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Amit Final PPT MJ.pptx

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Amit Final PPT MJ.pptx

  1. 1. 1 JINDAL STEEL AND POWER LIMITED 7th June 2018 Amit Agarwal President – Sales and Marketing Indian Steel Markets Conference 2018
  2. 2. • Overview of steel industry in India • Global steel industry • How domestic steel industry continues to play a major role in nation building • How Indian mills are geared up to meet the changing demand in infrastructure • Construction & Infrastructure to drive growth in India & healthy Indian finished steel demand • Govt.’s impetus on infrastructure spending & National Steel Policy 2017 • Indian steel industry and landscape • Way forward – Current issues along with remedial measures • JSPL overview and it’s positioning as an enabler in infrastructure growth • Approvals and certifications attained by JSPL • Industry wise bifurcation of material supplied by JSPL • Awards, recognitions and felicitations – Jindal Panther TMT Rebars and JSPL
  3. 3. 26-Nov-22 Presenter 3 • Infrastructure and construction sectors are the biggest consumers of steel in India • Steel is a major contributor to GDP Overview of Steel industry in India Other sectors – Automotive, Oil & Gas etc. Construction & Infrastructure sector Consumers of steel in India 50% 50% Others 98% Steel sector 2% GDP consumption in India
  4. 4. 11 11 8 4.85 5.65 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 80% 77% 74% 73% 70% 69% 72% 73% 75% CY 11 CY 12 CY 13 CY 14 CY 15 CY 16 CY 17 Feb '18 March '18 Steel demand recovered across key markets > Tail wind continue to push Capacity cuts in China improve supply and demand balance >150 mt cuts according to long-term capacity reduction plan >35 mt cuts expected going forward due to stricter environmental policies >protectionism and capacity reduction lead to lower pressure from Chinese Export 48% Source: WSA/Morgan Stanley/JSPL Estimates > Chinese Export Down by 48% from its peak level N. A. Ansari Global Steel Industry: Recovery Started in 2017 on better Economy & Steel Demand-Supply Balance > Global Steel Capacity Utilization improved in CY17 > Global economic momentum bodes well for steel demand growth Strong Global Economy: >Global growth momentum strengthens and is on a broader footing . Solid U.S. fundamental, firming recovery in EU, China re-acceleration, recovery in developing economies . >Moderate rebound in oil prices, contained inflation >Most benign global economic environment since the financial crisis >Growth in India and ASEAN remains on a solid ground >Many developing countries are progressing with structural reforms 6% 711 672 681 766 766 826 828 835 856 882 CY14 CY15 CY16 CY17E CY18E 1,537 1,500 1,516 1,622 1,648 > Following the closure of outdated induction furnaces in FY17 , nominal growth rate for steel demand in China increased to 12.4% / 766 million tonnes > WSA expects 1.8% world demand growth for finished steel for CY 18 Global steel demand (Mt) China Rest of the world
  5. 5. Steel industry’s contribution to National GDP Nearly 2% Steel Industry’s contribution to Index of Industrial Production (IIP) 6.68% Employment by the steel industry Over 7lakh direct Current Market value of the Indian Steel Industry $75 bn Total Investment expected till 2025-2030 $187 Bn > India’s per capita steel consumption is expected to increase to 158 Kg in 2031 from current 62 Kg+ > India ranks second in terms of low cost of steel production amongst major steel producing countries. > Indian steel industry continues to capitalize on its competencies to invest further. 116 144 300 FY '16 FY '20e FY '31 (GoI Vision) Crude Steel Capacity Projection 81.5 230 FY '16 FY '31e Finished Steel Consumption In Million MT (Mt) N. A. Ansari Domestic Steel Industry continues to grow and play a major role in Nation Building
  6. 6. Indian mills and domestic steel industry are geared up to meet the demand in infrastructure 19.1 21.4 18.0 23.0 12.5 19.0 10.0 10.0 6.3 7.3 5.1 8.6 55.3 58.3 FY17E FY22F Others JSPL RINL ESSAR Tata Steel JSWL SAIL 5% 69% 16% - 52% 28% 12% Growth Source: CRISIL Research 126.3 147.6 Source: CRISIL Research 71.0 73.5 74.0 77.0 81.5 83.9 88.1 92.9 113.3 6.9% 3.5% 0.8% 3.9% 5.9% 2.9% 4.5 - 5.5% 5 - 6% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% - 20.0 40.0 60.0 80.0 100.0 120.0 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17E 2017-18P 2018-19P 2021-22P Steel consumption Y-o-Y Growth (RHS) 7-7.5% (MT) CAGR 6 – 6.5% CAGR 3.4% > Indian steel capacity road map Top 3-4 contributing to majority of FY18-21E Capex > Indian steel demand forecast Increased government spending to spur growth >Construction and Infrastructure to Drive Growth in India >Following established trajectory, India’s per capita steel consumption is expected to increase to 175 Kg in 2025; potentially a 250Mt crude consumption opportunity, >GDP Per capita has gone up to ~$2000/Capita in March ’18 compared with $1,751.85 in March ’17, will likely to go further >Government is pushing for more steel intensive manufacturing industries and Construction practices Source: CRISIL/World Bank/JSPL Estimates
  7. 7. Construction and infrastructure accounts for over 50% of India’s steel consumption, the segment’s per–capita steel use is 31 kg, compared to an average 111 kg for other emerging economies. Source: BCG Steel Vision 2025, November 2013. Steel to Cement Ratio in Construction. Country Ratio UK 1.50 US 1.19 Germany 1.10 Japan 1.07 India 0.30 India Among the Lowest per Capita Electricity Consuming Countries Large Section of India’s Population Still Lives in Non-metal/RCC Roofed- houses India’s per Capita Installed Rail Infrastructure Low Compared to Other Countries Electricity Housing Rail Per Capita Consumption KWh Railway Length (Km)/per Million Population % of Households Split by Predominant Material of Roof in India 0 5,000 10,000 15,000 20,000 25,000 0 20,000 40,000 60,000 GDP (PPP)/Capita India 716 610 467 74 53 0 200 400 600 800 US Russia France China India CAGR (%) 3% 81 69 55 11 20 29 9 12 16 0 20 40 60 80 100 1991 2001 2011 GI/Metal/Asbestos Sheets Concrete Others (Grass/Thatched/Bamboo/Mud Tiles Etc.) 5% (2)% 5 Construction and Infrastructure to Drive Growth in India – Large head room to offer N. A. Ansari
  8. 8. - - 8 50.5 Mt Current Demand (FY '16) 8.2 Mt Construction & Infrastructure Steel/O&G/Highway/Bridge/Airport/ ports/Urban Infra/PreFab buildings/Power/ Real Estate(resid+Industrial) Automotive Projected Demand (FY31) > Major steel demand will come from Infrastructure & Construction sector 138 Mt 28 Mt 7% 9% Growth CAGR (%) 2.4 Mt Packaging and Others Petroleum, non-petroleum, LPG Gas Cylinders 6 Mt 18 Mt Engineering & Fabrication Capital Goods/Consumer Durable/Electrical Goods /Tube /Wire/Pressure Vessels/Defence /General Fabrication/General Enginnering 50Mt 8% 2.4 Mt Other Transport Rail lines, Wagons Coaches, Ship Building, Coastal 8 Mt 9% 7% 81.5 Mt Total 230 Mt 8% Per Capita Steel Consumption 61 158 7% Indian domestic Finished Steel Demand will likely to remain healthy Sector Wise Finished Steel Consumption Projection (Source: Min of Steel/MECON)
  9. 9. Government’s Impetus on Infrastructure Spending It is estimated that, on average, a 1% increase in infrastructure investment is associated with a 1.2% increase in GDP growth > Mega programme for Road Construction (Bharatmala) > Significant Railway reform & Spending > Emergence of New Infra Segments: • Civil Aviation : Nextgen Airport for Bharat (NABH Nirman) & UDAN Scheme • Impetus on Solar & Renewables Power • Metros in A & B Class city >Gov initiated major reforms, project implementation becomes swifter • Reduction of Stuck projects • Project running behind Declined (Current 25% Vs 56% in March 13 • Better Payment terms & Speedier Dispute Resolution • Open & Transparent Bidding in various projects > National Highway construction pace accelerated • Current 26KM/day Vs 3-6KM/day during 2012-14 163 147 109 70 60 41 32 16 10 Power Gen Indian Railways Road Power Distri Metro Railways Power Trans Urban Infra Airports Ports > Estimated Infra Capex planned : Total $650 Billion in 5 years (2018 to 2023) Fig in $ Billion 25% 23% 17% 11% 9% 6% 5% 2% 2% > FDI in Infra Picks Up
  10. 10. 26-Nov-22 Presenter 10 Robust finished steel per capita consumption of around 160 kgs National Steel Policy (NSP) 2017 Crude steel capacity of 300 million tonnes Production of 255 million tonnes By 2030 – 2031, NSP 2017 is aiming for -
  11. 11. 26-Nov-22 Presenter 11 NSP 2017 is an effort to – • Steer the industry to achieve it’s full potential • Enhance steel production • Focus on high end value added steel while being globally competitive The policy covers critical areas such as – • Self sufficiency in steel production • Globally competitive steel manufacturing capabilities • Domestic availability of key raw materials at competitive rates • Facilitating foreign investment and enhancing domestic steel demand
  12. 12. 26-Nov-22 Presenter 12 Remedial measures - Current Issues - • Cancellations or issues in iron ore and coal mine allocations • Delays in land acquisition • Obtaining environmental clearances • Increased logistics cost • Increased raw material costs • Higher operating cost for companies • Transportation of steel through coastal shipping - cost effective route • Greater focus on the domestic industry • Innovation • Indigenous research & development • Reduce the dependence of infrastructure sectors on imported steel Way Forward
  13. 13. THE JOURNEY OF JINDAL STEEL & POWER LIMITED Annual turnover over US$ 3.3 billion, part of diversified O. P. Jindal Group 7.5MTPA total Iron & Steel making capacity Committed investments exceeding US$ 30 billion in the future Total Steel Consumption in country- 90 MnT JSPL Share: 4.5% of steel demand catered by JSPL 3.6 MTPA ISP at Raigarh, 5 MTPA ISP at Angul, Odisha, 2 MTPA ISP at Sohar, Oman,
  14. 14. Raigarh (3.6 MTPA) • 1.0 MTPA Plate Mill • 0.75 MTPA Rail and Structurals • 0.6 MTPA Medium and Light Structurals • 0.7 MTPA Semis • 350 MW Captive Power Plant • 4x135 MW CPP at Dongamahua Patratu (1.60 MTPA) • 1.0 MTPA Rebar, Light Structural • 0.6 MTPA Wire Rods Barbil • 9.0 MTPA Pellet Plant Present Capacities JSPL OPERATIONS Angul (5.0 MTPA) •1.4 MTPA Rebar Mill • 1.2MTPA Plate Mill Oman • 2 MTPA SMS •1.5 MTPA DRI •1.4MTPA Rebar Mill Nalwa • 0.25 MTPA Rebar & Wire Rod
  15. 15. Product basket – JSPL along with annual production figures 2 lac tonnes per year 20 lac tonnes per year 5 lac tonnes per year 4.5 lac tonnes per year 15 lac tonnes per year 3 lac tonnes per year
  16. 16. 26 November 2022 PJM 16 Industry wise bifurcation of material supplied by JSPL • Construction & Infrastructure industry – 70% • Wire drawing industry – Automotive, Railways etc. – 10% • Oil & Gas industry – 10% • Other sectors – Power, Coal, Nuclear, Thermal – 10%
  17. 17. Approvals & Certifications
  18. 18. Realty Plus Interior Exterior Awards – Product Brand of the year (Steel and TMT category) - 2018 ET NOW MODI (Making of Developed India) awards -Best Steel Company of the year 2018 IBC InfoMedia India’s Most Trusted Brand Awards 2017 – Steel and TMT category Awards won by JSPL and Jindal Panther TMT Rebars Winner of Porter Prize - 2018
  19. 19. 11/26/2022 19 THANK YOU
  20. 20. Growth of 12%in India’s total finished steel production recorded at 102 million tonnes in 2016-17 (78.47 % of total) Capacity lying idle with plants having state of the art facilities is 28 million tonnes (21.53% of total) 3% growth in domestic consumption - modest increase owing to slow off take from construction & infrastructure industries Import of finished steel declined by 38% Total finished steel witnessed a growth of 4.5% in 2016-17 *130 million tonnes is installed capacity at present in the country Indian steel industry & landscape

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