TEDxKanke organized a Webinar Series with the title Make in India - In Steel Industry.
Speaker of the programme was Atul Bhatt, Chairman cum MF Mecon Ltd
It was Moderated By CM Chugh, Curator, GM, CET, SAIL
On importance of Steel in India’s context
“Steel has become synonymous with Indian identity. Steel plays an important role in country’s development. Examples like Bokaro, Bhilai and Jamshedpur show how development can take place where steel industry exists. Steel industry is going to show the way for the economy to come back on track post the ongoing pandemic.”
On the opportunities in Indian Steel Sector
• Steel is one of the few commodities where we are in global two – just behind China steel production. India also has the fastest growing steel industry – 7-8% pa.
• Steel is a capital-intensive industry. To construct 3 million-ton steel plant, we require about USD 3 billion. Importing capitals good has huge costs and a challenge towards 300 million-ton reality.
• About USD 22 billion in only capital goods will be required. A lot of equipment that we are purchasing from abroad can be made in India.
• 300 million ton is possible given the increasing demand of steel in India. We have evaluated the equipment that can be made in India, reducing our capital costs. This could save USD 21 billion.
• Advantages – low cost base, skilled labor and a diverse market in India. Import substitution and indigenization through MoUs/JVs/ToTs the way forward.
On roadblocks in Make in India
• Steel industry has a tremendous potential under MiN despite of little progress in the campaign.
• Last 5-6 years were spent in getting a declining steel sector back on track, which was marred by NPAs and high Capital Expenditure, Therefore, focus was on restructuring and not on growth of the sector.
• The time has come now that we, learning from China’s model, to indigenize our capital equipment.
• Steel industry did not realize how big the opportunity was in terms of saving money spent on capital goods and procuring of space. This is where we need to make necessary corrections.
• DMISP Policy - If there is any capacity of any product that exists in India, then it has to be purchased in India. Global tenders will require special permits.
On categorization on Make in India – what comes under this?
• India has required technologies (coke oven, blast furnaces, etc.) but we are missing downstream aspect (such as rolling mills). Technology suppliers are very limited in India.
• Technology could be based abroad, but manufacturing has to be local – need to develop an ecosystem.
• China has design institutes that work day in and day out that create mathematical models for convertor shops etc. MECON is trying to pursue similar ideas in agreement with IIT Kanpur to develop technologies. But huge investments are required.
• There is no reason why this ecosystem is not possible in India. We could make a start from fabrication and integrate backwards to design. A strong framework that can incentivize value addition in India is needed.
Audience Questions:
How can our companies grow to a level, like that in China, where we supply products and services throughout the world? To what extent should we protect our companies without making them inefficient? How long should we protect them?
By Mr Sunil Barnwal, IAS, Govt. of Jharkhand
• The tradeoff between protection vs inefficiency is critical. One of the issues is that we have our designs ready but when we go to industries to supply with these designs, we are asked for references. Even when our designs are good, there are no orders to show. The credentials cannot be developed in this case.
• The DMISP cell in Ministry of Steel came up with an idea that if 100 tons of orders are given, then 20% of that has to be necessarily given to Indian manufacturers. These orders have started allocation of some quantity and this in time will enhance the credential of Indian manufacturers.
• Gradually, as the ecosystem develops in India and we develop better credentials, we can start gaining from foreign markets besides saving on costs associated with purchases that are made abroad.
Domestic demand is apprehended to decline by 20%. What will be the way forward and how will we sustain in times when demand is very low?
By Mr Ritwik Mukherjee, Senior Asst. Editor of Deccan Chronicles, Kolkata
• The bulk of demands comes from infra and automobile which are going through a troubles time. Hence, steel ids declining. One sector within steel sector that has huge potential is automation. The level of automation in steel sector is very low. In coming years, people will look for automation solution.
• As a consultant, in the near term, we look at how steel industry can automate and made safer. This will boost steel demand. Additionally, long term growth story is intact where we will see more hospitals, educational institutions and other projects come up which will boost the demand.
Steel is a highly carbon intensive industry. When we have countries like Canada and EU talking about green transition post COVID recovery, where does India stand in its stance towards a sustainable recovery?
By Mr Bipul Mayank, Master of Environmental Management Candidate at Yale University
• Steel industry is very conscious that we have to move towards sustainable evolution. There is a new scrap policy in place where we would have recycled steel. India does not have a very active recycling industry like that in US and Europe where steel plants do not go through blast furnace route. They go through scrap melting that reduces carbon emissions. The new policy increases the scrap supply and in turn reduce the carbon emissions through the recycling industry.
• New technologies will be key. We will soon be moving towards the natural gas from coal for key production activities which will significantly reduce carbon emissions. Steel policy has integrated sustainability into its vision and we are hopeful of moving towards a sustainable transition.
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