The Steel Re-rolling sector in the secondary producers category has undisputed position I the Indian market today due to its extensive restructuring within its resources and within the financial crunch which the sector is facing from the very start after Independence. But the industry has not lost its patience and has been flourishing day-by-day facing all odds. The past few years have been tough for the secondary steel re-rollers in India. Hit by sluggish demand coupled with falling prices, high raw material prices, high wages payments absorbitant power tariff increase and fuel price increase. Actually, the backbone of the manufacturers would have been broken but their patience, enthusiasm, willpower to survive and technological upliftment within their own resources saved this industry. Most of the re-rolling industry belongs to small-scale sector.

There are approximately 2100 re-rolling mills throughout India, out of which approximately 600 units are closed. The first re-rolling mill in the country was installed in the year 1928 at Kanpur mainly for salvaging scrap materials. Since then till 1980s most of the re-rolling capacity, which came in the sector, was mainly based on arising of scrap and defectives of main steel producers throughout India with the economic liberalization and with the end of the era of subsidies to steel industry in public sector. The main steel producers were forced to take modernisation and renovation steps at their plant labour. The arising of scrap and defectives started to shrink at their end. This has made the steel re-rolling sector learn to live with its own steel making capacities. In the year of 1980 the capacity of the sector was assessed at 20 million tonnes, which has been increased to approximately 24 million tonnes at present.

The relentless efforts has made this sector self-sufficient in producing various common as well as most typical steel sections in their mills. The TOR steel, the flats, squares, special window sections, thinner size HR strips, thinner gaze HR strips, hexagons, wire rods, angles, channels, H-Beams, I-Beams, tele-channels etc are the products of this sector.

With the recent development in reinforcement bars world wide this sector now produces high quality, high grade TMT Bars throughout India. Some units have installed the TMT plants under the license of indigenously developed thermex technology and the other units have developed their own water quenching technology which is fully capable to produce the same quality of TMT Bars. The test results of both the technologies was found fully satisfactory though some spurious TMT Bars are also stated to be manufactured, but the days have gone for such sub-standard materials. As per our survey, the re-rollers in the secondary steel producers are shifting the old technology and getting even ISO:9002 status. Several re-rollers have already come under the control of Bureau of Indian Standards for their products.

Exports

This industry under small scale sector, has also penetrated into world market only due to its strong will, low investment and relentless efforts to overcome the obstacles. The substantial quantities of steel rolled products are being exported to the various parts of the world in addition to all neighbouring countries like Bangladesh, Nepal and Bhutan. Various fabricated and steel items, which are produced out of the rolled products, are exported to the most developed countries of the world like USA, Canada etc.

Domestic Supply

The estimated demand of the re-rolled products has been estimated at about eight million tonnes. The share of the secondary steel producers in India out of the total production of finished steel has been assessed at 59 per cent which itself proves the achievement of this sector. The secondary industry has always been recognized by the government and the steel experts as a compliment to the main stream of steel industry. The industry has catered thousand and thousand tonnes of its products to core projects, dams, State Electricity Boards and other infrastructure projects in India. The steel re-rolling industry caters to the needs of the domestic field up to the tune of 68 per cent of the total requirement. 80 per cent of the total exports of rounds and bars has been recorded from the secondary steel producers.

Pollution

The world has suddenly rose in the last two-three years against pollution in the environment. The cause is certainly noble, important and necessary for human being. But the way in which it has been propagated creates doubts in mind.

It seems that the strong world powers have over-powered the most of the world organizations and have started exploitation of the under-developed and the developed countries under the garb of pollution. Such countries which are thought to be scientifically developed, do not want to consider the body structure, which work as per the environment of the location. The emission level has forcibly been fixed in India at par with that of USA, which is neither logical nor ethical. Regarding the pollution in the re-rolling industry it may be firmly stated that almost 95 per cent of the steel re-rolling sector maintains pollution control norms; neither air pollution, nor water pollution is created by this sector. Though the industrial entrepreneurs are not supporting to consume furnace oil in their re-heating furnaces, but due to inactiveness, on the part of the government on the part of the development agencies and on the part of the development agencies and on the part of the research institutions, we Indians are not informed of proper technology to consume high ash contain coal which is abundantly available here and are forced to consume furnace oil increasing the import budget of India. No doubt environment remains clean without adopting any measure of pollution control devices if furnace oil is consumed in the re-heating furnaces, which is the common trend in India at present. The technology to consume pulvarised coal is well within the reach of the steel re-rollers which also does not create any pollution that is not permissible by many of the pollution control boards inclusive of West Bengal. Sincere efforts and assistance from all sectors are deserved.

Labour reforms

This industry has remained the most labour intensive one. However, with the inactiveness on part of the labour department, the age old labour laws are still implemented in the day to day interference of the labour unions and due to the mispropaganda regarding labour exploitation in India by the developed countries or the WTO authorities, the industry has been forced to shift this labour intensive industry to the very costly automisation.

Population is increasing in India day by day whereas the labour potentiality is decreasing in the newly coming projects as well as the adjusting age-old units. One important aspect should be kept in mind that no labour exploitation is generally possible in the steel re-rolling industry either in the field of minimum wages act or in the field of child labour act. Only strong and capable people can work in the steel re-rolling mills with no help of children or women. The based structure has been fixed in such a manner that the workers are paid for eight hours against the work of four hours.

Now we should come on some of the problems of the industry.

> Shortage of appropriate and adequate raw-materials

This has been the misfortune of this industry that it has fetched shortage of raw materials in general and shortage of appropriate raw materials in normal since independence. All voices to solve the problems reached the deep ears. This has resulted in the utilisation of capacity as below as 25 per cent to 35 per cent. The Re-Rolling Industry consumes the inappropriate raw materials i.e. also inadequate quantity and improper quality. Though the steel making capacity in the country has been growing but in a very steady and slow pace, main producers should increase the production of semis, which will not be harmful financially for them. The production of the semis will be much higher in comparison with the thinner sizes finished products.

> High rates of custom duty

Due to the indecision and reluctant policy of the Finance Ministry the custom duty on the raw material of the steel re-rollers i.e. semis and re-rollable scraps is absorbitantly high. Perhaps due to the misconception that it will be harmful for the health of main producers to import duty after adding the custom duty @ 25 per cent, surcharge @ 10 per cent, CVD @ 16 per cent, additional duty @ 4 per cent. The total rates of the imported billets/re-rollables come at par with the rate of the finished goods.

The request of the industry to reduce custom duty on raw materials has proved futile. The industry, though through its associations takes it as an insult to the country, if the voices are raised on the international platforms to get the help from WTO or the other developed countries.

> Finance for modernisation

The time has come that industry should sincerely consider the modernisation and technological upliftment in the re-rolling mills. Economy in consumption of fuel and power, reduction in rising of mill scales and roll spoils (missroll) is the question of life and bread for this industry. The financial crunch does not allow the industry to proceed further in the matter. There is no policy of any Government in India to assist the industry practically in this project. The industry hoped for actual help in the UNDP Project (World Bank Assistance) but that is also totally impractical. No soft loan with subsidised rate of interest will be allowed to the industry from UNDP Project. It is quite impossible for the industry to invest extensively for restructuring its technology and plant and machinery by taking funds from its Bankers, Institutions or even UNDP on payment of interest @ 14.5 per cent to 16 per cent. No one can expect to compete the world champions without proper renovation and modernisation of the age-old plant and machines. The industry deserves already approved 150 crore of Rupees (from the interest part) of the steel development fund at the rate of interest of four to five per cent only. Sooner the Government approves the scheme the better will be the outcome.

Last but not the least, industry is of the view that consumption of steel in India can be increased only with the help of the secondary steel re-rollers. It is quite embarrassing for India that per capita consumption of crude steel in China increased @ of 7.5 per cent annually to reach a level of nearly 90 Kg from 2Kg in 1950.

In comparison, India started with a per capita consumption of 5Kg, which grew at 3.24 per cent annually over the last half century to 24/26Kg presently. Steel is not steel before re-rolling or forging. It should always be kept in mind that the steel re-rolling industry in private sector can only generate the employment in India, can generate maximum revenue for India through Central Excise and can earn the maximum foreign exchange if it gets the proper raw materials in adequate quantity and at genuine prices. The main producers should strictly be advised not to penetrate within the production range of secondary steel producers in general. Adequate funds should be available for technological upliftment at the subsidised rate of interest and this sector should be treated as a major part of policy-making agencies whenever policies are framed on steel. If the main producers do not consider their obligation to help their younger brothers i.e. the steel re-rollers no extra preference should be given to main steel producers whether in case of help from steel development 'and, collection of payment of interest against already disbursed steel development fund or the preference on purchase of steel by any core sector.

The future prospect of the industry is in the sky. The consumption of per capita steel is at such a low level that it will have to increase. The construction work will grow in India substantially as we the Indians are still living in mud and kuccha houses in rural areas. If steel is produced cheaper which is a must, the per capita consumption of steel may reach to 100 Kg within a very short span of period. The Gatt agreement and WTO conditions cannot be suppressed under the pressure of any lobby. Practical policies will have to be taken by the Government of India. Customs Duty will certainly go down within 2005 under the compulsions of Gatt agreements and the scenario will be changed altogether. The fittest will survive and the fitness remains with the secondary steel re-rollers once the raw material is available at genuine prices.

The income will be generated by boosting of production due to adequate and proper raw materials. The steel re-rolling industry will be able to make technological upliftment with its own resources even if no financial assistance at genuine interest rates is provided by the time.

(The author is Chairman, SRMA. These are personal views of the author)