Indian steel ministry is proposing creation of ‘Integrated Steel Hubs’ based on the principle of availability of raw material,logistics support and proximity to demand centers with the vision to create a model ecosystem for steel manufacturing through world class steel clusters and to promote self-sufficiency,drive cost competitiveness and generate employment opportunities.
The focus will be on 2 types of clusters: one around the ISPs and other near the demand centers. The cluster around ISPs will be called ‘Ancillary and Downstream cluster’.They will primarily have ISP(s) as their anchor plant(s), with focus on ancillary units and may also entail downstream units. It will help create an integrated ecosystem for the industry with enhanced linkage for both the ISPs as well as the tenant units.
In addition, it will facilitate growth of SME units. On the other hand, ‘Value-Added steel clusters’ are likely be set up near demand center(s). It will enable capacity expansion of units producing carbon steel, alloy (including stainless steel) as well as other high grade and special steel by improving their cost competitiveness through effective raw material linkages and other interventions such as reduced cost of power.
Integrated steel hubs will be developed through various steel clusters which includes following components:
1.Steel producing unit(s): These units would be the main steel plant(s) that produce steel using iron ore, coal or sponge iron/DRI, scrap, depending upon the route of production.
2.Ancillary units: These units would be providing products or services which will be used as inputs for manufacturing of steel or other steel related products.These units can include refractories, spares and consumables, gas plants,repair shops among others.
3.Capital goods: Capital goods manufacturers and spares providers.
4.Downstream units: These units would be involved in further manufacturing of products and processing of finished steel. These units can include rolling and finishing units (such as GP/GC, pipes and tubes, fabrication units), end usage industries (such as agricultural implements, building material) and/or by-product processing units (such as cement, blast furnace slag processing units).
5.Evacuation infrastructure: The cluster may be equipped with access to adequate rail and road connectivity to fulfill the requirement of the units.Utilization of other modes of logistics such as inland waterways, slurry pipeline, gas pipeline and/or expansion of port capacity may be explored.
6.Physical infrastructure: Appropriate physical infrastructure will be provided on a case-by-case basis.
7.Common facilities: The cluster may be equipped with common facilities that will act as enablers for production by aforementioned units. An indicative list of these facilities include (specific set ups to be decided on a case- by- case basis):
Benefits of steel cluster- Given railways and roadways are primary existing modes of transportation, the aim will be to enhance their capacity as well as modernize.In order to setup a model cluster, it is imperative that it is facilitated with reliable supply of power,consistent quality and rationalized tariffs.
Also encumbrance-free availability of developed land,single-window for application for clearances and approvals of the same within specified time frame will greatly reduce project risk of the units.
Co-location of the anchor plant(s) with tenant units may help promote raw material security for the downstream units. Factors such as reduced logistics cost and scope to improve serviceability may also enhance demand certainty of cluster tenants such as ancillary units.
For detailed description PDF link attached : Draft Framework Policy – Development of Steel Clusters in India
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