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Rolling Mill- II, May

Sanjoy Bhagat

Dispatches in the FY 2010-11 + April & May


Dispatches (FY 10-11: 30,000 MT approx)
4500 4000 3500 3000 2500 2000 1500 1000 500 0 Trend line Initially we had some quality and supply related problem We took some time to gain trust of major customers Customer also reduced production particularly in the month of Oct and Feb Last FY, we dispatched about 30,000 MT Angle

Dispatches in the FY 2010-11 + April, May & June


Dispatches Actual
4500 4000 3500 3000 2500 2000 1500 1000 500 0 Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Initially we had some quality and supply related problem We took some time to gain trust of major customers Customer also reduced production particularly in the month of Oct and Feb Last FY, we dispatched about 30,000 MT Angle

Dispatches in the FY 2010-11 + Expected


Expected Dispatches
4500 4000 3500 3000 2500 2000 1500 1000 500 0 Dec Feb Sep Mar June Oct Nov Aug May May Aug Apr July Apr July Sep Jun Jan

Wt Avg. Price of MS, HT Angle Vs Daily Average Price of 12 mm TMT


Selling Price of material
48000

43000

TMT 38000 MS HT

33000

28000 Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Axis Title

In general MS 90X90 Section price is Rs 3000 More than TMT 12 MM price The gap some times increases and sometime decreases based on the demand supply HT Angle is Rs 3000 more than MS Angle Bigger sizes prices are more by adding between Rs 500 to Rs 1700

Price/Mt

Domestic All India Transmission Line Addition in FY11-12


Central Sector PGCIL DVC Total Delhi Haryana Himanchal J&K Punjab Rajasthan UttarPradesh Uttrakhand Chattisgarh Gujarat Goa MadhyaPradesh Maharashtra AndhraPradesh Karnataka Kerala TamilNadu Bihar Orissa WestBengal Assam Meghalaya Tripura Total Private Sector GrandTotal Q1 954 141 1095 0 55 76 0 0 303 293 0 0 319 0 144 47 60 61 0 79 19 0 7 0 0 0 1463 241 2799 Q2 1480 443 1923 19 123 24 19 12 58 140 38 0 269 0 0 449 56 584 12 290 0 0 0 0 0 0 2093 552 4568 Q3 1606 387 1993 31 311 0 165 62 225 241 49 153 345 20 0 424 254 653 40 0 0 17 364 0 0 0 3354 678 6025 Q4 Annual 3148 7188 0 971 3148 8159 46 100 0 85 0 125 280 0 0 474 0 16 106 144 0 54 280 0 0 0 0 0 0 1710 1542 6400 96 589 100 269 74 711 954 87 153 1407 20 160 1026 514 1298 106 649 19 17 371 0 0 0 16779 3013 19792

Future Forecast & Findings


PGCIL is going to add only 30% of the transmission capacity Rest 70% demand is likely to be of Non-PG material Gujarat is going to add maximum capacity in FY 1112 Most of the supplies for Gujarat are going to be met by manufacturers from Gujarat Non-PG demand is likely to be robust in the coming year

Source: Central Electricity Authority Website

Domestic All India Steel Requirement for tower FY11-12


Central Sector PGCIL DVC Total Delhi Haryana Himanchal J&K Punjab Rajasthan UttarPradesh Uttrakhand Chattisgarh Gujarat Goa MadhyaPradesh Maharashtra AndhraPradesh Karnataka Kerala TamilNadu Bihar Orissa WestBengal Assam Meghalaya Tripura Total Private Sector Grand Total Q1 46269 6838.5 53107.5 0 2000.625 2764.5 0 0 11021.63 10657.88 0 0 11603.63 0 5238 1709.625 2182.5 2218.875 0 2873.625 691.125 0 254.625 0 0 0 53216.63 8766.375 Q2 71780 21485.5 93265.5 691.125 4474.125 873 691.125 436.5 2109.75 5092.5 1382.25 0 9784.875 0 0 16332.38 2037 21243 436.5 10548.75 0 0 0 0 0 0 76132.88 20079 Q3 77891 18769.5 96660.5 1127.625 11312.63 0 6001.875 2255.25 8184.375 8766.375 1782.375 5565.375 12549.38 727.5 0 15423 9239.25 23752.88 1455 0 0 618.375 13240.5 0 0 0 122001.8 24662.25 Q4 Annual 152678 348618 0 47093.5 152678 395711.5 3492 21424.88 3637.5 9784.875 2691.75 25862.63 34701.75 3164.625 5565.375 51179.63 727.5 5820 37320.75 18696.75 47214.75 3855.75 23607.38 691.125 618.375 13495.13 0 0 0 610336.1 109597.9

Future Forecast & Findings


GETCO is going to consume maximum Transmission line tower steel in India among the states Rajasthan is also going to account for substantial amount of steel consumption for domestic transmission line creation After PGCIL & DVC private sector is going to be biggest steel consumer A substantial amount of this work is going to come to Gujarat Total Requirement of Our Section 40% of total = 4.5 lack tone all over India
Source: CEA Website and Presentation by CMD PGCIL, Mr. I. S. Jha

1673.25 3637.5 0 3091.875 0 4546.875 10185 0 0 17241.75 0 582 3855.75 5238 0 1964.25 10185 0 0 0 0 0 0 62201.25 56090.25

115090.5 189477.4 243324.5 270969.5 1115646

Total Tower Making Installed Capacity of Gujarat


Section

Name Typical % KPTL JHT/JYOTI GAMMON EMCO APS Others TOTAL

Total Quantity 90 to 150 200 & above 75 & 80 Less than 75 100% 40% 10% 8% 42.00% 9000 3600 900 720 3780 3000 1200 300 240 1260 2500 1000 250 200 1050 2500 1000 250 200 1050 2500 1000 250 200 1050 2500 1000 250 200 1050 19500 7800 1950 1560 8190

Total Angles Consumed in Gujarat in our scope of sizes are about 8000 MT This market was dominated by Nagpur Parties till last year Now we have replaced Sanvijay as the most preferred supplier for most important customers including KPTL Currently, we are capturing about 45% to 50% of Gujarat market This month we could not supply material in time

Locations of Major Tower Manufacturing Centers

Major Transmission line manufacturing facility in India (80%+) are located at Nagpur Mumbai Jaipur Delhi/ NCR/Mandi G Adj Hydrabad Vadodra/Ahmedabad

Locations of Major Angle Manufacturing Center Rolling mills are located near Tower Manufacturing Centers About 40% tower manufacturing is located near Nagpur area More than 50% Angle manufacturing is also located near Nagpur Freight is substantial part of angle price Scope for localization (Focused Strategy) JSPL entered with 30,000 MT/ M capacity and are quoting very low entry price stopped billet sells

JSPL

Name/Capacity Monthly Annual Sanvijay 12000 144000 Shilpa 4000 48000 Sunder 4000 48000 Prabhu 4000 48000 Bajarang 5000 60000 R. S. Rolling Jaipur 4000 48000 Mandi Madhav Alloys 4000 48000 Maharastra Power 4000 48000 Karamtara Mumbai 4000 48000 Kutch Vershana 2500 30000 JSPL 30000 360000 Total 77500 930000
Nagpur Raipur Parties

Major Competitors and Capacities

Power Grid Approved Billet Manufacturers


All 5 PG approved Billet Manufacturers are located in Eastern Corner of India Nagpur is major Angle Manufacturing Hub with lots of competing suppliers Nagpur is close to manufacturing center of billet

31 2

1. 2. 3. 4. 5.

Jindal, Raigardh TISCO, JamshedPur Adhunik, Sundergardh Jaiswal Nico, Raipur SAIL, Kolkata

Power Grid Approved Billet Manufacturers

All 5 PG

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1. 2. 3. 4. 5.

Jindal, Raigardh TISCO, JamshedPur Adhunik, Sundergardh Jaiswal Nico, Raipur SAIL, Kolkata

approved Billet Manufacturers are located in Eastern Corner of India Nagpur is major Angle Manufacturing Hub with lots of competing suppliers Nagpur is close to manufacturing center of billet
Result, cheaper PG material from Nagpur

Conclusion
y As on date, we are the No. 1 supplier of angle in Gujarat market y The position is seriously threatened by JSPL y We can still maintain our position as No. 1 and most preferred

supplier if we can y Continue with quality supplies y Timely delivery without missing delivery schedule y Continuing network selling y We have to out maneuver JSPL by retaining customer and not giving them any chance of defection only for price y In PGCIL, we will maintain our supplier status by supplying some quantity, however, priority would be NON-PGCIL material y We would do it

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