The decision of the Bureau of Indian Standards (BIS) to bring in mandatory certification of steel and steel products has left small and medium business outfits engaged in steel re-rolling and induction furnaces in Punjab under stress.
The guideline was implemented from September 12 and all units have to conform to the new norms within 45 days.
According to the BIS guidelines, all manufacturers, foreign and domestic, are disallowed to manufacture, import, store for sale or distribute steel and steel products that do not conform with the standards and which do not bear the standard ISI mark of BIS, which is allowed upon being granted a certification marks licence. The grant of a licence by the BIS for use of the standard mark shall be in line with the provisions of the BIS Act and the rules and regulations under the revised notification.
There are close to 500 small and medium steel mills in Punjab, mainly concentrated in Mandi, Gobingarh and Ludhiana. According to BIS sources, 83 units have availed licences from the BIS. So there is a tremendous scope for streamlining the quality with the help of the new guidelines.
But the industry finds this standardisation cumbersome as the small players buy rolling and breaking material in the form of steel scrap. The use of scrap will have to be stopped to seek the licence, which means input cost will escalate and the manufacturers do not have margins to bear this cost.
Moreover, an annual fee of Rs 34,000 is charged from large units and Rs 29,000 from small ones., and the licences are subject to renewal every year. The licensees will also have to have their products undergo lab tests by BIS.
Most of the mills in Punjab run on decades-old manufacturing techniques and have not upgraded to match technological advancements. The complacency among the entrepreneurs and the availability of cheap raw material in unregulated markets has kept the industry low profile.
Steel millers said that this would result in closure of units, as expenditure on licence fees and lab facilities are unviable for them.
