rk goyal kalyani steel

7/30/2019 RK Goyal Kalyani Steel

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February 201306

alyani Steels Ltd, is a part of

the over $2.1 billion KalyaniKGroup. Established in 1973,Kalyani Steels is a leading

manufacturer of forging and

engineering quality carbon & alloy

steels using the Blast Furnace route.

Over the years, Kalyani Steels has

been continuously upgrading its

technology and infrastructure. Thefacilities at KSL are at par with any

sophisticated steel manufacturers in

the world.

Although the forging industry in India

is the primary market for the company's

products, markets of various components

for commercial vehicles, two wheelers,

diesel engines, bearings, tractors, turbines

and rail also form a substantial part of the

company's clientele.

Kalyani Steels Ltd has earned the status of

preferred steel supplier for engineering,

automotive, seamless tube and primary

aluminum industry.

Mr. R. K. Goyal, an Engineering Graduate

from BITS, Pilani and M.B.A., is currently working

as Managing Director of Kalyani Steels Ltd., Pune

and is Director on the Boards of Kalyani Carpenter

Special Steels Ltd. And Kalyani Investment Co. Ltd., Pune.

Mr. Goyal is responsible for overall management of Kalyani Steels

Ltd., Kalyani Carpenter Special Steels Ltd. and Kalyani Investment Co.

Ltd. & new 3M MTs Steel plant and Power plant project and mining

business.

Before joining Kalyani Steels Ltd., Mr. Goyal worked as Director -

Strategy and Corporate Affairs with JSL Stainless Ltd. Mr. Goyal was

responsible for overall Growth Strategy Formulation, Mining Business,

Strategic Alliances, Mergers & Acquisitions, Indirect Taxation and was

monitoring performance of all companies in the Group. During 30years of his professional career, he is associated with Steel industry,

particularly stainless steel, for more than 25 years.

In the future, there will be increased emphasis on the Cost Reduction

projects , says Mr. R. K. Goyal, Managing Director - Kalyani Steels

Ltd.in an exclusive interview with Steelworld. Excerpts:

- R. K. GOYALManaging Director, Kalyani Steels Ltd.

Face-to-Face

Steel Making t

Adapt Vast Scop

of Development i

Coming Decad


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Face-to-Face

February 201308

What according to you is the presentsituation of Indian Steel industry andwhat is the future outlook ?

- The current Steel production in India

is around 73 Million Tons per annum.

However, the total installed capacity is

around 85 MT. This indicates a good

capacity utilization ratio of around 85%.

Financial YearImports Finished Steel

(Million Tons)

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

4.93

7.02

5.83

7.38

6.66

6.83

As we can see from the table above,

the imports have seen steady growth

barring couple of years. Looking at therecent problems in the Iron Ore mining

coupled with the growth rate of

consumption, it can be estimated that this

demand-supply gap will expand further

and India may be one of the major

importers of steel in the long term i.e. 5 to

7 years.

The Iron ore Mining Crisis has added

to the woes of the Steelmakers across

India.

In the Iron Ore mining sector, Orissa,

Karnataka and Goa together constitutes

more than 70% of the total Iron Ore

production in the country. However, all

these states are facing problems overillegal mining.

Honourable Supreme Court in its

order dated 29 July, 2011 and 5th August,

2011 banned all the mining activities in

the state of Karnataka. It later allowed

NMDC to mine up to 1 Million Ton Iron

Ore per month and sell it to Steel

companies through e-auction. The

Honourable SC also allowed selling 1.5

Million Tons of Iron Ore per month

through E-Auction from then existing

stocks of 25 Million Tons in Karnataka. By

now all the stocks have exhausted and

only Ore mined by NMDC is available

which is not more than 0.7 MMT per

month. In addition to this, 4 category A?

mines have opened but their material is

not available for E-Auction yet.

After closure of mines, they were

categorized under category A?, B? and

C? by CEC based on the extent of

illegalities and a detailed roadmap was

developed for starting these mines. A cap

of 30 million tons was put on the total

production of Iron Ore from the state

which is less than the current industry

requirement of 35 million tons in

Karnataka.

It may take around two years of time

for implementing all the R & R Plans andopening of all 'A' and 'B' category mines.

Based on the trends of approvals, the total

mined quantity excluding NMDC will be

around 10-11 Million Tons at the end of

the two years. This means that by the end

of 2013, the total available quantity may

be around 15 million Tons and may reach

upto 20-21 million Tons by end of 2014

provided NMDC mines upto 10 MTPA.

This will be much lower than the demand

of around 35 Million Tons in Karnataka

alone. Thus, the industry will continue to

starve for Iron ore.

In Goa, the State Govt. suspended all

mining activities temporarily from 11 Sep,

2012 after an expert panel formed by the

government found "serious illegalities

and irregularities" in mining operations.

Later, Honourable Supreme Court in an

order dated 5 Oct, 2012 banned all the

mining activities in the state. The CEC

also said that mining operation be allowed

only after Environment Impact

Assessment is done and reclamation and

rehabilitation (R&R) plans are in place.

Currently, all the mining activities are

banned in the state.

Similarly, in Orissa, the Shah

Commission is conducting its probe on

illegal mining and is expected to come up

with its findings soon.

The Honourable Supreme Court took

commendable steps in its decisions for

clampdown on the illegal mining but it may

have been done in a way so that the

companies who were doing a fair business

may have not been affected. The decision

of selling Iron ore through E-Auction and

limiting the mined quantity in Karnatak

led to speculative prices which in turn le

to closure or lower capacity utilization o

steel plants in the region. It also led to

skyrocketing in prices of Iron ore in othe

states.

Apart from this, Steel Industry is alsaffected by various regulatory issue

such as lengthy processes in allotment o

Iron Ore mines and Coal blocks. Severa

global major companies are rethinking

about their strategy to expand in the

Indian Market and implementing variou

brownfield and Greenfield projects

Currently, expansion plans of variou

companies like POSCO have hit the

roadblocks. POSCO inked a deal with

Orissa government to set up a 12 MTPA

steel plant 8 years ago but it still has to

start project related work in those areas.

The Government has missed its Stee

production target of 124 Million Tons by

40% in 2012. In 2009, the then stee

minister had repeatedly announced tha

India would double steel production by

2012. That is, from 62 million tons in 2009

to 124 million tonnes in 2012. However

the steel production in 2012 was around

76.7 million tons (Ref: World Stee

Association). Thus in comparison to an

expected increase of 62 Million Tons in

last 3 years, Steel production has only

gone up by 14 Million Tons.

With the current cap on Iron Ore

mining in Karnataka, and the simila

probable scenarios in other states, w

may not see large investments in

Greenfield projects in the country. Thusin next 5-10 years, India may become

major Steel importer.

For setting up new Greenfield Project

you require Land, Water and Iron Ore an

unless these issues are resolved new

investment may be limited. In India, the


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Face-to-Face

February 201310

investing companies found lot of troubles

in even acquiring the land. The current

process takes years for allotment /

acquisition of land, Water and Iron Ore

and then getting the necessary licenses.

Brownfield expansion may happen but if

the Iron ore will be sold at international

prices coupled with Coke procurement

from abroad, high energy and manpower

costs then as a country we may not be

competitive. It may be cheaper to import

Steel rather than to import the Raw

Materials.

- India may become world's second

largest country in terms of SteelConsumption by 2030 only behind China.

However, with the e-auction and limited

supply of Iron Ore, India will lose its

inherent competitive advantage of low

price Iron Ore and may be prone to

cheaper Steel imports from China.

In the future, there will be increased

emphasis on the Cost Reduction projects.

The Cost reduction projects and

initiatives which may see in future may

include

lProjects like Sinter, Beneficiation

and Pelletization which will enable the

Steelmakers to use the low-grade Iron

Ores as well as decrease their costs for

Steelmaking.

lHot Blast Stoves for reducing the

Coke Consumption in the Blast Furnace

lIncrease in injection of Pulverized

Coal to replace the imported Coking Coal

lUsage of Coke Oven gas and Blast

According to you, where will the IndianSteel industry stands in the globalperspective by about 2030 ?

How do you think the steel industryshould cope with the steep rise andfluctuations in the raw material prices,which the industry faced in recenttimes ?

Furnace Gas to replace FO consumption

in the plant and produce DRI.

Also, there is scope of vast

improvement if one improves their

internal efficiencies.

The coming decades may also see a

greater focus on the Energy consumption

reduction in the Steel Sector. The currentG loba l benchmark fo r Ene rgy

Consumption per ton of Crude Steel

production is 4.5-5.5 Gcal/t whereas the

Indian companies consumes somewhere

between 6-7 Gcal/t. As Energy also have

a significant costs in the Steelmaking,

decrease in Energy consumption will

result in decreased costs for Steel

Companies. The Indian Companies are

installing projects like Hot Blast Stoves

which will reduce the Coke consumption

and thus reduction in energy consumption

but more innovative steps are required.

The other area of focus may be

maximizing revenues from wastes.Currently, many Steel companies don't

realize maximum benefits from these by-

products. There is scope for substantial

metal recovery from these wastes which

can again be used in the Steel plant.

Also, the companies might look at

areas like developing new grades to

reduce life cycle cost, identifying a niche

market, identifying new applications for

their products or marketing their

products in alternate avenues in domestic

or foreign market.

The future may see a ban on small-

size blast furnaces as done in China

recently to improve the efficiency of Steel

sector and decrease Energy Consumption

(Large Size Blast Furnaces consumes

less Coke per ton of Steel Production).

In terms of adaptation to innovations

and new technologies, there is vast scope

of development and the coming decade

may see a higher level of adaptation to

new technologies in terms of Stee

making.

- Iron ore and Coking Coal are the tw

major raw materials for Steelmaking. Due

to the Iron ore mining crisis in Karnataka

the Iron ore purchasing costs have gone

up very sharply.

The Company has r ecen t l y

commissioned two Sinter Plants of 0.4

MTPA each. These Sinter Plants wil

enable the company to use Iron ore Fine

and Coke Fines in the Steel Plant and thu

will reduce the cost of Iron making as we

as decrease the raw material dependenc

on Iron ore Lumps.

The Company is also planning to setup

a beneficiation and Pelletization Plan

which will enable it to use low-grade

fines in the Blast Furnace by converting

them into pellets.

The Company is also exploring Iro

Ore and Coal mines in India and abroad

This will enhance the raw materia

security in the future.

Also, the Pulverized Coal Injectio

(PCI) plant will be commissioned by end

of this financial year. We are targeting a

reduction in Coke Consumption by aroun

90 Kgs per Ton of Hot Metal by injecting

100 Kgs of Pulverized Coal. The PC

project will enable the company to use

coal to replace Coke in the Blast Furnace.

- Unfortunately, The Steel industry

can't do much rather than adopting a wai

and watch policy. The Government may

help by developing a roadmap for granting

licenses within a stipulated time and on

fast track basis so that the new companie

might not have to wait long fo

implementation of their projects o

enhancement of the existing capacities.

The government may develop a mode

for allocation of resources and mineral

for Steel production. For example, for

Steel production plant of 3-5 MTPA

capacity, it may make a package o

Suitable size of land, water and Iron Ore

Mine. This package may be put for e-

auction globally. The companie

acquiring the package through e-auction

may be given a stipulated timeline fo

execution of projects. Administrative

measures should be taken in case of non-

execution of projects.

What are your plans for raw materiasecurity for the future ?

How do you think should the steeindustry face the environment, fores

and land issues ?

rk goyal kalyani steel

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