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A Blueprint of Indian Steel Industry. Wootz Steel (400-420 A.D.).

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slide1
A Blueprint

of

Indian Steel Industry

wootz steel 400 420 a d
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.“

india a few statistics
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
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
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
  • Customs Duties reduced from 150% to 15%(Currently5%)
  • Imports were freely allowed
  • Downstream Activities increased
    • Galvanized Coils & Cold Rolling-Approx 10 Plants
    • Pipes-Apprx 15 Plants
  • Metallics – Only 4 DRI Plants

Total Steel Capacity 25 Million MT

recent past stagnation 1999 2002
Recent Past - Stagnation 1999-2002
  • 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
Today – A New Confidence2002 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
Indian Steel Growth-Slowly, Steadily

Confidence

Stagnation

Decontrol

Controlled

Regime

1991

2005

1951

upstream metallics india s potential
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
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
pipe production
Pipe Production
  • For ERW Pipes from ½” – 16”
    • 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
slide14
Indian Steel Industry

- A Future Giant?

india 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 giant1
Strengths

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

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

India - A Future Giant?
immediate new capacities planned
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%
  • 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
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%
challenges an overview
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 Term- An 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 benchmarking1
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
slide24
Introduction to Lloyds

-A Quick Sales Spiel

lloyds group in steel
Lloyds Group in Steel
  • One of the top 100 Companies in India
  • One of the top 10 steel producers in India
  • 5 Manufacturing Units
  • Totally Integrated Operations-
    • 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 steel1
Lloyds Group in Steel
  • 5 DRI Kilns-Capacity 225,000 MTPA
    • Currently 150,000
  • Scrap Trading Company-300,000MTPA
  • 2 EAF’s, 60MT Capacity
  • 2 Slab Casters
    • #2 will be commissioned by Dec 2005
  • One 4 Hi-Steckle Mill, Allied Facilities
  • 2 Cold Rolling Mills, Allied Facilities
  • 2 Galvanizing Lines
    • #2 will be commissioned by April 2005
  • 3 ERW Pipe Mills
    • From ½ “ to 14”
    • 2 Galvanizing Lines
lloyds group in steel value added product range
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)