Buoyed by strong economic growth, steel demand is expected to grow at a compounded annual growth rate (CAGR) of over 10% in the next five years, Steel Minister Beni Prasad Verma said today.
"In the next five years, demand of steel is likely to grow at a higher annual average growth of over 10% as compared to the average annual growth of 8% achieved between 1991-92 and 2009-10," Verma was quoted as saying in an official press release.
While the economy grew by 8.9% in the first six months of the current fiscal, the consumption of finished steel increased by 7% in April-November. Production grew by 7.3% during the period on yearly basis.
During the 10th Plan period, country's steel production and consumption grew by 9.5% and 10.4%, respectively. Steel imports were up by 29% and exports by 14%.
Verma said to meet the growing demand, 222 Memorandum of Understandings (MoU) have been signed with various states for increasing the planned capacity to around 276 million tonne by 2019-20.
"This is likely to result in an investment of Rs 8,70,640 crore by 2020," Verma said, adding the planned investments are being carried out in the states of Orissa, Jharkhand, Karnataka, West Bengal and Chhattisgarh.
The country, the world's fifth-largest crude steel maker, had 72.96 million tonne per annum (mtpa) installed capacity in 2009-10, up from 51.17 mtpa in 2005-06.
Among the public sector units, SAIL is spending around Rs 70,000 crore, including Rs 10,000 crore for mine development to enahnce capacity to 21.4 mtpa from 12.84 mtpa now.
Rashtriya Ispat Nigam is also at an advanced stage of commissioning its crude steel capacity expansion project from 2.9 mtpa to 6.3 mtpa by 2011-12 at an estimated investment of Rs 12,228 crore. RINL is also chalking out a long-term plan to increase the capacity to 20 mtpa by 2020-21, he said.
Another PSU National Mineral Development Corporation (NMDC) has signed an MoU with the Chhattisgarh Government for setting up a three mtpa green field integrated steel with an estimated cost of around Rs 15,525 crore.
It has also recently signed an MoU with Severstal, a Russian steel company, for setting up a 2 mtpa plant in Karnataka