1 .

PROFILE OF STEEL INDUSTRY

1.1 Introduction

Steel is an alloy of iron usually containing less than 1% carbon is a versatile material wit
h multitude of useful properties used most frequently in the automotive and construction
industries. Steel can be cast into bars strips, sheets, nails, spikes, wire, rods or pipes as
needed by the intended user. The consumption of steel is regarded as the index of indu
strialization and the economic maturity any country has attained.
The development of steel industry in India should be viewed in conjunction with the type
and system of government that had been ruling the country. The production of steel in si
gnificant quantity started after 1900. The growth of steel industry can be conveniently st
udied by dividing in the period into pre & post independence era (or before 1950 & after
1950).The total installed capacity for in-got Steel production in during pre independence
era was 1.5 millions tones /year, which has risen to about 8 million tones of ingot by the
seventies. This is the result of the bold steps taken by the government to develop this s
ector.

1.2 Indian steel scenario:

As per the revised estimates of Annual Income & Quarterly Estimates of GDP released
by CSO & MOSPI on 30/05/08, the Indian economy grew at the rate of 9% in 2007-08, t
hird year in a row growing at a rate of 9% and above. In 2005-06, the economy grew at
9.3% followed by 9.6% in 2006-07. The agriculture sector has registered a higher growt
h of 4.5 percent during 2007-08 as against a growth rate of 3.8 percent last year. Howev
er, the manufacturing sector witnessed some slowdown. The growth rate in the manufac
turing sector for 2007-08 lowered to 8.8% from 12% in the previous year. Also there wa
s a slight decline in the Mining & Quarrying sector from 5.7% in 2006-07 to 4.7% in curr
ent fiscal. The growth rate in construction sector also fell to 9.8% in 2007-08 compared t
o that of 12% in 2006-07.
As per the statistics of Joint Plant Committee, the Apparent Consumption of Steel in Indi
a increased by 10% from about 47 Mt in 2006-07 to about 52 Mt in 2007-08. The increa
se in production was not commensurate and was only 6%. As a result, India became ne
t Importer of Steel since Nov., 07. The year ended with a Net Import of about 2 Mt.
The major steel and related companies in india
1. Bharat Refactories Ltd.
2. Hindustan Steel Works Construction Ltd.
3. Jindal Steel and Power Ltd.
4. KudremukhIron Ore Company Ltd.
5. Manganese ore (India ) Ltd.
6. Metal Scrap Trade Corporation Ltd.
7. Metallurgical and Engineering Consultants India Ltd.
8. National Mineral Development Corporation (NMDC).
9. Rashtriya Ispat Nigam Ltd.
10. Sponge Iron India Ltd.
11. Steel Authority India ltd.
12. Tata Iron Steel Company.

The Indian steel industry is growing very rigorously with the major producers like SAIL,
RINL, TISCO, JVL and many others. Our steel industry has amply demonstrated its abili
ty of adopt to the changing scenario and to survive in the global market that is becoming
increasingly competitive. This has been possible largely due to the adoption of innovativ
e operating practices and modern technologies.

Industrial Development in India has reached a high degree of self-reliance, and the ste
el industry occupies a primary place in the strategy for future development. The public s
ector steel industry has been restructured to meet challenges and a separate fund has b
een established for modernization and future development of the industry. The demand
and growth curves of steel in India are shown in the figure 2.1.a below.

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Fig: Demand and Growth curves of steel in India

The draft national steel policy of India envisages production of 60 Mt by 2012 and 110
Mt by2020, and annual growth rate of 6-7%. All this should there fore augur well for the I
ndian steel industry.

Supply of steel in the Indian market

Over the past ten years India’s crude steel output rose nearly 7%per year to 55.3 million
tons , while global crude steel output increased by 4% (Germany managed an increase
of just under 1%p.a.) Although India is the world’s eighth largest steel producer, its3%-pl
us share of global steel output is still very low; it is roughly the same as Ukraine’s share
of world steel production. China, the world’s biggest steelmaker, produces nearly ten tim
es as much as India
• Steel industry was de-licensed and decontrolled in 1991&1992 re
spectively.
• India is the fifth largest producer of steel in the world in 2008 with
55.2 million tones of crude steel production.

1.3 Global scenario

The global steel industry has witnessed several revolutionary changes during the last ce
ntury. The changes have been in the realms of both technology & business strategy. Th
e ultimate object of all these changes is to remain competitive and open global market.

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Table.2.2.a- Crude steel production(million tonnes)

Rank Country/Region 2007 2008

— World 1559.9 1504.5

1 People's Republic of China 494.9 500.5

— European Union 209.7 198.0

2 Japan 120.2 118.7

3 United States 98.1 91.4

4 Russia 72.4 68.5

5 India 53.1 55.2

6 South Korea 51.5 53.6

7 Germany 48.6 45.8

8 Ukraine 42.8 37.1

9 Brazil 33.8 33.7

10 Italy 31.6 30.6

11 Turkey 25.8 26.8

12 Taiwan 20.9 19.9

13 France 19.3 17.9

14 Spain 19.0 18.6

15 Mexico 17.6 17.2

16 Canada 15.6 14.8

17 United Kingdom 14.3 13.5

18 Belgium 10.7 10.7

19 Poland 10.6 9.7

20 Iran 10.1 10.0

21 South Africa 9.1 8.3

22 Australia 7.9 7.6

23 Austria 7.6 7.6

24 Netherlands 7.4 6.8

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25 Czech Republic 7.1 6.4

26 Romania 6.3 5.0

27 Egypt 6.2 6.2

28 Malaysia 6.1

29 Sweden 5.7 5.2

30 Thailand 5.5

31 Argentina 5.4 5.5

32 Slovakia 5.1 4.5

33 Venezuela 5.0 4.2

34 Kazakhstan 4.8 4.3

35 Saudi Arabia 4.6 4.7

36 Finland 4.4 4.4

37 Indonesia 4.0

38 Luxembourg 2.9 2.6

39 Greece 2.6 2.5

40 Belarus 2.4 2.5

— Others 29.2 24

The year 2004-05 was a remarkable one for the steel industry with the world crude steel
production crossing the one billion mark for the first time in the history of the steel indust
ry.

In 2007, as per International Iron and Steel Institute (IISI) report, world crude steel outpu

t reached 1,351,289 million metric tonnes (mmt) an increase of 7.5% over 2006] The grea
test steel producing country is currently China, which accounted for 36.6% of world steel
production in 2007. . The total production quantity represents the highest level of crude
steel output in history and it is the fifth consecutive year that world crude steel productio
n grew by more than 7%. China’s steel production in 2007 reached 489 Mt, a 15.7% incr
ease over 2006. It is however, observed that there is a reduction in growth from the 18.8
% achieved in 2006, 26.8% in 2005 and 26.1% in 2004. However, China remains the dri

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ving force behind the still strong world production figures. Without China, world crude st
eel production would have only grown at 3.3%. Other BRIC Countries (Brazil, Russia, In
dia & China) also maintained relatively high growth, with India and Brazil recording 7.3%
and 9.3% increase respectively. In 2007, India reached the 5th rank among the top steel
producing countries in the world by producing 53 Mt. As reported by the UK based Man
agement Engineering & Production Services (MEPS) International Ltd., the forecast for
crude steel production is 1420 Mt for the year 2008 which is 5.6% more than previous y
ear. Further growth is anticipated – rising to 1600 Mt by 2011.

In 2008, in the majority of steel producing countries, output fell as the global recession
began.
The list of countries by steel production in 2007 and 2008, based on data provided b
y the World Steel Association, accessed in May 2009 is given at Table.2.2.a.

♠♠♠♠♠♠♠♠♠

2. COMPANY PROFILE

2.1 Introduction

Visakhapatnam Steel Plant (VSP), the first coast based Steel Plant of India is located, 1
6 KM South West of city of Destiny i.e. Visakhapatnam. Bestowed with modern technolo
gies, VSP has an installed capacity of 3 million Tones per annum of Liquid Steel and 2.6
56 million Tones of saleable steel. At VSP there is emphasis on total automation, sea
mless integration and efficient up gradations, which result in wide range of long and stru
ctural products to meet stringent demands of discerning customers within India and abr
oad. VSP products meet exacting International Quality Standards such as JIS, DIN, and
BIS, BS etc.

VSP has become the first integrated Steel Plant in the country to be certified to all the th
ree international standards for quality (ISO-9001), for Environment Management (ISO-1
4001) & for Occupational Health & Safety (OHSAS-18001). The certificate covers qualit

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y systems of all Operational, Maintenance and Service units besides Purchase systems,
Training and Marketing functions spreading over 4 Regional Marketing Offices, 24 branc
h offices and stock yards located all over the country.
VSP by successfully installing & operating efficiently Rs. 460 crores worth of Pollution C
ontrol and Environment Control Equipments and converting the barren landscape by pla
nting more than 3 million plants has made the Steel Plant, Steel Township and surround
ing areas into a heaven of lush greenery. This has made Steel Township a greener, cle
aner and cooler place, which can boast of 3 to 4° C lesser temperature even in the peak
summer compared to Visakhapatnam City.

VSP exports Quality Pig Iron & Steel products' to Sri Lanka, Myanmar, Nepal, Middle Ea
st, USA, China and South East Asia. RINL-VSP was awarded "Star Trading House" stat
us during 1997-2000. Having established a dependable export market, VSP plans to ma
ke a continuous presence in the export market.

Having a total manpower of about 16,600 VSP has envisaged a labor productivity of 26
5 Tones per man-year of Liquid Steel.

2.2 Background & Corporate Plan of VSP

2.2.1Background
With a view to give impetus to Industrial growth and to meet the aspirations of the peopl
e from Andhra Pradesh, Government of India decided to establish Integrated Steel Plant
in Public Sector at Visakhapatnam (AP). The announcement to this effect was made in t
he Parliament on 17 April' 1970 by the then Prime Minister of India late Smt. Indira Gan
dhi. A site was selected near Balacheruvu creak near Visakhapatnam city by a Committ
ee set up for the purpose, keeping in view the topographical features, greater availability
of land and proximity to a future port. Smt. Gandhi laid the foundation stone for the plant
on 20.01.1971.

Seeds were thus sown for the construction of a modern & sophisticated Steel Plant havi
ng annual capacity of 3.4 Million Tones of hot metal. An agreement was signed between
Governments of India and the erstwhile USSR on June 12th, 1979 for setting up of an In
tegrated Steel Plant to produce structural & long products on the basis of detailed Proje

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ct report prepared by M/s M.N. Dustur & Company. A Comprehensive revised DPR joint
ly prepared by Soviets & M/s Dustur & Company was submitted in Nov' 1980 to Govt. of
India. The construction of the Plant started on 1st February 1982. Government of India
on 18th Feb'82 formed a new Company called Rashtriya Ispat Nigam Ltd. (RINL) and tr
ansferred the responsibility of constructing, commissioning & operating the Plant at Visa
khapatnam from Steel Authority of India Ltd. to RINL.

Due to poor resource availability, the construction could not keep pace with the plans, w
hich led to appreciable revision of the plant cost. In view of the critical fund situation and
need to check further increase in the plant costs, a rationalized concept was approved
which was to cost Rs. 6849 crores based on 4th Quarter of 1988. The rationalized conc
ept was based on obtaining the maximum output from the equipments already installed,
planned / ordered for procurement and achieving higher levels of operational efficiency
and labor productivity. Thus, the plant capacity was limited to 3.0 Million Tones of Liquid
Steel per annum. In the process, one of the Steel Melt Shops and one of the mills were
curtailed. The availability of resources were continued to be lower than what was planne
d and this further delayed the completion of the construction of the plant. Finally all the u
nits were constructed and commissioned by July' 92 at a cost of Rs.8529 Crores. The t
hen prime Minister of India Late Sri P. V. Narasimha Rao dedicated the plant to nation o

n 1st August 1992.

Since Commissioning VSP has already crossed many milestones in the fields of product
ion, productivity & exports. Coke rate of the order of 509 Kg/Ton of Hot metal, average c
onverter life of 3126 heats an average of 23.6 heats per sequence in continuous Bloom
Caster. Specific energy consumption of 6.07 G Kal / ton of liquid steel, a specific refrac
tory consumption of 8.94 kg and a labor productivity of 414 Ton / man-year are some of t
he peaks achieved in pursuit of excellence.

2.2.2 Corporate Plan :

Vision, Mission ,Objectives(VMO) and core values

MISSION
To attain 10million ton liquid steel capacity through technological up-gradation, operatio
nal efficiency and expansion: to produce steel at international standards of cost and qua

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lity: and to meet the aspirations of the stakeholders.

VISION
To be a continuously growing world-class company, we shall
• Harness the growth potential and sustain profitable growth
• Deliver high quality and cost competitive products and be the
first choice of customers
• Create an inspiring work environment to unleash the creative
energy of people
• Achieve excellence in enterprise management
• Be a respected corporate citizen, ensure clean and green
Environment and develop vibrant communities around

OBJECTIVES
• Towards growth-Expand the plant capacity to 7Mt by 2011-12 and 10Mt by 2019-
20.
• Towards profitability-Achieve net profits from 2002-03 onwards with special emph
asis on enhancement of production of value added steels and cost reduction.
• Towards employees-Make RINL the employer of choice. Upgrade the skills and
efficiency of employees through training and development and maintain high leve
ls of motivation and satisfaction.
• Towards customers-promote branding of products for quality and customer prefer
ence through effective customer relations management.
• Towards suppliers- Develop a reliable and strong supplier base and ensure effect
ive supply chain.

CORE VALUES

• Commitment
• Customer Satisfaction
• Continuous Improvement
• Concern for Environment
• Creativity & Innovation

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2.3 Various Policies are as follows:

Quality policy

Visakhapatnam Steel Plant is committed to meet the needs and expectations of their
customers and other interested parties. To accomplish this, they will

• Supply quality goods and services to customers delight

• Achieve quality of the products by following systematic approach

through planning, documented procedures and timely review of

Quality objectives.
• Continuously improve the quality of all materials, processes and
products.
• Maintain an enabling environment of all employees with their
involvement.

Environment policy

Visakhapatnam Steel Plant, while carrying out its operations reaffirms its commitmen
t to preserve the environment. To accomplish this, they will

• Document, implement, maintain and continuously review the

environment management system
• Comply with all the relevant environmental legislations,
regulations and other requirements
• Ensure continual improvement in the environmental
performance and prevention of pollution by minimizing the
emissions and discharges
• Maintain a high level of environmental consciousness amongst
employees
• Review the environmental objectives and targets on a
continuous basis.

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Energy policy

Visakhapatnam Steel Plant is committed to optimally utilize various forms of

energy in a cost-effective manner to effect conservation of energy resources. To acc
omplish this, they will

• Monitor closely and control consumption of various forms of

Energy through an effective Energy Management System.
• Adopt appropriate energy conservation technologies
• Maximize the use of cheaper and easily available forms of
energy.

OSHAS POLICY

Visakhapatnam Steel Plant is committed to occupational health and safety of employ

ees and contract workers. To accomplish this, they will

• Document, implement, maintain and periodically review the

Occupational health and safety management system including
the policy
• Comply with all the relevant occupational health and safety
legislations, regulations and other requirements.
• Ensure continual improvement in the environmental
performance and prevention of pollution by minimizing the
emission and discharges
• Maintain a high level of environmental consciousness amongst
employees.
• Review the environmental objectives and targets on a
continuous basis.

HR policy

Visakhapatnam Steel Plant, believe that its employees are the most important resource

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s. To realize the full potential of employees, the company is committed to:
• Provide work environment that makes the employees
Committed and motivated for maximizing productivity.
• Establish systems for maintaining transparency, fairness
and equality in dealing with employees.
• Empower employees for enhancing commitment,
responsibility and accountability.
• Encourage teamwork, creativity, innovativeness and high
achievement orientation.
• Provide growth and opportunities for developing skill and
Knowledge.
• Ensure functioning of effective communication channels
with employees.

Customer policy

• VSP will endeavor to adopt a customer-focused approach

at all times with transparency.
• VSP will strive to meet more than the customer needs and
and expectations pertaining to products, quality, and
value for money and satisfaction.
• VSP greatly values its relationship with customers and
would make efforts at strengthening these relations for
mutual benefit.

IT policy

• RINL/VSP is committed to leverage Information Technology as the vital enabl

er in improving the customer-satisfaction, organizational efficiency, productivit
y, decision-making, transparency and cost-effectiveness, and thus adding val
ue to the business of steel making. Towards this, RINL shall:
• Follow best practices in process Automation & Business Processes through I

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 T by in-house efforts / outsourcing and collaborative efforts with other organiz
ation / expert groups / institutions of higher learning, etc., thus ensuring the qu
ality of product and services at least cost.
• Follow scientific and structured methodology in the software development pro
cesses with total user-involvement, and thus delivering integrated and quality
products to the satisfaction of internal and external customers.
• Install, maintain and upgrade suitable cost-effective IT hardware, software an
d other IT infrastructure and ensure high levels of data and information securit
y
• Strive to spread IT-culture amongst employees based on organizational need,
role and responsibilities of the personnel and facilitate the objective of becomi
ng a World-Class business organization.
• Enrich the skill-set and knowledge based of all related personnel at regular int
ervals to make employees knowledge-employees.
• Periodically monitor the IT investments made and achievements accrued to re
view their cost effectiveness.

2.4 Technology, major units, sources of Raw materials, main products

VSP Technology: State-of-the-Art

• 7 meter tall, Coke Oven Batteries with coke dry quenching.

• Biggest Blast Furnaces in the Country
• Bell - less top charging system in Blast Furnace.
• 100% slag granulation at the BF Cast House.
• Suppressed combustion - LD gas recovery system.
• 100% continuous casting of liquid steel.

• "Temcore" and "Stelmor" cooling process in LMMM & WRM respectively.

• Extensive waste heat recovery systems.
• Comprehensive pollution control measures.

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Major units of Production in VSP
The major units of production are given in the table 2.4a

Major Sources of raw materials for VSP

The major Sources of raw materials are given in the table 2.4.b

Major products of VSP

The major products of VSP are given in the table 2.4.c

Table 2.4.a : Major Units

Annual

Capacity Units (3.0 MT Stage)

Department
(‘000 T)

Coke Ovens 2,261 3 Batteries of 67 Ovens & 7 Meters. Height

Sinter Plant 5,256 2 Sinter Machines of 312 Sq. Meters. grate area each

Blast Furnace 3,400 2 Furnaces of 3200 Cu. Meters. volume each

Steel Melt Sh 3 LD Converters each of 133 Cu. Meters. Volume and Six 4 strand blo
3,000
op om casters

LMMM 710 4 Strand finishing Mill

WRM 850 4 Strand high speed continuous mill with no twist finishing blocks

MMSM 850 6 STAND FINISHING MILL

Table 2.4.b : Major Sources of Raw Materials

Raw Material Source

Iron Ore Lumps & Fines Bailadilla, MP

BF Lime Stone Jaggayyapeta, AP

SMS Lime Stone Middle East

BF Dolomite Madharam, AP

SMS Dolomite Madharam, AP

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 Manganese Ore Chipurupalli, AP

Boiler Coal Talcher, Orissa

Coking Coal Australia

Medium Coking Coal (MCC) Gidi / Swang / Rajarappa / Kargali

Table 2.4.c : Major Products of VSP

Products By-Products

Blooms Flats Nut Coke Toluene

Billets Rounds Coke Dust Zylene

Channels,
Re-bars Coal Tar Wash Oil
Angles

Ammonium Sulp
Beams Steel Wire Rods Anthracene Oil
hate

Squares HP Naphthalene Granulated Slag

Benzene Lime Fines

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The process chart is shown in the figure. 3.3.a

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