2 2
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: TATA Steel, JSW Steel
Opportunities
Useful information
For updated information, please visit www.ibef.org
Steel MARCH
2013
3 3
Steel
For updated information, please visit www.ibef.org ADVANTAGE INDIA
Advantage India
MARCH
2013
Advantage India
• Demand to be supported by growth in the domestic market
• Infrastructure, oil & gas, and automotives will drive the growth of the industry
• Intended steel capacity build-up in India is set to result in investments in the range of USD104.2 billion to USD208.3 billion by 2020
• 301 MoUs have been signed with various states for planned capacity of about 488.6 MT
• India is the world’s fourth largest producer of crude steel (up from eighth in 2003); the country is expected to become the second largest producer by 2015
• Easy availability of low cost
manpower and presence of abundant reserves make India competitive in the global setup
• 100 per cent FDI through automatic route is allowed in the sector
• Large infrastructure projects in Public-Private Partnership (PPP) mode are being formed
• National Steel Policy (NSP) to encourage industry in reaching global benchmarks
Market value: USD83 billion
2014E
Market value: USD33 billion
2009
Notes: FDI - Foreign Direct Investment, MT - Million Tonnes, MoUs - Memorandum of Understanding, 2014E - estimated figure for the year 2014; these estimates are from Data monitor
Robust demand Increasing investments
Competitive advantages Policy support
4 4
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: TATA Steel, JSW Steel
Opportunities
Useful information
For updated information, please visit www.ibef.org
Steel MARCH
2013
5 5 For updated information, please visit www.ibef.org
Evolution of the Indian steel sector
MARKET OVERVIEW AND TRENDS
Notes: TISCO - Tata Iron and Steel Company, IISC - Indian Iron & Steel Company, SAIL - Steel Authority of India Ltd
• Production of steel started in India (TISCO was setup in 1907)
• IISC was set up in 1918 to compete with TISCO
• Mysore Iron and Steel Company was set up in 1923
• According to the new Industrial Policy Statement (1948) new ventures were undertaken only by the central government
• Hindustan Steel Ltd and Bokaro Steel Ltd were setup in 1954 and 1964 respectively
• In early 1990’s, the public sector dominated the steel production
• Private players were in downstream production, mainly producing finished steel using crude steel products
• SAIL was created in 1973 as a holding company to oversee most of India's iron & steel production
• In 1989 SAIL acquired Vivesvata Iron and Steel Ltd
• In 1993, the government set plans in motion to partially privatise SAIL
1907-1918
1923-1948
1954-1964
1973-1992
Steel
1993-2012
• Foreign players started entering the Indian steel market
• No license requirement for capacity creation
• Export duty has been imposed on iron ore, thereby giving more impetus on catering to growing domestic demand
• Decontrol of domestic steel prices
• Launch of Scheme for promotion of Research and Development in Iron & Steel sector
MARCH
2013
6 6 For updated information, please visit www.ibef.org
Structure of the steel sector
MARKET OVERVIEW AND TRENDS
Source: Report on Indian steel industry by Competition Commission of India, Aranca Research
Steel
Steel
End use
Structural steel
Construction steel
Rail steel
Form
Liquid steel Crude steel
Ingots
Semis
Finished steel
Flat
Non flat
Composition
Non-alloy steel
Low carbon steel
Medium carbon steel
High carbon steel
Alloy
Stainless
Silicon electrical
High speed
MARCH
2013
7 7
13.5 12.7 13.0 13.1 8.6
42.6 44.5 47.6
52.9
43.4
0
14
28
42
56
70
FY08 FY09 FY10 FY11* FY12* (April- Dec)
Public sector Private sector
For updated information, please visit www.ibef.org
Steel production in India has been growing at a fast pace
→ Total crude steel production grew at a CAGR of 6.6 per cent over FY08-11 to 69.6 MT; production in the first nine months of FY12 is a little more than three-fourth of FY11 levels and is estimated to touch 128.1 MT by FY17
→ Finished steel production stood at 66.0 MT in FY11, recording a CAGR of 4.2 per cent over the above-mentioned period; analysts expect production figures to shoot up in the next five years with the Ministry of Steel forecasting production levels at 115.3 MT by FY17
Total crude steel production (million tonnes)
MARKET OVERVIEW AND TRENDS
Steel
Source: Ministry of Steel, Aranca Research, Notes: FY - Indian Financial Year (April - March), MT - Million Tonnes, * - Provisional, CAGR - Compound Annual Growth Rate
17.1 16.4 16.7 17.0 12.3
36.8 42.1
49.1 52.6
41.1
0
20
40
60
80
FY08 FY09 FY10 FY11* FY12* (April- Dec)
Public sector Private sector
Total finished steel production (million tonnes)
MARCH
2013
8 8 For updated information, please visit www.ibef.org
Shares in production: SAIL and Tata lead the way
→ SAIL is the leading player in the steel sector in India; it accounted for 18.7 per cent of crude steel production in the country in the first nine months of FY12 and had a 13.5 per cent share in finished steel production in that period
→ TATA Steel, another household name in the country, leads private sector activity in the steel sector; during April - December 2011, the firm accounted for 9.9 per cent of crude steel production and 7.8 per cent of finished steel production
India crude steel market share by production - FY12* (Apr-Dec)
MARKET OVERVIEW AND TRENDS
Steel
Source: Ministry of Steel, Aranca Research, Notes: RINL - Rashtriya Ispat Nigam Limited, *Provisional
7.8%
13.5%
4.0%
74.7%
TATA steel
SAIL
RINL
Other
India finished steel market share by production - FY12* (Apr-Dec)
9.9%
18.7%
4.3% 67.1%
TATA Steel
SAIL
RINL
Other
MARCH
2013
9 9 For updated information, please visit www.ibef.org
Growth in market value of the Indian steel sector has also been strong
→ In 2011, the total market value of the steel sector in India was estimated to be USD55.1 billion
→ The sector has benefitted from rise in prices and production, especially since the beginning of the millennium
→ Over 2006-11, market value of the sector is estimated to have posted a strong CAGR of 19.3 per cent
Market value of the Indian steel sector (USD billion)
Source: Datamonitor, Aranca Research Note: E - Estimates
MARKET OVERVIEW AND TRENDS
Steel
22.8 25.5
38.6
32.9
46.8
55.1
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011E
MARCH
2013
10 10 For updated information, please visit www.ibef.org
Demand has outpaced supply over the last five years
→ Total consumption of steel exceeded production and grew to 70.9 MT in FY12 as against 66.4 MT in FY11; over FY07-12, consumption has expanded at a CAGR of 8.7 per cent
→ In the most likely economic growth scenario (9 per
cent GDP growth as envisaged by the Draft Approach Paper of the 12th Five Year Plan), demand for steel is set to rise to 113.3 MT by FY17
Consumption of steel (in million tonnes)
Source: Ministry of Steel, Indian Steel Markets Conference, Aranca Research
Notes: FY12* - Data for FY12 is provisional, MT - Million Tonnes
MARKET OVERVIEW AND TRENDS
Steel
46.8 52.1 51.9
59.3
66.4 70.9
FY07 FY08 FY09 FY10 FY11 FY12*
MARCH
2013
11 11 For updated information, please visit www.ibef.org
A consequence of demand outpacing supply has been rising imports
→ With demand growth for steel outpacing growth in domestic production over the last few years, import dependency has increased
→ Imports have increased at a CAGR of 6.8 per cent over FY07-12
→ Total imports in FY12 stood at about 6.8 MT
Steel exports and imports (in MT)
Source: Ministry of Steel, Aranca Research Notes: FY - Indian Financial Year (April - March)
*Data for FY12 is provisional
MARKET OVERVIEW AND TRENDS
Steel
4.9
7.0
5.8
7.4 6.8 6.8
5.2 5.1 4.4
3.3
3.5 4.0
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
FY07 FY08 FY09 FY10 FY11 FY12*
Imports Exports
MARCH
2013
12 12 For updated information, please visit www.ibef.org
Construction and infrastructure: Key consumers of steel in India
→ ‘Construction & infrastructure’ is the largest consumer of steel in India, accounting for 61 per cent of total consumption in 2010
→ This is not surprising given the heavy use of steel in this sector and soaring construction and infrastructure activity in the country over the past decade
→ ‘Capital goods’ is the next largest consumer, with 11
per cent of total consumption
Sector-wise steel consumption shares (2010)
Source: Crisil, Aranca Research
MARKET OVERVIEW AND TRENDS
Steel
61% 11%
8%
5%
3%
12%
Construction &Infrastructure
Capital goods
Autos
Packaging
Consumerdurables
Others
MARCH
2013
13 13 For updated information, please visit www.ibef.org
Key players in the industry
MARKET OVERVIEW AND TRENDS
Steel
Company Products
Tata Steel Ltd Finished steel (non-alloy steel)
SAIL Finished steel (non-alloy steel)
J S W Steel Ltd Hot rolled coils, strips, sheets
Jindal Steel & Power Ltd Iron and steel
Ispat Industries Ltd Hot rolled coils, strips, sheets
Welspun-Gujarat Stahl Rohren Ltd Tubes and pipes
Bhushan Steel Ltd Cold rolled coils, strips, sheets
MARCH
2013
14 14 For updated information, please visit www.ibef.org
Notable trends in the Indian steel industry
MARKET OVERVIEW AND TRENDS
Growing investments
• SAIL has undertaken modernisation and expansion of its integrated steel plants in Bhilai, Bokaro, Rourkela, Durgapur, Burnpur and Salem
• It is in the process of expanding its crude steel production capacity to 21.4 MTPA
• Completed mega expansion of Rashtriya Ispat Nigam Limited (RINL) to more than double capacity of plant (from 2.9 MT to 6.3 MT)
Strategic alliances
• International Coal Ventures Pvt. Ltd., comprising of SAIL, RINL, CIL, NTPC, and NMDC, has been set up for acquisition of coal mines overseas
• The consortium of SAIL and National Fertilizer Limited (NFL) has been nominated for revival of Sindri Unit of Fertilizer Corporation of India Limited
• RINL, Vishakhapatnam Steel Plant and Power Grid Corporation of India Ltd. (POWERGRID) signed an MoU to set up a joint venture company for manufacturing of Transmission Line Towers and Tower Parts including R&D of new high-end products
Entry of international companies
• Attracted by the growth potential of the Indian steel industry, several global steel players have been planning to enter the market
• National Mineral Development Corporation (NMDC) has signed an MoU with Russia’s third-largest steelmaker, Severstal for a greenfield steel plant in Karnataka
• Posco Steel to invest USD12 billion for setting up 12 MT project in India
Source: Ministry of Railways, Aranca Research Notes: MOUs - Memorandum of Understanding, MT - Million Tonnes
Steel MARCH
2013
15
Source: Company websites, Aranca Research
Steel
Key steel plants in India
RINL steel plant in Vishakhapatnam
Steel integrated plants under SAIL (Bhilai, Rourkela, Bokaro,
Durgapur and Burnpur)
Biggest steel plant of Tata Steel in Jamshedpur
Alloy and special steel plants under SAIL
(Bhadrawati and Salem)
MARCH
2013
For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
16 16
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: TATA Steel, JSW Steel
Opportunities
Useful information
For updated information, please visit www.ibef.org
Steel MARCH
2013
17 17 For updated information, please visit www.ibef.org GROWTH DRIVERS
Strong demand and policy support driving investments
Notes: FDI - Foreign Direct Investment
Steel
Policy support
100 per cent FDI in steel sector
Government is encouraging R&D
activities in the sector
Reduced custom duty and other
favourable measures
Growing demand
Growing demand in the construction
industry
Increasing investments
Rising investments from domestic and
foreign players
Increase in number of MoUs signed to
boost investment in steel
Foreign investment of nearly USD40
billion committed in the steel sector
Inviting Resulting in
Growing demand in the automotives
sector
MARCH
2013
18 18 For updated information, please visit www.ibef.org GROWTH DRIVERS
Construction & infrastructure and automotives driving steel growth
Steel
Source: Planning Commission, Aranca Research Notes: MTPA - Million Tonnes per annum
Projected values of investment in infrastructure (USD billion) → Investment in infrastructure is expected to expand at a CAGR of 14.5 per cent over FY12-17 by the Planning Commission
→ The Planning Commission expects total investment in infrastructure to be USD1 trillion in the 12th Five-Year Plan (2012-17), as compared to USD428 billion in the 11th Plan
→ This increase in investment in infrastructure is set to
raise steel demand by roughly 40 MTPA from FY13 to FY17
110.1 129.0
148.5
168.7
191.3
216.6
0
50
100
150
200
250
FY12 FY13 FY14 FY15 FY16 FY17
MARCH
2013
19 19 For updated information, please visit www.ibef.org GROWTH DRIVERS
Steel
Source: SIAM, Aranca Research Notes: E - estimate; FY - Indian Financial Year (April - March)
Total production of automobiles in India (million units) → Automotives production expanded at a CAGR of 22.2 per cent over FY09-12
→ Commercial vehicles are the fastest growing segment with a CAGR of 29.8 per cent over the same period
Automotives leading sector in driving steel growth
0
5
10
15
20
25
30
35
FY09 FY10 FY11 FY12 FY16E FY21E
Passenger vehicles Commercial vehicles
Three wheelers & two wheelers
MARCH
2013
20 20 For updated information, please visit www.ibef.org
National Steel Policy 2012
• In view of the changed dynamics of the sector both globally as well as domestically, Ministry of Steel has initiated the process of drafting the new National Steel Policy in place of the existing National Steel Policy in 2005
• The government has set up a committee headed by the Steel Secretary for monitoring the progress on formulation of the new National Steel Policy
• Four task forces have been constituted to study, analyse, consult and formulate draft policy documents on different aspects of the policy
R&D and innovation
• A new scheme named ‘The scheme for the promotion of R&D in the iron and steel sector’ has been approved with budgetary provision of USD24.6 million to initiate and implement the provisions of the scheme as per the 11th Five Year Plan
• A total amount of USD8.5 million has been spent under the scheme upto December 2011
• Steel Innovation Council for promotion of innovative ideas in the steel sector has been set up by the Ministry of Steel
Increased export duty on
iron ore • The government hiked the export duty on iron ore to 30 per cent ad-valorem on
all varieties of iron ore* (except pellets)
Steel
Foreign direct investment
• 100 per cent FDI through the automatic route is allowed in the Indian steel sector
GROWTH DRIVERS
Source: Ministry of Steel, Aranca Research Notes: *w.e.f. 30th December 2011
MARCH
2013
Policy support aiding growth in the steel sector
21 21 For updated information, please visit www.ibef.org
Source: Ministry of Steel, Aranca Research Notes: w.e.f - with effect from 30th December, 2011
Steel
• Export duty on iron ore has been increased to 30 per cent ad-valorem on all varieties of iron ore (except pellets), in order to preserve iron ore resources for domestic use
• As per the Government decision, 51 per cent shareholding of Government of India in Eastern Investments Company Limited (EIL) under Bird Group of Companies was transferred to RINL
• New Research and Development policy for Steel Sector has been finalised/adopted for implementation
• New techno-economic benchmarks have been evolved on international pattern for improvement in performance of steel PSUs and its implementation is being monitored closely
• The Joint Plant Committee (JPC) under the Ministry studied 300 districts, 1500 villages, 4500 manufactures and 8000 retailers spread over all the 35 states and union territories of the company to assess the steel demand in the rural areas and examine the potential of increasing the level of steel consumption
• Steel Innovation Council for promotion of innovative ideas in the steel sector has been set up by the Ministry of Steel
• New National Steel Policy for the forthcoming years is under finalisation
Major initiatives taken by the Ministry of Steel during the year
MARCH
2013
GROWTH DRIVERS
22 22 For updated information, please visit www.ibef.org
Steel SEZs in India
Steel
Developer Location Product
Viraj Profiles Ltd Thane, Maharashtra Stainless steel engineering products
Jindal Steel Ltd Kalinganagar Stainless steel
SAIL Salem SEZ Pvt Ltd Salem, Tamil Nadu Steel
Orissa Industrial Infrastructure Development Corporation
Jajpur, Orissa Metallurgical-based engineering and
ancillary/downstream industry
Source: Formal approvals granted in the Board of Approvals after the SEZ rules coming into force,” Special Economic Zones in India website, www.sezindia.nic.in
GROWTH DRIVERS
MARCH
2013
23 23 For updated information, please visit www.ibef.org
The sector witnessed rising investments in the last decade
Steel
M&A scenario - details
Period: 1 January 2011 to 13 June 2012
Deal type No of deals Largest deal (USD million)
Inbound - -
Outbound 1 1.01
Domestic 7 474.4
Source: Thompson ONE Banker, “Fact Sheet On Foreign Direct Investment (FDI)”, Department of Industrial Policy and Promotion; “JSW - JFE Partnership Press Meet Presentation”, Press releases; and Ministry of Steel,
Government of India, Annual Report 2009-10
Cumulative FDI inflows
Period: April 2000 to September 2012
Sector
Metallurgical industries USD6.7 billion
Per cent of total FDI inflow 4.0
GROWTH DRIVERS
MARCH
2013
24 24 For updated information, please visit www.ibef.org
Steel
State MoUs signed Capacity addition (MTPA)
Orissa 63 81.2
Jharkhand 49 105.1
Chhattisgarh 76 60.0
West Bengal 16 39.4
Karnataka 57 173.0
Andhra Pradesh 18 11.8
Other states 22 18.2*
Total 301 488.6
Capacity addition plans
Company Plans
SAIL SAIL is planning to invest USD27.3 billion to increase capacity from 21.4MTPA to 45MTPA. In its recent expansion plan, it has undertaken modernisation and expansion of its integrated steel plants at Bhilai, Bokaro, Rourkela, Durgapur, Burnpur and a special plant at Salem
NMDC It is setting up a greenfield integrated steel plant of 3MTPA capacity in Nagarnar, Chhattisgarh at an estimated cost of about USD3.2 billion
GROWTH DRIVERS
Source: Ministry of Steel, Annual report 2011-12, Note: MTPA - Million Tonnes Per Annum, * - Estimated figures
MARCH
2013
Planned capacity additions in different states
25 25
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: TATA Steel, JSW Steel
Opportunities
Useful information
For updated information, please visit www.ibef.org
Steel MARCH
2013
26 26 For updated information, please visit www.ibef.org
TATA Steel: A compelling growth story … (1/3)
SUCCESS STORIES: TATA STEEL, JSW STEEL
Steel
Source: Company website (www.tatasteel.com), Planning Commission, Aranca Research
Projected crude steel capacity in the 12th Plan (million tonnes) TATA Steel Limited
Established in 1907, by the visionary-founder JN Tata, Tata Steel
is among the top ten global steel companies with an annual
crude steel capacity of over 28 million tonnes per annum
(MTPA)
Caters to - Automotive, Construction, Consumer goods,
Engineering, Packaging, Energy & Power, Ship Building, Rail,
and Defence and Security
• Milestones
• 2009 - Tata Ryerson and HMPCL merge with Tata Steel in 2009
• 2007 - Integration of Tata Steel and Corus was accomplished at USD12 billion, making Tata Steel one among the top ten steel producers globally
6.8 7.6
9.2 11.0
15.1
17.5
20.0
0
5
10
15
20
25
FY11 FY12 FY13 FY14 FY15 FY16 FY17
MARCH
2013
27 27 For updated information, please visit www.ibef.org
TATA Steel: A compelling growth story … (2/3)
SUCCESS STORIES: TATA STEEL, JSW STEEL
Steel
Financial growth (USD billion) Production and sales of steel division (million tonnes)
0.9 1.0 1.1 1.1 1.4 1.4
4.2 4.7
5.7 5.8
6.8 7.4
-
2
4
6
8
FY07 FY08 FY09 FY10 FY11 FY12
NPAT Gross revenue
Source: Company website (www.tatasteel.com), Aranca Research Notes: NPAT - Net Profit After Tax
4.9 5.4
6.4 6.7 7.0
4.8 5.2
6.2 6.4 6.6
-
1
2
3
4
5
6
7
8
FY08 FY09 FY10 FY11 FY12
Production Sales
MARCH
2013
28 28 For updated information, please visit www.ibef.org
Steel
SUCCESS STORIES: TATA STEEL, JSW STEEL
1994 1995 1996 1997 1998 1999 2000 2002 2004 2006 2008 2010 2011 2012
Blast furnace
Wheel, tyre and
axle plant (railways)
Alloy steel
Iron making and
castings
Developed products
Organic growth in Steel
Capacity expansion
(3 MT)
M&A (Tata-Corus)
Technological upgradation
1912 Production capacity (1.6 Lakh tonnes)
Diversification (Coal injection
unit)
TATA Steel: A compelling growth story … (3/3)
FY06 USD3,625 million
turnover
FY12 USD7,445
million turnover
Pig iron and
steel ingots
Wheel, tyre and
axle plant (railways)
Alloy steel
Iron making and
castings
Developed products
MARCH
2013
29 29 For updated information, please visit www.ibef.org SUCCESS STORIES: TATA STEEL, JSW STEEL
Steel
Source: Company website (www.jsw.in), Planning Commission, Aranca Research
Projected crude steel capacity in the 12th Plan (million tonnes)
JSW Steel
Established in 1994, JSW Steel Ltd manufactures iron and steel
products in India and abroad
Products - Hot rolled coils, plates, and sheets; cold rolled coils
and sheets; galvanised sheets and coils; pre-painted galvanised
coils, sheets, and galvanised corrugated sheets
• Achievements -
• 2011 - National Sustainability Award by Indian
Institute of Metals
• 2009 - Gold Award in Metal and Mining Sector
• 2008 - National Energy Management Award instituted by CII
11.1 13.23
14.3 14.3 14.3
17.6 18.4
0
4
8
12
16
20
FY11 FY12 FY13 FY14 FY15 FY16 FY17
MARCH
2013
JSW Steel: Surging ahead on cost competitiveness … (1/3)
30 30 For updated information, please visit www.ibef.org SUCCESS STORIES: TATA STEEL, JSW STEEL
Steel
JSW Steel: Surging ahead on cost competitiveness … (2/3)
1,937 2,631
3,162
4,053
5228
7221
269 360 96 421 419 339
0
2,000
4,000
6,000
8,000
FY07 FY08 FY09 FY10 FY11 FY12
Gross revenue NPAT
Source: Company website (www.jsw.in)
0.3
3.1
1.1
1.6
0.4
4.3
1.5 1.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Semis Rolled Flats Rolled Longs Value AddedFlat
FY11 FY12
MARCH
2013
Product group-wise sales (in million tonnes) Financial growth (in USD million)
31 31 For updated information, please visit www.ibef.org
Notes: JV - Joint Venture TMT - Thermo Mechanically Treated, MML - Mysore Minerals Limited MTPA - Million Tonnes Per Annum
Steel
SUCCESS STORIES: TATA STEEL, JSW STEEL
JSW Steel: Surging ahead on cost competitiveness … (3/3)
MARCH
2013
1994 1995 1996 1997 1998 1999 2000 2002 2004 2006 2008 2010 2011 2012
Special steel bars
Wheel, tyre and
axle plant (railways)
Alloy steel
Iron making and
castings
Organic Growth & Integration
1994 ISO Accreditations
Capacity addition 7.8 MT
1994 Production capacity
(1.25 MTPA)
FY06 USD1,417 million
turnover
FY 12 USD7,221 million
turnover
Galvanised
product
TMT rebars
Wire rods
Cold rolled
Hot rolled
JV formed to explore, develop & mine iron ore
with MML
32 32
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: TATA Steel, JSW Steel
Opportunities
Useful information
For updated information, please visit www.ibef.org
Steel MARCH
2013
33 33 For updated information, please visit www.ibef.org OPPORTUNITIES
Opportunities … (1/2)
Notes: Capex - Capital Expenditure
Steel
Automotive
• The size of the automotives industry is forecasted to grow between USD122 billion and USD159 billion by 2016
• With increasing capacity addition by the automotives industry, demand for steel from the sector is expected to be robust
Capital goods
• Capital goods accounts for 11 per cent of steel consumption, and has the potential to increase in tonnage and market share
• Corporate India’s capex is expected to grow and generate greater demand for steel
Infrastructure
• The government aims to increase infrastructure spending from 8.4 per cent of GDP in FY11 to 10.7 per cent of GDP by FY17
• Due to such a huge investment in infrastructure the demand for long products of steel will be increasing in years ahead
Airports
• More and more modern and private airports expected to be set up
• Development of Tier-II city airports will sustain consumption growth
• The estimated steel consumption in airport building is likely to grow more than 20 per cent over next few years
MARCH
2013
34 34 For updated information, please visit www.ibef.org OPPORTUNITIES
Opportunities … (2/2)
Steel
Railways
• Dedicated Rail Freight Corridor (DRFC) network expansion will be enhanced in future
• Gauge conversion, setting up of new lines, and electrification will drive steel demand in the near future
Oil and gas
• Pipeline network for liquid fuel transportation is likely to grow from the present 16,800 km to 22,000 km in 2014
• This would lead to an increase in demand of steel tubes and pipes and hence provides a lucrative opportunity to the steel industry
Power
• The government is aiming to add 71,000-1,07,500 MW of capacity during the 12th Five Year Plan
• Both generation and transmission capacities will be enhanced, thereby raising steel demand from the sector
Source: Planning Commission, Aranca research
MARCH
2013
35 35
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: TATA Steel, JSW Steel
Opportunities
Useful information
For updated information, please visit www.ibef.org
Steel MARCH
2013
36 36 For updated information, please visit www.ibef.org USEFUL INFORMATION
Industry associations
Indian Stainless Steel Development Association L-22/4, DLF Phase - II Gurgaon, Haryana - 122 002 Phone: 91-124-4375501 Fax: 91-124-4375509 E-mail: [email protected]
Steel MARCH
2013
37 37 For updated information, please visit www.ibef.org
Glossary
→ CAGR: Compound Annual Growth Rate
→ FDI: Foreign Direct Investment
→ FY: Indian Financial Year (April to March)
→ So FY10 implies April 2009 to March 2010
→ JV: Joint Venture
→ MoU: Memorandum of Understanding
→ MT: Million tonnes
→ MTPA: Million tonnes per annum
→ NPAT: Net Profit After Tax
→ SEZ: Special Economic Zone
→ TMT: Thermo Mechanically Treated
→ USD: US Dollar
→ Conversion rate used: USD1= INR48
→ Wherever applicable, numbers have been rounded off to the nearest whole number
USEFUL INFORMATION
Steel MARCH
2013
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India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this
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