Professional Documents
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FOCUS ON INDIA
V.Shyamsundar Executive Director, Corporate Planning Steel Authority of India Ltd. (SAIL)
INDIA AHOY!!!!!
% growth
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
200607(e)
Services
Industry
% growth
4 2 0
-2 2000 -4 -6 -8
2001
2002
2003
2004
2005
Agriculture
Agriculture
Industry
Services
Increasing FDI
Year
1992-93
1993-94
1994-95 1995-96 1996-97
0.6
1.3 2.1 2.8
1997-98
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
3.6
2.5 2.2 4.0 6.1 5.0 4.3 5.7 5.8 (April-January)
11.3
10 8
9.9
9.5
% growth
6 4 2 0
2001-02
2002-03
2003-04
2004-05
2003-04
5591
2004-05
6493
2005-06
11280
266.8
377.33
671.5
6.7
8.65
10.4
Steel Sector
The Back Seat Drivers!
Construction
Capital Goods Construction
Manufacturing
Manufacturing
5
Consumer Durables
Capital Goods
05-06
0
00-01 01-02 02-03 03-04 04-05
-5 -10
Consumer Durables
Industrial growth led by Manufacturing Capital and Consumer Goods sectors flag bearers of manufacturing sector growth
513 127
564 105
609 114
842 146
960 249
1,045 263
Commercial Vehicles
Two Wheelers Three Wheelers Total
157
3,758 203
162
4,271 212
204
5,076 276
275
5,625 340
350
6,528 374
391
7,600 434
4,759
5,316
6,277
7,229
8,460
9,735
% growth
11.70
14.97
4 laning and 6 laning of the existing highways and development of Expressways after 2009.
Port Capacity as on March05 approx. 400 mTpa Capacity likely to be added in near future - 100 mtpa (investment approx. US$ 1.75bn.)
Airports
Rapid increase in domestic & international air traffic Modernisation of Delhi and Mumbai airports finalised Total estimated investment US$ 3.1 bn. Planning for development of 10 non-metro airports in advanced stages 20 more non metro airports identified for development
2002-07
41,100 MW
(Likely to be achieved 34000 MW)
2007-12
67,000 MW
(inclusive of Non Conventional Sources of Energy)
Construction Investments
(US$ Bn.)
IX plan (1997-02)
Airports Irrigation Ports Power Thermal Hydel Nuclear 0.6 7.6 0.5 7.8 2.1 5.4 0.3
X plan (2002-07)
0.9 19.3 1.1 11.7 3.6 4.5 1.3
% Growth
56.7 152.9 98.6 49.3 72.7 23.2 395.2
Railways
Roads Telecom Tourism Urban infrastructure Total Source: Plan Documents
4.3
12.1 1.8 0.1 7.8 42.8
5.6
19.0 1.9 0.35 18.5 78.5
30.6
57.4 8.6 392.4 135.4 83.6
Apparent Consumption of Finished Steel in 2005-06 - 38.1mT, growth of 10.8%. Apparent consumption of Longs -16.2 mT, Flats - 21.8 mT.
Largest producer of Sponge Iron - 12.8 mT in 2005-06 (a growth of 25%). Indias exports of Finished Steel in 2005-06, 4.4 mT, Imports 3.7 mT Huge Iron Ore reserves 23 bn. tonnes Private Steel Producers are opting for Forward as well as Backward Integration Indian Steel Producers are increasingly looking for overseas acquisitions in steel as well as raw materials.
* Year indicates FY
CAGR 7.0%
31.2 25 26.5 27.4 28.9
33.3
mT
22.6 23.5
10 91-92
93-94
95-96
97-98
99-00
01-02
03-04
05-06
SAIL 22% Others 40% RINL 7% Essar 8% Tata Steel JSWL 9% 8% Ispat 6%
ESSAR
ISPAT JSWL OTHERS Total
3.3
2.6 3.5 17.2 42.7
Source - JPC
WEAKNESSES
High cost of energy Higher duties and taxes Infrastructure Quality of coking coal
Labour laws
Dependence on imports for steel manufacturing equipments & technology Slow statutory clearances for development of mines
THREATS
Slow growth in infrastructure development
Market fluctuations and Chinas export possibilities
OBJECTIVE
To have modern and efficient steel industry of world
standards, catering to diversified steel demand. To achieve global competitiveness in cost, quality, productmix, efficiency and productivity
7.3%
7.1%
13.3%
6.9%
STRATEGY
Demand Side
Strengthening of delivery chain Interface between producers, designers of steel intensive products, fabricators and ultimate user Creating awareness about cost-effective and technically efficient end-use of steel
Supply side
Enhanced and easy access to critical inputs iron ore & coking coal Expansion and improvement in quality of infrastructure Well developed financial market Increased focus on R&D, training of manpower and integrated information services
Focus on Infrastructure
Planned additional 75 MTPA of steel implies 300MT of additional traffic.
Railways :
Participation by Steel Industry in the creation of railway infrastructure.
Roads:
Road network to be expanded; national highway development
Ports:
Steel producers would be encouraged to develop port and berth facilities.
New Capacities
2005-06
Hot Metal Crude Steel Saleable Steel 14.60 13.47 12.05
2011-12
22.5 21.6 20
Indias current population is - 1050 million It is assumed that till 2051, population would be about : 1.4 bn.
GROWTH SCENARIOS
Optimistic Case
Fin. Steel Cons. Growth Rate
Medium Growth
Consumption (mTpa)
Conservative
Fin. Steel Cons. Growth Rate Consumption (mTpa)
20052020
20202030 20302040 20402050
7.6%
6.5% 5.0% 5.0%
100
188 305 498
6.9%
5.5% 4.0% 4.0%
90 *
147 217 322
5.5%
4.5% 3% 3%
76
118 158 212
OPPORTUNITIES
High economic growth driven increasingly by industry Faster Urbanisation Increased Fixed Asset Building Automobiles and component industry growth
POLICY
Pro-active stance of Govt. Encouragement for overseas investments