Abstract

The strategic location of the steel industry in Mandi Gobindgarh one of Asia’s oldest steel towns, plays a significant role in the development in the region’s sustainable development and sustainability of the ancillary industries located in other states and cities. This research investigates how the town’s non-proximity to ports and raw material sources influences the operational efficiency, cost structures and competitive disadvantage that the industry possesses when competing in domestic markets with other larger producers or producers of commodities such as steel in other favorable locations. This study explores the spatial relationship between Mandi Gobindgarh and key raw material suppliers, including coal mines, iron ore sources and scrap metal markets, as well as its connectivity to major ports such as Kandla and Mumbai. The study also provides a detailed depth into how energy, non-proximity to ports and lack of high levels of vertical integration prevalent in the industry leads to losses and unorganized - fragmented structures in the market and the negative impacts it possesses on businesses and domestic manufacturers and suppliers. The research highlights the resilience and expertise possessed by businesses and ancillary industries alike to sustain the Steel city tag it has possessed since the last century. The findings reveal that the industry’s reliance on inland transportation networks adds to the proximity problem of the town for procurement of raw materials or exportation of goods. The research also highlights how the inaccessibility of efficient railway networks to transport freight and highways create logistical bottlenecks, thus making it harder to facilitate the continuous requirements of raw materials into the region at cheaper prices. The research aims to address various spatial, geographical and external challenges the cluster faces to retain its title of Steel City.

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