By Bizodisha Bureau, Bhubaneswar, July 12, 2019: Odisha has to play a key role in ramping up its steel production capacity to push the country’s target to add production of 159.5 million tonne (MT) of steel by FY 2031 to meet the growing demand in India.

The National Steel Policy 2017 projects that an additional 159.5 MT of steel will be produced by FY 2031 to meet the growing demand in India. The consumption of finished Steel in India is expected to increase from 81.5 MT in FY 2016 to 230 MT in FY 2031, the report adds.

India has recently replaced Japan as world’s second largest steel producing country. India’s crude steel production in 2018 was at 106.5 MT, up by 4.9% from 101.5 MT in 201738.

Odisha is a leading producer of Steel in India, and contributes to nearly 22% of the production in the country. Odisha also leads the national average in terms of growth in crude steel production between 2014 and 2018. Nationwide, the crude steel output during the period witnessed a 22 per cent jump — rising from 87.29 mt to 106.5 mt. In Odisha, crude steel output almost trebled from 8.8 mt to 23 mt, shows a report – ‘Towards One Trillion Dollar Economy’, prepared jointly by JSW Group and PwC India.

The country’s crude steel capacity is estimated to grow to 300 mt by 2030, of which actual production is gauged at 255 mt. Odisha is expected to contribute approximately 80 mt in incremental production. This additional production in Odisha will be catalysed by brownfield ramp-ups by Tata Steel, Jindal Steel & Power (JSPL), Jindal Stainless (JSL), and others, along with a new 12-million-tonne greenfield steel plant proposed by JSW Steel.

Tata Steel is deploying an extra Rs 23,500 crore to scale up capacity of the Kalinganagar steel plant, from to 8 mtpa (million tonnes per annum) from the current 3 mtpa.

JSPL has announced it will raise its total investment in the state from Rs 45,000 crore to Rs 1 trillion by 2030.

The Naveen Jindal controlled-JSPL’s integrated steel unit at Angul will see its capacity more than treble from 6 mtpa to 20 mtpa.

This will make it the biggest single-location steel project in the country. Besides the steel plant ramp-up, JSPL is also setting up an industrial park at Angul to promote ancillary and downstream industries.

If large scale steel investments propelled by private players are commissioned, Odisha has the potential to reach up to 102.7 mt of production by 2031.

To reach this output, production in Odisha needs to grow at an ambitious CAGR (compound annual growth rate) of 11.3 per cent till 2031. Further, the state has set a vision to achieve 50 per cent value addition to metals produced in Odisha by 2030.

Such value addition will enhance the contribution of the sector to the economy. Just as how resource-rich regional economies such as Hebei (China) became growth drivers of the national economy, Odisha has the potential to drive the economy, the report observed.