indian steel industry
DESCRIPTION
A present on overall Key Aspects of Indian Steel Industry.TRANSCRIPT
Indian Steel Industry
International School of Business & Media; Kolkata
Anindya PalAbhijit Samanta
Kamalika MondalSubhadeep Chakraborty
Saugata Dastidar
Presentation Overview
Steel Industry in India
Sales Trend Analysis
Conclusion
Industry forecast vs Company forecast
Sales Strategies
1
2
3
4
5
In 1992, India produced 14.33 million tones of finished carbon steels and 1.59 million tones of pig iron. In 2008, India produced nearly 46.575 million tones of finished steels and 4.393 million tones of pig iron.
In 1992, the total consumption of finished steel was 14.84 million tones. In 2008, the total amount of domestic steel consumption was 43.925 million tones.
While steel continues to have a stronghold in traditional sectors such as construction, housing and ground transportation, special steels are increasingly used in engineering industries such as power generation, petrochemicals and fertilizers.
Steel production in India has increased by a compounded annual growth rate (CAGR) of 8percent over the period 2002-03 to 2006-07. The per capita consumption of steel in India, at around 46 kg, is well below the world average (150 kg) and that of developed countries (400 kg). Indian demand is projected to rise to 200 million tones by 2015.
Indian Steel Industry
Today India is in seventh position among all the crude steel producing countries
Industry Forecast
Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Forecast for Dec-
10
0
10000
20000
30000
40000
50000
60000
5452053064.6666666666
49818.2
Crude Steel Production Forecast
Actual Produc-tion
3 Yr moving average
5 year moving average
'000
tonn
es
Source: IAS, CMIE
Industry Forecast
Source: IAS, CMIE
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Fore
cast f
or Dec-1
00
10000
20000
30000
40000
50000
60000
70000
57164 55256
50295.2
Finished Steel Production Forecast
Actual Production
3 Yr moving average
5 Yr moving average
'000
tonn
es
Production Forecast: Market Leader vs Market Challanger
Source: IAS, CMIE
Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Forecast for Dec-
10
0
2000
4000
6000
8000
10000
12000
14000
16000
12881 13034
12936.6
5019 4678
4455.6
Company wise production forecast statistics
SAIL - Actual Produc-tion
SAIL - 3 Yr MA
SAIL - 5 yr MA
Tata Steel - Actual Production
Tata Steel - 3 Yr MA
Tata Steel - 5 Yr MA
‘000
ton
es
Production Forecast: Market Leader vs Market Challanger
• The actual steel production of SAIL is varrying at a higher rate than of the TATA STEEL
• 3 Yr & 5 Yr moving average of SAIL is showing almost same forecast.• Being a market leader SAIL is having much more production than of
TATA STEEL.
SAIL
• The actual production of TATA STEEL is growting maintaining a constant growth rate and the fluctuation in production is less.
• As compare to SAIL, TATA STEEL is having lower production volume . • In last two years i.e. 2008 & 2009 TATA STELL has managed to
reduce the production gap with SAIL by maintaing a constant growth in their production.
TATA STEEL
Market Share Analysis: 2007-2009
Steel Authority Of India
Tata Steel Ltd.
Essar Steel Ltd.J S W Steel Ltd.
Ispat Industries Ltd.
0.00%
50.00%
100.00%
51.36%
17.22%
17.50%14.13%
12.76%
Market Share 07,08,09
Market Share - 2007
Market Share - 2008
Market Share - 2009
Source: IAS, CMIE
Market Share Analysis: 2007-2009
1. There is a slight fall down in the market share of SAIL in recent years.
2. TATA STEEL is maintaing a constant market share and in recent years there is a slight growth in their overall market share.
3. Essar Steel faced a slight decline in their market share in 2009.
4. JSW Steel maintained a huge growth in 2008 market share but again in 2009 it falled down.
Assumption:We are assuming that these are the major steel manufacturing companies in India.
Steel Industry & Major Consumers of Steel : Trends
Source: IAS, CMIE
Engines Production
Hydro Turbines Production
Compressors Production
Cranes Production
Dump Loaders ProductionMaterial Handling Equipment Production
AC Generators
Total Production (Three Wheelers)
Tractor Production
0.00
0.50
1.00
Steel & Other industry trends
Co Relation between growth of steel production and other relevent products
Steel Industry & Major Consumers of Steel : Trends
1. The chart shows the co-relation between the YOY growth of Steel and Various products of steel.
2. For all the areas the co-relation is +ve which means that the steel production and the productions of steel dependent items have a very significant relationship.
3. Hydro turbine, AC Generators and Automobile Industry is very highly co-related ( Value > 0.5) with steel production. In other words more we produce steel more is the scope of growth of these industries.
SALES TREND ANALYSIS
Steel Industry & Major Consumers of Steel : Trends
Source: IAS, CMIE
0
10000
20000
30000
40000
50000
60000
Sales Trend for SAIL (Rs)
Actual Sale
Exponential (Actual Sale)
R s.
C r o
r e
Steel Industry & Major Consumers of Steel : Trends
Source: IAS, CMIE
Mar-94
Mar-95
Mar-96
Mar-97
Mar-98
Mar-99
Mar-00
Mar-01
Mar-02
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Fore
cast M
ar- 10
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
Forecast on the basis of Sale's trend (Rs)
Actual Sales
Exponen-tial (Actual Sales)R
s. C
r o
r e
SALES STRATEGIES
Sales Strategies: Market Leader vs Market Challanger
SAIL(Market Leader)
TATA STEEL(Market
Challenger)
Hold its market share
Increase market
share to become
the leader
SAIL
Colaboration with Posco, South Korea
Producing various grades of auto steel.
Increase Cost Competetiven
ess
Plan value added items in
the product basket
Leveraging marketing network
SAIL : Defensive Strategy
TATA STEEL
Acquisition of Millennium
Steel, Thailand in 2005
Acquisition of NatSteel, Singapore in 2004.
Accuisition of Corus in 2007
TATA STEEL : Offensive Strategy
Conclusion
From the over all analysis of strategies we can see that the market leader always try to defend its own position and market share.
The main objective of all the activities they perform is to be there in the market with their existing position.
On the other hand the market challenger always try to increase the market share. The main thing they try to do is to get into various mergers and acquisitions so that they can create a strong industry base with the other existing players.
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