Post on 14-Jan-2016
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WHY INVEST IN JHARKHAND?
Jharkhand has been integral to industrial growth
1907 Steel Works set up at Sakchi1910 Jharia Division begins operations1923 The Tinplate Company of India is established1925 Noamundi Mines commence supply of iron ore1927 Tata Pigments is formed1948 West Bokaro collieries acquired by Tata Steel1950 Tata Motors establishes plant in Jamshedpur1953 Indian Tube Company is set up, now a part of Tata Steel1957 Uranium Corporation of India established 1958 Heavy Engineering Corporation1959 MECON Ranchi established1961 TRF Limited set up by Tata Group1964 Bokaro Steel Plant commences operations1985 Tata Sponge sets up base in Joda1962- 1968 Tayo Rolls, Tata Growth Shop and JAMIPOL1975 Central Coal Fields formed, a miniratna company1998 Timken establishes base in India1999 1991 Indo Danish Tool Room established• Tata Power sets up thermal power plant2003 Tata Steel takes over ISWP
Regulatory framework
Procedures for entry and exit of firms
Industrial regulation, labour regulation, other government regulations
Certainty about rules and regulations
Security, law and order situation
Incentives to industry
Tax incentives and exemptions
Investment subsidies and other incentives
Availability of finance at cost-effective terms
Incentives for foreign direct investment (FDI)
Profitability of the industry
Since its creation the state it has set in place a range of enablers for investment
Jharkhand is a leader in key industries
PARTNERING GROWTH IN THE STEEL INDUSTRY
Growth in Global Apparent Steel Use is expected to be steadyApparent steel** demand in Mn.T (yoy % growth)
Source: WSA, SRO_April 2011Source: WSA, SRO_April 2011
Effective crude steel capacity (Mn.T) in 2011 (f)
NAFTA
Rest of Asia
China
EU - 27CIS
9%8%
China
Asia, Oceania & Africa (ex-China)C & S America
India 14%13%
8%
5%5%
8%
11%4%
6%
6%5%
7%
818
86
161
**ASU depicted is for carbon + alloy steel
185140
42962
The total demand will be 1.44bn mt in 2012, a growth of 6% over 2011
China and India are the centres of economic growth and Steel demand: GDP growth estimated between 8-10% in the next 3-5 years
Strong Steel demand in India: 10-12% on back of robust growth in Auto and Construction
India is an attractive destination for both imports and setting up of new facilities: by 2015 ~ 55 mt of capacity is expected to be added by domestic steel companies as well as the global players
Belief in the potential of the steel industry in India
Steel is the backbone of the India Growth Story
India’s per capita consumption is 30 kgs of steel
India’s steel consumption is expected to reach 300 mtpa by 2025, it has set a production target of 110 mt by 2020
India needs one integrated steel plant every year, for next ten years to meet its demand
To achieve its growth targets India will need steel
Indian steel demand is expected to grow at ~8-9% in FY’12
Drivers for change
•Revisions in sector growth rates are based on slowing economic momentum due to inflationary pressures, high borrowing costs and global economic turmoil.
•As a result of expectations of lower sector growth rates and changes in other macroeconomic parameters steel demand growth for FY12 is downgraded slightly to ~8-9%.
5662.1
67.38.5%
11%
Major steel consuming sectors are expected to post lower growth rates in FY12…
Growth rates yoy (%) Carbon steel ASU* (Mn. T)
* After JPC’s revised estimates added ~ 3 MT to FY10 ASU
25.0%
6.5%
19.2%
26.2%
27.5%
8.1%
15.0%
14.0%
12.0%
8.5%
10.0%
11.0%
Auto
Constn
Cap Gds
Consumer Durables
FY10 FY11 FY12 F
It is the first and fastest to provide return on investments and further value creation
Steel is leading the change for mineral based industries
The steel industry is expanding markets through new age applications and growth through operations in diverse geographies
Steel is 100% recyclable therefore it is a sustainable industry
The steel industry is expected to be a driver of economic growth in India
Manufacturing Spares (Mech / Elect / Hydraulic etc.)Steel Service CentreSlag CementSponge ironRollsPumpsTools & TacklesMobile EquipmentFoundry & ForgeLubrication oilsRubber Belts / CablesSafety appliancesStationary itemsFurniturePaintsPower generation & distribution
Manufacturing Spares (Mech / Elect / Hydraulic etc.)Steel Service CentreSlag CementSponge ironRollsPumpsTools & TacklesMobile EquipmentFoundry & ForgeLubrication oilsRubber Belts / CablesSafety appliancesStationary itemsFurniturePaintsPower generation & distribution
ServiceHandling agents / Couriers3 PLTransport contractsMaintenance -contractsHospitalityMedicalRetail Realty
ServiceHandling agents / Couriers3 PLTransport contractsMaintenance -contractsHospitalityMedicalRetail Realty
The steel industry is a growth multiplier given the opportunities it generatesfor Allied Industries
Proposed investment of around US $ 1 trillion in infrastructure in the 12th plan, half of which would come from the private sector
Efforts to increase the share of manufacturing sector from 15 per cent to 25 per cent of GDP by 2020
This will lead to high demand of steel
It will be a challenge to meet the targets of the 12th Five Year Plan
India's steel demand is likely to grow 10.3 per cent per annum, and will reach a level of 113 million tonnes by the terminal year (2016 -17) of the 12th plan
In a business-as-usual scenario, domestic supply of steel will significantly fall short of domestic demand
The 12th Five Year Plan has given impetus to the steel industry
Growth plans of the global steel industry for India
Key enablers for growth of the steel industry in IndiaNational Mineral Policy emphasises:
The need for conservation and judicious exploitation of finite mineral resources through scientific methods of mining, beneficiation and economic utilisation
Development of mineral resources by taking into account national and strategic considerations
To ensure adequate supply and best use keeping in view present needs and future requirements
To ensure indigenous availability of basic and strategic minerals to avoid disruption of core industrial production
Key enablers for growth of the steel industry in India
National Steel Policy is expected to be released soon. The task force has brought together stakeholders from all areas
The policy will focus on regulatory hurdles, taxation issues and infrastructure bottlenecks
It will look into boosting capacity expansion due to soaring imports and to address issues which are hindering capacity expansion
Measure for optimum utilisation of raw materials including beneficiation
Features specific to the Mining and Minerals Sector
•Simplify procedures and expedite granting of mining leases
•Provide certain relief to make mining activities easier
•Encourage use of modern exploration techniques to set up a
resource inventory of various minerals in the State
•Encourage joint venture projects with State Mineral Development
Corp
•Clear mining lease applications and project report within 60 days
•Encourage Foreign investment and technological collaboration by
OCBs and NRIs in selected sectors including Mineral development
•Encourage Private Sector participation in Mining Activities
Features specific to the Mining and Minerals Sector
•Simplify procedures and expedite granting of mining leases
•Provide certain relief to make mining activities easier
•Encourage use of modern exploration techniques to set up a
resource inventory of various minerals in the State
•Encourage joint venture projects with State Mineral Development
Corp
•Clear mining lease applications and project report within 60 days
•Encourage Foreign investment and technological collaboration by
OCBs and NRIs in selected sectors including Mineral development
•Encourage Private Sector participation in Mining Activities
Jharkhand Industrial Policy’s focuses on growth of mineral based industries in the state
Source: Jharkhand Industrial Policy 2011
According to the steel ministry assessment report:
Of the 22 MEGA steel projects planned
eight are located in Jharkhand – the maximum for any state in India
Growth of the contribution of steel and steel based industries industrial value
56.02
15.25
7.7
21.03Share of industries
Iron & Steel
Auto & Auto Components
Coke oven product
Others
• Iron and Steel accounts for more than 50% of Jharkhand’s industrial out put.
Steel industry has grown by 24% in the last decade
Auto and it’s ancillaries which use steel as a principal input have become the second largest contributor to industrial output.
Further growth and Value Creation can take place if idle mineral resources are utilised
The investments which have led to this growth
26 mega industries, 106 large and medium industries and 18,109 micro and small industries have been set up
The approximate value investments is Rs 28,424.06 crore
Industries have been able to acquire about 8,000 acres of land through direct negotiation with raiyats; the State government has provided 3000 acres of land
Around 17 mega industries have already come into production and several other industrial units are likely to be commissioned during the financial year 2011-12
Steel production in the State has increased from 8 million tonnes to over 12 million tonnes per annum during the 11th Plan period
Source: Jharkhand Industrial Policy 2011
Steel is leading the change for mineral based industries
25% of the steel produced in India is made in Jharkhand
The proposed projects by Tata Steel, Bokaro Steel, Essar, etc will add 25 MTPA to steel making capacities in Jharkhand
An Auto Cluster is being made operational at Jamshedpur
An Automobile Vendor Park will be established under PPP or Private Mode by Mega Automobile Manufacturing Units
Skill development and training in activities like driving, vehicle maintenance will receive financial support from the State
Why Jharkhand is seen as an emerging steel hub?
In 1867 J.N. Tata attended a lecture by Thomas Carlyle (British writer) in Manchester. Carlyle's statement "the
nation which gains control of iron, soon acquire control of gold" had a profound effect on J.N. Tata, exposing him to
the idea of setting up a steel mill in India.
He chose Jharkhand - we believe you should too