Description
COMPETITION ISSUES IN INDIAN STEEL INDUSTRY
Competition Issues in Indian Steel Industry
Final Report: December 18, 2008
Prepared for Competition Commission of India e! Del"i
Team Laveesh Bhandari Payal Malik A.S. Firoz Ramrao Mundhe Monica Jaitly Maj. Advisors eneral Bhu!endra "adav #r. Ashok #esai
$ndicus Analytics
This page is purposely left blank
ii
Contents
1. Introduction..................................................................................................................................................1 2. Steel Industry in India: Overview, erfor!ance and Structure ..................................................................." ". Institutional #esign...................................................................................................................................1$ %. &nalysis of 'o!petition in the Steel Industry...........................................................................................1( $. 'onclusions...............................................................................................................................................") &ppendi* I......................................................................................................................................................"" &ppendi* III..................................................................................................................................................."+ &ppendi* I,...................................................................................................................................................%$
#cronyms BR B$S B&F )A R )A R )R #+PB #R$ +AF +SSAR P- ) .B$ ..$ .R) $F $$S$ $2S#A $PT $SA $SPAT JP) JSPL JS3L J4SL M1A MBF 2M#) Bars and Rods Bureau o% $ndian Standards Basic &'y(en Furnace )om!ound Annual ro*th Rate )om!ound Annual ro*th Rate )old Rolled #uty +ntitlement Pass,ook Scheme #irectly Reduced $ron +lectric Arch Furnace +ssar Steel Ltd alvanized Sheets .ot Bri/uetted $ron .er%indahl0.irschman $nde' .ot Rolled )oils $nduction Furnace $nternational $ron 1 Steel $nstitute $nstitute %or Steel #evelo!ment and ro*th $nter Plant Trans%er $ndian Steel Alliance $s!at $ndustries Ltd Joint Plant )ommittee Jindal Po*er and Steel Ltd. JS3 Steel Ltd Jindal 4ijayna(ar Steel Ltd. Mer(ers and Ac/uisitions Mini Blast Furnace 2ational Mineral develo!ment )or!oration
i
2SP &) &.F &M) &M#) P&S)& R1# R$2L SA$L S#F SM+ SS$)s TMBP T$S)& TSL5 T6FS
2ational Steel Policy &*n )onsum!tion &!en .earth Furnace &rissa Minin( )or!oration &rissa Mineral #evelo!ment )or!oration Pohan( Steel )or!oration Research and #evelo!ment Rastriya $s!at 2i(am Ltd Steel Authority o% $ndia Steel #evelo!ment Fund Small and Medium +nter!rises State Small $ndustries )or!orations Tin Mill Black Plate Tata $ron and Steel )o. Tata Steel Ltd Technolo(y 6!0(radation Fund Scheme
ii
1$
Introduction
$ndia7s economic (ro*th is contin(ent u!on the (ro*th o% the $ndian steel industry. )onsum!tion o% steel is taken to ,e an indicator o% economic develo!ment. 3hile steel continues to have a stron(hold in traditional sectors such as construction8 housin( and (round trans!ortation8 s!ecial steels are increasin(ly used in en(ineerin( industries such as !o*er (eneration8 !etrochemicals and %ertilisers. $ndia occu!ies a central !osition on the (lo,al steel ma!8 *ith the esta,lishment o% ne* state0o%0the0art steel mills8 ac/uisition o% (lo,al scale ca!acities ,y !layers8 continuous modernisation and u!(radation o% older !lants8 im!rovin( ener(y e%%iciency and ,ack*ard inte(ration into (lo,al ra* material sources. Steel !roduction in $ndia has increased ,y a com!ounded annual (ro*th rate 9)A R: o% ; !ercent over the !eriod
COMPETITION ISSUES IN INDIAN STEEL INDUSTRY
Competition Issues in Indian Steel Industry
Final Report: December 18, 2008
Prepared for Competition Commission of India e! Del"i
Team Laveesh Bhandari Payal Malik A.S. Firoz Ramrao Mundhe Monica Jaitly Maj. Advisors eneral Bhu!endra "adav #r. Ashok #esai
$ndicus Analytics
This page is purposely left blank
ii
Contents
1. Introduction..................................................................................................................................................1 2. Steel Industry in India: Overview, erfor!ance and Structure ..................................................................." ". Institutional #esign...................................................................................................................................1$ %. &nalysis of 'o!petition in the Steel Industry...........................................................................................1( $. 'onclusions...............................................................................................................................................") &ppendi* I......................................................................................................................................................"" &ppendi* III..................................................................................................................................................."+ &ppendi* I,...................................................................................................................................................%$
#cronyms BR B$S B&F )A R )A R )R #+PB #R$ +AF +SSAR P- ) .B$ ..$ .R) $F $$S$ $2S#A $PT $SA $SPAT JP) JSPL JS3L J4SL M1A MBF 2M#) Bars and Rods Bureau o% $ndian Standards Basic &'y(en Furnace )om!ound Annual ro*th Rate )om!ound Annual ro*th Rate )old Rolled #uty +ntitlement Pass,ook Scheme #irectly Reduced $ron +lectric Arch Furnace +ssar Steel Ltd alvanized Sheets .ot Bri/uetted $ron .er%indahl0.irschman $nde' .ot Rolled )oils $nduction Furnace $nternational $ron 1 Steel $nstitute $nstitute %or Steel #evelo!ment and ro*th $nter Plant Trans%er $ndian Steel Alliance $s!at $ndustries Ltd Joint Plant )ommittee Jindal Po*er and Steel Ltd. JS3 Steel Ltd Jindal 4ijayna(ar Steel Ltd. Mer(ers and Ac/uisitions Mini Blast Furnace 2ational Mineral develo!ment )or!oration
i
2SP &) &.F &M) &M#) P&S)& R1# R$2L SA$L S#F SM+ SS$)s TMBP T$S)& TSL5 T6FS
2ational Steel Policy &*n )onsum!tion &!en .earth Furnace &rissa Minin( )or!oration &rissa Mineral #evelo!ment )or!oration Pohan( Steel )or!oration Research and #evelo!ment Rastriya $s!at 2i(am Ltd Steel Authority o% $ndia Steel #evelo!ment Fund Small and Medium +nter!rises State Small $ndustries )or!orations Tin Mill Black Plate Tata $ron and Steel )o. Tata Steel Ltd Technolo(y 6!0(radation Fund Scheme
ii
1$
Introduction
$ndia7s economic (ro*th is contin(ent u!on the (ro*th o% the $ndian steel industry. )onsum!tion o% steel is taken to ,e an indicator o% economic develo!ment. 3hile steel continues to have a stron(hold in traditional sectors such as construction8 housin( and (round trans!ortation8 s!ecial steels are increasin(ly used in en(ineerin( industries such as !o*er (eneration8 !etrochemicals and %ertilisers. $ndia occu!ies a central !osition on the (lo,al steel ma!8 *ith the esta,lishment o% ne* state0o%0the0art steel mills8 ac/uisition o% (lo,al scale ca!acities ,y !layers8 continuous modernisation and u!(radation o% older !lants8 im!rovin( ener(y e%%iciency and ,ack*ard inte(ration into (lo,al ra* material sources. Steel !roduction in $ndia has increased ,y a com!ounded annual (ro*th rate 9)A R: o% ; !ercent over the !eriod