Tata Steel expects the industry to focus on creating a level playing field for domestic producers to compete with exporting countries in 2016.
TV Narendran, Managing Director, Tata Steel, said the focus for next year is to ensure a level playing field for the domestic companies as it now appears to be skewed with increasing imports.
The pace of economic growth in the country is encouraging for the steel sector and the demand is expected to increase seven per cent to 87.6 million tonnes next year from 81.5 mt in 2015, he said. In India, steel prices have dropped by 40 per cent in last 18 months wherein internationally it was down by about 30 per cent.
Overall 2015 was a tumultuous year for commodity sector globally and will go down as the toughest patch for the industry in recent past. Indian steel companies were also been affected by the global oversupply situation, added Narendran.
One of the biggest challenges for domestic steel companies was to tackle imports from steel surplus countries such as China, Japan and Korea. The sharp increase in imports and predatory pricing has impacted the profitability of Indian steel producers, he said.
Despite gloomy situation, the steel sector has been working to achieve the Government target to scale steel production to 300 million tonne by 2025, said Narendran.
Tata Steel recently commissioned its 3 million tonne per annum integrated greenfield steel plant in Odisha and focusing on specialised products to sell the incremental production.
“We are opening up new segments as the product range from Kalinganagar is wider and thicker compared to Jamshedpur unit. We continue to build on the equity we have in the market place with many of our business-to-business customers,” he said.
Of the total revenue, branded product sales account for 40 per cent and within this, he said, direct sale to consumer is about 20 per cent. “We have made significant inroads into the LPG segment and are focusing more on SMEs,” he said.