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`Core sector must fuel steel demand'

Our Bureau

Kolkata , Nov. 5

A SUSTAINED annual growth rate of 12 per cent in per capita consumption of steel is imperative for the country to become a developed country, according to Dr S.K. Gupta, National Metallurgist and Executive Vice-Chairman of Jindal Vijaynagar Steel Ltd.

Speaking at a seminar on "The role of the Metal Industry in the Resurgence of the East" organised here on Wednesday by the Bengal Chamber of Commerce and Industry, Dr Gupta said growth in the demand for steel would necessarily have to be fuelled by investments in the infrastructure sector, especially roads and housing.

He said that, for India to become a developed nation by 2020 - a vision statement made earlier by the President, Dr A.P.J. Abdul Kalam, and the Prime Minister, Mr Atal Bihari Vajpayee - the average per capita consumption of steel has to go up to 550 kg.

Currently, the average per capita consumption of steel in the country stands at 27 kg, compared with 373 kg in the US, 367 kg in the European Union, 133 kg in China and 810 kg in South Korea.

In his address, Mr Nirupam Sen, West Bengal's Minister for Industries and Commerce, said iron and steel were vital to the development industry, agriculture and infrastructure. "There are only two locations in the entire country which have both iron ore and coal i.e. the Chhattisgarh-Orissa-West Bengal-Jharkhand and the Karnataka-Goa belts. Other things being equal, only these two regions in the entire country offer competitive advantage for the iron and steel sector".

Mr V.S. Jain. Chairman of SAIL, cited the example of China, where steel consumption grew by 15 per cent between 1997 and 2002 when the global steel industry was passing through a bad phase. In fact, 25 per cent of the total global steel production is consumed by China.

Mr B. Muthuraman, Managing Director of Tata Steel, said it was necessary to have a global mindset and re-engineer business processes to be successfully globally. He said there was great potential to increase steel consumption in the domestic market as well.

Dr T. Mukherjee, Deputy Managing Director of Tata Steel, said that even if one were to take into account the "Hindu rate of growth", the demand for steel in the country was expected to touch 60 million tonnes in the next 10 years. As such, the demand for metallics would grow as well.

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