IRON AND STEEL INDUSTRY
We must be able to answer
The Localization Factors of Iron and Steel Industry
Distribution of this industry in India and why this pattern of distribution
Its Growth and Development in pre and post-Independence periods
Future prospects of Iron and Steel industry in India
LOCALIZATION FACTORS OF IRON AND STEEL INDUSTRY
• Raw Material
• Market
• Transportation
• Labour
• Government Policy
• Technology
Raw Material
• Iron and Steel industry is a Weight Losing Industry (Material Index, M.I. > 1). All the raw materials of this industry – Coking Coal, Iron Ore, Limestone, Dolamite, Mn are heavy and bulky
• Location is governed by proximity to raw materials particularly coking coal and Iron ore.
• Localization either near coal and Iron ore or in between.
• VISW is an exception, located far from main coal producing areas. Earlier it used locally available charcoal and now using HEP from Sharavati Power Project.
Market
• Finished steel products are quite bulky, and transport cost per tonne km of steel product is about 3 times more than that of coal and iron ore. Therefore market plays an important role in localization.
• Agglomeration of market forces brings economics in the cost of production, thus making market favourable location.
• One of the major consumers of steel industry is Automobile industry which in itself prefers a market location. These industries have also raised the importance of market for iron and steel industry. Further their waste in the form of scrap provides additional raw material for iron & steel industry.
Transportation
• Both raw materials & finished products are bulky and require big transportation facilities.
• Optimum transportation cost of carrying raw materials from source and finished products to market play important role.
• However, setting up of large integrated steel plants boosted the growth of infrastructure, especially road and rail links in these regions.
Technology
• Increasing popularity of Open Hearth Process. It uses scrap as raw material (1/2 of world’s raw material). It is easier to transport in raw form. Therefore, changed location of industry from traditional raw material site to market.
Port location
• Port locations provide easy and cheap means of transportation. These are also highly helpful in the import of raw materials and export of finished products.
• The Vizag Plant is a glaring example of this kind of location.
Government Policy
• Trickle down hypothesis for balanced regional development guided tremendously the location of I&S industry in the backward regions.
• Policy of developing Growth Centres & Growth Poles with I&S industry as their core also influenced its location in India.
• Political lobbying at times influences greatly its location.
• VISW Plant was set up to fulfill Defence requirements.
Labour
• Cheap and abundant labour is required for this industry. Therefore Chottanagpur, West Bengal and the nearby regions were favourable locations.
• Port locations provide easy and cheap means of transportation. These are also highly helpful in the import of raw materials and export of finished products.
• The Vizag Plant is a glaring example of this kind of location.
Government Policy
• Trickle down hypothesis for balanced regional development guided tremendously the location of I&S industry in the backward regions.
• Policy of developing Growth Centres & Growth Poles with I&S industry as their core also influenced its location in India.
• Political lobbying at times influences greatly its location.
• VISW Plant was set up to fulfill Defence requirements.
Labour
• Cheap and abundant labour is required for this industry. Therefore Chottanagpur, West Bengal and the nearby regions were favourable locations.
• Cheap and abundant labour is required for this industry. Therefore Chottanagpur, West Bengal and the nearby regions were favourable locations.