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sponge iron industry –past-present-future - SIMA

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CHAIRMAN<br />

V S BAPNA<br />

VICE CHAIRMAN<br />

B L AGRAWAL<br />

EXECUTIVE DIRECTOR<br />

S S BHATNAGAR<br />

GOVERNING BODY<br />

V S Bapna<br />

B L Agrawal<br />

N K Patnaik<br />

Suresh Thawani<br />

G K Chhanghani<br />

Rajesh Gupta<br />

Sushil Maroo<br />

P L Mohanty<br />

P Mohanty<br />

T Srinivasa Rao<br />

V Ramachandran<br />

Prakash Tatia<br />

Narayan Tekriwal<br />

Amitabh Mudgal<br />

S S Bhatnagar<br />

EDITORIAL<br />

The Indian economy has been growing from strength to<br />

strength and is expected to grow by 9% in 2010-11<br />

against 6.7% in 2008-09 & 7.4% in 2009-10. It is<br />

encouraging to see <strong>future</strong> projections that the economy<br />

shall continue to be robust and grow in double digits in<br />

the next few years.<br />

All indicators and authentic data show that the demand<br />

for steel will substantially grow from Infrastructure,<br />

Construction, Automobile & White goods sectors. These<br />

are all on an upswing and are supporting the consumption<br />

and demand of steel which is projected to steadily and<br />

strongly rise. Though the statistics forecast a promising<br />

<strong>future</strong> for the Indian Sponge Iron Industry, the ride may not be so smooth in the<br />

near to long term.<br />

In 2010,the Sponge Iron Industry faced unprecedented problems and struggled<br />

with sharp input cost increases with unmatched selling prices thereby putting<br />

tremendous pressure on the financial viability of most units. The situation has not<br />

changed much. The supplies of vital inputs namely Iron Ore, Coal and to some<br />

extent Natural Gas have been affected both in terms of availability & prices. To<br />

add to the hardships of Sponge Iron Manufacturers, poor infrastructure support is<br />

also increasing costs thereby putting further pressure and affecting the bottomline.<br />

We all know India has sufficient Iron Ore & Non Coking Coal based on which huge<br />

investments were made and large number of coal based units were established<br />

thereby making India the largest producer of <strong>sponge</strong> <strong>iron</strong> in the world. These<br />

inputs have now become a matter of serious concern. No doubt availability of<br />

natural gas is expected to improve in next 3-4 years but effective pricing policy<br />

here will play a very important role.<br />

The Indian Sponge Iron Industry is a very cost effective, efficient and high<br />

performance sector which is now passing through very critical times. With no clear<br />

cut policy initiatives from the Government for the sustained supply of the essential<br />

inputs, survival of the Industry is at stake, to meet the fast growing demands of<br />

quality metaliks by secondary steel sector in terms of National Steel Policy.<br />

<strong>SIMA</strong> has been regularly taking up the hardships being faced by the Industry with<br />

the Government authorities who are fully aware of the situation. However on this<br />

front very little has been done by the government to ensure raw materials availability<br />

in adequate quantities & affordable prices particularly Iron Ore.<br />

We are confident that with constant re<strong>present</strong>ations and through regular high level<br />

interactions, the Government will have to take some positive measures to give the<br />

much needed boost to the <strong>sponge</strong> <strong>iron</strong> sector which is the backbone of the<br />

secondary steel production.<br />

A study is being done by Ernst & Young on <strong>future</strong> sustainability of the Industry in<br />

collaboration with Tata Sponge. The report is likely to be ready by February, 2011<br />

and shall bring to light lot of facts for the consideration of the members and for<br />

making further recommendations to the Government.<br />

We sincerely hope that as in the past with your active participation and full support<br />

to <strong>SIMA</strong> the year 2011 shall usher in new prospects and prosperity.<br />

Wishing you and your family a very happy, bright, prosperous and fruitful<br />

business like 2011.<br />

S S BHATNAGAR

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