Consultant BCG apprises steel ministry of challenges facing sector post lockdown

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The Boston Consulting Group (BCG) has flagged to the steel ministry certain key challenges the sector is likely to face in the post lockdown period, sources said.

In a 'Discussion Document', the US-based BCG, which provides consultation services to the ministry, also suggested a few interventions to mitigate these challenges.

Sources said in a meeting held recently at the ministry, top officials have been apprised that "boosting steel demand and scaling up of supply chain area would be among the three key challenges staring at the domestic steel sector post lockdown from a longer-term perspective. Another challenge is ensuring regulatory approvals for the continuity of the businesses."

An e-mail query sent to the ministry seeking official comment remained unanswered.

BCG is learnt to have told the ministry that in the post lockdown period, there would be severely reduced demand from major end-use sectors as discretionary spending is likely to move towards healthcare and allied segments.

In the supply chain, bottlenecks are likely due to lack of availability of manpower post lockdown. Besides, there may be risks involved in enforcement of safe working practices across the entire steel supply chain.     Thirdly, potential lapsing of existing regulatory clearances might lead to challenges.

According to BCG, "addressing these challenges will require actions three key themes. Ensuring smooth operation of supply chains, providing fiscal relief package and developing early trade preparedness for steel sector."

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