Steel Minister
Chaudhary Birender Singh at the ‘Make in Steel’ Conference in New Delhi today:
“Dr. Aruna
Sharma, Secretary, Steel
Shri P.K.Singh,
Chairman, SAIL
Shri Prashant
Ruia, MD, Essar
Madam Rita
Singh, CMD, MESCO Steel
Distinguished
delegates
Friends from the
Media
Ladies &
Gentlemen;
I am glad to be
here at this conference on a very relevant theme- ‘Make in Steel’. My
compliments to the organisers for choosing this topic for the conference.
It has been over
six months since I took over as Steel Minister. I have met different
stakeholders and visited steel plants and mines. I have come to the conclusion
that steel industry is a vibrant and dynamic industry where employees
work hard round the clock to produce steel which is the building block
for a strong economy.
International
linkages for raw materials and markets make the
industry dependent on changing trends in world steel market.
Steel industry
is important for the country because it has one of the highest economic
linkages in overall GDP. Steel has an output-multiplier effect of around
1.4 times on GDP, so if steel industry grows by 1 per cent, its
proportionate impact on GDP would be 1.4 %.
Employment-multiplier
effect of steel is around 7 times, that is, with
increase in output, steel industry has the potential to create 7 times
the job opportunities, in upward and downward industries.
In 2016, India
retained its position as the fastest growing major steel economy in the world. We
are all proud of it, and we are confident that India would continue to
lead the growth trend in world steel industry. All of us will have to work
together for it.
In my view,
there are five important thrust areas we need to focus on and
to make it easy to remember, we have coined an acronym ‘PRIDE’ that aptly
sums up the way forward for the steel industry.
P stands for
production & productivity
R for Research
& Development
I for
Indian-made steel
D for Demand of
Steel
E for excellence
in quality
Each
of these areas is important from the perspective of ‘Make in Steel’,
which I understand as maximising usage of steel in different segments
of industry.
I would go one
step further and add another element to the theme, which is ‘Why Steel’.
We need to ask this question to ourselves and then convince the potential
customers about the advantages of using steel. Our message will be clear when
we are ourselves clear about what we want to achieve.
Steel industry
needs to join the drive to demonstrate benefits of steel. Through
Life Cycle Analysis, we need to showcase that steel structures are
highly cost-effective and have shorter lead time for erection.
Steel has greater durability with high design comfort.
At Ministry
level, we have directed all concerned to utilize every possible opportunity to
showcase prototypes and exhibits of steel for this purpose.
We must use all marketing,
branding avenues to push this message. That is the only way to
meet the challenge of product substitution by aluminium, concrete, plastic, glass
etc.
As far as the
first letter P in PRIDE is concerned, India is on its way to become world’s
second largest steel producer.
The gap between
India and Japan was 16 million tonnes in 2015, which has come down to 9 million
tonnes in 2016.
India’s share in
global steel production was 5.5 % in 2015, which has increased to 5.9 % in 2016. So
as far as production of steel is concerned, we are on the right path.
In draft
National Steel Policy that was put up in public domain recently, we aim to more
than double the capacity to 300 million tonnes. That means an
investment to the tune of Rs. 10 lakh crore.
We definitely
need to create demand in line with the planned increase in capacities. Our
target is to increase per capita steel consumption to 160 kilogram.
We should work
towards meeting the entire domestic demand of high-grade automotive
steel, electrical steel and special steels from domestic production. These
products constitute a major portion of the steel imports in India.
We are examining
the feasibility of setting up scrap-based steel plants in India. These
will be on the lines of ‘Melt & Manufacture’ steel technology in USA.
Scrap-based
steel plants are environment-friendly, energy-efficient and
cost-effective. These will have the capability to produce special
high-quality steels, a pre-requisite for Make in Steel.
I would like you
to deliberate on the cost-benefit analysis of setting up scrap based
steel plants in North and West India.
MSTC-Mahindra
Intertrade state-of-the-art Auto Shredding Plant is likely to be functional
in 2018.
Indian market
has huge potential for auto-shredding. As per reports, there are more than 7
lakh cars and over 4 lakh trucks and buses which have reached
end-of-life stage. By 2025, around 28 lakh cars and 12 lakh trucks and
buses will reach their end-of-life stage.
India imports
around 6 million tonnes of scrap steel every year and is the second largest
importer of scrap after Turkey. By 2025, we will be able to generate 7.5
million tonnes of scrap every year.
So far as productivity
is concerned, we are lagging behind the international benchmarks of
performance. At country level, PSUs need to catch up with the productivity
and efficiency levels achieved by Private steel companies.
At
international level, all Indian steel companies need to aim high and work
towards achieving international levels.
Research &
Development in Indian Steel industry is dismal. Whatever
little R&D is being done is scattered and isolated. At one hand,
there is overlapping & duplication of research efforts, at the
other, no research is being done on future requirements of the
industry. We are happy and contented with token R&D here and there.
I went to
Luxembourg last year and was apprised that they are trying to explore for
mineral resources in space.
If a small
country like Luxembourg can dream that big, what stops us from
aiming high and working on out-of-the-box solutions and technologies
for steel making using indigenous resources.
We are still
dependent on imported raw material and high-end steel products. We have the
potential to enhance usage of domestic coking coal by setting up more coal
washeries,
we
are capable of producing auto-grade, defence-grade and other special steels
in India. What we need to do is to push ourselves and to come out of our
comfort zones. Then and then only can we be self-sufficient and strong.
We are trying to
bring together all R&D efforts under one umbrella of SRTMI (Steel
Research & Technology Mission of India) with public-private partnership.
Ministry of
Steel is in constant touch with different user ministries to ensure
that steel-intensive structures are promoted through regulatory, advisory and
other measures. We are in the process of talking to hill states
to increase use of crash barriers to minimize fatalities due to road
accidents on hills. Rural Development Ministry has already recommended
use of steel-intensive structures in rural housing.
We are
trying that “Indian
Made Steel” can be
defined in the light of existing Public Procurement Bill.
This will
provide for mandatory procurement from domestic bidders on the
grounds of promoting domestic industry. Basically the aim is to
emphasize lower life cycle costing while evaluating projects, rather than just
looking at the upfront cost alone.
Demand of steel
is most important factor from the Make in Steel angle. I
am happy that you have devoted most part of the conference to this
aspect. There is no dearth of potential for steel demand. You name a
core sector and steel is an integral part of it. The need of the
hour is to channelize our resources in harnessing this demand.
At Ministry
level, we are constantly working to think of and work on ways for increasing
steel demand in India.
We had
the meeting of newly constituted
Steel Consumer Council last
month, in which
concrete feedback has come from different stakeholders. We invited suggestions
on increasing steel consumption in India on MyGov platform and Ministry is
working on implementable suggestions.
We have constituted
four task forces and committees of experts and users of steel to
formulate strategies to increase steel consumption in India.
The importance
that we are giving to this area can be gauged from the fact that we
discussed ways and means to increase steel demand in Parliamentary
Consultative Committee and urged the members to use their good offices to
propagate the message.
We all know that
a record allocation of around Rs. 4 lakh crore has been made for
infrastructure sector in the recent budget.
Focus on areas
such as ports, roads, affordable housing, physical infrastructure should
provide the steel sector necessary impetus to meet its growth targets.
The budget has
given infrastructure status to housing and enhanced budget for
housing, which is expected to revive domestic steel demand as it
will push up demand for construction grade steel particularly those for roofing
purposes.
At present around
40 % steel consumption is from construction and infrastructure sectors,
and we want to take it to 60 percent in long-term.
In the budget,
the Government has waived basic custom duty on nickel and reduced custom duty
on specific-use grades of hot-rolled and cold rolled steel coils. The decision
to cut down customs duty to on LNG (liquefied natural gas) will boost domestic
steel companies that rely on imports to run gas-based steel plants.
All these
decisions will go a long way in ensuring that Make in Steel drive is successful
in India.
Lastly, all
these efforts will mean nothing, if we are not able to produce steel of high
quality. If we want to compete at international level, we will
have to perform as per international benchmarks of efficiency and quality.
It is my firm
belief that Indian steel industry needs to move to a 100 % quality regime, for
health and safety of end users. That is why we are going ahead
with making BIS certification essential for most of the products.
All the measures
we discussed will have to be taken as a part of comprehensive strategy to
generate steel demand in the country.
I am sure you
will all use PRIDE as your guiding principle for Make in Steel Roadmap for the
industry.
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