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STEEL AUTHORITY OF INDIA LIMITEDInvestors Meet
June 01, 2015
Contents
Global Steel Scenario
Domestic Steel Scenario
SAIL : Overview
SAIL : Performance
SAIL: modernization & expansion plan
Global Steel Scenario
World Steel Association (WSA) forecast :Global apparent steel use will grow byanother 0.5% and will reach 1,544 mtpa in2015.
1433 1537 1559 1642 1662
2010 2011 2012 2013 2014
1.2%
GLOBAL crude steel production in MT (last 5 yrs.)
Global Crude steel production : remains flat at 1662 mtpa (growth of 1.2 % over 2013)
Avg. growth rate of global crude steel production in last 5 yrs. is 6%
India’s crude steel production has increased by 2.2% over 2013
Growth in developed Countries like US & Japan remained flat(between 1-2%)
Growth in China remained flat at 0.9%; there is a 7.5% jump in South Korea
Rank CountryCrude steel
production 2014in MTPA
1 China 8232 Japan 1113 United States 884 India 835 South Korea 71
World 1662
Growth Trends of World Steel Industry
Source WSA
0.6 % growthover 2013
GLOBAL finished steel consumption
(last 5 yrs.) CAGR (5 yrs.) = 6 %
Rank CountryProjected Finished Steel Consumption
2015(in mt)
1 China 707
2 United States 107
3 India 80
World 1544
13071411 1437
1532 1537
2010 2011 2012 2013 2014
Share in total 2014 World Finished Steel Consumption: India: 5% ; China: 46%; Asia: 71%
Global finished steel consumption projected 2015:
1544 mtpa (growth of 0.6 % over 2014)
Avg. growth rate of global finished steel consumption in last 5 yrs. is 6.0%
In the United States, after a decrease of -0.6% in apparent steel use in 2013, steel demand has increased by 11.7% to 107 mtpa in 2014. Projection flat for 2015
India’s finished steel consumption is projected to increase by 6.2% over 2014Source: WSA; duration is considered on
calendar basis
Growth Trends of World Steel Industry
Region / Country
2014 2015 forecast 2016 forecast
Quantity(in million Tonnes)
Growth over
2013 (%)
Quantity(in million Tonnes)
Growth over
2014 (%)
Quantity (in million
Tonnes)
Growth over 2015 (%)
World 1537.3 0.6 1544.4 0.5 1565.5 1.4World Excluding China 826.6 4.2 837.2 1.3 861.8 2.9European Union(28) 146.8 4.5 149.9 2.1 154.1 2.8Other Europe 37.0 0.2 38.0 2.8 38.5 1.4CIS 56.5 -4.9 52.4 -7.3 52.2 -0.3NAFTA 144.6 11.3 143.3 -0.9 145.1 1.3Central & South America 48.1 -3.9 46.5 -3.4 48.1 3.4Africa 36.9 4.2 39.6 7.4 41.5 4.9Middle East 51.9 3.7 53.3 2.8 55.6 4.2Asia & Oceania 1015.6 -1.0 1021.5 0.6 1030.4 0.9
- China 710.8 -3.3 707.2 -0.5 703.7 -0.5- India 75.3 2.2 80.0 6.2 85.8 7.3
World Steel Association (WSA) Short Range Outlook, Apr’15
Domestic Steel
Scenario
India’s Crude steel
production (2014) : 83
mtpa (growth of 2.3 %
over 2013)
In 2015, a further 6%
growth in steel demand in
India is expected.
64 69 74 77 81.3 83.2
2009 2010 2011 2012 2013 2014
Crude Steel Production (mtpa)
5865 70 72 74 75.3
2009 2010 2011 2012 2013 2014
Finished Steel Consumption (mtpa) 2.2%
Per capita finished steel consumption, 2013
World – 225 kg/t
China – 515 kg/t
India – 58 kg/t
Source: WSA
Growth Trends of Indian Steel Industry
6.77.8 8.9
2468
1012
6% 7% 8%
Stee
l Con
sum
ptio
n G
row
th R
ate
(in %
)
GDP Growth Rate (in %)
Steel Consumption2021-22 (MTPA)
Steel Consumption 2025-26 (MTPA)
GDP Growth Rate 6% 135 175
GDP Growth Rate 7% 150 202
GDP Growth Rate 8% 166 234
Elasticity = 1.11
Source : Draft NSP, Team Analysis
Indian Steel Industry: Finished Steel Demand Projection
SAIL: Overview
Several decades of experience in the steel sector
...with an Established and Successful Operating Track Record
SAIL incorporated as a holding company for HSL, Bokaro Steel Ltd, Salem Steel Ltd, Hindustan Steel Works Construction Ltd (“HSCL”), Bharat Coking Coal Ltd (“BCCL”), NMDC Limited
Maharashtra Elektrosmelt Limited (“MEL”) taken over as a subsidiary
Visvesvaraya Iron & Steel Ltd (“VISL”) taken over as a subsidiary
Listing of SAIL on Bombay Stock Exchange (“BSE”)
Listing of SAIL on National Stock Exchange of India (“NSE”)
Listing of SAIL GDRs on the London Stock Exchange
SAIL accorded Navratna status
VISL merged with SAIL in 1998
Joint Venture with NTPC & DVC for captive power generation in 2001 & 2002 respectively
IISCO merged with SAIL in 2006
Erstwhile Bharat Refractories Ltd. merged with SAIL as SAIL Refractory Unit(SRU) in 2007
SAIL initiated the modernisation and expansion plan
SAIL accorded Maharatna status
Completed merger with MEL Entered into
JV with Kobe Steel
Integrated Commissioning of Expansion Plan of RSP and ISP
Over a period of time, formed JVs with SCI Shipping, RITES, Tata Steel, Jaypee Group etc.
Hindustan Steel Ltd (“HSL”) established
HSL comprised Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant and Alloy Steels Plant
SAIL became an operating company
Demerger of HSCL and NMDC
Indian Iron & Steel Company (“IISCO”) taken over as a subsidiary
Partial commissioning of new facilities at IISCO Steel Plant and Rourkela Steel Plant
Transfer of refractory unit of Burn Standard Company Limited at Salem to newly formed subsidiary of SAIL
SAIL: Well Positioned to Benefit
1
2
4
Leadership position in India Strategically located
integrated operations with access to resource base including large land bank, captive mines
Low leveraged financial position Diversified product
mix supported by strong marketing and distribution network
Experienced management team supported by strong execution team
In-house R&D centre , Centre for Engineering & Technology(CET) and captive Engineering Shops
3
6
5
7
Responsible corporate citizen
Share Holding Pattern as on 31.12.2014
75.0
21.2
3.1 0.7
GoI FIs / Banks / MFs / FIIs /GDR Individuals Companies / Trusts
Integrated steel plants
Alloy and special steel plantsFerro alloy plant
Iron ore mine
Limestone mine
Dolomite mine
Coal mine
Madhya Pradesh
Odisha
West Bengal
Karnataka
Tamil Nadu
Jharkhand
ChhattisgarhMaharashtra
Note: Map not to scale
Location of Steel Plants & Mines
Present Iron ore Linkages in SAIL
BSP
•Kiriburu (KBR)•Meghataburu
(MBR)•Bolani
•Kiriburu (KBR)•Meghataburu (MBR)
•Barsua• Kalta•Chiria
•Chiria• Gua
• Dalli• Rajhara
•Kiriburu (KBR)•Meghataburu
(MBR)•Bolani
DSP
RSP BSL
IISCO
Bhilai Steel Plant (BSP)• Saleable Steel (SS) Production 2014-15 : 4.33 MT, Post Expansion capacity : 6.56 MTPA• Products: Rails, TMT Bars, Rounds, Heavy Plates, Wire Rods, Light & Heavy Structurals, Semis
Durgapur Steel Plant (DSP)• Saleable Steel (SS) Production 2014-15 : 1.97 MT, Post Expansion capacity : 2.12 MTPA• Products: Wheel & Axle, Rebars, Medium Structurals, Semis
Rourkela Steel Plant (RSP)• Saleable Steel (SS) Production 2014-15 : 2.55 MT, Post Expansion capacity : 3.99 MTPA• Products: HR Coil & Sheet, CR Coil & Sheet, Plates, GP/GC Sheets, CRNO Coil, ERW & SW
Pipes, HR Plates, Special Defence Grade Plates
Bokaro Steel Plant (BSL)• Saleable Steel (SS) Production 2014-15 : 3.38 MT, Post Expansion capacity : 4.18 MTPA• Products: HR Coil & Sheet, HR plates, CR Coil & Sheet, GP / GC Sheets
IISCO Steel Plant (ISP)• Saleable Steel (SS) Production 2014-15 : 0.13 MT, Post Expansion capacity : 2.39 MTPA• Products: TMT Bars, Rounds, Wire Rods, Heavy Structurals, Semis
SAIL: 5 Integrated Steel Plant Production Capacity & Products
SAIL: Performance
Saleable Steel (in Million Tonne)
11.00
11.50
12.00
12.50
13.00
12-13 13-14 14-15
12.4
12.9 12.8
1.000
3.000
5.000
7.000
Q4 - FY14 Q4 - FY15
3.3 3.4
Annual Saleable Steel Production (including Special Steel Plants)
Saleable Steel Production(incl. Spl. Steel Plants)
Production Performance
Saleable Steel from 5 Integrated Steel Plants(in Million Tonne)
10.0
11.0
12.0
13.0
12-13 13-14 14-15
11.9
12.4 12.4
1.000
3.000
5.000
7.000
9.000
11.000
Q4 - FY14 Q4 - FY15
3.1 3.3
Production Performance
BOF Process, 82.4%
THF Process, 16.0%
EAF Process,
1.6%
CC Route74%
Ingot Route26%
Value Added Steel44%
Commodity56%
Crude Steel Production by processProduction of Value Added Steel (5 ISPs)
Production by Process
Production by Process & Sales Mix: FY 15
Longs41%
Flats59%
Production of Saleable Steel (5 ISPs)
SAIL: Expansion And Modernisation Plan
New Sinter Plant No.3 at RSP
RSP: BATTERY-6
Coal Handling Plant under RMHS at ISP
RSP: Blast Furnace Tapping
SAIL’s Expansion & Modernisation Plan
Particulars
Actual production
2014-15
AfterOn-going
Expansion
Hot Metal 15.41 23.5
Crude Steel 13.91 21.4
Saleable Steel
12.84 20.2
in million tonne
Expansion Plan : Technological Shift
Technology Current Status After Expansion
BOF Steel Making 79% 100%
CC Route 71% 94%
Pelletisation Plant No Yes
Coke Dry Quenching Partial Yes
Top Pressure Recovery Turbine No Yes
Auxiliary Fuel Injection in BF Partial Coverage Full Coverage
Desulphurization of Hot Metal Partly 100 %
Beam Blank Casting No Yes
Coupled Pickling & Tandem Mill No Yes
Beneficiation Plant Partial Full
Ongoing ProjectsThe Expected Outcome:
Production through twin-hearth furnace (THF) route to be replaced by BOF-LD
converter route.
Production through Ingot – teeming route to be replaced with Continuous cast
production route.
Enhancement of Production Capacity by addition of 3 new 4060 m3 Blast Furnace.
Increased Market Share.
World class technology and products.
Improved Product Mix / proportion of value added products to increase.
Enhanced Pollution Control measures, with Environmental Conservation
Ongoing ProjectsThe Products to be added:
Auto grade CR Products, Galvanized Coils /Sheets.
Plates / Pipes to meet up to API 100 Grade specification.
Universal Beams/Heavy Beams to support increasing Infrastructural
requirements.
Rails for Metro – Railways and dedicated freight corridors.
Increased production of Rails and wheels to meet the increasing
requirements of Indian Railways.
Quantum jump in Rounds and Structural production.
Wider plates in the size of 4200 mm.
Ongoing Projects The ongoing expansion has been planned to achieve saleable steel
production of 20.23 million tonne at a cost of Rs. 39,131 crore approximately
In addition, following capex has also been planned for schemes ,as given here:
Value Addition / Product-Mix Improvement Rs. 7,039 crore
Technological Upgradation / Modernization Rs. 3,509 crore
Sustenance including de-bottlenecking, AMR & Environment
Rs. 12,191 crore
Augmenting Raw Material from existing mines & development of new mines
Rs. 10,264 crore
Product Mix - Saleable Steel Production
Semis12% Structurals
14%
Bars & Rods19%
Rly Products8%
PM Plates16%
HR Plates/Coils/S
heets/skelp16%
CR Coils/Sheets
11%
Galvanized Products
3%
PET Products
1%
FY 15
Post Ongoing Expansion
Semis25%
Structurals3%
Bars & Rods12%
Rly Products6%
PM Plates15%
HR Plates/Coils/S
heets/skelp32%
CR Coils/Sheets
4%
Galvanized Products
2%
PET Products1%
Raw Materials
YearHot Metal
(mtpa)
Iron Ore Consumption
(mtpa)Linkages of Iron Ore
Post Expansion
23.46 39
The capacity of existing mines at Kiriburu, Meghataburu, Bolani, Gua & Barsua are being ramped up to meet the requirement of Iron Ore for post ongoing phase of expansion.Two new Pellet Plants (One of 4 mtpacapacity at Gua & another of 1 mtpacapacity at Dalli) have been planned for better utilisation of Iron Ore Fines.In addition to the above, iron ore shall be mined from new mines at Rowghat, Chiria and Taldih.
MineExisting Capacity (mtpa)
Capacity after ongoing expansion
(mtpa)Remarks
Kiriburu 5.5 5.5 Capacity of Existing mines is being ramped up to meet the requirement of the ongoing expansion plan.The entire requirement of the increased capacity shall be met through captive mines.The timeline for mines expansion is expected to be in line with Steel Plants expansion.New Pellet Plant shall use the existing reserve of fines at captive mines.
Meghataburu 5.0 6.5
Bolani 5.0 10.0
Gua 4.0 10.0
Dalli / Rajhara 8.7 7.0
Barsua, Kalta, Taldih
3.3 6.5Environment clearance received from MOEF
Rowghat New 12.0All statutory clearances have been received.
Chiria 0.75 5.8Stage-I Forest Clearance has been obtained
Raw Materials
Statements / Data which do not relate to SAIL and are used / made in this
presentation are from sources which are considered reliable and Company cannot be
held for its authenticity.
Further, statement describing the Company’s projections, estimates, expectations
are “forward looking statements” within the meaning of applicable securities laws
and regulations. Actual results may differ materially from those expressed
depending on the circumstances / situations.
Major factors that could affect the Company’s operations include, among
others, economic conditions affecting demand / supply and prices in the domestic
and global markets in which the Company operates, changes in Government
regulations, tax laws and other statutes etc.
Disclaimer