The global economic data are encouraging at this moment. Obviously, this is good for the steel industry and for those who are planning new investments. However, the steel industry in India, as also globally, has different opportunities to tap and challenges to face. Most importantly, the industry has to gear itself up to meet the challenges of global warming and climate change as they grow. Not only that the way steel is produced will have to be changed but also the product specifications and the way the same is used will also require forced alteration.
The days of the steel industry associated with sooty smokes have more or less gone by. But, the environmental issues related to the industry are far from over, becoming more and more complex and challenging, more so in the developing nations such as China and India. While both steel consumption and production are growing menacingly in China, in India, there is a good potential for the same to be replicated and each wants that to happen. Although there is a growing concern about environmental issues related to the steel industry everywhere, the immediate economic compulsions to tap any opportunity that comes on the way to mainly create jobs for a very large number of people make the national governments look for a balance. The balance is always tilted to investment and growth.
The modern economy is energy intensive and consumption of steel itself is highly energy intensive. Most steel bearing major products cannot be used without energy. In the days ahead, with energy shortage in front and challenges to fight global warming and climate change closely following, the steel industry will not only have to go for technologies that create minimum disturbance to the environment but also at the same time develop and produce steel that is lighter but also strong. More importantly, a stricter approach to climate change issues will perhaps force the world to cut steel consumption sharply. Steel makers will have to spend time and money collectively to innovate, not only for the right products, most suitable technologies but also to find ways and means to survive collectively in a shrinking market. From volumes, the steel makers will have to turn to value.
China?s mindless industrial growth, including in the steel industry, cannot be the role model for India. It is time Indian steel makers take a leap in technology and prepare itself for the future differently than how one has planned so far as seen in the policy documents of the government. ?Growth and only growth? is no good developmental strategy.
Among innumerable examples that can be discussed, let us take one. On a conservative estimate, about 20 million tonne of rebars are produced in India in outdated technology. Most of these plants engaged in their production are based on inefficient iron and steel making plants and rolling mills. In the days to come, overpowered by the threat of climate change and environmental concerns, many such technologies will have to shown the door. Further, the nature of housing and construction in general are changing or will have to be changed. For example, in the case of residential construction, the individual small owner built houses will give way to large organized condos as land becomes scarce. The nature of rebars and other steel products used there are different. They will have to go for stronger and technologically well defined products instead of those which are picked up by individuals from the retail markets with complete disregards to their technical specifications. If the plants currently in business of making rebars are to be replaced by new ones, the investment designs will have to be developed with necessary care and attention considering the location and logistics of moving these materials at the lowest cost to customers. Significant planning will in fact be needed here. Most of the people take production of rebars lightly.