Government’s import bill down Rs 8,000 crore on domestic steel procurement policy

The government has been able to save Rs 8,000 crore worth of import bill ever since it has promulgated the policy of preference to domestic steel producers in the case of PSU procurement. Union steel secretary Binoy Kumar said, the policy came into force from May 2017. It has been estimated that the government can save import bills worth up to Rs 39,000 crore per annum if the capital goods industry can source the required steel domestically for manufacturing critical capital goods instead of imports. “This needs transfer of technology for which in the recently concluded capital goods conclave in Orissa there were 11 MOUs signed by various foreign and domestic steel producers. This would boost R&D that would help to manufacture special grade of steel needed for manufacturing critical capital goods,” Kumar said. Tata steel CEO and managing director TV Nadrendran said in the changing scenario the business model for the entire steel sector needs rethinking. Smart, digitally enabled, steel units needs to be put up to bring about a change in the system of production, while the entire model of steel business from carrying raw materials to distribution and marketing of finished steel needs rethinking. Tata steel with an annual crude steel production capacity of 27.5 million tonnes per annum with operations in 26 countries has added new product lines in its diversified portfolio following new acquisitions recently. While the company is open to more acquisitions, it has started reworking on its logistics and distribution to bring cost optimisation in the entire value chain of steel making and distribution, a Tata Steel official said on the sidelines of the 72nd annual technical meeting of the Indian Institute of Metals. According to Narendran, “if a fraction of the data we generate everyday is used, the model for steel business can be changed.” Kumar said the government was trying to work out an integrated model for logistics in and around Kalinganagar, where a number of steel units have come up. This integrated model would include use of inland waterways and laying out slurry pipelines along with facilities for rail and road transport. The commerce department of the Orissa government was at present working on it, Kumar said adding the entire pressure of logistics is borne by the Railways at present.” He said while logistics remain an issue, supply of coking coal, on which the steel industry was much dependent, is a matter of concern. SAIL, RINL and NMDC mined 1.2 million tonne of coking coal in Mozambique last year, which is expected to go up to 1.9 mt this fiscal. But the steel ministry is looking at Coal India for supplying more washed coal. Besides the government needed to work out on the increment in per capita steel plant consumption which was 69 kg per person per annum against the global average of 214 kg per person per annum.