Pardon me if my figures are not bang on, for I am neither an expert in steel, nor an economist with a major in statistics. I am an ad guy and the figures that I quote are NOT to flaunt my knowledge, but to underscore basic points that have occurred to me as an advertising professional. My apologies are therefore upfront and unconditional.
Per Capita consumption of steel (total finished steel) in India is about 65 kgs. The world average is about 225 kgs. India was the world’s third largest steel producer with roughly 122 million tons crude steel making capacity. Actual production is about 90 million tons. The gap – roughly 32 million tons, is something that is conveniently overlooked. It can either be looked as a National Wastage (inefficiency) or a National Source of Corruption.
If India were to aim for the World average, we have to make 1,34,51,60,900 Indian consume (roughly) an additional 160 kgs of steel every year.Oh, BTW, Japan, Germany, Korea and China are WAY beyond our reach. So, let’s concentrate on the World AVERAGE.
That means, we have to set up and additional X Million tons of greenfield steel-making capacity – considering that the plants run at 70 percent of their rated production capability. Again, forget about what we have achieved so far, when we paint pictures, we Indians go easy on the facts and let the colours roll.
By the Rule of the Thumb, the additional required capacity will require a direct investment of INR X crores. To put things in the right perspective, that is … you do the Maths, its way beyond me! Point is, where will the money come from?
Now suppose we overcome that “little” problem of financial resources, do you think the world has enough ready coal (of the Coking variety) and iron ore to meet the demand in the medium term? I say medium term, as “we will all be dead in the long run”. And Engineers? Technicians? Accountants? LAND? Environmental clearances? Water?
Forget that. In the future, even if everything becomes possible . But then again, what will be the Carbon Footprint of the additional capacity that will be set up? What will be the per ton SOCIAL cost of the additional production that the NATION and OUR CHILDREN will have to bear? Any Guesses? Who cares?
And yes, when we do get to that magic figure, will the Industry become self-reliant? Mature enough to face global gluts? Strong enough to absorb “dumping” and NOT run to the Government clamouring for protection? Remember it is one thing to make jingoistic noises from your drawing room, and a completely different thing to fight it out in the market.
Let’s get back to the beginning. 122 million tons of Steel.
Average per ton Advertising spend by Indian companies? No one knows.
A cricketer Selling TMT bars from a hoarding behind a bus? Bas sirf, itna? And we are talking of competing globally?
Name one Indian Steel Company that is as big a brand as it is a company? If we have to increase our consumption by 160 kgs per head, we the industry have to ensure that such a demand is generated. Or will we continue to do what we have been doing so long – wait for the Government to kick-start the economy by pumping “huge” amounts into the core sector which will revive the dormant steel sector and generate demand in its wake? Talk about molten metal as pipe dreams.
Friends, let us not talk of things that are beyond our grasp. Instead, focus on what we have. Instead, focus on effectively utilising the dormant capacity. Focus on cutting costs, on reducing the carbon footprints. Focus on sustainable operations.
And while you are at it, you can trust us to help you with the branding.
So that, together, we can ensure that India walk the talk – towards decent consumption figures, per capita.
Come let us resolve in steel to say Jai Hind!
Anup Kumar Agarwalla is the founder-owner of Azure Communication a boutique Advertising Agency based out of Kolkata. He is the man behind some highly visible and terribly effective campaigns whose achievements are celebrated in the bottom lines of the brands they refurbish.