STEEL AUTHORITY OF INDIA LIMITED Investors Meet June 01, 2015 - - PowerPoint PPT Presentation

STEEL AUTHORITY OF INDIA LIMITED

Investors 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 by another 0.5% and will reach 1,544 mtpa in 2015. 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 %

• ver 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 Country

Crude steel production 2014 in MTPA

1 China 823 2 Japan 111 3 United States 88 4 India 83 5 South Korea 71 World 1662

Growth Trends of World Steel Industry

Source WSA

0.6 % growth

• ver 2013

GLOBAL finished steel consumption (last 5 yrs.) CAGR (5 yrs.) = 6 %

Rank Country

Projected Finished Steel Consumption 2015

(in mt)

1 China 707 2 United States 107 3 India 80 World 1544 1307 1411 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 2014 Source: 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

• ver

2013 (%) Quantity (in million Tonnes) Growth

• ver

2014 (%) Quantity (in million Tonnes) Growth over 2015 (%) World

1537.3 0.6 1544.4 0.5 1565.5 1.4

World Excluding China

826.6 4.2 837.2 1.3 861.8 2.9

European Union(28)

146.8 4.5 149.9 2.1 154.1 2.8

Other Europe

37.0 0.2 38.0 2.8 38.5 1.4

CIS

56.5

• 4.9

52.4

• 7.3

52.2

• 0.3

NAFTA

144.6 11.3 143.3

• 0.9

145.1 1.3

Central & South America

48.1

• 3.9

46.5

• 3.4

48.1 3.4

Africa

36.9 4.2 39.6 7.4 41.5 4.9

Middle East

51.9 3.7 53.3 2.8 55.6 4.2

Asia & 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 %

• ver 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)

58 65 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

6.7 7.8 8.9 2 4 6 8 10 12 6% 7% 8% Steel Consumption Growth Rate (in %) GDP Growth Rate (in %)

Steel Consumption 2021-22 (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

• ver as

a subsidiary

• Visvesvaraya

Iron & Steel Ltd (“VISL”) taken

• ver as a

subsidiary

• Listing of

SAIL on Bombay Stock Exchange (“BSE”)

• Listing of SAIL
• n 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

• f Expansion Plan
• f 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
• perating

company

• Demerger of HSCL

and NMDC

• Indian Iron &

Steel Company (“IISCO”) taken

• ver as

a subsidiary

• Partial commissioning
• f 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 plants Ferro alloy plant Iron ore mine Limestone mine Dolomite mine Coal mine

Madhya Pradesh

Odisha

West Bengal

Karnataka

Tamil Nadu Jharkhand

Chhattisgarh

Maharashtra

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 Route 74%

Ingot Route 26%

Value Added Steel 44% Commo dity 56%

Crude Steel Production by process Production of Value Added Steel (5 ISPs) Production by Process

Production by Process & Sales Mix: FY 15

Longs 41% Flats 59%

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 I SP RSP: Blast Furnace Tapping

SAIL’s Expansion & Modernisation Plan

Particulars

Actual production 2014-15 After On-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 Projects

The 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 Projects

The 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

Semis 12% Structurals 14% Bars & Rods 19% Rly Products 8% PM Plates 16% HR Plates/Coils/S heets/skelp 16% CR Coils/Sheets 11% Galvanized Products 3% PET Products 1%

FY 15 Post Ongoing Expansion

Semis 25% Structurals 3% Bars & Rods 12% Rly Products 6% PM Plates 15%

HR Plates/Coils/S heets/skelp 32%

CR Coils/Sheets 4% Galvanized Products 2% PET Products 1%

Raw Materials

Year Hot 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

• ngoing phase of expansion.

Two new Pellet Plants (One of 4 mtpa capacity at Gua & another of 1 mtpa capacity 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.

Mine Existing Capacity (mtpa) Capacity after

• ngoing expansion

(mtpa) Remarks Kiriburu 5.5 5.5

Capacity of Existing mines is being ramped up to meet the requirement of the

• ngoing 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 6.5

Environment clearance received from MOEF

Rowghat New 12.0 All statutory clearances have been received. Chiria 0.75 5.8 Stage-I Forest Clearance has been

• btained

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

• thers, 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