The modernisation of IISCO Steel Plant (ISP) at Burnpur in West Bengal is definitely a shot in the arm for the state ailing with industrial sickness. This big ticket investment in steel industry has the potential of generating demand for raw materials, income and employment opportunities for downstream industries, particularly for small and medium enterprises and to contribute immensely to logistics. The unit, which has a long history of facing enormous challenges of an outdated technology and for long faced an uncertain future, has ultimately been taken over as an inseparable part of SAIL behemoth.
In the past a number of private entrepreneurs came forward to take control of the land and the high quality of iron ore at Chiria, one of the biggest reserve in Jharkhand as part of the buyout of the plant. All fell through due to political opposition. In late 80s, the Japanese offer of modernising the plant was mixed with an export commitment.
It was a costly proposal, but could not get through due to the change in the government.
By 2005-06, SAIL management had taken a prudent decision to carry forward the expansion and modernisation of the plant with support from the state government. Although there were project delays sometimes due to the factors beyond the control of the present management, the completion of modernisation at Burnpur is the fulfillment of a cherished dream of many involved in the process. Indeed it goes to the credit of SAIL, as a major PSU to take care of the existing employees’ interests at Burnpur in the midst of so much uncertainty in the past 40 years. We are not aware if there is a second example of such nature in any part in the globe.
One unique feature of construction of a mega steel plant (>1 million t) is that the product-mix is pre-determined and cannot be a variable component as it is based on numerous auxiliary facilities and the layout drawing of the plant. As the long product market in the country is highly competitive with a number of large, medium and small players, the projected investment for making urban and rural infrastructure, including housing for all, is all set to boost the sagging demand in the coming years.
As integrated steel plants’ share in long products is a mere 30%, Burnpur’s production would enhance the high quality component in the market by catering to the institutional requirements, the forte of all the major steel plants. Thanks to a few value-added profiles envisaged in the ISP product-mix, like high carbon, cold heading quality, tyre bid grade, Electrode quality wire rods, TMT Fe 550/600 grade, the plant must realise a higher margin compared to the current market benchmark. The Universal Beam mill with Parallel Flange beams up to 900mm must help construction of large, multi-storied and high rise buildings.
The wide marketing network of SAIL in all parts of the country should help meeting the regional demand with service centres to market the tailor-made long products for the various projects. With the commercialisation of the product range from the new plant, it would be easy for SAIL to synergise the long product profiles among Bhilai, Durgapur and Burnpur plants and make full utilisation of the billets and blooms to roll finished products.
Workshops and conferences to publicise the new product range are a well established strategy to make changes in the existing marketing practices.
The history of last four decades and the glorious endeavours by SAIL are bound to trigger huge emotions but a most pragmatic approach at this stage can only make the plant commercially successful.
The author is DG, Institute of Steel Growth and Development. Views expressed are personal.