Steel Industry Example

With exponential growth in the global economy many new challenges are emerging in the corporate world. The explosion of investment in the industry world wide demands high levels of competencies to reap fruitful benefits.

In spite of many all round reforms, the industry is unable to meet the extremely large numbers and complex variety of challenges that have cropped up in view of the sky rocketing targets, declining profitability due to rising cost of inputs, shortage of skilled manpower and other resources This emerging scenario forces the industry to develop a continuum strategy to maneuver the five engines of growth viz Market, Capital, Technology, Organization and most importantly the people- they are the task masters who control the other engines.

Thus the need of the hour is to buildup the levels of competencies across the entire cross-section of the organization so as to meet these challenges and fulfill the goals and vision of the industry. It can be easily understood that the growth target for SAIL has suddenly shot up, while the manpower is taking a deep downslide. Thus the urgent need of the hour is to increase the manpower productivity to bridge the ever widening gap. This can only be possible by improving upon the existing competencies and learning new ones.

UNDERSTANDING THE TOPIC Considering the above facts SAIL has chosen the topic “Maintaining consistent growth and supremacy in a competitive market: Challenges & Strategy of SAIL” for young managers championship trophy 2013-14. Above topic covers mainly four topics which are as follows; 1. Consistent Growth 2. supremacy in competitive market 3. challenges before SAIL 4. strategy of SAIL to tackle the challenges before SAIL So, our Empirical study lies around the four elements given above.

But before thinking upon the each and every element of young manager’s championship trophy 2013-14 theme, we should know the other important things which are essential to understand and find out the solutions of the same. WORLD STEEL SCENARIO The steel industry in today’s world is considered as the backbone of the economy and is often indicative of economic progress, as it plays a critical role in infrastructural and overall economic development. In 2012, total world crude steel production was 1,547.

8 million metric tonnes (mmt). The biggest steel producing country is currently China, which accounted for 46. 3% of world steel production in 2012. In 2008 and 2009, output fell in the majority of steel producing countries as a result of the global recession, in 2010 started to rise again. The Steel industry directly employs more than two million people worldwide, with a further two million contractors and four million people in supporting industries.

Considering steel’s position as the key product supplier to industries such as automotive, construction, transport, power and machine goods, and using a multiplier of 25:1, the steel industry is at the source of employment for more than 50 million people. World crude steel production has increased from 851 (Mt) in 2001 to 1,548 Mt for the year 2012. World average steel use per capita has steadily increased from 150kg in 2001 to 215kg in 2011. India, Brazil, South Korea and Turkey have all entered the top ten steel producers list in the past 40 years.

INDIAN STEEL SCENARIO:- India’s rank in the world order of steel production remained unchanged at forthwith an output of 76. 7 million tons, despite logging the highest growth of 4. 2 percent among major producing nations in 2012. There was no change in the top three slots with China, Japan and the US retaining their positions in respective order. India was the world’s fourth largest steel maker in 2011 and 2010 as well with a total production of 73. 6 mt steel and 69 mt respectively. The country had clinched the third spot in 2009, but

lost out to the US since 2010. Does this signal anything for the industry? It surely does. It shows that even though India’s steel industry is faced with numerous hurdles such as sluggish demand, raw material shortages, inflow of capital, infrastructure and land acquisition, it is set to become a powerhouse. The pattern of steel demand would continue to change and manufacturers who are able to roll out value-added products could see their revenues improving. For instance, the product mix demand from different sectors such as automobiles or real estate would vary.

New grades of steel and customized products would see more takers. According to analysts, though there could be supply constraints in India in 2013, steel prices are likely to remain under pressure due to a steady stream of imports. Currently, India imports nearly 7-10 million tons of finished steel. Meanwhile, the green field projects in the country continue to encounter obstacles. Therefore, steel companies are looking into brown field expansion. The global capacity utilization for steel mills is below 80 percent.

However, it is more than 90 percent for India. As per the ‘World Steel in Figures’ report published by World Steel Association (world steel) , which provides essential facts and statistics about the global steel industry, in 2012 world average steel use per capita was 216. 9 kg. Average per capita steel consumption in Asia stood at 243. 5 kg in 2012. But it is unfortunate to say that Average per capita steel consumption in India is only 59 kg. It shows that there is immense scope of steel industry in Indian market. SWOT ANALYSIS OF INDIAN STEEL INDUSTRY