Industry to work on enhancing Steel consumption in rural markets
Ministry of Steel to set up SPUs in Uttar Pradesh State
Hon’ble Minister of Steel, Govt. of India, Mr Beni Prasad Verma inaugurated the Conference on Enhancing Steel Consumption in India organized by the Confederation of Indian Industry (CII) in Lucknow on 21st October 2011. At the inaugural address, he stated that the Ministry of Steel, Govt. of India is very much committed to the growth of steel in India and mentioned that industry needs to work together to raise the steel consumption in rural India that currently stands at 8.5 Million Tonnes. He felt that rural markets present a very big opportunity for steel industry as 70 per cent of the country’s population is rural.
He stated that during the 12th Five Year Plan, Govt. of India is planning to invest Rs. 45.0 lakh crore in the field of infrastructure development and 50% of investment would be made by private sector. He invited industry to take a more proactive role to make this growth viable.
He announced that Ministry of Steel, Govt. of India through SAIL is going to revive the erstwhile Malvika Steel in Jagdishpur and setting up SPUs in Barabanki, Lakhimpur Kheri, Gonda, Mirzapur etc to boost industrial activities in at State level and provide jobs opportunities to the local youth. He added that RINL is also in the process of establishing SPUs in rural areas.
Mr. P.K. Mishra, Secretary, Ministry of Steel, Govt. of India stated that though India has emerged as the third largest finished steel consumer at the global level, there is scope to enhance consumption in domestic market by tapping rural markets. Asia as emerged as a major global steel consumption hub and its contribution has raised from 55 per cent in 2006 to 64 per cent in 2010. The overall steel consumption growth in the region has gone up by 7.5 per cent during this five year period.
He observed that use of steel in Indian rural market is low as compared the urban markets. He highlighted that with a shift in type of construction design, the use of steel in rural areas can be enhanced. He emphasized that the factors related to price weight of steel, strength, durability, use of latest technology and training of labour can help make this growth possible. He stated that small industries need to be encouraged and industry should aim for long term expansion and improvement in supply and logistics for the promotion of steel sector at domestic level in India . He also emphasized on the fact that recycling of steel in rural areas is yet another important area that needs to be addressed.
Mr C S Verma, Chairman, CII National Committee on Steel and Chairman, Steel Authority of India Ltd stated that there is tremendous scope of use of steel in Indian rural markets. He mentioned that India is enhancing its share in steel use at the global level and is currently on a growth phase. He stated that the Indian growth rate stands at 4.3 per cent at the global level during the year 2011. The global steel consumption is expected to grow by 6.5 per cent and 5.4 per cent respectively in 2011 and 2012.
During 2005, the per capita consumption of steel was 2 kg and now it is 9.5 kg in the Indian rural sector. He stated that the industry needs to address the big challenge of managing cost and technology in the field of steel manufacturing. He observed that some efforts have to be made for the growth of steel i.e. fabrication facilities, incentives to small entrepreneurs and abolishing credit deposits etc.
Mr A P Choudhary, Chairman & MD, Rashtriya Ispat Nigam Ltd stated that for India to achieve 8 to 10 per cent growth in the steel industry and reach the level of 200 MT in the long run, we need to look at new trends and opportunities in rural markets. Considering that about two thirds of the population is in rural areas, there is a huge potential for consumption. He stated that an increase in consumption by 1 kg would result in an increase by a million ton. He mentioned that industry needs to address the twin factors of price and delivery to capture rural markets. He added that RINL has put in efforts to cut the investment size, implementing micro financing with the help of banks to help promote the use of steel in Indian rural market.
Mr Ved Krishna, Chairman, CII UP State Council & MD, Yash Papers Ltd. in his welcome address outlined the various activities of CII in UP state and stressed on the need for Government and industry to jointly work on Research and Development with focus on innovation and breakthrough technology to create more viable options for the Indian rural markets in the steel sector. He added that given India ’s human resource capabilities, India can play a leadership role in R&D to boost growth in the domestic steel industry in India .