Part - I

Abstract

"Innovation is the key to achieve a competitive edge in the international market. Innovation in its broadest sense includes new technologies, new ways of managing or discovering new market segments."

In this paper I have tried to analyze the Indian Steel Industry with the Global Steel Industry considering the past with the present scenario and formulating a strategy for the future. I have tried to explore ways and give a roadmap so that the Indian steel Industry can become globally competitive. The various problems faced by the industry like overcapacity, low productivity, low profit margins, low exports etc. are discussed in this paper and the formulation of a long term strategy to address these problems have been looked into. It is found that that the industry has to increase production of finished steel through expansion of existing plants and installation of new plants using the latest technology. Also a distinctive shift in product mix of companies by the production of value added products and products of international quality standards makes them more competitive as regards their global counterparts. A look into the power reforms and financial restructuring of steel companies are also envisaged so that the performance of the steel industry is improved. The study tries to suggest strategies and a road map to achieve and sustain competitive advantage in global arena.

Introduction

Steel has always been the backbone of any economy. The Indian iron and steel industry is nearly a century old, and it was the first core sector to be completely freed from the licensing regime. At present India is the 8th largest producer of steel in the world producing nearly 30mt of steel. Two of its companies (SAIL ranks 13th and Tata Steel 57th) figure among the world's 80 largest steel producers. With a market capital of 102billion it, gives direct employment to about 0.5million and indirect employment to 1.5million people. Indian steel sector enjoys easy availability of raw materials (iron ore) and cheap labour. However they have to bear additional costs pertaining to power, fuel and freight costs.

The global steel industry continues to suffer from both weak demand and chronic oversupply. The table given below shows historically the imbalance between consumption and capacity globally: -

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* Contributed by: -
Amit Chaddha,
B.E. (Metallurgy), MMS (Marketing),
School of Management Studies,
MNNIT Allahabad.