and construction of hostels womenrsquos college building
etc
4 Fourteen scholarships are awarded to deserving SCST undergraduate engineering students in various
disciplines to encourage technical education among them
5 In many cases tuition fee in company run schools is exempt for SCST students Steps are taken to
provide education to more and more tribal children in company schools
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
6 The unemployed SCST youth are given specialized training in various technical trades to develop
skill and knowledge Such training is provided free of cost
7 Adult literacy campaign is carried out in most of the steel townships Every year more and more men
and women are being covered in this campaign
8 Development of fishery and cottage industry providing sewing machines to village mahila mandals
and promoting other self-employment generation schemes
9 SAIL has established a hockey academy with stadium and hostel facilities at Rourkela to tap and
nurture the talent scattered in surrounding tribal area The academy was successful in spotting a
number of young talented tribal players and grooms them under expertise of ex-Olympian
Technology
The biggest boost to efficiency in the steel industry has come from the increased use of continuous
casting ndash 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 03) which suggests there is
restructuring potential
TATA Steel
Tata Steels 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 amp Power MN Dastur amp 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 worlds 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 worlds most
eminent metallurgists manufacturers of metallurgical and mining machinery and related sectors
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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
ldquoWe are looking at alternate technology Corus has developed an alternate technology which could be
implemented in our greenfield plantsrdquo 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 SAILs fortunes in the near future The objective of the Rs15000-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 SAIL is
also modernising its finishing mills and is adding secondary refining facilities to improve quality
Safety measures
A unique feature of safety management in steel industry is that a bipartite forum named Joint
Committee on Safety Health and Environment in Steel Industry (JCSSI) was formed in 1973 at national
level having representatives from steel plants in SAIL RINL TISCO and Ispat Group All the Central Trade
Unions are represented on this Committee With a view to inculcate safety consciousness JCSSI organises
seminars workshops training programme safety competitions for member organisations JCSSI with the
co-operation and support of Trade Union representatives formulates policies and guidelines for its member
plants and monitors the implementation
Tata Steel
Safety has always been a prime focus at Tata Steel A Safety Committee a Safety department and a
Safety Trophy helped spread the message all across the company
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
TATA reaffirms its commitment to provide safe working place and clean environment to its employees
and other stakeholders as an integral part of its business philosophy and values We will continually enhance
our Environmental Occupational Health amp Safety (EHS) performance in our activities products and
services through a structured EHS management framework Towards this commitment we shall
Establish and achieve EHS objectives and targets
Ensure compliance with applicable EHS legislation and other requirement and go beyond
Conserve natural resources and energy by constantly seeking to reduce consumption and promoting
waste avoidance and recycling measures
Eliminate minimize andor control adverse environmental impacts and occupational health and
safety risks by adopting appropriate state-of-the-art technology and best EHS management
practices at all levels sand functions
Enhance awareness skill and competence of our employees and contractors so as to enable them to
demonstrate their involvement responsibility and accountability for sound EHS performance
Steel Authority of India
SAIL has a separate corporate unit called the SAIL Safety Organisation to monitor safety system amp
activities- SAIL also has a comprehensive safety policy
Annual Performance Plans (APP) for the areas of safety and fire services are formulated and review
of implementation of APP is done during Heads of Safety meeting
Internal and external safety audits of major departments particularly hazardous areas are conducted
every year and points arising from these audits are liquidated Safety aspects have been incorporated
in standard operating practices (SOP) and standard maintenance practices (SMP)
All major capital repairsshut downs are closely monitored round the clock Periodic drives are
conducted to inculcate safety awarenessculture up to grass-root level apart from regular inspections
as per checklists to identify unsafe conditionsacts
Safety training is imparted to target group employees at various levels HRD intervention in the area
of safety covers Heads of Departments Line Managers amp Departmental Safety Officers Besides area
specific workshops are conducted at different locations on important topics like gas safety railroad
safety safety in iron steel amp coke making etc
Consistent efforts were made by SAIL Safety Organisation for improving safety standards in the
company by taking measures like intensive safety drives in works area and conducting safety audits in
hazardous departments of different plants and mines In addition specific workshops on safety aspects were
organised in various SAIL steel plants
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Measures taken by Indian government to improve the industry
Now letrsquos have a look over what government has done to make the industry competitive in world
market Government has taken several initiatives in last decade to improve the steel industry The main steps
taken for this are as follows-
1 In the new Industrial Policy announced in July 1991 Iron and Steel industry among others was
removed from the list of industries reserved for the public sector and also exempted from the
provisions of compulsory licensing under the Industries (Development and Regulation) Act 1951
2 With effect from 24th May 1992 Iron and Steel industry has been included in the list of `high priority
industries for automatic approval for foreign equity investment up to 51 This limit has been recently
increased to 100
3 Price and distribution of steel were deregulated from January 1992 At the same time it was ensured that
priority continued to be accorded for meeting the requirements of small scale industries exporters of
engineering goods and North Eastern Region of the country besides strategic sectors such as Defence
and Railways
4 The trade policy has been liberalised and import and export of iron and steel is freely allowed There are
no quantitative restrictions on import of iron and steel items covered under Chapter No 72 of the
ITC(HS) Code The only mechanism regulating the imports is the tariff mechanism Tariffs on various
items of iron and steel have drastically come down since 1991-92 levels and the government is
committed to bring them down to the international levels In Chapter 72 there are two items viz
72042110 and 72042910 which fall in the restricted list of imports
5 Iron amp Steel are freely importable as per the Extant Policy
6 Iron amp Steel are freely exportable
7 Advance Licensing Scheme allows duty free import of raw materials for exports
8 The floor price for seconds and defectives continues till date
9 Imports of seconds and defectives of steel are allowed only through three designated ports of Mumbai
Calcutta and Chennai
10 Mandatory pre inspection certificate by a reputed international agency for every import consignment of
seconds and defectives
11 In budget 2004-05 the customs duty on nonalloy steel was reduced from 15 to 10 per cent and on
alloy steel from 20 per cent to 15 per cent In August 2004 the customs duty on non-alloy steel was
further reduced from 10 per cent to 5 per cent on meltingscrap from 5 per cent to zero and on ships
for breaking from 15 per cent to 5 per cent
12 Further customs duty on several raw materials used by the steel sector like noncoking coal metcoke and
nickel has been reduced to 5 per cent and on coking coal to zero
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
13 To bring down the prices of steel the excise duty on steel products was reduced from 16 per cent to 8 per
cent with effect from February 28 2004 with a caveat that the duty regime will be reviewed Budget
2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent as the intended
impact of duty cut on moderating prices was not achieved
14 The union Budget 2007-08 the import duty on seconds and defective has been further reduced from 20
to 10
Special assistance being provided by Ministry of Steel to Private Sector
1 Ministry of Steel is extending all possible support as detailed below for the development of Iron and
Steel Sector in the country
2 The Ministry is providing linkage for raw materials rail movement clearance etc for new plants and
expansion of existing ones wherever applied for
3 To ensure an un-interrupted supply of raw materials to the producers
4 The Ministry has been interacting with All India Financial institutions to expedite clearance of projects
5 Regular interactions with Entrepreneurs who are proposing to setup Iron and Steel Plants are held at the
level of Secretary
6 Ministry of Steel identifies infra-structural and related facilities required by steel industry so that their
absence does not lead to bottlenecks in the future growth of the Iron and Steel Sector and takes up these
issues with the concerned ministries
7 The Ministry has encouraged the setting up of Institute for Steel Development and Growth (INSDAG)
in Calcutta in August 1996 The leading steel producers in the country are members of this Institute
which has been set up with the objective of promoting developing and propagating the proper and
effective use of steel
8 In order to resolve the problems faced by existing amp new steel plants amp to assist major steel plants being
implemented Govt has setup a Project Coordination Group under the Chairmanship of Steel Minister
NATIONAL STEEL POLICY 2005
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
The progress of the steel industry has a critical influence on the pace of Indiarsquos development and as such
great importance is attached to capacity expansion in line with expected demand at cost and prices which
make Indian steel internationally competitive The existing regime of liberalization decontrol and
deregulation of industry in the country has opened up new opportunities for the expansion of the steel
industry With a view to accelerating the growth of the steel sector and attaining the vision of India
becoming a developed economy by 2020 the Ministry of Steel formulated a National Steel Policy (NSP) in
2005
The following salient features can be derived after analysing the NSP 2005
1 The NSP sets out a broad roadmap for the Indian Steel Industry in its journey towards reform
restructuring and globalisation
2 The long-term goal of the NSP is that India should have a modern and efficient steel industry of world
standards catering to diversified steel demand The focus of the policy is to achieve global
competitiveness not only in terms of cost quality and product-mix but also in terms of global
benchmarks of efficiency and productivity
3 In order to achieve the goal of 110 million tones of steel production by 2019-20 the NSP seeks to
remove the supply-side constraints to the growth of this industry in an open globally integrated and
competitive environment
4 The NSP seeks to adopt a multi-pronged strategy to move towards the long-term policy goal On the
demand side the strategy would be to create incremental demand through promotional efforts creation
of awareness and strengthening the delivery chain particularly in rural areas On the supply side the
strategy would be to facilitate creation of additional capacity remove procedural and policy bottlenecks
in the availability of inputs such as iron ore and coal make higher investments in RampD and encourage
the creation of infrastructure such as roads railways and ports
5 The NSP acknowledges the low per capita consumption of steel in the country especially in the rural
areas and the need to boost steel consumption to improve quality of life and help in meeting the growing
aspirations of masses
6 In order to achieve the strategic goal of 110 MT of steel production by 2019-20 the industry would need
additional capital In addition funds would be required for technological upgrade of existing facilities In
order to mobilize such vast resources NSP seeks to encourage foreign direct investment In addition the
policy also seeks to make the fiscal incentives available to infrastructure projects accessible to the steel
industry
7 The NSP seeks to support developing of risk-hedging instruments like futures and derivatives to contain
price volatility in the steel market
8 The NSP seeks to strengthen the existing training and research facilities available to the domestic steel
industry so as to provide suitable training programmes especially for the secondary small-scale units and
also to collect and analyse data on important parameters of the industry
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
9 The NSP seeks to mount aggressive RampD efforts to create manufacturing capability for special types of
steel substitute coking coal use iron ore fines develop new products suited to rural needs enhance
material and energy efficiency utilize waste and arrest environmental degradation
10 The NSP acknowledges the important role played by the secondary steel sector in providing
employment meeting local demand of steel in rural and semi-urban areas and meeting the countryrsquos
demand of some special products and seeks to endeavour to provide the necessary feedstock to these
units at reasonable prices from major plants through the existing mechanism of State Small Industries
Corporations
11 The NSP recognizes the fact that integration of the Indian steel industry with the global economy
requires that the industry should be protected from unfair trade practices The NSP therefore envisages
institution of mechanisms for import surveillance and monitoring export subsidies in other countries
The present per capita consumption of steel in the country is very low compared to the world average As
mentioned above one of the objectives of the NSP is to augment the demand and consumption of steel in the
country by conscious promotion of steel usage With a view to create a mass awareness campaign on
conscious promotion of steel usage a lsquoSteel Promotion Coordination Committeersquo has been formed under the
Chairmanship of Secretary Ministry of Steel consisting of major steel producers The Committee is being
serviced by Institute for Steel Development and Growth (INSDAG) The objective of the Committee is to
promote steel usage in the country by way of an awareness campaign with particular emphasis on rural
sectors The Committee also aims at educating the designers architects builders and planners regarding the
qualitative and cost effective applications of steel in various structures including buildings bridges flyovers
and airports
Exports
Similar optimism prevails with regard to export of iron and steel Export of steel starting from a
negligible amount in 1991-92 has increased to 55 million tonnes in 2003-04 Exports in 2004-05 were lower
at 46 million tonnes primarily because of rising domestic demand and low capacity additions Exports now
constitute around 17 per cent of total production and Indias presence in the developing and developed world
is being increasingly felt Indian steel producers have recently been able to supply specialized grades and
products used for sophisticated applications like automobiles On the cost front some of our producers are
counted amongst the least cost producers of the world For an average reference plant India is competitively
placed in the middle of the hierarchy of steel producing nations
However we have a long way to go to catch up with the leading exporters of the world such as Japan
the CIS countries Brazil etc It is however expected that by 2019-20 India will be able to export around 26
million tonnes of steel representing 24 per cent of total projected production The projected export ratio
compares well with the current worldwide export ratio of 27 per cent (excluding intra-regional trade)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
The projected production of steel by 2019-20 to meet the domestic and export demand will be around
110 million tonnes Management of resources and infrastructural growth is going to be critical in
achievement of the production level envisaged The broad requirements of various resources will increase
manifold from the current level The bottlenecks in availability of critical inputs and various facilities need
to be removed through concerted efforts of Government and industry The broad strategy to overcome these
constraints as well as meet the strategic goals of the steel sector has been discussed in the National Steel
Policy which has been recently approved by the Government
As stated earlier the long-term goal of the National Steel Policy is that India should have a modern
and efficient steel industry of world standards catering to a diversified steel demand The focus of the policy
is to achieve global competitiveness not only in terms of cost quality and product mix but also in terms of
global benchmarks of efficiency and productivity The policy envisages adopting a multi-pronged strategy to
achieve these goals On the demand side the strategy would be to create incremental demand through
promotional efforts creation of awareness and strengthening the delivery chain particularly in rural areas
On the supply side the strategy would be to facilitate creation of additional capacity remove procedural and
policy bottlenecks in the availability of inputs such as iron ore and coal make higher investments in RampD
and HRD and encourage the creation of infrastructure such as roads railways and ports
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
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 There is however some
concern regarding the differential treatment meted out to overseas players to attract investment mainly in
respect of export of iron ore In the final analysis the industry scenario is expected to radically alter in the
coming years
However the public sector is expanding its capacities but it has more potential lies within to
perform more than that
Utilization of capacities in public sector is more than that of private sector but the
performance still has to be improved
Public sector has increased its profit over the year particularly in 2006-07
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
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
SAIL has reduced the no of accidents due to improper handling of machinery still no of
accidents are more than that of TATA Steel
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 ie 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
BIBLIOGRAPHY
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)
Annual report (2006-07) published by ministry of steel
Annual report (2006-07) published by TATA Steel
Presentation on lsquoPERFORMANCE HIGHLIGHTS 2006-07rsquo and lsquoDIRECTORS REPORTrsquo posted
by SAIL on its website
lsquoBackground Notersquo prepared after lsquoECONOMIC EDITORSrsquo CONFERENCErsquo held on 07 Nov 2006
Article published in magazine lsquoFRONTLINErsquo in December 2006 edition
wwwsteelnicin (Official website of ministry of industry)
wwwtatasteelcom (Official website of TATA Steel)
wwwsailcoin (Official website of Steel Authority of India)
wwwworldsteelorg (official website of International Iron amp Steel Institute)
wwwjpcindiansteelnicin (Website of joint planning committee)