SOCIO-ECONOMIC VOICES

"High Time that Expert Automation and AI are Integrated to Upscale the Steel Production in India"
-Susmita Dasgupta,Former Joint Chief Economist - JPC, Ministry of Steel, GoI & Promoter and Founder, Heather House LLP
"Newer Grades of Steel are the Need of the Hour"

Intro: “Waste from the steel industry has a lot of potential,” asserts this week’s protagonist on Socio Economic Voices - Susmita Dasgupta, who is former Joint Chief Economist, Economic Research Unit Joint Plant Committee, Ministry of Steel, Government of India. She informs Senior Journalist Mahima Sharma that to fully utilise the potential of the steel industry, India needs better skilled workers as well as integration of modern technology. Ms Dasgupta asserts that newer grades of steel are the need of the hour which we do not produce. So how must India stride ahead in the steel sector? A short SWOT analysis and a roadmap in an exclusive interaction ahead. Take a read:

MS: Steel Industry, Skill Development and Green Technology. What's you take on the same - the current scenario as well as the future of the same? What needs to be done, considering that only 60% of the country's potential is being realised in the steel manufacturing industry?

SD: 60% capacity utilisation is not much of an issue with the steel industry for across the world we have similar capacity utilizations. The reasons for this are complex and not within the scope of the answer to this question. So, I am sharing some important aspects of Green Technology which is compulsory as the norms of emissions and standards of effluents are closely defined.

  1. Selection of raw materials so that emissions are controlled, and this includes the choice of hydrogen as fuel. The use of scrap and DRI are also helpful in the reduction of emissions.
  2. Selection of technologies which circulate waste heat, often depends on the design of waste heat recovery contraptions within the steel plant.
  3. Post process contraptions like air bag filters and ESP; these machines need expert automation and AI to be connected and integrated to the production process.
  4. Presently, there are specialised companies who deal with cleaning up technologies and typically these companies also can process waste like slags and use these for developing bricks and concrete.

Skills is a problem area in the steel industry as the steel companies ideally do not encourage skilled workers since they claim higher wages. Also, it is not unlikely that engineers who qualify into higher degrees and skills lose their jobs fast and find themselves unemployable. If there is no demand for skills, it is unlikely that we can develop skills.

MS: Steep inflation is the steel sector amid less production. What's your advice to the government and the sector drivers, on how must they stride ahead to strike a balance?

SD: The drop in production in steel is not known to me as I do not have access to the JPC anymore in view of my retirement. However, it is likely that demand has dropped for steel, for at least four reasons which needs work upon:

  1. Production not sustaining earlier growth rate.
  2. Lower consumer demand on account of economic slowdown and production adjusting to less.
  3. Steel is stronger but lighter now, so in terms of tonnage, we consume less.
  4. Newer grades of steel are the need of the hour which we do not produce. Earlier we could import the higher grades and export our basic grades, but with import duties and now export duties, we are forced to do whatever we produce. Hence, we are not investing in those areas where we do not have the right quality of steel and hence a drop in consumption and demand.
  5. Less production can lead to steep prices especially when steel producers cartelize, of which there appears to be some evidence. Also, the commencement of futures in the steel products, artificial shortage is created due to speculation in the futures.

MS: The wrath of climate change and the crumbling infrastructure. In your various assertions, you have shared the role of steel and how it can better the life of the masses. How can this carve a better future in India and abroad?

SD: Though the production of steel is a climate hazard, yet the use of steel can be of great solace in tackling climate change. We need to develop high end skills in steel fabrication to have homes suitable for solar energy, rainwater harvesting, water heating and cooling through floors and all these are possible also in rural areas. We need imaginative architects, solid investors into projects and skilled workforce for back end supply chain management.

MS: You have often spoken about 'waste to gold' in the steel sector. In your experience, how Indians must stride ahead, amid the slowly diving economy and rising inflation.

SD: Waste from the steel industry has a lot of potential. The byproducts from the steel industry like - Slag, both BF (blast furnace), LD converter and EAF (electric arc furnace) have huge possibilities as construction material. Charcoal dust from sponge iron units can be used to separate costly carbon, heat from waste gas is already being used for generating electricity. Mill scale is pure iron.

The roadmap should use the JPC data on reported production and the typical production route and derive the category, quantity and nature of waste generated. With this data on each kind of waste, one can post these on a dedicated website and promote it for the prospective waste recyclers.

MS: How about green hydrogen, related infrastructure and its role in the steel industry. What's your take?

SD: There is no significant demand for hydrogen by the steel sector yet. However, we need to assess the value chain to make hydrogen available if at all it becomes an optional fuel.

MS: Various global economists have stated Steel As the Next Gold. How can India harness this opportunity to its fullest and revive the economy?

SD: It is unlikely that steel will be the new gold because the rate of new innovation in steel is not taking place. Without a substantial technological breakthrough which provides incremental returns to scale higher than in the sectors leading the technology trajectory, steel will remain a sunset industry.

MS: The middle and small scale industries also play a major role in the steel sector, accounting for nearly 50-52 per cent production through their nearly 3,000 units. How can these MSMEs be better employed to ensure that the target of doubling the production in next eight years (envisioned by the Union Steel Minister) is met?

SD: Perhaps, I am not the right person to answer this because there is no need to increase production at this moment. However, in view of their smaller scale, they can develop niche products like medium carbon, super alloys and so on.

MS: Jobs in the steel sector. How can the youth of India be better employed in this burgeoning sector?

SD: Steel is a shrinking sector where jobs are concerned. This applies for the steel sector anywhere in the world. It is difficult to imagine that this Sunset industry will attract the youth. However, the youth may find employment here in the generic areas such as automation, machine learning where the domain knowledge would belong to specialised metallurgists. The steel industry is not keen to employ skilled persons, hence skilled persons do not look upon this sector as promising.

MS: What kind of careers can the young population of India look at in the Steel Industry in the times to come, if not now?

SD: Students should increasingly focus on focusing on machine learning, which is industry 4.0 especially important for green technologies in steel.

About Susmita Dasgupta

Ms Dasgupta is a retired Joint Chief Economist, Economic Research Unit Joint Plant Committee, Ministry of Steel, Government of India. She is also the promoter and Founder of Heather House LLP.

She has worked as a policy economist for 35 years with the Ministry of Steel. She is also the author of the book, Economics of the Indian Steel Industry, Taylor and Francis, United Kingdom, 2017. Her experience ranges from data analysis, value chain management, trade and investment strategies to product mix planning, strategising technology.

About the Interviewer

Mahima Sharma is a Senior Journalist based in Delhi NCR. She has been in the field of TV, Print & Online Journalism since 2005 and previously an additional three years in the allied media. In her span of work she has been associated with CNN-News18, ANI - Asian News International (A collaboration with Reuters), Voice of India, Hindustan Times and various other top media brands of their times. In recent times, she has diversified her work as a Digital Media Marketing Consultant & Content Strategist as well. Since March 2022, she is also an Entrepreneurship Education Mentor at Women Will - An Entrepreneurship Program by Google in Collaboration with SHEROES. Mahima can be reached at media@indiastat.com

Disclaimer : The opinions expressed within this interview are the personal opinions of the interviewed protagonist. The facts & statistics, the work profile details of the protagonist and the opinions appearing in the answers do not reflect the views of Indiastat or the Journalist. Indiastat or the Journalist do not hold any responsibility or liability for the same.

indiastat.comAugust, 2022
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