ACNielsen ORG-MARG

Situation Analysis for SME

Sector

Submitted to TERI

By

Orissa Cluster

ACNielsen ORG-MARG

SUMMARY OF FINDINGS

• There are approximately 45 units in this cluster who are engaged in manufacturing

of Sponge Iron.

➢ PRODUCTION:

Annual Production (In Tonnes)

7

9 9

5 5

6

2

3

4

3

4

3

6

4

1

8

1011

0

2

4

6

8

10

12

2005-06 2006-07 2007-08

Upto 20000 Tonnes 20000 to 40000 Tonnes 40000 to 60000 Tonnes

60000 to 80000 Tonnes 80000 to 100000 Tonnes 100000 to 150000 Tonnes

Above 150000 Tonnes

ACNielsen ORG-MARG

➢ ENERGY REQUIREMENTS

• CUMULATIVE FUEL USAGE

Qty consumer per

annum

Number of Units using

the fuel

Electricity 40038000 Units 41

Coal / Hard Coke 3781560 Tonnes 43

HSD 644000 Liters 39

• USAGE OF ELECTRICITY (IN UNITS CONSUMED PER ANNUM)

Usage of Electricity (In Units consumed per annum)

15%

12%

20%

26%

15%

12% Upto 100000 Units

100000 to 500000 Units

500000 to 1000000 Units

1000000 to 1500000 Units

1500000 to 2000000 Units

Above 2000000 Units

• USAGE OF COAL (IN TONNES PER ANNUM)

ACNielsen ORG-MARG

Usage of Coal (In Tonnes per annum)

12%

5%

9%

37%

14%

9%

14%

Upto 10000 Tonnes

10000 to 25000 Tonnes

25000 to 50000 Tonnes

50000 to 75000 Tonnes

75000 to 100000 Tonnes

100000 to 200000 Tonnes

Above 200000 Tonnes

• USAGE OF HSD (IN LITERS PER ANNUM)

Usage of HSD (In Liters per annum)

30%

18%

26%

13%

13%

Upto 5000 Liters

5000 to 10000 Liters

10000 to 20000 Liters

20000 to 30000 Liters

Above 30000 Liters

ACNielsen ORG-MARG

➢ RAW MATERIAL REQUIREMENT

• CUMULATIVE RAW MATERIAL USAGE

ACNielsen ORG-MARG

Qty consumer per

annum

Number of Units using the raw

material

Iron Ore 3837000 Tonnes 26

• USAGE OF IRON ORE (IN TONNES PER ANNUM)

Usage of Iron Ore (In Tonnes per annum)

4%

19%

23%

12%19%

23%

Upto 50000 Tonnes

50000 to 100000 Tonnes

100000 to 150000 Tonnes

150000 to 200000 Tonnes

200000 to 300000 Tonnes

Above 300000 Tonnes

ACNielsen ORG-MARG

FIELD OBSERVATIONS

✓ As per the field findings this cluster is not an SME cluster as the plant & machinery

cost is more than Rs. 20 crs.

✓ In Mayurbhanj, Keonjhar and Sundergarh around 130 sponge iron

factories were functioning, of which over 50% were illegal. Many are operating

even without NOCs. Clearnance procedures and Public hearings are unheard of

here and inspite of this in the past two years people have managed to get almost 6

plants to withdraw or stop construction in Sundergarh. The main reason cited by

the people for opposition has been the large-scale air and water pollution, which

had started affecting not only their health but also that of their livestock, agriculture

and land.

✓ Sponge iron also known as direct reduced iron is extracted from iron ore

and is used in the making of steel

✓ In Orissa the most affected district is Sundergarh where almost 50 of these

plants are situated. The district inspite of being a Schedule V area is facing a

situation where land is being transferred to these companies without NoCs from

the Gram Sabha

✓ These units are dependant on National Mineral Development Corporation

(NMDC) and private miners for iron ore

✓ Sponge iron is used for making long steel products such as ingots and

billets.

✓ In sundergar district 16 nos, In Keonjhar district 14 nos, Jharsuguda District

11 nos & in Jajpur district 4 nos.

✓ All the sponge iron units are mechanized in nature and are in operation

since last 7/8 years, there are some units, which have started very recently - 2

years back.

✓ The units are using technology sourced from Lurgi.

✓ All the units are running continuously for 3 shifts and are sourcing power

from the grid @ 3.90/- per unit, having HT connections. Some units have CPP.

✓ If a plant has a total annual production capacity of 6.9 million ton, it requires

about 17 million-ton iron ore and 13 million ton of coal.

✓ The sponge iron units have an high energy cost of 30 to 35% and the raw

material cost is 60%t of total production cost

ACNielsen ORG-MARG

Electricity

❖ Electricity supply by North Eastern Electricity supply company of Orissa ltd,

Corporate office, Januganj, Balasore,Ph- 06782-269864

❖ Western Electricity supply company of Orissa Ltd, corporate office- Burla,

Sambalpur, Orissa, Ph-0663-2430892, 2430895

❖ Power getting from grid, duration of electricity20 to 22 hr regularly

Equipments

➢ Induction furnace – 15 ton

➢ Crusher (Coal crusher, iron crusher & slag crusher)

➢ Sponge iron kiln – 350 to 400 tpd

➢ Motor

➢ Conveyors

Process

• Fe2O3 Fe3O4 FeO Fe

Raw material mixed (Iron ore, Dolomite & limestone + coal)

Magnetic separator

Screen Cooling to

atmospheric

condition

Feeding in Kiln Induction furnace (Temp required 750oC to 1050oC) & prs of 1 to 2 bars.

Waste through

conveyor

ACNielsen ORG-MARG

• For rolling process temperature required 900oC to 1100oC & Prs

required 7 kg to 14 kg CM2

Final

Product

ACNielsen ORG-MARG

ACNielsen ORG-MARG

Mines

Iron OreYard

ACNielsen ORG-MARG

Coal yard

Sponge iron plant

ACNielsen ORG-MARG

Kiln

Sponge iron

ACNielsen ORG-MARG

SERVICE PROVIDER

Raw material supplier (Coal)

❖ Mahanadi Coal field ltd, Brajraj nagar, Orissa

❖ Basundhara Coal Field ltd, Talcher, Orissa

❖ Global Coal & Mining pvt. Ltd, Belpahar

❖ Bhatia International Ltd, Belpahar

Raw material supplier ( Iron ore)

❖ Rungta Mines, Barbil, Orissa

❖ Sirajudhin Minerals, Barbil, Orissa

❖ Essel Pvt. Ltd, Joda, Orissa

❖ East India Pvt. Ltd, Orissa

❖ S.Lal & co ltd, Barbil

HSD (Indian Oil, Bharat Petrolium)

Equipment suppler

Hari Machines Ltd

Rajgangpur,

Orissa,

Ph-06624-220141/161

B.K. Engineering

Bhilai,

Chhatisgarh

Venus Control, Noida (U.P)

Ucan, Mumbai

Elgpa Eng. Ltd, Hyderabad

ACNielsen ORG-MARG

Ashok Technologies

A – 15, Maypuri Industrial Area,Phase – 1, New Delhi – 110064,

Ph-011-28115308, 228116570

Association

Orissa Sponge Iron Manufacturers’ Association.

Palash Palli,

Bhubaneswar-751020

Ph-0674-2594875 (Mr. G.S. Agarwal)

ACNielsen ORG-MARG

Bankers

✓ All the units are associated with the baks for CC limits.

o IDBI

o State bank of India, Jajpur road, Orissa

o Canara bank, Jajpur, Orissa

o United bank of India

o Bank of Baroda, KEONJHAR,ORISSA-758001