– By Satish Kumar Agarwal
Recent announcement made by the union steel minister late last month regarding the steel ministry’s deliberation on PLI 2.0 is a step in the right direction. Further mooting the idea for inclusion of secondary steel will be the real game changer for the industry in the backdrop of Industry 4.0 as it will help address both CapEx and OpEx requirements.
Secondary steel, once included in PLI 2.0 will bring much needed relief for secondary steel manufacturers. The government’s push for large scale investment in mega infrastructure projects (Bharatmala, Sagarmala, Udaan, Urja Ganga Gas Pipeline Project, Smart Cities, AMRUT, PMAY Urban and PMAY Gramin, Jal Jeevan Mission, etc.) calls for increase in steel production capacity from the current level of 121 MT in 2022-23.
Growth projections
Analysing the current production growth trajectory, industry analysts and experts are of the opinion that domestic steel production has increased by 50 per cent from 80 MT in 2013-14. Considering the current rate of CapEx of steel manufacturers, they further estimate that India will be able to achieve 300 MT production capacity by 2030.
Employment generation potential
Already 57 MoUs with 27 companies under the PLI scheme for speciality steel have been signed with an estimated investment of 30,000 crores while creating an additional production capacity of 25 million tonnes of speciality steel over the next five years. This will help generate more than 60,000 employment opportunities across job categories. Secondary steel, once included in PLI 2.0, is likely to generate 12,000 to 15,000 employment opportunities across job categories which is close to 25 per cent of new speciality steel manufacturing job opportunities.
CapEx in the backdrop of Industry 4.0
Enhancing operational efficiency calls for implementation of integrated process management systems like digital dashboard for end-to-end information analysis of supply chain to warehouse and finally to point of sale (dealers/franchisees, etc.) through a robust enterprise resource planning and use of artificial intelligence (AI) and machine learning (ML). To increase production capacity of secondary steel manufacturers, huge CapEx will be required to be made due to Industry 4.0 in steel manufacturing, which will be achieved through digital transformation. Deployment of smart technologies like Industrial IoT platforms (IIOT); vertical integration of the production system; horizontal integration of the production line with complete supply chain; and the likes.
Conclusion
In order to achieve ‘Make in India’ for ‘Atmanirbhar Bharat’ by secondary steel manufacturers, a holistic business process transformation strategy is the need of the hour, otherwise industry players will miss the bus with regard to staying relevant in the business ecosystem. Hence it becomes highly relevant and important for manufacturers to reap the benefits of schemes like PLI 2.0 while ensuring long term sustainability of business.
(Satish Kumar Agarwal is the chairman and managing director at Kamdhenu Group.)
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