Stainless Steel production in India – implications for cookware and food services equipment industry

India has quite a robust cookware and household durables industry with over 50% of stainless steel production being attributed to that particular industry segment. (Stainless Steel World, Nov 2015)

Doubling of stainless steel production capacity

According to N.C. Mathur, president of Indian Stainless Steel Development Association (ISSDA), $5 billion has been invested to increase Indian’s stainless steel production capacity to around 5 million tonnes per year.  Compare this to a stainless steel production capacity of about 2 million tonnes in the 2006-2007 FY.  As a frame of reference, India has set an output target of 300 MT of all steel (including stainless) by 2025  (Ministry of Steel, Govt of India, Press Release, Feb 24, 2016.)

The graphic below shows some of the added capacity and their locations.  What is of interest is the fact that most of the added capacity has been on the coasts; more so on the East coast.  Of course, 95% of India’s chrome ore comes from the state of Orissa, on the East coast of India.

Source: Chiketa, LLC, presentation slide

Food Services Equipment/Cookware industry companies follow expanded capacity        

In the past, prior to all the coastal expansion of the stainless steel production, the cookware, and household durables industry was primarily centered in the North, around the capital region.  That was naturally dictated by the historical presence of stainless steel producers in that region.

India is not a large consumer of stainless steel products on a per capita basis (approx 2 kg) compared to the rest of the world (average 6 kg).  Therefore, it does make sense that the Stainless Steel production capacity expansion has been along the coasts, aimed at the export markets.  The proximity to the shipping ports allows for a lower cost compared to the products coming from stainless steel producers in inland India.

Interestingly enough the drift towards the coasts has been mirrored in the production of cookware and household durables products.  Producers in that segment have also followed suit and producers are setting up shop along the coasts as compared to the preponderance of such companies in the capital region vicinity.

The graphic below represents the shifting distribution of the cookware and household durable goods producers.

Source: Chiketa, LLC, presentation slide

Conclusion

If you are involved in the purchasing of stainless steel cookware items (or for that matter any stainless steel items) keep in mind that new potential suppliers may have emerged.  These new players, in all likelihood, are located in the coastal areas and cities like Mumbai, Chennai or Kolkata.

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Some additional references that may be of interest:

  1. Cheap Imports Haunt Indian Stainless Steel Industry, Steel World, Oct 2014
  2. I N D I A – The Next Stainless Steel Powerhouse? Steel Market Intelligence Report
  3. India Steel Industry: Export prospects. Export-Import Bank of India, June 2015