CALCUTTA, Dec 25: The steel industry and government have formed a steering committee and decided to launch an extensive rural survey to boost steel demand. The steps, part of a nationwide campaign aimed at increasing demand, were taken at a meeting in Delhi last week attended by senior officials of public and private sector steelmakers and the steel ministry.

The decision to form the steering committee was taken at the brainstorming session, attended by representatives of Steel Authority of India Ltd, Tata Iron & Steel Co, Essar, Jindal, Ispat group, Usha Malvika and Sesa Goa among others.

Top industry sources told The Financial Express that talks were on with the National Institute of Design for exploring customised markets. As part of the marketing exercise, the committee would start off with a massive rural survey. A media blitz was being planned to push the generic idea of steel.

Various operational research groups like the ORG, Dalal Consultants, National Council for Applied Economic Research, and Price Waterhouse were being contacted for the purpose.

The rural survey would be undertaken in 16 states at various levels. Consumption levels would be ascertained for all sectors including the household, manufacturing, farm and non-farm sectors. Non-government organisations would also be roped in to provide supportive services.

The Steel Development Fund will extend Rs 10 lakh for the survey. The sources said the national campaign to promote steel consumption was being done to tackle the abysmally low steel consumption level. A further downtrend in consumption levels is expected this year, the source said.

The nationwide campaign would focus on the rural segment, where steel consumption is extremely low, the sources said. "The GDP in 1996-97 was high due to a higher agricultural growth rate. If the industry targets this sector, consumption levels are bound to rise", he added.

In the rural sector, the steering committee will analyse the lack of awareness among consumers, price barriers, technology and support services among others.

"Provision for customisation of products is being discussed. The auto segment has one of the largest potential for steel usage", he said.

Steel companies are expected to meet in Chennai early next month to discuss various customer-specific products with their end-users.

The steering committee is incorporating ideas from global steel majors. "We are studying ideas of the Steel Alliance, which is an association of 13 major steel producers in the US. Moreover, the Chinese model for increasing consumption levels was also being looked at," the source said. Both the US and China have shown positive consumption trends in the last five years.

Total consumption of steel in India increased marginally to 22.26 million tonnes during 1996-97, a 4.6 per cent growth over the previous year. The ministry has targeted a consumption of 32.6 million tonnes which would mean an 11 per cent growth rate.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.