Transcript Slide 1

A Blueprint
of
Indian Steel Industry
Wootz Steel
(400-420 A.D.)
“Wootz was the first High Quality Steel
made anywhere in the world. According
to travelers to the East, the Damascus
Swords were made by forging small
cakes of Steel that were manufactured
in South India. This Steel was called
“Wootz”. It was a 1000 years before
Steel as good was made anywhere in
the West. “
Indian Steel Industry
- An Overview
India –
A Few Statistics
 World’s Biggest Democracy
 Population – 1.045 Billion
 Area -3.16 Million Sq Kms (7th Largest)
 GDP - $512 Billion
 Became independent on Aug 15, 1947
Recent Past of Steel- Controlled
Regime- Till 1991
 3 Integrated Producers with full “control”
by Government
 Secondary Steel producers only in long
products.
 Controlled Imports with restrictions on end
use, duty of upto 150%
 Continuous situation of shortage for the
last 35 years
 In 1992, SAIL only manufacturer of HR
Coils.
Total Steel Capacity 14 Million MT
Recent Past – Decontrol &
Growth 1994-99
 In 1991-94, Indian Economy was Liberalized, & all
Manufacturing (Incl Steel) was de-licensed
 4 New Steel Plants -1993-1998

Total Capacity increased 6 Million Tons
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Galvanized Coils & Cold Rolling-Approx 10 Plants
Pipes-Apprx 15 Plants
 Customs Duties reduced from 150% to
15%(Currently5%)
 Imports were freely allowed
 Downstream Activities increased
 Metallics – Only 4 DRI Plants
Total Steel Capacity 25 Million MT
Recent Past - Stagnation
1999-2002
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The World Market Collapsed
Demand for all commodities, including Steel Collapsed
The Far East & Russian Currencies Collapsed
These led to Over Capacities in Steel, in World Market
Customs Duties being Low, India was not Insulated
New Capacities continued to be added, based on Old
Projected Growth
India Starts Exporting Steel
Prices reached all time LOW
Total Steel Capacity 27 Million MT
Today – A New Confidence
2002 onwards
 The ‘New Boom’ triggered by the US
announcement of Sec 201, placed India in a
strong position in the USA Market
 Quality a Gainer, since the Quantities were
guaranteed
 Cautious approach to Growth, after the
depression of last 5 years
 India emerges as a World Force in Value
added Steels, for example Thin Gauge GP.
Large Dia API Pipes
Total Steel Capacity 36 Million MT
Indian Steel Growth
-Slowly, Steadily
40
36.5
35
30
26.2
25
24.2
20
15
14.3
12.02
10
Controlled
Regime
5
9.36
6.75
5.05
3.23
0
1.1
1951
1.1
1.62
1991
2005
Upstream & Metallics
- India’s Potential
 Iron ore Reserves of 13.46 Billion MT (131
Years)
 Current Mining of 102 Million MT
 Exports of Iron ore 48 Million MT
 Pelletisation-Currently 3 Plants, & 3 more
plants being implemented
 DRI –India #1 in the world- Nearly 11
Million MT in 2005, & Capacity of 2 Million
being added
 5 Mini Blast Furnaces upto 550 M3 are
also being setup
Downstream Capacities
-Value, Not Volume
 Pre Painted & Galvanized Coils
 1.60 Mill MT New Cap in Galvanized has been Planned
, increase of 35%
 0.24 Million MT Capacity in Prepainted has been
Planned , increase of 300%
 This includes Required Cold Rolled Capacities also
 Total Galvanized Capacity will become 6.39 Million MT
by 2006
 Pipes
 DSAW, Spiral welded API Pipes Capacity Addition is
already taken place - Capacity is now 2.12 Million MT,
from 324,000MT in 2000
 ERW Pipe growth is steady, at 10-12% Per Annum, &
currently it is 1.49 Million MT
 DI & CI Pipes – Capacities being added
Composition of Steel Production
-A Value Proposition
Quantity %age
Pipe
GP
Long Products
CR
Plate
HR
HR
Long
Prods
.
13.928
42%
HR
7.254
22%
Plates 1.832
5%
CR
2.251
7%
GP
4.790
14%
Pipes
3.616
11%
Total
33.670
100%
Pipe Production
 For ERW Pipes from ½” – 16”
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Capacity 3.16 Million Tons Per Annum
Capacity utilization 70-75%
Percentage of Black to Galvanized 60 – 40 %
Export Quantity 0.45 Million Tons per annum.
 For DSAW/SW Pipes 18” – 36”
 Capacity 2.12 Million Tons Per Annum
 Capacity utilization % 75 – 80
 Export Quantity 0.5 Million Tons per annum
Indian Steel
Industry
- A Future Giant?
India - A Future Giant?
Objectives of the National Steel Policy:
To increase steel making capacity
From 35 million tons in 2004
to 60 million tones in 2012
to 100 million tons in 2020
India - A Future Giant?
 Strengths
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Iron Ore reserves of
Trained Manpower
Stable & Vibrant
Democracy
Market – A strong
Middle Class
Overall economical
Growth is sustainable
Global Location for
Exports
Indians already
making 120 Million
MT
 Weaknesses
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Capital Availability
Lack of Proper
Infrastructure
Resources Like Coke,
Coal
Plant & Machinery
Availability
Government Policies
Vacillation
Inconsistent Growth
Rates
Manpower Shortage
since Indians already
make 120 million MT
Immediate New Capacities
Planned

Greenfield and Brownfield Capacity addition plan
announced
 6 Plants of 2 Million Tons & Up (Flat & Long Products)
 87 Plants of 100,000 to 200,000 (all Long)
 All existing plants enhancing their Capacities, by 10-15%
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Global majors like POSCO & Mittal Group have shown in
putting up Integrated steel mills in India.

It is estimated that if all the plans fructify, Indian Steel
capacity will be 60 million MT by 2012, which needs an
investment of over USD 17 Billion

To reach 100 million MT by 2020, total required investment
will be USD 37 Billion
Demand Indicators
 Automobiles
 HCV’s/LCV’s- Growth 25% last 2 years , per
Annum
 Passenger Cars & 2 Wheelers-Growth 21% last 2
years , per Annum
 Exports of 800,000 Passenger vehicles projected by 2008
 Housing
 Growth of 19% in organized sector
 Growth in Rural sector & Unorganized sector is
not measured.
 GDP Growth is currently 6.2%, from high of 8.5%
last year
 Manufacturing Sector Growth is 9.0% current year
 Capital Goods Industry Growth is 14.4%
Apparent Steel Consumption in India
during 2003 - 2004
Productio
n
Import
Total Availability
Export
App
Cons/capita
36.10
1.82
37.92
5.15
32.77
The total domestic Consumption is 32.7 million
tons
Export at 5.15 Million Tons is 14.3% of Production
Can India Sustain 100 Million
MT Consumption?
Projected Growth Rates in Per Capita Steel
Consumption
Year
Population
(Millions)
Growth over
Previous
decade
(actual) and
forecasted
growth rates
(beyond 2001)
Apparent Steel
Consumption
(Million MT)
Estimated
Per Capita
Steel
consumptio
n (KG)
1981
683
24.7%
17.658
25.85
1991
846
23.9%
23.658
27.41
2001
1027
21.4%
29.191
28.42
2011
1222
19%
62.600
63.04
2021
1429
17%
103.000
138.03
GLOBAL EXPERIENCE
-Benchmarking
Country
South Korea
Japan
Germany
USA
Malaysia
China
World Average
India
Current Per Capita
Consumption (KG)
917
562
407
309
307
163
144
29
CHALLENGES – AN OVERVIEW
 A sustained growth of GDP at 6% and steel
consumption at 7% for the next 16 years
 Financing Greenfield Projects for the Long TermAn Investment of $37 Billion
 Reaching Per Capita Growth of 138 Kgs, against
Historical Consumption of 30 Kgs, & Lesser
 Exporting 5 Million Tons till 2012 if consumption
grow at 6% per annum and 8 Million Tons by
2020.
GLOBAL EXPERIENCE
-Benchmarking
 Developed countries like USA, Russia, Japan went
through a manufacturing led growth, with thrust
on value added steel production.
 Chinese experience was building capacities slowly
to match higher domestic demand.
 Being highly Populated, a healthy Mix of Both
strategies will be followed by India
Introduction to
Lloyds
-A Quick Sales Spiel
Lloyds Group in Steel
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One of the top 100 Companies in India
One of the top 10 steel producers in India
5 Manufacturing Units
Totally Integrated Operations
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From DRI to Value Added Steels
API HR Coils, Commodity HR Coils
Galvanized Coils
Galvanized Pipes, & API Pipes
 Exported 120,000 MT of Galvanized Coils & Pipes
to the USA between Mar 2002 & Dec 2004
 Total Employees Currently – 2761
 Total Sales Mar ‘2005 Apprx $383 Million
Lloyds Group in Steel
 5 DRI Kilns-Capacity 225,000 MTPA
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Currently 150,000
 Scrap Trading Company-300,000MTPA
 2 EAF’s, 60MT Capacity
 2 Slab Casters
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#2 will be commissioned by Dec 2005
 One 4 Hi-Steckle Mill, Allied Facilities
 2 Cold Rolling Mills, Allied Facilities
 2 Galvanizing Lines
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#2 will be commissioned by April 2005
 3 ERW Pipe Mills
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From ½ “ to 14”
2 Galvanizing Lines
Lloyds Group in Steel
-Value Added Product Range
 Hot Rolled Coils & Plates
 Coils from 2mm (0.08”) to 16mm (0.63”)
 Plates Upto 60mm (2.36”)
 Structural Grades, Pipe Grades, Cold Rolling
Grades
 Special Steels like API (Upto X-70), HSLA, High
Tensile, Hi Manganese , Boiler Quality
 Galvanized Coils
 0.23mm (0.009”) to 1.50mm(0.059”)
 ERW Pipes
 ½” to 14”
 Galvanized, Black (Gr A, GrB, API)
Lloyds Group in Steel
Lloyds
In
Steel
225,000 MT
DRI
(5 Kilns LMEL)
240,000 MT
Galvanized
Coils
225,000 MT
Purchased DRI
& Pig Iron
100,000 MT
HR Coils
(Commodity)
200,000
Scrap
200,000 MT HR
Special Coils
& Plates
60,000 MT
Galvanized &
Black Pipes
Thank You