Rashtriya Ispat Nigam Ltd Chairman and Managing Director A.P. Choudhary has stressed the need for the steel industry to produce steel at the lowest cost possible, as it is the prime requisite for not only sustainable growth but also for generation of adequate margins to fund the investments for future capacity additions in the country, according to a press release.
He was addressing the “Steel Industry 2013” summit, organised by the FICCI in Mumbai on Friday.
He said improvement in techno-economic parameters, such as specific energy consumption, raw material consumption, productivity and yields, waste recycling, waste-heat recovery and other relevant areas would largely contribute to reducing the cost of production.
He said the next major challenge was on the raw material front.
“Cost is the main driver for competitiveness and more than 60 per cent of the steel production cost is on account of raw materials. The plants which were set up 5-6 decades ago were able to secure raw material deposits in the form of mining leases.
“However, new generation plants are not able to have the same advantage and have to source the raw material at very high prices from the market.
“Adequate support is, therefore, required for such plants to ensure availability of the key raw materials at a reasonable cost to ensure competitiveness in the industry,” he said.
He said that in today’s competitive market scenario value creation had become very important.
Time for transformation
The time has come where the steel companies have to transform themselves to ‘niche’ or ‘multi niche’ operators.
This transformation is possible only through innovation and it calls for a effective strategy for focused innovative efforts through R&D.
Synergies within the country and international co-operation for technology exchange need to be developed,” he said.
He said that requirement for ‘clean steel’ was also of great importance today. Every tonne of steel requires approximately 12 tonnes of inputs (6 tonnes of air; 3 tonnes of water; & 3 tonnes of raw materials).
He said experts were of the opinion that “Indian steel production is likely to outstrip the rise in steel demand in the next decade, resulting in a wave of low cost exports from the country to the world market.”