| Date post: | 08-Apr-2018 |
| Category: |
Documents |
| Upload: | amit-saraf |
| View: | 214 times |
| Download: | 0 times |
of 32
8/6/2019 Metal_060109
1/32
www.ibe.org
METALSDecember 2008
8/6/2019 Metal_060109
2/32
www.ibe.org
The Indian Metals Industry has two main segments
METALSDecember 2008
Comprise o aluminium, copper,zinc, lead, nickel and tin
Demand rom agriculture,
automobiles, railways,telecommunications, building andconstruction and chemical plants
Primarily consist o iron anddierent varieties o steel
Demand rom construction and
automobile sectors
Indian Metals Sector
Non-errous metals
Ferrous metals
It is a key sector as it meets the requirements ofa wide range of key industries
8/6/2019 Metal_060109
3/32
www.ibe.org
The industry is highly ragmented, especially in downstream segments
Type o Metal Type o Operations
Non-FerrousMetals
Primary
producers
Secondary
producers
has only a few players Many players in the organised
and unorganised sectors
FerrousMetals
Ore miners
3 major producers
Secondary
producers
Integrated /
Main producersRe-rollers
Stand-alone
producers }
METALSDecember 2008
8/6/2019 Metal_060109
4/32
www.ibe.org
The Steel sector in India has been growing rapidly
While production o Pig lron has been uctuating over the years Finished Steel production has been growing steadily
METALSDecember 2008
0
2007-08 (est)
2006-07
2005-06
2004-05
2003-04
2 3 4 651
Production o Pig lron
5.29
4.99
3.86
3.23
5.22
Million Tonnes
Source: www.steel.gov.in
2007-08 (E)
2006-07
2005-06
2004-05
2003-04
10
Production o Finished Steel
42.64
40.05
36.19
Million Tonnes
Source: www.steel.gov.in
20 30 40 50 70600
55.15
58.26
8/6/2019 Metal_060109
5/32
www.ibe.org
The Steel sector in India has been growing rapidly
India is the seventh largest producer o Crude SteelGrowth in manuacturing and inrastructure is uelling
demand or steel products, driving growth in the sector
METALSDecember 2008
Top producers o Crude Steel in 2008 (Apr-Sep)
50 100 150 2000 450250 300 350 400
Russia
S. Korea
China
Japan
USA
Germany
India
Italy
Ukraine
Brazil 26.8
31.5
24.2
41.1
36.2
76
389
41.3
Million Tonnes
56.5
92.3
Source: www.worldsteel.org
8/6/2019 Metal_060109
6/32
www.ibe.org
Steel trade out o India has also been going up
Exports growing at a healthy % CAGR; but
Imports growing at double the rate
METALSDecember 2008
Exports o Steel rom India
70 4321
2007-08
2006-07 5.6
2005-06 3.8
4.22004-05
2.62003-04
US$ billion
5 6
6.6
Import o Steel into India
100 4321
2007-08
2006-07 6.1
2005-06
3.42004-05
1.82003-04
US$ billion
5 6
9
7 8 9
5.5
CAGR 26%CAGR 50%
Source: Export Impor t Data Bank, Ministry of Commerce, GoI - www.commerce.nic.in
8/6/2019 Metal_060109
7/32
www.ibe.org
Steel trade out o India has also been going up
METALSDecember 2008
Top 10 steel exports destinations (2007-08)
100 7000 400
UAE
Germany
Chian 223
214
426
Belgium
S Korea
Italy
Indonesia
Netherlands
USA 473
316
262
454
230
577
Japan 195
300200 600500
Million Tonnes
Top 10 steel import destinations (2007-08)
200 1,6000 800
Japan
Thailand
Ukraine
Chian
Belgium
USA
Russia
Germany
S Korea 856
629
1,460
UAE 257
600400 1,2001,000
Million Tonnes
1,400
292
294
507
312
517
529
Source: Export Impor t Data Bank, Ministry of Commerce, GoI - www.commerce.nic.in
Belgium and USA are key exports markets China and Korea are the key sources or imports
8/6/2019 Metal_060109
8/32
www.ibe.org
1000
Sectoral distribution o aluminium consumption
Key Players in the Indian Aluminium Sector
Group Key Players
Aditya Birla Group Hindalco Industries LimitedIndian Aluminium Company Limited (INDAL)
Sterlite Industries Bharat Aluminium Company Limited (BALCO)Madras Aluminium Company Limited (MALCO)
Publ ic Sector National Aluminium Company Limited (NALCO)
METALSDecember 2008
The production o Aluminium has been growing at
over 10 per cent CAGR
0
2008
2007
2006
2005
2004
Primary Aluminium Production
n Sterlite Group nNalco n Hindalco
1400200 400 600 800
478
359 429
338 409
198 388
000 Tonnes
1200
359 443
359
CAGR 10.9%136
129
399
351
211
8/6/2019 Metal_060109
9/32
www.ibe.org
The Aluminium sector in India is concentrated among
three key players, and has been growing
Aluminium Consumption by Sector in 2006
n Electrical n Automotive
n Building & Construction n Packaging
n Others
31%
13%
18%
11%
27%
Electrical, Automotive and Construction sectors are
the key consumers
METALSDecember 2008
8/6/2019 Metal_060109
10/32
www.ibe.org10
The Copper industry has also shown steady growth
Key Applications:
Wires
Cables
A/C and Rerigeration Tubings
Production growing at 15% CAGR
METALSDecember 2008
Copper Production in India
100 200 300 400 500 600 8000
2008 708
2007 643
2006 522
2005 413
2004 402
000 tonnes
700
Source: ICRA Sector Analysis, June 2008
CAGR 15.2%
8/6/2019 Metal_060109
11/32
www.ibe.org11
The Copper industry has also shown steady growth
Key User Sectors:
Telecom
Power
Engineering
Auto
Consumer Durables
Deence
Hindalco and Sterlite garner 90% o the output
Copper Industry Market Share HCL
n Hindalco n Sterlite
n HCL
METALSDecember 2008
46%
6%
48%
Source: ICRA Sector Analysis, June 2008
8/6/2019 Metal_060109
12/32
www.ibe.org1
Zinc production and consumption have
been increasing, primarily or Galvanising
Production o Zinc Concentrates
100 200 300 400 5000
2007-08 457.1
2006-07 380.9
2005-06 297.9
2004-05 238.6
2003-04 254.5
CAGR 15.7%
000 tonnes
METALSDecember 2008
Zinc Market Segmentation
n Galvanising n Castings
n Die Casting Alloys n Oxides and Chemicals
n Extruded products
57%
16%
14%
7%
6%
Source: Industry analysts reports , October 2008
8/6/2019 Metal_060109
13/32
www.ibe.org1
Zinc production and consumption have
been increasing, primarily or Galvanising
Zinc Products
n Tubes n Sheets
n Structurals n Wires
7%
37%
23%
33%
METALSDecember 2008
Source: Industry analysts reports , October 2008
Zinc Consumption
100 200 300 400 5000
2002 283
2003 300
2004 340
2005 375
2006 410
000 tonnes
CAGR 9.7%
8/6/2019 Metal_060109
14/32
www.ibe.org1
India has very low penetration levels o key metals,
indicating high growth potential
Per Capita Consumption o Steel
200 400 600 800 1000 1200 14000
UAE 1314
Japan 649
Germany 469
USA 382
India 38
Kgs
METALSDecember 2008
Indias penetration levels are substantially lower,not only when compared to mature markets, butalso countries like China
8/6/2019 Metal_060109
15/32
www.ibe.org1
India has very low penetration levels o key metals,
indicating high growth potential
Per Capita Consumption o Copper
2 4 6 8 10 12 140
Japan 12
N. America 9.8
Oceania 8.8
Europe8.5
India 0.15
Kgs
Asia 2.5
METALSDecember 2008
Per Capita Consumption o Aluminium
5 10 15 20 25 30 35
Japan 32
USA 31.9
Germany 31.6
China 6.5
India 1.1
Kgs
0
8/6/2019 Metal_060109
16/32
www.ibe.org1
Government policies play an important role or the growth o the industry
The Government o India has taken up several policy
initiatives to boost the metals sector:
Foreign equity holding allowed up to 100 per cent
on automatic route or all non-uel, non-atomic
minerals except Diamond & Precious Stones
13 minerals that were reserved or the public sector
have been opened out or private sector investment.
These include iron ore, manganese ore, chrome ore,
sulphur, gold, diamond, copper, lead, zinc, molybdenum,
tungsten, nickel and platinum
Customs duty on primary & Secondary metals
reduced rom 15 per cent to 10 per cent
METALSDecember 2008
8/6/2019 Metal_060109
17/32
www.ibe.org1
Government policies play an important role or the growth o the industry
Steel
* The National Steel Policy (NSP) 2005 lays emphasis
on improving productivity, efciency, cost, qualityand
product mix or accelerating growth in the
domestic production and consumption o steel
* Import duties on various steel products have been
reduced rom 15 per cent to 10 per cent. Customs
duty on alloy and stainless steel reduced to
fve per cent
* Duty on nickel reduced rom fve per cent
to two per cent, to help domestic stainless
steel manuacturers tackleincrease in global
raw material prices
Source: www.chemicals.nic.in/petro1.htm
METALSDecember 2008
8/6/2019 Metal_060109
18/32
www.ibe.org1
Government policies play an important role or the growth o the industry
Copper
* Copper and Copper products can be imported at
Zero Duty rom Sri Lanka under the Free Trade
Agreement (FTA) with that country
* Duties on copper and copper products have been
progressively reduced or example, customs duty
has been reduced rom 35 per cent in 2001 to
10 per cent in 2006
Source: www.chemicals.nic.in/petro1.htm
METALSDecember 2008
8/6/2019 Metal_060109
19/32
www.ibe.org1
The Metals sector in quite competitive,
but presents attractive growth options as well
Threat of New Entrants
Supportive policy regime
Growing domestic market as well as exports,
across segments
Supplier Power
Rich reserves o minerals, ores
Growing, skilled manpower base
Competitive Rivalry
Number o domestic players
Highly competitive in secondary anddownstream segments
Source: KPMG Analysis
METALSDecember 2008
HIGH
MEDIUM
LOW
8/6/2019 Metal_060109
20/32
www.ibe.org0
The Metals sector in quite competitive,
but presents attractive growth options as well
Customer Power
User industries experiencing strong growth
Highly demanding customers
Wide range o products, specifcations to meet
dierent needs
Threat of Substitutes
Plastics and other substitutes being tried out
in some user segments
No viable substitute in a majority o usage areas
Source: KPMG Analysis
METALSDecember 2008
HIGH
MEDIUM
LOW
8/6/2019 Metal_060109
21/32
www.ibe.org1
Many Indian players are looking at expanding capacities
Sterlite and Hindalco (Birla Copper) are looking at
adding signifcant smelting capacities in the coming
years. Birla Coppers expansion plan to double
capacity rom 250000 TPA to 500000 TPA will make
it one o the top 10 copper producers in the world
Both Sterlite and Hindalco have also acquired copper
mines (in Australia) to assure consistent supply
Tata Steel, through its acquisition o Corus, became
the fth largest steel producer in the world
METALSDecember 2008
8/6/2019 Metal_060109
22/32
8/6/2019 Metal_060109
23/32
www.ibe.org
APPENDIXMETALS December 2008
Attractive States or investment
Raw materials supply or key metals is concentrated in
certain states:
* Copper reserves Bihar, Rajasthan, Madhya Pradesh
* Bauxite Orissa, Chattisgarh, Karnataka
* Iron Ore Orissa
Access to raw materials supply, labour and energyare key requirements or setting up operations in this
sector
Based on these actors, Orissa, Chattisgarh, Madhya
Pradesh, Andhra Pradesh and Karnataka could be
attractive locations or investment in the sector
8/6/2019 Metal_060109
24/32
www.ibe.org
Tata Iron and Steel Company Limited (TISCO)
TISCO has diversifed to manuacture, welded-steel
tubes, cold-rolled strips, seamless tubes, carbon and
alloy steel bearing rings, alloy steel ball bearing rings,
bearings, erro manganese and erro chrome
It has become the fth largest steel producer in the
world, ater acquiring Anglo-Dutch steel company
Corus
Plants - Jharkhand, Karnataka, Orissa, West Bengal,
Maharashtra
Profle o Key Players
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
25/32
www.ibe.org
Profle o Key Players
Steel Authority of India Limited (SAIL)
Government o India has 86 per cent stake in the
company and it is the worlds 13th largest steel
producer
Sales US$ 11 billion in 2007-08
Manuactures steel or domestic construction,engineering, power, railway, automotive and deence
industries and or exports
Plants - Bhilai, Bokaro, Durgapur, Rourkela, Salem,
Bhadravati
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
26/32
www.ibe.org
Profle o Key Players
Essar Steel
Promoted by the mumbiai-based Essar group which
is into Power, Shipping, Oil & Gas, Construction and
Telecom
Sales US$ 2.9 billion in 2007-08
Oers over 300 customised grades o Steel and is onthe approved list o companies or supplies to some
o the worlds most renowned automotive companies
and Oil & Gas Pipeline projects
Plants Hazira, Vishakapatnam and Indonesia
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
27/32
www.ibe.org
Profle o Key Players
Jindal Iron and Steel Company Limited (JISCO)
Leading company in Galvanised Steel Products
Sales US$ 1.3 billion in 2007-08
Engaged in Hot Rolling, Cold Rolling and Galvanizing
Plants - Vasind and Tarapur in Maharashtra
Hindustan Copper Limited (HCL)
Public Sector Enterprise under the Ministry o Mines,
Government o India
Sales US$ 455 million in 2007-08
The companys major activities include exploration,
mining benefciation, smelting, refning and casting o
fnished copper
Plants - Khetri in Rajasthan, Jharkhand, Malanjkhand
in Madhya Pradesh, Taloj in Maharashtra
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
28/32
www.ibe.org
Profle o Key Players
Hindalco Industries Limited
A agship company o the Aditya Birla Group
Turnover US$ 4.8 billion in 2006-07
Structured into two strategic businesses-aluminium
and copper and is an industry leader in both these
segments It is the largest integrated aluminium manuacturer
in the country
Plants - Renukoot, Muri, Belgaum, Hirakud, Alupuram,
Belur, Taloja, Silvassa, Kalwa and Dahej
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
29/32
www.ibe.org
Profle o Key Players
National Aluminium Company
Limited (NALCO)
A public sector enterprise o the Government o India
Net sales US$ 1.4 billion in 2007-08
Asias largest integrated aluminium complex,
encompassing bauxite mining, alumina refning,aluminium smelting and casting, power generation,
rail and port operations
Captive power plant and aluminium smelter.
Rolled poducts unit at angul, alumina refnery
at Damanjodi, bauxite mines at Panchpatmali
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
30/32
www.ibe.org0
Profle o Key Players
Sterlite Industries India Limited
Part o Vedanta Resources, a London listed metals
and mining major with aluminium, copper and zinc
operations in UK, India and Australia
Net sales- US$ 6.7 billion in 2007-08
The Groups principal activity is to manuacture andmarket cast copper rods, copper cathodes, aluminium
cold rolled products and conductors
A copper producer with its own captive mines in
Australia and refnerius and smelter in India Silvassa
refnery, Tuticorin smelter
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
31/32
www.ibe.org1
Profle o Key Players
Hindustan Zinc Limited
A part o Vedanta Resources, a London listed metals
and mining major with aluminium, copper and zinc
operations in UK, India and Australia
Net sales US$ 800 million in 2006
Only integrated zinc manuacturer in India and ownscaptive Zinc mines that supply complete requirement
o zinc concentrate or its smelters
Mines and smelters are spread across multi-locations
Rajpura Dariba mine, Zawar mining complex,
Chanderiya smelter, Debari smelter, Vizag smelter,
Rampura Agucha mine
APPENDIXMETALS December 2008
8/6/2019 Metal_060109
32/32
This presentation has been prepared jointly by the India Brand
Equity Foundation (IBEF) and KPMG Advisory Services Private
Limited (Author).
All rights reserved. All copyright in this presentation and related
works is owned by IBEF and the Authors. The same may not be
reproduced, wholly or in part in any material orm (including
photocopying or storing it in any medium by electronic
means and whether or not transiently or incidentally to someother use o this presentation), modifed or in any manner
communicated to any third party except with the written
approval o IBEF.
This presentation is or inormation purposes only. While due
care has been taken during the compilation o this presentation
to ensure that the inormation is accurate to the best o the
Authors and IBEFs knowledge and belie, the content is not
to be construed in any manner whatsoever as a substitute or
proessional advice.
The Author and IBEF neither recommend or endorse any
specifc products or services that may have been mentioned
in this presentation and nor do they assume any liability or
responsibility or the outcome o decisions taken as a result
o any reliance placed in this presentation.
Neither the Author nor IBEF shall be liable or any direct or
indirect damages that may arise due to any act or omission
on the part o the user due to any reliance placed or guidance
taken rom any portion o this presentation.
DISCLAIMER
www.ibe.org
METALSDecember 2008
