Indian Steel Industry
An overview and growth
prospects in north India
Contents
Indian steel industry
4
India steel industry outlook
6
Potential growth constraints
10
Investment scenario in steel
11
Challenging global environment
12
Steel industry in north india: Structure and challenges
14
De-bottlenecking the steel sector in north india
16
2
3
Indian steel industry
The Indian steel industry has entered into a new era of
development since 2007-08, riding high on the resurgent economy
and robust demand for steel. Rapid rise in production has resulted
in India becoming the 4th largest producer of crude steel and the
largest producer of sponge iron in the world.
Indian steel industry has just delivered a decade of
exponential revenue and profit growth
The Indian steel industry has
achieved significant milestones
in terms of growth in capacity,
production and exports to
become a major player in the
global steel industry. Between
FY2008 and FY2013, India’s
steel production has grown at
a compound annual growth
rate (CAGR) of about 7 percent
(Exhibit 1).
Exhibit 1. Total finished steel production for India
(in million ton)*
80
70
60
50
40
30
20
10
2008
2009
2010
2011
2012
2013
*Source: World Steel Association and Metal Bulletin
Industry revenues (top four
companies) grew close to 4x,
while operating profits grew
by approximately 5x during the
past decade (Exhibit 2).
Exhibit 2. Revenues and operating profits for top four
Indian steel companies (Rs. Crores)*
150
120
90
60
30
0
2003
Revenues
2013
Operating profits
*Source: World Steel Association and Metal Bulletin
4
On the basis of ownership, the
Indian steel industry is broadly
divided into private and public
The Indian steel industry is divided sector enterprises. The private
into primary and secondary sectors. sector dominates production—
The primary sector comprises a few accounting for almost 78 percent
of the finished steel output—while
large integrated steel providers
the public sector has higher
producing billets, slabs and hot
capacity utilizations.
rolled coils, among others. The
secondary sector comprises small
units focused on the production
of value added products such as
cold rolled coils, galvanized coils,
angles, columns, beams and other
re-rollers, and sponge iron units.
Both sectors cater to different
market segments.
Structure of the Indian
steel industry
Indian steel industry is
more consolidated than
the global steel industry
The capacity share of the top five
Indian steel players stood at 51
percent of the total capacity (87.3
MTPA) in fiscal year (FY) 2011
compared to less than 15 percent
capacity share for the top five
global steel players (Exhibit 3).
This has resulted in the large
integrated producers having
significant pricing power, forcing
the secondary producers to look
at backward integration to
remain competitive.
Exhibit 3. Consolidation in the Indian and global steel industry*
Top 5 players capacity share - India
Top 5 players capacity share - Global
Others
85%
Others
49%
Bhushan
5%
ESSAR
7%
Tata Steel
9%
Wuhan group
2%
JSW
15%
POSCO
2%
SAIL
15%
Arcelor Mittal
5%
Hebei Group
3%
Baosteel Group
3%
*Source: World Steel Association and Metal Bulletin
5
India steel industry outlook
Domestic steel demand
to remain muted during
FY2012–17 on account of
a weak macroeconomic
environment
The demand for longs is expected
to increase by 19 million ton
(MT) at a CAGR of 9 percent and
for flats by 16 MT at a CAGR of
8 percent between FY2012 and
FY2017 (Exhibit 4). This is due to
relatively weaker growth prospects
of flats end-user industries (such
as automotive and consumer
durables) than those for longs.
Exhibit 4. Finished steel demand: longs and flats (in MMT)*
120
100
80
60
40
20
2011
Flats
2012
2013
Longs
*Source: World Steel Association and Metal Bulletin
6
2014
2015
2016
2017
Increased domestic
competition
Incumbents and challengers have
announced 71 million ton per
annum (MTPA) of steel capacity
addition between FY2012 and
FY2017 through both brownfield
and greenfield routes. However,
there is considerable uncertainty
on the actual capacity addition as
many projects are yet to achieve
financial closure due to delays or
lack of regulatory clearances.
Based on our bottom-up
assessment of the announced
capacity additions, projects
aggregating to 35 MTPA of
crude steel capacity have already
achieved financial closure. Hence,
we expect a minimum aggregate
capacity of 122 MTPA to be
commissioned by FY2017
(Exhibit 5).
This capacity addition will lead
to two structural changes. First,
the concentration in the longs
segment will increase by 5–7
percent in the medium term,
deepening the sustainability
challenge for secondary producers.
Second, it will shift the current
flats-longs capacity split of
50:50 to 60:40 by FY2017, if
all the announced projects are
commissioned. As a result, one can
expect oversupply in flats and a
capacity shortfall in longs.
Exhibit 5. Crude steel capacity forecast*
Installed capacity
2011-12
Financial closure
Projects pending
financial closure
Total capacity
2016-17
*Source: World Steel Association and Metal Bulletin
7
Steel capacity to outpace demand in the medium term
We have projected capacity for
crude and finished steel between
FY2012 and FY2017 to understand
the supply-demand balance.
In light of the uncertainty in
regulatory approvals and financial
closures, we have built three
scenarios for capacity addition:
• Aggressive (all announced
capacity commissioned)
• Base (all brownfield and
financially closed; greenfield
capacity commissioned)
Exhibit 6. Flats steel demand versus capacity*
in Mn Ton
100
90
80
70
60
50
40
30
20
10
2011
• Low end (only financially closed
capacity commissioned)
2012
Demand
2013
2014
Low end case
2015
2016
Base Case
2017
Aggressive
case
*Source: World Steel Association and Metal Bulletin
We believe that the supply for flats
could outpace demand between
FY2012 and FY2017, even in the
low-end capacity addition scenario Exhibit 7. Longs steel demand versus capacity*
leading to increased pressure
in Mn Ton
on utilization and margins. This
70
coupled with the downturn in
60
global steel prices will prod primary
producers to substitute imports
50
and crowd out secondary producers
40
(Exhibit 6).
In contrast, the longs segment
could see demand outpacing
capacity over the next five years,
except in the most aggressive
capacity addition scenario. Longs
steel players are likely to face a
favorable demand environment
with only a transient overcapacity
leading to better utilization and
margins compared to flat steel.
Overcapacity could be prolonged
only if the entire announced
capacity addition—21 MTPA—is
completed (Exhibit 7).
8
30
20
10
2011
Demand
@7.55%GDP
growth
2012
2013
Low end case
capacity
*Source: World Steel Association and Metal Bulletin
2014
2015
Base Case
capacity
2016
2017
Aggressive
case capacity
Domestic raw material supply volatility to continue despite improvement in
the global scenario
We expect global prices of
iron ore to soften in the near
term, but the same might not
materialize for Indian players
primarily due to the challenging
regulatory environment. The
future landscape of iron ore
supply in domestic markets will
be determined by who wins the
regulatory tussle—iron ore miners
or steel players (Exhibit 8).
Exhibit 8. Iron ore supply versus demand scenarios*
Scenario 1: Iron players win
in Mn Ton
300
250
Supply
shortage
200
150
100
Scenario 1: If iron ore miners win,
it will lead to:
• Firmer iron ore prices in
the local market—import
parity pricing.
• Iron ore shortage for
nonintegrated steel players.
• Potential margin compression in
the case of weak realizations.
50
10
2017
2017
Iron Ore
demand
2017
Export
2017
2017
2017
Iron Ore
production
*Source: World Steel Association and Metal Bulletin
Scenario 2: Steel players win
in Mn Ton
300
Scenario 2: If steel players win, it
will lead to:
• Softer iron ore prices in t
he local market—export
parity pricing.
• Adequate iron available for
nonintegrated players.
250
Supply
equals
demand
200
150
100
50
10
2017
Iron Ore
demand
2017
2017
Export
2017
2017
2017
Iron Ore
production
*Source: World Steel Association and Metal Bulletin
9
Potential growth constraints
Demand-side constraints
Supply-side constraints
The growth in the steel market is
expected to be muted in the short
term on account of poor growth
in core consumer sectors such as
infrastructure and construction.
The large steel players and new
entrants have announced capacity
addition of about 71 MTPA till
2017. Regulatory hurdles and land
acquisition challenges remain the
largest supply-side constraint for
the Indian steel market. Mining
bans in Karnataka and Goa
and delays in the execution of
announced capital projects can
further constrain supplies.
The demand is expected to
rebound in the latter half of 2015
with growth in infrastructure
as announced in the Twelfth
Five-year Plan. Growth in the
automobile and consumer durable
sectors will also support demand
growth in the long term.
Exhibit 9. End uses for steel in India*
22%
22%
6%
10%
22%
18%
Others
Automobiles
*Source: World Steel Association and Metal Bulletin
10
Capital Projects
Pipes
Infrastructure
Consumer
Durables
Investment scenario in steel
Incumbents and challengers have announced 71 MTPA of steel capacity
addition between FY2012 and FY2017 through both brownfield and
greenfield routes. However, there is considerable uncertainty on the
actual capacity addition as many projects are yet to achieve financial
closure due to delays or lack of regulatory clearances.
Land acquisition and
regulatory clearances pose
major challenges to new
greenfield investments
Need to secure raw
material supply have led
Indian steel companies to
look at global asset base
Delays in the government
allocating sufficient iron ore
blocks, regulatory approvals and
challenges in land acquisition
have slowed many steel projects.
Moreover, regulatory clearances
and land acquisition challenges
have affected expansion and
modernization projects. Major
investments from leading MNCs
and large Indian corporates across
Karnataka, Odisha, Jharkhand and
West Bengal have been affected
due to land acquisition challenges.
The raw material security scenario
has slightly improved due to
regulatory support to overseas
acquisitions. The Indian steel
companies are actively seeking
mining leases and assets globally
to secure raw material supplies.
The capability to acquire, develop
and operate these assets has
become a key strategic imperative.
These assets provide a natural
hedge at the raw material portfolio
level, and are also important
for overcoming the short-term
domestic challenges.
Several Indian steel companies
have acquired iron ore and coking
coal assets in countries such as
Canada, Australia and South Africa
through joint ventures. One of the
leading Indian steel companies
acquired a majority stake in a new
iron ore reserve in Canada. It had
acquired a minority stake in an
Australian mine, which was sold
last year to a leading global miner.
Another Indian steel company has
acquired and operates anthracite
mines in South Africa. It has also
acquired a significant minority
stake in an Australian coal miner
with exploration rights for coking
coal in Queensland.
11
Challenging global environment
Globally, steel players have been operating
in a challenging environment. These trends
are now extending to India leading to margin
compression and weaker growth prospects.
Shift toward relatively
lower steel demand
growth in most of the
heavy-weight economies
including China
Steel companies globally have
been operating in a challenging
environment of rising input costs
and limited pricing power (in most
years), leading to steady erosion in
margins. In response, steel makers
have been integrating upstream
facilities to secure supplies of iron
ore and coking coal.
The global macroeconomic crisis
appears to have accelerated the
pre-existing trend toward declining
the steel intensity in the OECD
economies. The steel industry
is staring at a flatter demand
trajectory globally, including in
China—which is expecting a very
low single-digit growth.
The global scenario has been
a prologue to the Indian
market where after a decade of
exponential revenue and profit
growth, the steel players are
entering a down-cycle. Historically,
high asset utilizations, benign
global pricing, consolidated
industry structure and a local
demand-supply environment have
enabled Indian players to generate
better realizations compared to
their global counterparts.
Recently, however, the Indian steel
industry has started witnessing
the signs of down-cycle leading to
margin compression despite strong
volume growth. This is primarily
due to high input costs and a weak
macroeconomic environment,
both globally and domestically.
Declining margins, coupled with
sluggish demand growth, has made
investors cautious about steel
companies. As a result, enterprise
12
value for the Indian steel industry
has declined almost 30 percent
since FY2010.
This situation is further
complicated by key trends in the
global and domestic steel industry
that have far-reaching impact
on Indian steel players and
customer markets
Structural shifts in China
could fundamentally
impact Indian players
Steel demand growth
is expected to flatten
in heavy-weight
China is experiencing significant
economies including
overcapacity as players have
OECD economies, even created capacity ahead of demand.
This, coupled with weak pricing,
as major structural
presents a significant threat to
shifts in China and
demand in the local and other
Asian markets for Indian players.
fewer acquisitions of
raw material suppliers Cooling down of iron ore
in India are expected to and coking coal prices,
reshape these markets. reducing acquisition pace
The steel industry in OECD
economies is witnessing
persistent low capacity utilization
compounded by margin squeeze.
This, coupled with three key trends,
is leading to a structural shift in
the global steel industry.
of Chinese and Indian
players
Steel players in China and India
were on an acquisition spree for
iron ore and coking coal assets
around the globe to insulate
themselves from price volatility.
But as raw material prices
cooled in the past few years, the
race for self-sufficiency has taken
a backseat.
13
Steel industry in north India:
structure and challenges
Industry structure
industry operates out of several
centers including Sahibabad,
Shamli and Gorakhpur. Bhushan
Steel, Gallant Ispat, Jai Bharat
Steel, Rathi Steel are the main
players with production facility in
Uttar Pradesh.
India’s northern steel hub
contributes about 16 percent to
India’s annual steel production. The
hub comprises multiple small and
medium units—primarily induction
furnaces and steel re-rolling mills—
located in and around Punjab
and Haryana. These units largely
cater to the construction and
light engineering sector including
bicycle and auto-parts.
owing to tax benefits, and are
catering to Jammu and Kashmir,
and Haryana.
Rajasthan
Rajasthan is the third largest
producer and fourth largest
consumer of steel in north India.
Punjab
The industry produced 2.5 MTPA
Punjab’s secondary steel
of steel in 2011-12. Rajasthan’s
manufacturing capacities
secondary steel manufacturing
are concentrated in Mandi
capacities are concentrated in
Gobindgarh, Khanna and Ludhiana, Bhiwadi/Alwar, Bhilwara, Jaipur
catering to the construction and
and Kota. Kamdhenu Steel is
light engineering sector.
a major steel producer with
Uttar Pradesh
production facility in Rajasthan.
Uttar Pradesh is the largest
In the past few years, units in
producer and consumer of steel in
north India. The industry produced Himachal Pradesh have developed Haryana
an edge over Punjab’s steel mills
Haryana is the fourth largest
5.6 MTPA of steel in 2011-12. The
producer and third largest
Exhibit 10. Production and sale of finished steel in North India in FY 2012* consumer of steel in north India.
The industry produced 2.3 MTPA
of steel in 2011-12. Haryana’s
FY2011-12 Data
steel manufacturing capacities
Annual Production
(‘000 tonnes)
are concentrated in Bhadurgarh
Annual Sales MMTP
and Hissar. Jindal Group and
(‘000 tonnes)
Surya Steel Pipes are two major
Jammu & Kashmir
steel producers with production
facilities in Haryana.
Himachal Pradesh, Jammu
& Kashmir and Uttarkhand
Himachal Pradesh
Punjab
Himachal Pradesh, Jammu &
Kashmir and Uttarkhand jointly
occupy the fifth position as steel
producing states in north India.
Each of these states produced 0.4
MTPA of steel in 2011-12.
Chandigarh
Haryana
Delhi
Rajasthan
*Source: JPC2012 report
0
14
Uttar Pradesh
Steel units in Himachal Pradesh
are concentrated around Kala
Amb. These units have in the last
few years developed an edge over
Punjab’s steel mills owing to tax
benefits. Amba Group, Jai Bharat
Steel and SPS Group are a few of
the steel producers with production
facilities in Himachal Pradesh.
Steel units in J&K are concentrated
in Jammu. Cosmic Steel, KC
Group and are a few of the steel
producer with production facilities
in Uttarkhand.
Steel units in Uttarkhand are
located in Haridwar, Kashipur,
Kotdwar and Udham Singh Nagar.
KVS Group and Sidhbali Group are
a few of the steel producer with
production facilities in Uttarkhand.
Industry challenges
Scarce natural resources but
advantage of proximity to
end users
Power shortages and rupee
depreciation impact the
industry in the north
Challenges to remain
competitive in the flats
products market
Most steel mills are running at
less than 50 percent of their
respective rated capacities
because of poor power supply
and rising input costs. The power
outages in northern states are
resulting in production losses and
forcing many mills to work only
single shifts.
High value flat products such as
cold rolled coils and galvanized
coils have better transport
durability as compared to long
products. This makes it easier for
primary steel producers to ship
these products from their primary
manufacturing locations to global
consumers. The long product units
can benefit from proximity to end
users and provide an opportunity
for secondary steel players in
north India. The demand for
long products for infrastructure
and capital projects is met by
downstream units in north
India. These units focus on the
production of TMT bars and wire
rods, among others.
Also, the depreciation of the
Indian rupee against the US
dollar has resulted in a significant
increase in the cost of imported
steel melting scrap, a major input
in secondary steel production.
Further, due to the rupee
depreciation, export orders have
been cancelled or deferred, which
is another set-back for the steel
industry in north India.
North India has not been naturally
endowed with rich iron ore and
coal deposits like East or South
India. Poor proximity to ports,
higher cost and shortages of power
do not favor setting up primary
steel manufacturing units in the
region. Moreover, the logistics cost
of transporting raw material from
the eastern and southern states
make it unviable to produce crude
steel in the region.
However, north India continues
to be a substantial consumer of
steel. North India is the industrial
hub for automobile and consumer
durable goods factories, which are
among the key consumers of steel.
The proximity to these units makes
secondary steel production
a commercially viable option in
north India.
B
15
De-bottlenecking the steel sector in
north India
Opportunities
Challenges
Initiatives
Infrastructure investments
in north India to spur the
local steel demand
Depreciating rupee and
competitive import market
will continue to impact
steel manufacturers in
north India
Customer-centric sales and
marketing
The government has announced
many mega-investment projects
in north India including the
prestigious US$100-billion DelhiMumbai Industrial Corridor, slew
of export zones and industrial
parks across Rajasthan, Haryana
and western Uttar Pradesh.
These projects will continue to
drive sustained demand for long
steel across the northern states.
Regional steel suppliers need to
remain competitive on cost and
service to play a major role in the
implementation of these projects.
Automobile sector is
centered in north India
About 32 percent of the Indian
major automobile manufacturers
have strong presence in the north
India region including Maruti
Suzuki, Hero MotoCorp, Honda
Motorcycle & Scooter, Honda
Cars, Bajaj Auto, Yamaha, TAFE,
Tata Motors, Ashok Leyland, and
Mahindra & Mahindra. Many autocomponent manufacturers too are
based in north India. This provide a
tremendous opportunity for Indian
auto-component manufacturers in
north India.
16
The Indian government’s continued
push toward imposing import
duties on scrap has increased
cost of production for domestic
steel producers. Additionally,
the depreciating rupee will
continue to make imports of scrap
more expensive depressing the
secondary steel margin further.
The north Indian steel producers
will have to work on other aspects
apart from price to remain afloat
in the market
Challenges in establishing
north India as a hub
for production of highvalue steel
High-value steel products typically
travel well and are packaged to
travel over long distances. The
raw material transportation costs
make nonprimary steel producing
hubs less attractive for the
production of high-value steel. The
automobile and consumer goods
plants in north India continue to
purchase high-value flat products
from around the globe due to
competitive pricing and excellent
travel characteristics.
As Indian steel companies expand,
they are increasingly facing
an overlap in their market and
product footprint. This coupled
with a lower demand growth has
led to increased price competition
and pressure on margins. In this
scenario, increased customer
centricity will differentiate the
high performers. Indian secondary
steel producers will have to
demonstrate higher customer
centricity to maintain business in
highly competitive north Indian
markets. The core customer base
of automobiles, consumer durables
and engineering has become more
demanding in terms of quality
and service levels. Firms will need
to deepen their understanding of
buyer values and create innovative
products and service offerings
targeted at different customer
segments. Capability to analyze
customer buying patterns will
enable the sales force to be more
proactive in the selling cycle.
Additionally, as customers become
more demanding and offering
complexity increases, firms will
need to embrace leading Sales
and Distribution practices from
consumer focused industries
such as FMCG & Pharma to
differentiate themselves from
their peers.
Indian steel companies will need
to:
•
1.Deepen their understanding
of buyer values and create
differentiated products and service
offerings
The understanding of the end
customer buyer values would need
to go beyond the basic knowledge
of grade and volume and into
the realm of product usage and
identification of critical attributes.
Indian steel companies could
leverage this knowledge to create
a differentiated value proposition
targeted at the appropriate
customer segment. In some cases,
they could bundle the product
with a value-added service to
create a differentiated offering.
Aligning pricing with customer
value: Understand the value
delivered to customers or their
customers’ end customers,
and capture a part of the
value-in-use for customers via
pricing. For instance, if a coil
with customized thickness or
width results in a five percent
reduction in manufacturing
costs, steel players price the
custom SKU to share this
benefit along with additional
cost incurred in rolling the
same. Executing this pricing
decision is challenging as it
requires understanding the
criticality of product attributes
to the end customer and
cost elements across the
value chain.
2.Embrace leading sales and
distribution practices
Traditionally Indian steel
companies have been laggards
when it comes to adapting
leading sales and distribution
practices from consumer-focused
companies. As the emphasis on
selling their products increases,
Indian steel companies will
need to institutionalize leading
practices and become more
customer-centric. This would
include adapting aspects such as
customer account management,
effective sales call processes,
structured market working
across the business-to-business,
business-to-consumer and
business-to customers.
3.Enhance pricing capabilities
Indian steel companies will need
to align their pricing strategy with
the changing market conditions
and customer segments.
Organizations need to incorporate
leading practices to maximize
pocket margins and reduce
revenue leakage including:
•
Improve pricing discipline
to prevent margin leakage:
Indian steel companies need
to balance price flexibility and
monitoring to control offinvoice leakages. Companies
can enhance pricing discipline
by adhering to standard
price-setting models mapped
to the segmented strategies
and streamlining the invoiceto-payment process. This is
typically done by using price
waterfall approach.
Differentiated supply
chains
Firms will also need to develop
nimble supply chains to
minimize working capital and
improve customer service. Firms
will need to reevaluate their
manufacturing strategies and
adopt a differentiated approach
for specific segments. At the
same time, they will need to
build flexibility in their supply
chains, for instance, by pushing
differentiation further down the
supply chain and adopting
Finish-to-Order approaches in
order to balance inventory and
customer responsiveness.
As customers get more
sophisticated and demanding,
Indian steel companies will need to
move away from the ‘one-size-fitsall’ approach and customize their
service levels and supply chains by
customer segments.
Historically, when the Indian steel
market was a seller’s market,
Indian steel companies would
ration out the production and
deploy a make-to-order (MTO)
strategy across products and
customer segments. Going forward,
companies will need to reevaluate
their manufacturing strategies
and adopt a differentiated
approach for specific segments.
At the same time, they will need
to build flexibility in their supply
chains; for instance, by pushing
differentiation further down the
supply chain and adopting finishto-order approaches in order to
balance inventory and customer
responsiveness. Indian steel
companies also would need to:
1. Segment customers and
products by service levels and align
manufacturing strategy and supply
chain to the customer segments
Indian steel companies need to
do this in three steps. In the first
step, they need to define customer
segments based on size and
profitability, service levels and
product specificity. Post this, they
need to define the manufacturing
strategy and supply chain for each
customer segment.
17
2.Implement integrated order
management
To support order promising
to large, demanding and
sophisticated customers based
on capable-to-promise (CTP)
and available-to-promise (ATP)
capabilities rather than on an
ad hoc basis. This will enable
the companies to balance
responsiveness and inventory
carrying cost in lower margin,
over-supplied markets.
3. Deploy improved demand
forecasting and sales and
operations planning (S&OP)
techniques
Indian steel companies will
need to improve their demand
forecasting techniques as an
over-supplied market will enable
their customers to demand lower
lead times. Further, the companies
will need to develop the ability to
assign the right order to the right
plant as several of the Indian steel
companies have already moved to
a multi-plant and multi-location
environment. As an example, a
leading Indian steel company
implemented an advanced
optimization solution that allows
it to block capacity in an optimal
manner across plants based on
demand forecasts. The solution
then confirms the same on the
receipt of orders. This process
allows the enterprise to maximize
the overall contribution for a given
demand basket.
018
Focus on reduction
of raw material and
manufacturing costs
will be required to execute
on the organization’s chosen
strategy.
2. Discover talent by sourcing
Firms with large scale operations
and selecting the best talent
can look at elimination of raw
to propel the execution of
material risks through backward
an organization’s chosen
integration. Few large north Indian
strategy. Organizations will
steel players have built upstream
need to innovate to find the
facilities in iron ore rich states.
best talent for their needs. For
Similarly, larger steel players
example, as steel marketing
can also look at investments in
organizations become more
hydro-electric power projects to
customer centric–they could
ensure stable supply of power for
benefit from sourcing talent
operations. Smaller players will
from more traditionally
have to explore consortium based
consumer focused industries
approaches for optimizing
like consumer durables,
their costs.
automotive and durables.
Human capital
management
India steel companies’ ability
to manage and leverage its
human capital will become a
key differentiator and will play
a key role in enabling their growth
aspirations. We believe Indian
steel companies will need
to address the 4 D’s of
managing talent.
1. Define talent required by
identifying and articulating
the organization’s critical
talent needs for each area
of the business, in particular
for the mission-critical
workforces. This entails
defining the specific technical
and behavioral competencies
by workforce and level that
3. Develop talent by continuously
developing individual and
collective skills, knowledge,
and behaviors to expand the
organization’s capabilities
and its strategic advantage.
In fact, developing the next
generation of leadership
is one of the foremost
challenges facing Indian steel
companies today.
4. Deploy talent by building the
capability to put the right
talent in the right place at
the right time to allow the
organization to execute its
current strategy and prepare
for future challenges and
opportunities. For example,
organizations need an active
program of performance and
career management to rotate
high potential executives
between specific functions to
build a cadre of strong future
business leaders.
In summary, in order to attract
and retain the best talent the steel
companies would require to:
•
Develop a long-range plan in
line with the growth objectives
•
Institute programs to attract
talent and retain key talent
•
Up-skill existing resources in
order to stay relevant in the
changing marketplace
•
Strengthen the overall
employee value proposition
•
Build an HR work-force that
focuses on Strategic and
Performance Enhancement
and less on Transactional and
Administrative activities
About CII
The Confederation of Indian
Industry (CII) works to create and
sustain an environment conducive
to the development of India,
partnering industry, Government,
and civil society, through advisory
and consultative processes.
CII is a non-government, notfor-profit, industry-led and
industry-managed organization,
playing a proactive role in India’s
development process. Founded
over 118 years ago, India’s
premier business association has
over 7100 members, from the
private as well as public sectors,
including SMEs and MNCs, and
an indirect membership of over
90,000 enterprises from around
257 national and regional sectoral
industry bodies.
CII charts change by working
closely with Government on policy
issues, interfacing with thought
leaders, and enhancing efficiency,
competitiveness and business
opportunities for industry through
a range of specialized services and
strategic global linkages. It also
provides a platform for consensusbuilding and networking on
key issues.
Extending its agenda beyond
business, CII assists industry to
identify and execute corporate
citizenship programmes.
Partnerships with civil society
organizations carry forward
corporate initiatives for integrated
and inclusive development
across diverse domains including
affirmative action, healthcare,
education, livelihood, diversity
management, skill development,
empowerment of women, and
water, to name a few.
The CII Theme for 2013-14
is Accelerating Economic
Growth through Innovation,
Transformation, Inclusion and
Governance. Towards this, CII
advocacy will accord top priority to
stepping up the growth trajectory
of the nation, while retaining a
strong focus on accountability,
transparency and measurement
in the corporate and social ecosystem, building a knowledge
economy, and broad-basing
development to help deliver the
fruits of progress to all.
With 63 offices, including
10 Centres of Excellence, in
India, and 7 overseas offices in
Australia, China, Egypt, France,
Singapore, UK, and USA, as well as
institutional partnerships with 224
counterpart organizations in 90
countries, CII serves as a reference
point for Indian industry and the
international business community.
19
About Accenture
Accenture is a global management
consulting, technology services and
outsourcing company, with approximately
275,000 people serving clients in
more than 120 countries. Combining
unparalleled experience, comprehensive
capabilities across all industries and
business functions, and extensive research
on the world’s most successful companies,
Accenture collaborates with clients to
help them become high-performance
businesses and governments. The company
generated net revenues of US$28.6 billion
for the fiscal year ended Aug. 31, 2013. Its
home page is www.accenture.com.
About Accenture’s Steel
practice
Accenture works with the leading
international steel players as well as
Indian steel companies on business
challenges ranging from Operations
excellence, Capital Projects, Sales &
Marketing to Post Merger Integration,
Strategy, Talent & Organization and
Systems Design and Implementation.
In India, Accenture’s steel practice has
advised more than 70% of the Top 15
steel companies in India.
Authors
Deepak Malkani
Managing Partner–Resources Operating
Group, Accenture India
deepak.malkani@accenture.com
Rakesh Surana
Managing Director–Capital Projects
Practice, Accenture India
rakesh.surana@accenture.com
Samir Verma
Senior Manager–Resources Operating
Group, Accenture India
samir.verma@accenture.com
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