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Part - III

With the firming up of steel prices the world over India should restructure its steel industry but it is not all that easy. In developed countries the labour costs are 35% of the total cost of steel production whereas it is only 15% in India inspite of overmanned steel plants. This cost advantage is wiped out since the productivity in India is only 90t/person as against 150t/person in developed countries. It is clear that we have to formulate some strategies so that Indian steel industry can be made more productive and efficient.

Some of these strategies can be: -

Increase in Finished Steel Production
The demand for steel is derived from sectors like automobiles, white goods and construction/infrastructure. Now, these manufacturers of automobiles and white goods use finished steel hence the higher the production the higher will be the revenues of the company. As the chart below shows that this production is growing steadily but efforts should be made so that this production is increased through new capacity installation. Also the forecast for demand of finished steel in the future is also bound to increase as shown in the table given below. In order to maintain this demand the Industry has to look for new expansions and installations.

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