ArcelorMittal South Africa Vanderbijlpark Works HY1 2012
Agenda • ArcelorMittal South Africa’s standing • Process • Main Industries • Sales • Corporate Responsibility 1
A Committed South African Citizen • ArcelorMittal South Africa’s long standing commitment to South Africa will continue – Approximately ZAR16bn invested since 2001/2 including the payment of R2,8 billion for the undivided share of the mining right over Sishen and R9bn in Capex over last six years • Major employer committed to sustainable job creation – 9, 886 employees in South Africa, with an additional 2,500 on contract – Despite market meltdown, no job losses in workforce • ArcelorMittal South Africa remains fully committed to complying with all BEE legislation ArcelorMittal South Africa has an outstanding social development programme • – Contributes in the form of bursaries to engineering students, specifically at math & science facilities – Development program for black engineering firms successfully launched – Building of schools across the country • World class safety initiatives underway at all South African operations • Local industry being comprehensively supported in supplying the requirements of the public sector infrastructure development program • The Department of Labour has recognized ArcelorMittals position of pre-eminence in the technical skills development arena 2
ArcelorMittal in South Africa HR issues* Flat Steel Products shipped* • Full time employees 9 886 for the year • Vanderbijlpark Works – 2 478 kt • Employees per million tons prod = 1 813 • Saldanha Works – 941 kt • Revenue per head R3.2m (US$0.4m) Long Steel Products shipped* • Newcastle Works – 947 kt Steel plants • Vereeniging Works – 337 kt Thabazimbi Captive iron ore source Iron ore procured* Johannesburg • 4 584 kt from Sishen Vanderbijlpark Vereeniging Works Works • 1 409 kt from Thabazimbi Newcastle Sishen • 650 kt others Works South Africa Durban Coke & Chemicals shipped* • Coke – 631 kt • Tar – 118 kt Saldanha Works Cape Town 3 *12 months to December 2011
Flat carbon steel - Vanderbijlpark Works H1 2012 • Liquid steel production (‘000 tons) 1 281 • Sales tons 1 208 • Domestic percentage of total sales 86% • Domestic percentage (excl SS) 80% • Manpower 4 797 • Area of site 2 300 Ha • Perimeter 20 km • Rail networks 256 km and 34 locomotives • Electricity consumption 5,49 GWh per day • Primary raw materials received 16.7kt per day • Secondary raw materials received 6.6kt per month • Fresh water consumption 3.1 mega liters per day 4
Company Structure ArcelorMittal ArcelorMittal South Africa Limited Flat steel products Long steel products Vanderbijlpark Works Saldanha Steel (Pty) Ltd Newcastle Works Vereeniging Works Hot rolled Hot rolled coil Rolled profiles Rolled profiles (Vereeniging) Heavy Plates - thin and ultra thin Special profiles (Pretoria) Cold rolled Forged products (Pretoria & Vereeniging) Coated Seamless tubes (Vereeniging) - Galvanised Directly reduced iron (Dunswart) - Painted Coke & Chemicals Joint Ventures - Tinplated Coke batteries - Pretoria Mr Eric Samson - Vanderbijlpark - Newcastle 50% - Vanderbijlpark 50% Macsteel International Tar plant (Pty) Ltd - Vanderbijlpark Export marketing Shipping Nampak Ltd Anglo American Ltd 40% 50% 60% 50% 50% Consolidated Wire Collect a Can (Pty) Ltd Industries (Pty) Ltd Can Reclamation Wire drawing Diversified primary steel producer 5
Vanderbijlpark Works Management Team Vacant General Manager Vanderbijlpark Works Koos Geldenhuys Albert Swanepoel Gerhard Moolman Chris van Dijk Cobus Muller Erwee Lourens Pierre Joubert Werner Venter Work Manager Works Manager Manager Works Manager Works Manager Works Manager Works Manager Works Manager Central Mainte= Quality Iron Making Coke Making Engineering Steel Making Hot Rolling Cold Rolling nance Services Management Christo Greyling Corne Muller Wynand Scholtz Hayder Dalwai Dieter Sauer Dirk Odendaal Manager Manager Manager Manager Manager Manager Finance Production Planning Human Resources Business SHERQ Information Management & Logistics Improvement VDB & MCC
Vanderbijlpark Works Process Configuration 7
Production and sales history Export sales 1000 Local sales Liquid steel production 800 600 (000t) 400 200 0 2007 2008 2009 2010 2011 2012 8
Production and sales history Sales vs LS Production Local Prime Export Prime t'000 Non Prime Total Liquid Steel 997 952 859 851 845 828 741 797 789 784 691 780 754 612 75 732 81 54 67 692 26 74 12 103 25 606 653 590 82 79 76 608 113 38 19 129 65 78 70 73 62 555 133 59 66 32 84 69 89 54 55 22 85 428 103 35 49 33 62 63 26 187 19 62 53 63 716 713 695 614 608 601 584 555 538 532 528 520 522 490 474 465 458 451 421 405 386 370 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 9
Domestic Sales: Prime Volume H1 2012 Tin Tin DWI Cold Rolled Q & T Plate 6% 5% 13% 0% Colour Appliance Plate Normal 1% 4% Colour Normal Hot Rolled to DSP 4% 1% Hot Rolled P&O 7% Electro 4% Hot Dipped 14% Hot Rolled Coils <= 1.5 mm 0% Hot Rolled Dry 41% 10
Domestic sales: Prime Volume per segment H1 2012 Automotive 11% Primary Transformation. 23% Building Exterior - Roofing & Cladding 15% Pressure Vessel 3% Packaging 11% Civil Engineering Other Transport 18% 5% Converters & Re- Machinery and Domestic equipment Appliances rollers 1% 11% 1% 11
Export Sales: Prime Volume per Segment H1 2012 Cold Rolled 27% Hot Rolled Dry 41% Colour Normal 0% Asia 0% Hot Dipped 13% Hot Rolled Coils <= 1.5 mm 19% Africa 100% 12
Financial history R 7,000 50% Revenue Operating profit R 6,000 40% Margin R 5,000 30% R 4,000 20% (milj) R 3,000 10% R 2,000 0% R 1,000 -10% R 0 2007 2008 2009 2010 2011 2012 -R 1,000 -20% 13
Implementing a Corporate Responsibility strategy Environment Communities Shareholders Human Resources Social Human Capital Environmental Corporate Commitments Commitments Governance and Commitments sustainability reporting • Health & Safety • Environmental • Local economic • Board compliance and development independence • Equitable legacy issues employment • Social and • Equal rights practices • Waste disposal community uplift- among • World class ment and shareholders • Ground water and training and skills sustainable • Best in class air quality development investment disclosure and • ISO 180001 • Community shareholder • Human Rights engagement dialogue Protection 14
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