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Amit Final PPT MJ.pptx
1. 1
JINDAL STEEL AND POWER LIMITED
7th June 2018
Amit Agarwal
President – Sales and Marketing
Indian Steel Markets Conference 2018
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. 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. 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. 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. 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. 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
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. 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. 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. 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. 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. 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,
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. 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%
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
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
