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STEEL AUTHORITY OF INDIA LIMITED
Performance Highlights FY2006
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Global Steel Scenario
Globally Steel is considered as a cyclic industry.Globally Steel is considered as a cyclic industry. After last recession, Global Steel Industry has been consolidating itsAfter last recession, Global Steel Industry has been consolidating its
position and has been marked by many mergers and acquisitions.position and has been marked by many mergers and acquisitions. Appetite for steel by China has been the driving force of the growth inAppetite for steel by China has been the driving force of the growth in
production/consumption of Steel.production/consumption of Steel. 1132 million tonnes Crude Steel Production in 2005, registering a growth1132 million tonnes Crude Steel Production in 2005, registering a growth
of 6% over 2004. China accounted for most of the incrementalof 6% over 2004. China accounted for most of the incrementalproduction.production.
Region wise crude steel production (in Million Tonnes) is as under:Region wise crude steel production (in Million Tonnes) is as under: Further growth in production/consumption is expected to come from BRICFurther growth in production/consumption is expected to come from BRIC
countries (Brazil, Russia, India and China).countries (Brazil, Russia, India and China). Cost/Availability of raw materials (mainly iron ore & coal) a majorCost/Availability of raw materials (mainly iron ore & coal) a major
challenge.challenge.
RegionRegion 20052005 Production Growth Over 2004Production Growth Over 2004 Growth (%)Growth (%)
ChinaChina 349349 6969 25%25%
IndiaIndia 3838 66 17%17%
JapanJapan 113113 -- --
South AmericaSouth America 4545 -0.6-0.6 -1%-1%
North AmericaNorth America 126126 -8-8 -6%-6%
EUEU
187187
-7-7
-4%-4%
WorldWorld 11321132 6565 6%6%
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Overview of Indian Steel Industry
TISCO
11%RINL8%
SAIL
34%
ESSAR,ISPAT &
JSWL
17%
OTHERS
30%
Crude Steel Production 2005-
06
CompanyCompany 05-0605-06
(Million tonnes)(Million tonnes)
SAILSAIL 13.47013.470
TISCOTISCO 4.7294.729
RINLRINL 3.4953.495
ESSAR, ISPAT & JSWLESSAR, ISPAT & JSWL 7.1007.100
OthersOthers 12.55012.550
TOTALTOTAL 41.34441.344
Source: JPC / Internal
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Overview of Indian Steel Industry
8th largest steel producing nation in the world with crudesteel production of 38.1 million tonnes in 2005 (as per IISI)
Apparent consumption of finished steel in 2005-06 - approx.38.11 million tonnes, growth of 10.8% over 2004-05.
Per capita steel consumption: approx. 33 kg
Finished steel exports in 2005-06: approx. 4.45 milliontonnes (growth of 1.6 % over 2004-05)
India is a net exporter with imports of approx. 3.8 milliontonnes in 2005-06 (78.5% growth in imports)
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Steadily increasing consumption of steel in the country
Finished Steel Production, Consumption & Exports
Indian Steel Industry
Source: JPC
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
MillionTonne
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY06
Production
Consumption
Exports
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Production FacilitiesProduction Facilities:: 5 Integrated Steel Plants5 Integrated Steel Plants 3 Special Steel Plants3 Special Steel Plants
1 Subsidiary - Ferro Alloy Plant (under merger)1 Subsidiary - Ferro Alloy Plant (under merger)
Marketing Network:Marketing Network:
34 Branch Sales office34 Branch Sales office 14 Customer Contact Office (CCO)14 Customer Contact Office (CCO) 4242Warehouses (Departmental 24 & Consignment Agencies 18)Warehouses (Departmental 24 & Consignment Agencies 18)
Captive Mines:Captive Mines: 9 Iron Ore Mines9 Iron Ore Mines 5 limestone mines5 limestone mines
2 Dolomite Mines2 Dolomite Mines
3 Collieries3 Collieries
Overview of SAIL
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Formed in 1973 as a holding company with the objective:
Of bringing in companies producing steel and related inputsunder one umbrella
In 1978, SAIL became an operating company:
Steel making subsidiaries were dissolved & merged with SAIL
Other companies in the area of mining, collieries, construction &consultancy etc. were spun off as independent companies
Subsequently, the following companies were taken over assubsidiary companies:
Indian Iron & Steel Company (IISCO) 1979 (merged with SAILin 2005-06)
Maharashtra Elektrosmelt Limited (MEL) 1986 (under mergerwith SAIL )
Visvesvaraya Iron & Steel Limited (VISL)- 1989 (merged withSAIL in 1998-99)
Overview of SAIL
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SAIL
(13.47)
Integrated Steel Plants
Special SteelPlants
Subsidiary
BSL(4.23)
RSP(1.66)
DSP(1.80)
BSP(5.05)
SSP(0.17)
Sal..Steel
ISP(0.44)
MEL(0.10)
Ferro Alloys
Figures in bracket are crude steel production in 2005-06 in million tonnes.
VISL(0.15)
ASP(0.14)
Overview of SAIL
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17th largest steel producer in the world in 2005 as per IISI
Diversified product portfolio Both in Longs and Flats Segment
Leading Steel Producer in India - around 34% share of crudesteel production
Captive mines of iron ore & fluxes Largest producer of Ironore in India
Marketing network of 48 Branch Sales Offices & CustomerContact Offices.
Material delivered to customers from 42 warehouses includingconsignment agencies attached to BSOs /CCOs.
Overview of SAIL
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Gross Sales of Rs.32280 crore and PAT of Rs.4013 crore
EBDIT/SALES 22.9%
PAT / Net worth 32.4%
Reduction in borrowings by Rs.1472 crore
Debt / Equity Ratio 0.35:1
Declared Dividend @ 20% of paid up equity capital (12.5%interim & 7.5% Final)
Financial Highlights FY 06
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Highest ever saleable steel production of 12.05 million tonnes(MT) growth of 6.6%
Avg. Capacity utilisation (saleable steel) (For 4 Integrated
Steel Plants) about 109%
Production through Concast up by 4%
Lower energy consumption by 1.2%
Coke Rate lower by 6 kg per tonne of hot metal
BF productivity up from 1.43 to 1.46 tonnes/cum/day
Performance Highlights FY 06
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Highest ever sales volume at 11.3 million tonnes. Growth of2.6%
SAIL continues to be virtually debt-free, with companies shortterm deposit in banks exceeding borrowings.
Overall borrowings Rs. 4298 crore as on 31.3.06
Debt to equity ratio improved to 0.35:1 from 0.58:1
Performance Highlights FY 06
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Category of ShareholdersCategory of Shareholders(as on 31st March 2006)(as on 31st March 2006)
% age Holding% age Holding
Government of IndiaGovernment of India 85.8285.82
Domestic Financial InstitutionDomestic Financial Institution 4.734.73
Foreign Institutional InvestorsForeign Institutional Investors 5.085.08
Individuals (Incl. Employees, NRI, GDRs)Individuals (Incl. Employees, NRI, GDRs) 3.163.16
OthersOthers 1.211.21
TOTALTOTAL 100.00100.00
Shareholding Pattern
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Production Performance
9.710.4
11.0
11.0
12.0
0.0
1.0
2.0
3.0
4.0
5.0
6.07.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
FY 02 FY 03 FY 04 FY 05 FY06
Saleable Steel (Million Tonnes)
7.5
8.3
8.9
9.3
9.8
6.0
6.5
7.0
7.5
8.0
8.59.0
9.5
10.0
10.5
11.0
11.5
FY 02 FY 03 FY 04 FY 05 FY 06
Finished Steel (Million Tonnes)
% ofsal.
Steel7878 7878 8080 8181 8484 8181
Highest saleable steel and finished steel
production in 2005-06. FY 06 includes
ISP.
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Product Mix Of Saleable Steel ProductionFY 2006
PIPES
0.5%
RAILWAY MATERIALS
8%STRUCTURALS6.7%
CR COILS / SHEETS
8.7%
COATED PRODUCTS
2.8%
ROUNDS / BARS
10.2%
SEMIS
19.6%
PLATES
19.8%
HR COILS / SHEETS
24.1%
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Techno-Economic Improvements
Energy Consumption (Gcal/tcs)
7.27.29
7.467.50
7.69
7.33
7.24
6.50
7.00
7.50
8.00
FY 02 FY 03 FY 04 FY 05 FY06
5.96
6.53
7.25
7.637.92
4.00
4.50
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
FY 02 FY 03 FY 04 FY 05 FY 06
Concast Production(Million Tonnes)
Incl. ISP
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Techno-Economic Improvements
557
538542
536
549
529
543
520
530
540
550
560
570
580
FY 02 FY 03 FY 04 FY 05 FY 06
Coke Rate (kg/thm)
Coke rate has reduced by:
Higher sinter usage
Increase in hot blast temperature of blast furnaces.
Use of alternate fuels like tar & Coal Dust Injection
Up-gradation of BF 4 at RSP
Incl. ISP
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Quarter-wise Profit (Incl. ISP)
1704 1707
1036
1258
1126 1127
656
1103
0
200
400
600
800
1000
1200
1400
1600
1800
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
(Rupeesincrores)
PBT
PAT
FY 2005-06
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Manpower Vs Production
138211
126,857
131,910
137,496
147,601
156,719
159,940
174,736 13.47
12.1012.08
11.30
10.68
10.54
9.9910.07
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06
Manpower(N
os.
8.00
9.00
10.00
11.00
12.00
13.00
14.00
Production(millio
ntonne
Manpower Crude Steel Production
FY 06 Includes ISP
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Manpower Productivity
96105
111
123
137144
150
70
80
90
100
110
120
130
140
150
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06
Crude steel production per man per year (tonnes)
FY 06FY 06IncludesIncludes
ISPISP
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Sales Turnover
16233 15502
19207
24178
3180532280
10000
15000
20000
25000
30000
35000
------RsCrore------
FY 01 FY 02 FY 03 FY 04 FY 05 FY 06
-------Year------
FY 06
Includes
ISP
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Sales Volume
8.9
9.2
9.5
10.6
10.7
8.5
9.0
9.5
10.0
10.5
11.0
FY 02 FY 03 FY 04 FY 05 FY 06
0.56
0.86
1.17
0.47
0.58
0.20
0.30
0.40
0.500.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
FY 02 FY 03 FY 04 FY 05 FY06
Domestic Sales (Million Tonnes) Exports (Million Tonnes)
FY 05 and FY 06 Includes ISP
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Profitability
4013
6817
2512
-304
-1707-3000
-2000
-1000
0
1000
2000
3000
4000
5000
6000
7000
FY 02 FY 03 FY 04 FY 05 FY 06
Net Profit after tax/Loss [Rs./Crs.]
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Profitability Ratios
62.9
35.6
22.9
12.895.73
29.2834.9
19.2311.276.52
0
10
20
30
40
50
60
70
FY 02 FY 03 FY 04 FY 05 FY 06
%
EBDIT /Cap. Employed EBDIT/turnover
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Reduction in Borrowings
3000
5000
7000
9000
11000
13000
15000
FY 02 FY 03 FY 04 FY 05 FY 06400
600
800
1000
1200
1400
1600Borrowings
Interest Cost
YearYear FY 02FY 02 FY 03FY 03 FY 04FY 04 FY 05FY 05 FY 06FY 06
D/E RatioD/E Ratio 6.236.23 6.506.50 1.871.87 0.580.58 0.350.35
SAILs market borrowings stood at Rs.4298 crore, a reduction of Rs.1472 crore from
the previous year. Interest outgo was also lower by Rs.137 crore during FY 06.
Borrow
ings(R
s.InC
rore
)
InterestCost(Rs.
InCrore)
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Performance of SAIL Share price vis--vis BSE Sensex
63.65
82.30
79.70
53.0554.65
48.1552.70
62.05
65.10
51.30
50.70
54.00 56.20
83.30
9,397.93
9,919.89
8,788.81
7,892.32
8,634.48
11851.93
10398.61
6,154.44
10,370.24
7,805.437,635.42
6,715.11
7,193.85
11,279.96
10
20
30
40
50
60
70
80
90
Apr-0
5
May-05
Jun-05
Jul-0
5
Aug-05
Sep-05
Oct-0
5
Nov-05
Dec-05
Jan-06
Feb-06
Mar-0
6
Apr-0
6
May-06
2000
4000
6000
8000
10000
12000
14000
SAIL
SENSEX
Sensex(Points)
Sh
areP
rice(R
s)
MonthClosing Share Price & Sensex as on the last day of the month
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Neelanchal Ispat Nigam Limited (NINL)Neelanchal Ispat Nigam Limited (NINL) Committee of secretaries, Government of India, haveCommittee of secretaries, Government of India, have
recommended merger of NINL with SAIL.recommended merger of NINL with SAIL. SAIL board approved in principle the merger and final decisionSAIL board approved in principle the merger and final decision
on this after valuation.on this after valuation. Appointment of valuer for valuation of NINL is underway.Appointment of valuer for valuation of NINL is underway.
Maharashtra Elektrosmelt Limited (MEL)Maharashtra Elektrosmelt Limited (MEL) Ministry of Steel has accepted the recommendation of expertMinistry of Steel has accepted the recommendation of expert
committee on merger.committee on merger. SAIL & MEL board have approved the merger in principle.SAIL & MEL board have approved the merger in principle. Enabling activities for merger are in progress.Enabling activities for merger are in progress.
National Iron & Steel Company (NISCO)National Iron & Steel Company (NISCO)
SAIL board approved in principle the acquisition of NISCO.SAIL board approved in principle the acquisition of NISCO. Final decision after confirmatory letter from Govt. of WestFinal decision after confirmatory letter from Govt. of West
Bengal regarding taking over of NISCO by SAIL on clean slateBengal regarding taking over of NISCO by SAIL on clean slatebasis, etc.basis, etc.
Mergers & Acquisitions in SAIL
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Corporate Plan - 2012
ParticularsParticulars
Production (Million Tonnes)Production (Million Tonnes)
(Including ISP)(Including ISP)
2005-062005-06(Actual)(Actual)
2011-122011-12
(Corporate Plan)(Corporate Plan)
Hot metalHot metal 14.6014.60 22.5522.55
Crude SteelCrude Steel 13.4713.47 21.5921.59
Saleable SteelSaleable Steel 12.0512.05 20.2520.25
Production through BOF (% OF CS)Production through BOF (% OF CS) 7676 100100
Continuous Casting Production (% OF CS)Continuous Casting Production (% OF CS) 5959 100100
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Corporate Plan - 2012
Total Investment envisaged Rs. 35000 crore
Capital schemes valued at over Rs.4400 crore are under variousstages of implementation
Major Capital Schemes
Bhilai Steel Plant
Rebuilding of Coke Oven batteries # 5,6 & 9
Modernisation of Blast Furnaces (including GCP) # 1 to 7Installation of new Slab Caster, 2nd RH Degasser & 2nd LF inSMS-II
Revamping of existing slab casters-2 Nos. in phased manner
New Bar & Rod Mill (1.0 mtpa)
New Pipe Plant of 0.2 mtpa capacity
AMR & other Schemes including logistics & infrastructure
Installation of new SMS III (3.9 mtpa cap.) with associatedfacilities by phasing out SMS-I & BBM.
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Durgapur Steel PlantDurgapur Steel Plant
Bloom Caster & associated facilitiesBloom Caster & associated facilities New 0.7 mtpa Bar & Rod Mill & 0.4 mtpa MediumNew 0.7 mtpa Bar & Rod Mill & 0.4 mtpa Medium
Structural MillStructural Mill
Upgradaton of Blast Furnace #1 & CDI in BF #1,3 &Upgradaton of Blast Furnace #1 & CDI in BF #1,3 &
44
Rebuilding of Coke Oven battery # 4Rebuilding of Coke Oven battery # 4
Installation of a new Billet CasterInstallation of a new Billet Caster
Rourkela Steel PlantRourkela Steel Plant Rebuilding of Coke oven battery # 1Rebuilding of Coke oven battery # 1
New Blast Furnace # 5 2000 m3New Blast Furnace # 5 2000 m3 CDI & Reconstruction of BF -1CDI & Reconstruction of BF -1
Phase II SMS : BOF Vessels/Casters/VADPhase II SMS : BOF Vessels/Casters/VAD
Revamping of SP-I incl. Pollution Control SchemeRevamping of SP-I incl. Pollution Control Scheme
New Plate Mill (0.7 1.0 mtpa capacity- Wide width)New Plate Mill (0.7 1.0 mtpa capacity- Wide width)
Corporate Plan - 2012
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Bokaro Steel PlantBokaro Steel Plant New 2.5 mtpa hot strip mill & 0.6 mtpa Cold rolling millNew 2.5 mtpa hot strip mill & 0.6 mtpa Cold rolling mill
Installation of 3nos. of Slab Caster in SMS-IInstallation of 3nos. of Slab Caster in SMS-I
Installation of New modern BOFs (3 nos.) in SMS-IInstallation of New modern BOFs (3 nos.) in SMS-I
Rebuilding of Coke Oven batteries # 1,2 & 5Rebuilding of Coke Oven batteries # 1,2 & 5
CDI in blast furnace # 2 & 3CDI in blast furnace # 2 & 3
IISCO Steel PlantIISCO Steel Plant Modernisation of Steel making facilities
New Multi purpose Section Mill/ Universal Mill
Development of collieries
Raw Materials DivisionRaw Materials Division Development of Chiria & Rowghat MinesDevelopment of Chiria & Rowghat Mines
Installation of Pellet PlantInstallation of Pellet Plant
Corporate Plan - 2012
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Accolades
Excellent MoU Rating for 2003-04, and 2004-05 (assessed) from
Government of India Bhilai Steel Plant won the Prime Ministers Trophy for best
performing Integrated Steel Plant for the 7th time for 2004-05
Institute of Cost & Works Accountants of India awarded SAIL withGood Performance Award for 3rd consecutive year under the
category National Award for Excellence in Cost Management 2005
Dept. of Science & Technology, Ministry of Science & Technologyawarded SAILs RDCIS National Award for R&D efforts inIndustry for pioneering contributions in design, development &
application of new special steel products for the year 2005 World Environment Foundation awarded RSP with Golden Peacock
Environment Management Award 2005 for excellence ineffective environment system
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AMRAMR Additions, Modifications & Replacements ASPASP Alloy Steel Plant BBMBBM Blooming & Billet Mill BFBF Blast Furnace BOFBOF Basic Oxygen Furnace BSLBSL Bokaro Steel Limited BSOsBSOs Branch Sales Offices BSPBSP BhilaiSteel Plant CCOCCO Customer Contact Office CDICDI Coal Dust Injection CSCS Crude Steel DSPDSP Durgapur Steel Plant EBDITEBDIT Earnings Before Depreciation Interest & Taxes G.Cal/tcsG.Cal/tcs Giga Calories per tonne of Crude Steel GCPGCP Gas Cleaning Plant IISIIISI International Iron & Steel Institute ISPISP Iisco Steel Plant
Continued
Abbreviations used
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JPC Joint Plant Committee
Kg/thm Kilo Gram Per Tonne of Hot Metal LF Ladle Furnace MEL Maharashtra Elektrosmelt Limited MT Million Tonne Mtpa Million Tonne Per Annum
PAT Profit After Tax PBT Profit Before Tax RDCIS Research & Development Centre for Iron &
Steel RINL Rashtriya Ispat Nigam Limited RSP Rourkela Steel Plant SMS Steel Melting Shop SP Sinter Plant SSP Salem Steel Plant VAD Vacuum Arc De-gassing VISL Visvesvaraya Iron & Steel Limited
Abbreviationsused
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Disclaimer
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 Companys 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 Companys 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