STEEL AUTHORITY OF INDIA LIMITED Investors Meet June 01, 2015 - PowerPoint PPT Presentation

STEEL AUTHORITY OF INDIA LIMITED Investors Meet June 01, 2015

Contents  Global Steel Scenario  Domestic Steel Scenario  SAIL : Overview  SAIL : Performance  SAIL: modernization & expansion plan

Global Steel Scenario

Growth Trends of World Steel Industry Global Crude steel production :  remains flat at 1662 mtpa (growth of 1.2 % over 2013) 1.2% 1662 1642 1559 1537 Avg. growth rate of global crude steel 1433  production in last 5 yrs. is 6% India’s crude steel production has increased  by 2.2% over 2013 Growth in developed Countries like US &  Japan remained flat (between 1-2%) 2010 2011 2012 2013 2014 Growth in China remained flat at 0.9%;  there is a 7.5% jump in South Korea GLOBAL crude steel production in MT (last 5 yrs.) Crude steel Rank Country production 2014 World Steel Association (WSA) forecast : in MTPA Global apparent steel use will grow by 1 China 823 2 Japan 111 another 0.5% and will reach 1,544 mtpa in 3 United States 88 2015. 4 India 83 5 South Korea 71 World 1662 Source WSA

Growth Trends of World Steel Industry Projected Finished Steel Consumption Rank Country 2015 0.6 % growth (in mt) over 2013 1 China 707 1532 1537 1437 1411 2 United States 107 1307 3 India 80 World 1544 Share in total 2014 World Finished Steel Consumption: India: 5% ; China: 46%; Asia: 71% Global finished steel consumption projected 2015:  1544 mtpa (growth of 0.6 % over 2014) Avg. growth rate of global finished steel consumption in last  2010 2011 2012 2013 2014 5 yrs. is 6.0% GLOBAL finished steel consumption In the United States, after a decrease of -0.6% in apparent  (last 5 yrs.) CAGR (5 yrs.) = 6 % steel use in 2013, steel demand has increased by 11.7% to 107 mtpa in 2014. Projection flat for 2015 India’s finished steel consumption is projected to increase by  Source: WSA; duration is considered on 6.2% over 2014 calendar basis

World Steel Association (WSA) Short Range Outlook, Apr’15 2014 2015 forecast 2016 forecast Quantity Growth Quantity Growth Quantity Region / Country Growth over (in million over (in million over (in million 2015 (%) Tonnes) 2013 (%) Tonnes) 2014 (%) Tonnes) 1537.3 0.6 1544.4 0.5 1565.5 1.4 World 826.6 4.2 837.2 1.3 861.8 2.9 World Excluding China 146.8 4.5 149.9 2.1 154.1 2.8 European Union(28) 37.0 0.2 38.0 2.8 38.5 1.4 Other Europe 56.5 -4.9 52.4 -7.3 52.2 -0.3 CIS 144.6 11.3 143.3 -0.9 145.1 1.3 NAFTA 48.1 -3.9 46.5 -3.4 48.1 3.4 Central & South America 36.9 4.2 39.6 7.4 41.5 4.9 Africa 51.9 3.7 53.3 2.8 55.6 4.2 Middle East 1015.6 -1.0 1021.5 0.6 1030.4 0.9 Asia & Oceania 710.8 -3.3 707.2 -0.5 703.7 -0.5 - China 75.3 2.2 80.0 6.2 85.8 7.3 - India

Domestic Steel Scenario

Growth Trends of Indian Steel Industry India’s Crude steel Crude Steel Production (mtpa)  production (2014) : 83 83.2 81.3 77 74 69 mtpa (growth of 2.3 % 64 over 2013) In 2015, a further 6%  growth in steel demand in India is expected. 2009 2010 2011 2012 2013 2014 Finished Steel Consumption (mtpa) 2.2% 75.3 74 72 70 65 Per capita finished steel 58 consumption, 2013  World – 225 kg/t  China – 515 kg/t  India – 58 kg/t 2009 2010 2011 2012 2013 2014 Source: WSA

Indian Steel Industry: Finished Steel Demand Projection 12 8.9 Steel Consumption Growth Rate (in %) 7.8 10 6.7 8 6 4 2 Elasticity = 1.11 6% 7% 8% GDP Growth Rate (in %) Steel Consumption Steel Consumption 2021-22 (MTPA) 2025-26 (MTPA) 135 175 GDP Growth Rate 6% 150 202 GDP Growth Rate 7% 166 234 GDP Growth Rate 8% Source : Draft NSP, Team Analysis

SAIL: Overview

...with an Established and Successful Operating Track Record Several decades of experience in the steel sector  IISCO merged with SAIL in 2006  Over a period of  Erstwhile Bharat  Completed time, formed JVs Refractories Ltd. merger with with SCI Shipping, merged with SAIL MEL RITES, Tata Steel, as SAIL Refractory Jaypee Group etc.  Entered into  SAIL Unit(SRU) in 2007  SAIL initiated the  Listing of SAIL JV with Kobe  SAIL became an accorded modernisation Steel on National operating Navratna  Visvesvaraya and expansion company Stock plan  Hindustan Steel Ltd Iron & Steel Ltd status  Demerger of HSCL Exchange of (“HSL”) established (“VISL”) taken and NMDC India (“NSE”) over as a  HSL comprised  Indian Iron & subsidiary Bhilai Steel Plant, Steel Company Durgapur Steel (“IISCO”) taken Plant, Rourkela over as Steel Plant and a subsidiary Alloy Steels Plant  Integrated  Partial commissioning of new facilities at Commissioning IISCO Steel Plant and of Expansion Plan  SAIL Rourkela Steel Plant  VISL merged of RSP and ISP  Transfer of refractory with SAIL in 1998 accorded unit of Burn Standard  Joint Venture  Listing of SAIL Company Limited at Maharatna  Listing of with NTPC & DVC Salem to newly GDRs on the status for captive power formed subsidiary of SAIL on  Maharashtra  SAIL incorporated as a London SAIL generation in Bombay Elektrosmelt holding company for 2001 & 2002 Stock Exchange HSL, Bokaro Steel Ltd, Stock Limited respectively Salem Steel Ltd, Exchange (“MEL”) taken Hindustan Steel Works (“BSE”) over as Construction Ltd a subsidiary (“HSCL”), Bharat Coking Coal Ltd (“BCCL”), NMDC Limited

SAIL: Well Positioned to Benefit Leadership position in India Strategically located integrated operations with Responsible 1 access to resource base corporate including large land bank, citizen captive mines 7 2 Low leveraged financial 6 Diversified product position 3 mix supported by strong marketing and distribution network 5 4 Experienced management team In-house R&D centre , supported by strong Centre for Engineering execution team & Technology(CET) and captive Engineering Shops

Share Holding Pattern as on 31.12.2014 3.1 0.7 21.2 75.0 GoI FIs / Banks / MFs / FIIs /GDR Individuals Companies / Trusts

Location of Steel Plants & Mines Integrated steel plants Alloy and special steel plants Ferro alloy plant Jharkhand Madhya Pradesh West Bengal Iron ore mine Limestone mine Odisha Chhattisgarh Maharashtra Dolomite mine Coal mine Karnataka Tamil Nadu Note: Map not to scale

Present Iron ore Linkages in SAIL • Kiriburu (KBR) • Dalli • Meghataburu • Rajhara (MBR) • Bolani BSP DSP • Kiriburu (KBR) • Kiriburu (KBR) • Meghataburu (MBR) • Meghataburu • Barsua (MBR) • Kalta • Bolani • Chiria BSL RSP • Chiria • Gua IISCO

SAIL: 5 Integrated Steel Plant Production Capacity & Products Bhilai Steel Plant (BSP) • Saleable Steel (SS) Production 2014-15 : 4.33 MT, Post Expansion capacity : 6.56 MTPA • Products: Rails, TMT Bars, Rounds, Heavy Plates, Wire Rods, Light & Heavy Structurals, Semis Durgapur Steel Plant (DSP) • Saleable Steel (SS) Production 2014-15 : 1.97 MT, Post Expansion capacity : 2.12 MTPA • Products: Wheel & Axle, Rebars, Medium Structurals, Semis Rourkela Steel Plant (RSP) • Saleable Steel (SS) Production 2014-15 : 2.55 MT, Post Expansion capacity : 3.99 MTPA • Products: HR Coil & Sheet, CR Coil & Sheet, Plates, GP/GC Sheets, CRNO Coil, ERW & SW Pipes, HR Plates, Special Defence Grade Plates Bokaro Steel Plant (BSL) • Saleable Steel (SS) Production 2014-15 : 3.38 MT, Post Expansion capacity : 4.18 MTPA • Products: HR Coil & Sheet, HR plates, CR Coil & Sheet, GP / GC Sheets IISCO Steel Plant (ISP) • Saleable Steel (SS) Production 2014-15 : 0. 13 MT, Post Expansion capacity : 2.39 MTPA • Products: TMT Bars, Rounds, Wire Rods, Heavy Structurals, Semis

SAIL: Performance

Production Performance Saleable Steel (in Million Tonne) 12.9 12.8 13.00 12.4 7.000 12.50 5.000 12.00 3.4 3.3 3.000 11.50 1.000 11.00 Q4 - FY14 Q4 - FY15 12-13 13-14 14-15 Saleable Steel Production Annual Saleable Steel Production (incl. Spl. Steel Plants) (including Special Steel Plants)

Production Performance Saleable Steel from 5 Integrated Steel Plants (in Million Tonne) 13.0 12.4 12.4 11.000 11.9 9.000 12.0 7.000 5.000 3.3 3.1 11.0 3.000 10.0 1.000 12-13 13-14 14-15 Q4 - FY14 Q4 - FY15

Production by Process & Sales Mix: FY 15 Crude Steel Production by process Production of Value Added Steel (5 ISPs) EAF THF Process, Commo Process, 1.6% dity 16.0% 56% Value Added Steel 44% BOF Process, 82.4% Production of Saleable Steel (5 ISPs) Production by Process Ingot Route Longs 26% 41% Flats CC 59% Route 74%

SAIL: Expansion And Modernisation Plan Coal Handling Plant under RMHS at I SP RSP: Blast Furnace Tapping New Sinter Plant No.3 at RSP RSP: BATTERY-6

SAIL’s Expansion & Modernisation Plan in million tonne Actual After production On-going Particulars 2014-15 Expansion Hot Metal 15.41 23.5 Crude Steel 13.91 21.4 Saleable 12.84 20.2 Steel