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SUJANA METAL PRODUCTS LIMITED<br />
Some of the growth drivers helping the sector<br />
to grow are:<br />
- Abundant availability of iron ore in the<br />
country with States such as Orissa,<br />
Jharkhand and Chhattisgarh being<br />
rich in iron ore reserves. The National<br />
Minerals Development Corporation<br />
(NMDC) plans to expand its iron ore<br />
production capacity from its existing<br />
capacity of 30 million tonnes per annum<br />
(MTPA) to 50 MTPA by 2014–15 through<br />
capacity expansion of current mining as<br />
well as by new mining.<br />
- The country has well established<br />
facilities for the production of steel.<br />
The Indian steel industry ranks fifth in the<br />
world with an estimated crude steel production<br />
of 63 MnT in FY 2010-11. Integrated steel<br />
producers contributed 55% of the total crude<br />
steel production in 2010-11 and 45% by<br />
secondary producers.<br />
During the period 1997-98 to 2000-01 steel<br />
production witnessed a marginal growth of<br />
3% CAGR. However, during 2001-02 to 2007-<br />
08 owing to a boom in the infrastructure and<br />
automobile sectors, the industry witnessed a<br />
sharp turnaround and registered a steep hike<br />
of 12% CAGR.<br />
Snapshot (2010-11)<br />
Capacity Production Import Export Not Import Consumption<br />
78 MnT 63 MnT 6.8 MnT 3.5 MnT 3.3 MnT 66 MnT<br />
+5% +11% (11)% (4)% - +10.6%<br />
Source: JPC<br />
In 2010-11 steel consumption grew at a<br />
healthy 10% from 59 MnT in 2009-10 to<br />
66 MnT, owing to strong demand from the<br />
infrastructure construction, automobile, and<br />
industrial sectors. Rising production capacities<br />
has reduced India’s import dependency from<br />
13% in 2009-10 to about 10% in 2011-12.<br />
Performance Trend<br />
Production Import Export Consumption<br />
2005-06 42 4.3 4.8 41<br />
2006-07 47 4.9 5.2 47<br />
2007-08 50 7.0 5.1 52<br />
2008-09 57 5.8 4.4 58<br />
2009-10 55 7.4 3.3 59<br />
2010-11 63 6.5 3.4 66<br />
CAGR 8.4% 8.6% (6.7%) 10%<br />
Source: JPC<br />
Capacity addition programme<br />
According to estimates by the Ministry of<br />
Steel, India is slated to add around 200 MnT<br />
of capacity during the next decade, increasing<br />
overall crude steel capacity from 78 MnT in<br />
2010-11 to around 280-290 MnT by 2020.<br />
Certain estimates suggest that India would<br />
emerge as the world’s second largest steel<br />
producer by 2015-16.<br />
Sate<br />
Mou’s<br />
Capacity<br />
(MnT)<br />
Orissa 49 75.66<br />
Jharkhand 65 104.23<br />
Chhattisgarh 74 56.61<br />
West Bengal 12 21.00<br />
Others 22 18.20<br />
Total 222 275.20<br />
Source: Ministry of Steel<br />
Per Capita Consumption<br />
India presents a high growth potential with its<br />
per capita finished steel consumption of 54<br />
kg, compared with 430 kg in China and 187<br />
kg globally. Interestingly, India’s per capita<br />
steel consumption in rural locations is only<br />
13 kg, with 70% of Indians residing in these<br />
areas. The government is making efforts to<br />
leave adequate income in the hands of the<br />
rural masses through attractive procurement<br />
prices for agricultural produce and NREGA<br />
scheme. Rural markets are expected to<br />
emerge as a huge opportunity for increasing<br />
steel consumption in the coming years.<br />
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