Admitting that the steel industry in India is going through a rough patch, Union Minister of Steel Narendra Singh Tomar sees the increase in production capacity, creating infrastructure for carrying raw steel to plants and boosting domestic production as the only way out of the present slowdown in the steel sector.
Tomar, in town for inaugurating the Steel Mart organised by CII here today, however, was non-committal on any revival package for the small and medium tertiary steel producers in the country.
“We are aware that the small steel units are going through a severe recession. The ministry is organising an interface between the organisations representing these SMEs and the large (primary and secondary) steel producers in Delhi next month. All issues concerning the steel industry will be discussed here and we will try to find ways for reviving them,” he said.
The minister, when apprised of the sharp decline in production in the steel town of India — Mandi Gobindgarh — by The Tribune, said he did not have a definite plan to revive the industry, but would examine the reasons for closure of hundreds of steel units in the town at a meeting to be held next month. It is estimated that over 600 small steel units in Mandi Gobindgarh-Khanna alone have closed down since 2011.
Across India, poor availability and high cost of raw material in domestic market and supply of cheaper material from neighbouring markets like China has adversely hit Indian steel industry. India imported over 9 million tonne of finished steel (including flat and long) in 2014-15, which is around 18% of total domestic production. This increase of 70% steel import over 2013-14 led to most steel plants in India cutting down their production capacity by 20%, prompting the government to impose a hike of 2.5% on import duty of finished steel.
Tomar said the government was committed to address problems of the ailing steel industry and achieve the target of production of 300 million tonne per annum (mtpa) by 2025.
“To attain this target, we have set up a “Steel Research & Technology Mission of India” (SRTMI) along with industry to promote collaborative research programmes in steel sector so as to enhance their competitiveness, quality, R&D and production capacities. We cannot impose additional import duties, because it also pushes up the price for consumers. So the government is focusing on bringing down costs of steel manufacturers, interest rates, debt and transportation costs. Proper rail connectivity of ports with raw material sites and steel plants, especially across North is highly imperative as well, to bring down the logistics costs and save time”, he said, adding they were also looking at increasing the domestic per capita consumption from the present 59kg and closer to the world’s per capita consumption of 215 kg. He said that the Ministry of Steel has planned Special Purpose Vehicles (SPVs) with four iron ore rich states i.e. Karnataka, Jharkhand, Orissa and Chhattisgarh, to set up plants to produce 3 mtpa of steel initially, which would touch 6 mtpa soon, adding 24 mtpa to the national production level.
Source: The Tibune
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