Fourth-largest producer

of crude steel

• Steel production in India has increased at a CAGR of 7.7 per cent over 2005–12. The

country is slated to become the second-largest steel producer by 2015 as large public and

private sector players strengthen steel production capacity in view of rising demand

Strong growth

opportunities

• Huge scope for growth is offered by India’s comparatively low per capita steel

consumption and the expected rise in consumption due to increased infrastructure

construction and the thriving automobile and railways sectors

Technological

advancements

• Increased government and corporate sector focus on using innovative production

techniques for enhancing operational as well as financial performance is a positive

Rising domestic and

international

investments

• Domestic players’ investments in expanding and upgrading manufacturing facilities are

expected to reduce reliance on imports. In addition, the entry of international players*

would provide benefits in terms of capital resources, technical know-how and more

competitive industry dynamics

Notes: * - Arcelor Mittal and POSCO

• The engineering sector is delicensed; 100 per cent FDI is allowed in the sector

• Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period

Growing demand

Notes: FDI - Foreign Direct Investment, MT - Million Tonnes

MoUs - Memorandum of Understanding, 2016E - Estimated figure for the year 2016; These estimates are from Data monitor

Robust demand

• Demand would be supported by growth in the domestic market

• Infrastructure, oil & gas and automotives would drive the growth of the industry

Increasing investments

• 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

Policy support

• 100 per cent FDI through the automatic route is allowed

• Large infrastructure projects in the Public-Private Partnership (PPP) mode are being formed

• National Steel Policy (NSP) implemented to encourage the industry to reach global benchmarks

Competitive advantage

• 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

2011

Market

value:

USD57.8

billion

2016E

Market

value:

USD95.3

billion

Advantage

India

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 only

undertaken by the

central government

• Hindustan Steel Ltd

and Bokaro Steel Ltd

were setup in 1954

and 1964,

respectively

• In the early 1990s,

the public sector

dominated 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 and

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

1993–2012

• Foreign players

began entering the

Indian steel market

• No license

requirement for

capacity creation

• Imposition of export

duty on iron ore, to

focus more on

catering growing

domestic demand

• Decontrol of domestic

steel prices

• Launch of Scheme for

promotion of

Research and

Development in Iron

& Steel sector

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

Source: Report on Indian steel

industry by Competition Commission

of India, Aranca Research

Total crude steel production (million tonnes)

Total crude steel production rose at a CAGR of 6.6 per cent over FY08–11 to 69.6 MT; production in the first nine months

of FY12 was a little more than three-fourth of FY11 levels

Finished steel production stood at 66.0 MT in FY11, recording a CAGR of 4.2 per cent during FY08–11; analysts expect

production figures to improve rapidly over the next five years with the Ministry of Steel forecasting production levels at

115.3 MT by FY17

Total finished steel production (million tonnes)

17.1 16.4 16.7 17.0 12.3

36.8 42.1

49.1 52.6

41.1

FY08 FY09 FY10 FY11* FY12* (April -Dec)

Public sector Private sector

13.5 12.7 13.0 13.1 8.6

42.6 44.5 47.6

52.9

43.4

FY08 FY09 FY10 FY11* FY12* (April -Dec)

Public sector Private sector

Source: Ministry of Steel, Aranca Research;

Notes: FY - Indian Financial Year (April – March); MT - Million Tonnes, * - Provisional; CAGR - Compound Annual Growth Rate

India crude steel market share by production -

- FY12* (Apr-Dec)

SAIL is the leading player in India’s steel sector; in the first nine months of FY12, the company accounted for 18.7 per cent

of the country’s crude steel production and had a 13.5 per cent share in finished steel production

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 finished steel market share by production

- FY12* (Apr-Dec)

Source: Ministry of Steel, Aranca Research;

Notes: RINL - Rashtriya Ispat Nigam Limited, * - Provisional

9.9%

18.7%

4.3% 67.1%

Tata Steel

SAIL

RINL

Other

7.8%

13.5%

4.0%

74.7%

Tata Steel

SAIL

RINL

Other

Market value of the Indian steel sector

(USD billion)

In 2011, the Indian steel sector’s total market value was

USD57.8 billion

The sector has benefitted from rises in price and

production, especially since the beginning of the

millennium

Over 2007–11, the sector’s market value is estimated to

have posted a strong CAGR of 17.7 per cent 30.1

43.0

36.5

46.8

57.8

2007 2008 2009 2010 2011

CAGR: 17.7%

Source: Datamonitor, Aranca Research

Note: E - Estimates

Consumption of steel (in million tonnes) 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

Driven by rising infrastructure development and growing

demand for automotives, steel consumption is expected to

grow at an average rate of 6.8 per cent, reaching 104 MT by

2017

Source: Ministry of Steel, Indian Steel Markets Conference,

Datamonitor, BMI, Aranca Research

Notes: FY12* - Data for FY12 is provisional, MT - Million Tonnes

46.8 52.1 51.9

59.3

66.4 70.9

FY07 FY08 FY09 FY10 FY11 FY12*

CAGR: 8.7%

Steel demand and production (in million tonnes)

With steel’s demand growth 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

In FY12, total imports stood at about 6.8 MT

Steel exports and imports (in million tonnes)

Source: Ministry of Steel, JSPL presentation, Aranca Research

Notes: FY - Indian Financial Year (April - March), * - Data for FY12 is provisional

50

55 55 60

67 71

50

53 55 57

64 69

2007 2008 2009 2010 2011 2012

Demand Production

4.9

7.0

5.8

7.4 6.8 6.8

5.2 5.1 4.4

3.3

3.5 4.0

FY07 FY08 FY09 FY10 FY11 FY12*

Imports Exports

Source: JSPL May 2013 presentation, Aranca Research

Sector-wise steel consumption FY12 Infrastructure is India’s largest steel consumer, accounting

for 63 per cent of total consumption in FY11

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

Engineering and fabrication is the next largest consumer,

with 22 per cent of total consumption

63%

22%

10%

3% 2%

0 Infrastructure

Engineering andfabrication

Autos

Packaging

Transportation

Company Products

Tata Steel Ltd Finished steel (non-alloy steel)

SAIL Finished steel (non-alloy steel)

JSW Steel Ltd Hot-rolled coils, strips and sheets

Jindal Steel & Power Ltd Iron and steel

Ispat Industries Ltd Hot-rolled coils, strips and sheets

Welspun-Gujarat Stahl Rohren Ltd Tubes and pipes

Bhushan Steel Ltd Cold-rolled coils, strips and sheets

Source: Aranca Research

Source: Ministry of Railways, Aranca Research

Notes: MOUs - Memorandum of Understanding, MT - Million Tonnes

Growing investments

• SAIL has modernised and expanded its integrated steel plants in Bhilai, Bokaro, Rourkela,

Durgapur, Burnpur and Salem

• The company is in the process of expanding its crude steel production capacity to 21.4

MTPA by 2013

• Completed mega expansion of Rashtriya Ispat Nigam Limited (RINL) to more than double

capacity of plant (from 2.9 MT to 6.3 MT) from 2013-14

Strategic alliances

• International Coal Ventures Pvt Ltd, comprising SAIL, RINL, CIL, NTPC and NMDC, has

been set up for acquisition of coal mines overseas

• The consortium of SAIL and National Fertiliser Limited (NFL) has been nominated for

revival of Sindri Unit of the Fertiliser Corporation of India Limited

• RINL, Vishakhapatnam Steel Plant and the Power Grid Corporation of India Ltd

(POWERGRID) signed an MoU to set up a joint venture company to manufacture

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 in setting up a 12 MT project in India

Increased emphasis on

technological

innovations

• Indian steel companies have now started benchmarking their facilities and processes

against global standards, to enhance productivity

• These steps are expected to help Indian companies improve raw material and energy

consumption as well as improve compliance with environmental and pollution yardsticks

• Companies are attempting coal gasification and gas-based direct-reduced iron (DRI)

production. Other alternative technologies such as Hlsmelt, Finex and ITmk3 being

adopted to produce hot metal

Source: Aranca Research

Steel integrated plants

under SAIL (Bhilai, Rourkela,

Bokaro, Durgapur and

Burnpur)

Tata Steel’s largest steel

plant, based in Jamshedpur

RINL steel plant in

Vishakhapatnam

Alloy and special steel

plants under SAIL

(Bhadrawati and Salem)

Source: Company websites, Aranca Research

Policy support

100 per cent FDI in the steel sector

Encouragement of sector-based R&D

activities by the government

Reduced custom duty and other

favourable measures

Growing demand in the construction

industry

Increasing investments

Rising investments from domestic and

foreign players

Increasing 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

Rising demand for consumer durables and capital goods

Growing demand

Note: FDI - Foreign Direct Investment

Projected values of investment in infrastructure

(USD billion)

Investment in infrastructure by the Planning Commission is

expected to expand at a CAGR of 14.5 per cent over FY12–

17

The Planning Commission expects total infrastructure

investment to be USD1 trillion in the 12th Five-Year Plan

(2012–17), from USD428 billion in the 11th Plan

This increase in infrastructure investment is set to raise

steel demand by roughly 40 MTPA during FY13–17

Source: Planning Commission, Aranca Research

Notes: MTPA - Million Tonnes Per Annum

97.3 114.1

131.2

149.1

169.0

191.4

FY12 FY13 FY14 FY15 FY16 FY17

CAGR: 14.5%

Consumer durables market size (USD billion)

Over FY03-FY11, consumer durables has grown at a CAGR of 12.2 per cent as growth in disposable income resulted rise

in their demand

Capital goods and consumer durables are expected to grow at a 7.5 per cent to 8.8 per cent over 2012-2021

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

Over FY12-FY21, the automotive sector is projected to grow at a CAGR of 11.5 per cent to 12.5 per cent

Total production of automobiles in India

(million units)

Source: SIAM, JSPL May 2013 presentation, Corporate Catalyst India, Aranca Research

Notes: E - Estimate; FY - Indian Financial Year (April - March)

2.9 3.2

3.5 3.8

4.2 4.7

5.2

6.3

7.3

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

1.8

2.4

3.0

3.1

5.1

9.7

0.4

0.6

0.8

0.9

1.4

2.4

8.9

11

.1

14

.2

16

.3 21

.0

30

.2

FY09 FY10 FY11 FY12 FY16E FY21E

Passenger vehicles Commercial vehicles

Three wheelers & two wheelers

CAGR: 12.2%

National Steel Policy

2012

• In view of the sector’s changed dynamics, globally as well as domestically, the Ministry of

Steel has initiated the process of drafting a new National Steel Policy to replace the

existing National Steel Policy of 2005

• The government has set up a committee headed by the Steel Secretary to monitor the

formulation of the new National Steel Policy

• Four task forces have been constituted to study, analyses, consult and formulate draft

policy documents on different aspects of the policy

• The current policy draft proposes allotment of captive iron ore mines to producers through

open bidding and putting some mines in the general category

R&D and innovation

• A new scheme, ‘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

• USD10.7 million had been spent under the scheme up to December 2012

• The development of technology for cold-rolled grain oriented (CRGO) steel sheets and

other value-added products is also included under the policy purview and is allocated

USD6.7 million

Source: Ministry of Steel, Aranca Research

Foreign Direct

Investment • 100 per cent FDI through the automatic route is allowed in the Indian steel sector

Rise in 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)

Source: Ministry of Steel, Aranca Research

Notes: * - w.e.f. 30th December 2011

• Export duty on iron ore has been increased to 30

per cent ad valorem on all varieties of iron ore

(except pellets), to preserve iron ore resources for

domestic use

• As per the government’s decision, the Government

of India’s 51 per cent shareholding in Eastern

Investments Company Limited (EIL), under Bird

Group of Companies, was transferred to RINL

• New Research and Development policy for the

steel sector have been finalised/adopted for

implementation

• New techno-economic benchmarks have been

evolved on international patterns to improve

performance of steel PSUs; implementation is

being monitored closely

• Under the Ministry, the Joint Plant Committee

(JPC) studied 300 districts, 1,500 villages, 4,500

manufactures and 8,000 retailers spread over

India’s 28 states and 7 union territories to assess

steel demand in the rural areas and examine the

potential to increase steel consumption levels

• The Ministry of Steel set up the Steel Innovation

Council to promote innovative ideas in the steel

sector

• The New National Steel Policy for the forthcoming

years is under finalisation

• In April 2013, the Ministry of Steel signed a Letter

of Intent (LoI) with the Tanzanian Government to

strengthen cooperation in steel and mining

activities

Source: Ministry of Steel, Aranca Research

Notes: W.E.F - With Effect From 30th December, 2011

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

M&A scenario – details

Period: 1 January 2012 to 21 June 2013

Deal type Number of deals Largest deal (USD million)

Inbound 2 -

Outbound 1 -

Domestic 3 232.6

Cumulative FDI inflows

Period: April 2000 to March 2013

Sector

Metallurgical industries USD7.5 billion

Per cent of total FDI

inflow 3.9

Source: Thomson ONE Banker, “Fact Sheet On Foreign Direct Investment (FDI)”, Department of Industrial Policy and Promotion

For updated information, please visit www.ibef.org

State MoUs signed (2011) 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 2012

Company Plans

SAIL SAIL plans to invest USD27.3 billion in increasing capacity from 21.4 MTPA to 45 MTPA. In

its recent expansion plan, the company modernised and expanded its integrated steel

plants at Bhilai, Bokaro, Rourkela, Durgapur, Burnpur and a special plant at Salem

NMDC NMDC is setting up a greenfield integrated steel plant of 3 MTPA capacity in Nagarnar,

Chhattisgarh at an estimated cost of about USD3.2 billion

Source: Ministry of Steel, Annual Report 2011-12; Note: MTPA - Million Tonnes Per Annum, * - Estimated figures

Jindal Steel and Power Limited

Incorporated in 1979, Jindal Steel and Power Limited (JSPL)

is an integrated steel producer and the largest coal-based

sponge iron manufacturer in the world. The company has an

installed steel production capacity of 3 MTPA. JSPL is

engaged in manufacturing long products and is specialised

in producing long rails for railways and large sized H-beams

as well as columns for the infrastructure and construction

sector

JSPL also has significant presence across the mining, power

generation and infrastructure sectors

• Achievements:

• 2011 – Ranked third in the Metals category of

Business World’s Most Respected Companies

Survey, 2011

• 2010 – Rated the World’s Second-Largest Value

Creator by the Boston Consulting Group (BCG)

and the World’s Largest Value Creator in the

Mining and Materials category

Projected crude steel capacity in the 12th Plan

(million tonnes)

Source: Company website (www.jindalsteelpower.com),

Planning Commission, Aranca Research

3.0 3.0

4.5

7.0

8.0

10.0

11.5

FY11 FY12 FY13 FY14 FY15 FY16 FY17

CAGR: 25.1%

Financial growth (USD million) Sale of steel (million tonnes)

0.3 0.2

0.7 1.0

1.2

1.6

1.9

0.5

0.8

1.4 1.6

2.0 2.3

2.8 2.8

3.8

FY06 FY07 FY8 FY9 FY10 FY11 FY12

Finished steel products Semi steel products Pellets

671 816

1,488

1,803 1,596

2,287

3,315

3,007

103 197

431 438 395 634

818 721

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Gross revenue PBIDT

Source: Company website (www.jindalsteelpower.com)

Notes: Company clubs iron and steel segment ‘s performance; PBIDT (Profit Before Interest, Depreciation and Tax)

1991 1993 1995 1997 1999 2002 2006 2010 2012

Long track rails

Hot-rolled parallel

flange beams

Column sections

Plate and coils

Wire rods

Organic growth

through capacity

additions

Foray into the oil &

gas and cement

sectors as a part of

diversification

1991

Commenced

operations

FY08

ISO

9001:2008

accreditation

FY 13–14

Steel capacity to

rise from

3.5MTPA to

7.0MTPA

The iron and steel

segment continues

to be a major

contributor (~75%)

Expansion in

international

markets

TMT Re-bars

Strong diversified

customer base of

2,758 customers

Bhushan Steel Limited

Established in 1983, Bhushan Steel Limited (BSL) is the

third-largest secondary steel producer in India. The company

has an existing steel production capacity of 2.5 MTPA. It

primarily manufactures flat steel products for the automobile

industry

Products – Cold-rolled closed annealed coils, galvanised

coils and sheets, high tensile steel strapping, colour coated

coils, galume sheets and coils, hardened and tempered steel

strips, billets, sponge iron, precision tubes and wire rods

• Milestones:

• 2004 – Commissioned secondary steel production at

Khapoli, Maharashtra

• 2006 – Commissioned primary steel production at

Meramandali, Odisha

• 2006 – Commissioned secondary steel production at

Sahibabad, Uttar Pradesh

Projected crude steel capacity in the 12th Plan

(million tonnes)

2.2 2.5

4.5

5.0 5.0 5.0 5.0

FY11 FY12 FY13 FY14 FY15 FY16 FY17

Source: Company website (www.bhushansteel.com),

Planning Commission, Aranca Research

Financial growth (USD million) Production of steel (million tonnes)

Source: Company website (www.bhushansteel.com), Aranca Research

Notes: NPAT - Net Profit After Tax

1.0

1.2 1.1

1.6

1.8

2.1

FY07 FY08 FY09 FY10 FY11 FY12

693

928

1,161 1,178 1,266

1,662

2,251

1,541

35 69 105 92 178 221 213

116

FY06 FY07 FY08 FY09 FY10 FY11 FY12 9MFY13

Gross revenue NPAT

1989 1991 1993 1995 1997 1999 2002 2006 2010 2012

Cold-rolled

Wheel, tyre and

axle plant (railways)

Alloy steel

Iron making and

castings

Organic growth in

steel and flat

products

Capacity

expansion

(0.9 MT to 2.5 MT)

1989

Secondary

steel

production in

UP

Partnership with

Japanese steel

producer,

Sumitomo FY06

Primary steel

production in

Odisha

FY12

USD2.5 billion

turnover

Galvanised

Color coated tiles

and pipes

Alloy billets

Sponge iron

Other

developed products

Technological

upgradation and

further capacity

addition

Strong diversified

customer base of

3,300 customers

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 MTPA

The company caters to sectors such as automotive,

construction, consumer goods, engineering, packaging,

energy & power, ship building, rail and defense & security

• Milestones:

• 2009 – Tata Ryerson and HMPCL merge with Tata

Steel

• 2007 – Tata Steel and Corus were integrated at

USD12 billion, making Tata Steel one of the top ten

global steel producers

Projected crude steel capacity in the 12th Plan

(million tonnes)

Source: Company website (www.tatasteel.com),

Planning Commission, Aranca Research

6.8 7.6

9.2

11.0

15.1

17.5

20.0

FY11 FY12 FY13 FY14 FY15 FY16 FY17

CAGR: 19.7%

Financial growth (USD million) Production and sales of steel division (million tonnes)

Source: Company website (www.tatasteel.com), Aranca Research

Notes: NPAT - Net Profit After Tax

4.6 4.9 4.9 5.4

6.4 6.7 7.0

7.9

4.4 4.8 4.8 5.2

6.2

6.4 6.6

7.5

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Production Sales

0.8 0.9 1.2 1.1 1.1

1.5 1.4

3.9

4.5

5.6 5.9 5.8

7.2 7.1

FY06 FY07 FY08 FY09 FY10 FY11 FY12

NPAT Gross revenue

Source: Company website (www.tatasteel.com), Aranca Research, * - Revenues from Indian operations

Note: M&A - Mergers and Acquisitions

1912 1995 1996 1997 1998 1999 2000 2002 2004 2006 2008 2010 2011 2012 2013

Blast furnace

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)

FY06

USD3,625

million

turnover

FY13

USD7.0

billion

turnover*

Pig iron and

steel ingots

Wheel, tyre and

axle plant (railways)

Alloy steel

Iron making and

castings

Developed products

Announced plans

to merge Tata

Metaliks Ltd and

Tata Metaliks

Kuboto Pipes Ltd

with itself in April

2013

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 sheets

• Achievements:

• 2011 – National Sustainability Award by the Indian

Institute of Metals

• 2009 – Gold Award in the Metal and Mining sector

• 2008 – National Energy Management Award

instituted by CII

Projected crude steel capacity in the 12th Plan

(million tonnes)

Source: Company website (www.jsw.in),

Planning Commission, Aranca Research

11.1

13.23 14.3 14.3 14.3

17.6 18.4

FY11 FY12 FY13 FY14 FY15 FY16 FY17

CAGR: 8.8%

Financial growth (USD million) Product group-wise sales (million tonnes)

Source: Company website (www.jsw.in)

0.3

4.7

1.1

0.4

5.9

1.5

0.3

6.9

1.71

Semis Rolled Flats Rolled Longs

FY11 FY12 FY13

1,417 1,937

2,631 3,162

4,053

5,228

7,221 7,137

178 269 360 96

421 419 339 332

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Gross revenue NPAT

Notes: JV - Joint Venture, TMT - Thermo Mechanically Treated, MML - Mysore Minerals Limited, MTPA - Million Tonnes Per Annum

1994 1995 1996 1997 1998 1999 2000 2002 2004 2006 2008 2010 2011 2012 2013

FY 14 Saleable steel sales to reach 9.75 million

tonnes

Special steel bars

Galvanised

product

TMT Re-bars

Wire rods

Cold-rolled

Hot-rolled

Organic growth

and integration

JV formed to

explore, develop &

mine iron ore with

MML

1994

ISO

accreditations

Capacity

addition 7.8 MT

1994

Production

capacity

(1.25 MTPA)

FY06

USD1,417

million

turnover

FY 13

USD7.1

billion

turnover

Note: Capex – Capital Expenditure

Automotive

• The automotives

industry is forecasted

to grow in size by

USD122–159 billion

by 2016

• With increasing

capacity addition in

the automotive

industry, demand for

steel from the sector

is expected to be

robust

Capital goods

• The capital goods

sector 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

by FY17

• Due to such a huge

investment in

infrastructure the

demand for long steel

products would

increase in the years

ahead

Airports

• More and more

modern and private

airports are expected

to be set up

• Development of Tier-

II city airports would

sustain consumption

growth

• Estimated steel

consumption in

airport building is

likely to grow more

than 20 per cent over

next few years

Source: Planning Commission, Aranca Research

Railways

• The dedicated rail

freight corridor

(DRFC) network

expansion would be

enhanced in future

• Gauge conversion,

setting up of new lines

and electrification

would drive steel

demand

Oil and gas

• The liquid fuel

transportation pipeline

network 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,

providing a lucrative

opportunity to the

steel industry

Power

• The government aims

to add 71,000–

1,07,500 MW (Mega

Watt) of capacity

during the 12th Five-

Year Plan

• Both generation and

transmission

capacities would be

enhanced, thereby

raising steel demand

from the sector

Rural India

• Rural India,

accounting for 70 per

cent of Indian

population has low

per capita steel

consumption which

provides huge scope

for growth

• Policies like Bharat

Nirman and Rajiv

Gandhi Awaaz Yojna

are driving growing

demand for

construction steel in

rural India

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: nissda@gmail.com

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

Wherever applicable, numbers have been rounded off to the nearest whole number

Year INR equivalent of one US$

2004-05 44.95

2005-06 44.28

2006-07 45.28

2007-08 40.24

2008-09 45.91

2009-10 47.41

2010-11 45.57

2011-12 47.94

2012-13 54.31

Exchange Rates (Fiscal Year)

Year INR equivalent of one US$

2005 45.55

2006 44.34

2007 39.45

2008 49.21

2009 46.76

2010 45.32

2011 45.64

2012 54.69

2013 54.45

Exchange Rates (Calendar Year)

Average for the year

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