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Bharana Mehta
Joint Plant Committee (for iron & steel) under ministry of steel wants the steel industry to focus on creating new demand by offering new kind of products to consumer industries as per their requirement. If the steel industry wants to increase consumption of steel, it should offer what consumers want, opined RK Prasannan, development commissioner for iron & steel and the chairman of Joint Plant Committee (JPC).
He said that the average per capita consumption of steel is still hovering around five kg, against the world average of 150 kg. Therefore, unless the consumption level is abundantly increased, steel market could not be buoyant.In the Year 1997-98 there has been an all round fall in demand from all industrial sectors including construction, engineering and capital goods. After liberalisation of steel in 1991, a tremendous enthusiasm was visible among the producers and entrepreneurs to set up new unit.The increased capacity has put pressure on the industry as supply is exceeding demand. In the lasttwo years demand for steel in the country has remained stagnant. Increasing exports on higher level have also not been possible on account of currency crash and economic crisis in the East Asian countries. The result is that both the main producers and secondary producers of steel are nursing huge inventories and some of them had to cut down their production.
The Steel Authority of India Ltd had an inventory of one million tonnes while the Tata Iron & Steel Company and Visakhapatnam Steel Project had more than a quarter of a million tonnes each the year 1997-98 witnessed a growth of four per cent in the production of crude/ingot steel. The production of crude steel in the country was 24.71 million tonnes during 1997-98 as compared to 23.69 million tonnes in 1996-97.
Though the overall growth of the steel industry was low compared to that in the previous years, the secondary sector recorded growth of 11 per cent. The share of the secondary producers in the total production of crude steel was about 33 percent. In this situatation, Prasannan said, industry must evolve new strategy to improve consumption level. He said that the need of the hour is customer orientation.
According to him, consumer industry of steel is not happy with the quality and range of products offered by the steel industry. He said that the seller's market has now become buyer's market. So product has to be of consumer's choice.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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