Steel Sector Report May 2018

For updated information, please visit www.ibef.org May 2018
STEEL

Table of Content
Executive Summary……………….….…….3
Advantage India…………………..….……...4
Market Overview …………………….……..6
Recent Trends and Strategies …….……..17
Growth Drivers…………………….............22
Opportunities…….……….......………….…30
Industry Associations……………....……...36
Success Stories……………....……………33
Useful Information……….......…………….38

For updated information, please visit www.ibef.orgSteel3
EXECUTIVE SUMMARY
 Total crude steel production in India has increased at a CAGR of 5.43 per cent during FY12–18, with country’s
output reaching 102.34 million tonnes per annum (MTPA) in FY18.
 The country became the 3nd largest crude steel producer in 2017, as large public and private sector players
strengthen steel production capacity in view of rising demand.
 Moreover, capacity has increased to 134.6 million tonnes (MT) in 2017-18 while in the coming ten years the
figure is anticipated to rise to 300 MT of steel.
3rd largest producer of
crude steel
Source: World Steel Association, Ministry of Steel, Aranca Research
 India’s comparatively low per capita steel consumption and expected growth in consumption due to growing
infrastructure construction, automobile and railways sectors has offered scope for growth
 National Mineral Development Corporation is expected to increase the iron ore production 75 million tonnes
per annum (MTPA) until 2021 indicating new opportunities in the sector
 Domestic players’ investments in expanding and upgrading manufacturing facilities are expected to reduce
reliance on imports. In addition, the entry of international players would provide benefits in terms of capital
resources, technical know how and more competitive industry dynamics
Note: MTPA – Million Tonnes Per Annum
Strong growth
opportunities
Rising domestic and
international investments

ADVANTAGE INDIA
 Demand would be supported by growth in
the domestic market
 Infrastructure, oil and gas and automotives
would drive the growth of the industry
 Lower per capita consumption compared to
international average
 Steel production in India is forecast to double
by 2031, with growth rate expected to go
above 10 per cent in FY18
 To achieve steel capacity build-up of 300
million tonnes per annum (MTPA) by 2030,
India would need to invest US$ 156.08
billion by 2030-31.
 301 MoUs have been signed with various
states for planned capacity of about 486.7
MT.
 Ministry of Steel plans to set up Steel
Research and Technology Mission in India
to promote R&D activities in the sector
 As of 2017, India is the world’s 3rd largest
producer of crude steel (up from 8th in
2003). India’s steel production in 2017
stood at 101.4 MT.
 Easy availability of low-cost manpower
and presence of abundant iron ore
reserves make India competitive in the
global set up
 100 per cent FDI through the automatic
route is allowed. Large infrastructure
projects in the PPP mode are being formed
 National Steel Policy (NSP) implemented to
encourage the industry to reach global
benchmarks
 Policy clarity and stability expected in
respect of mining leases and forest
clearances
 20 per cent safeguard duty on steel imports
ADVANTAGE
INDIA
Source: Metallurgical and Materials Engineering Division Board, Aranca Research
Notes: MT - Million Tonnes, FDI – Foreign Direct Investment

EVOLUTION OF THE INDIAN STEEL SECTOR
Notes: (1)TISCO - Tata Iron and Steel Company; IISC - Indian Iron and Steel Company; SAIL - Steel Authority of India Ltd;
1907-18 1923-48 1973-921954-64 2015-181993-2014
 Production of steel started in
India (TISCO was setup in 1907)
 IISC was set up in 1918 to
compete with TISCO
 Hindustan Steel Ltd and Bokaro Steel Ltd
were setup in 1954 and 1964, respectively
 In the early 1990s, the public sector
dominated steel production
 Private players were in downstream
production mainly producing finished steel
using crude steel products
 Foreign players began entering the Indian steel
market
 No license requirement for capacity creation
 Imposition of export duty on iron ore, to focus more
on catering growing domestic demand
 Decontrol of domestic steel prices
 Launch of Scheme for promotion of Research and
Development in Iron and Steel sector
 Mysore Iron and Steel Company
was set up in 1923
 According to the new Industrial
Policy Statement (1948), new
ventures were only undertaken by
the central government
 SAIL was created in 1973 as a holding company
to oversee most of India's iron and steel
production
 In 1989, SAIL acquired Vivesvata Iron and Steel
Ltd
 In 1993, the government set plans in motion to
partially privatise SAIL
 In 2017, India ranked as the 3nd
largest crude steel producer in the
world, leaving behind United States.
 During 2017-18, 9.62 MT of steel
was exported from India.

STRUCTURE OF THE STEEL SECTOR
Source: Report on Indian steel industry by Competition Commission of India, Aranca Research
Steel
Form Composition End use
Liquid Steel Crude Steel
Finished
Steel
Alloy Non-alloy
Steel
Structural Steel
Ingots
Semis
Flat
Non-flat
Stainless
Silicon
electrical
High
Speed
Low
carbon
Steel
Medium
carbon
Steel
High
Carbon
Steel
Construction Steel
Rail Steel

STEEL PRODUCTION IN INDIA HAS BEEN GROWING
AT A FAST PACE0
53.68
57.81
61.94
64.92
71.77
71.87
78.91
75.30
17.0 16.5 16.5 16.8
17.2 17.9
18.5 17.9
0
20
40
60
80
100
120
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18P
Private Sector Public Sector
Source: Ministry of Steel Annual Report
 In FY18, crude steel production in India was 102.34 MT, with the
total crude steel production growing at a CAGR of 5.43 per cent over
the last 7 years.
 The steel sector contributes over 2 per cent to the GDP of the nation
and provides 20 lakh jobs in the country.
 During 2017-18, finished steel production for sale in India stood at
104.98 MT respectively.
 Steel manufacturing output of India is expected to increase to 128.6
MT by 2021, accelerating the country’s share of global steel
production from 5.4 per cent in 2017 to 7.7 per cent by 2021.
55.37
63.18
68.86
74.24
79.34
78.00
96.39
92.46
13.3
12.5 12.8 13.4 12.8 13.0
14.9 14.6
0
20
40
60
80
100
120
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18P
Private Sector Public Sector
Notes: FY - Indian Financial Year (April – March), MT - Million Tonnes, CAGR - Compound Annual Growth Rate; P – Provisional, 1April 2017 to February 2018 , 2CAGR is till FY17, Figures
mentioned are as per latest data available, ^ As per BMI Research Report, *without deducting own consumption by producers
1
1
Total finished steel production (million tonnes)*
2CAGR 8.39%
Total crude steel production (million tonnes)
CAGR 5.49%

SHARES IN PRODUCTION: SAIL AND TATA LEAD THE
WAY
Source: Ministry of Steel Annual Report 2016-17, Aranca Research
 As of FY17, SAIL dominated India’s steel sector, with the company
accounting for 11.40 per cent of country’s finished steel production
and 14.59 per cent of country’s crude steel production. During FY17,
Tata Steel accounted for 11.46 per cent of finished steel production
and 12.46 per cent of the country’s crude steel production
 In January 2017, Indian government inaugurated Universal Rail Mill
(URM) worth US$ 178.49 million at SAIL’s Bhilai steel plant. The
production of the world’s longest single rail of 130 meters from the
new URM also commenced in the new mill.
Notes: RINL - Rashtriya Ispat Nigam Limited ; (1)Provisional; Figures mentioned are as per latest data available
India’s crude steel market share by production – FY171
India’s finished steel market share by production – FY171
14.59%
12.46%
4.47%
68.49%
SAIL
TATA
RINL
OTHERS
10.40%
10.46%
3.22%
75.91%
SAIL
TATA
RINL
OTHERS

52.12
52.40
59.34
66.42
70.92
73.48
74.10
76.99
81.52
84.04
90.68
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
DEMAND HAS OUTPACED SUPPLY OVER THE LAST
FIVE YEARS
 Total consumption of finished steel was 90.68 MT in FY18 as
compared to 83.90 MT in FY17.
 Steel consumption is expected to grow 5.7 per cent year-on-year to
92.1 MT in 2018.
 It is expected that consumption per capita would increase supported
by rapid growth in the industrial sector and rising infra expenditure
projects in railways, roads and highways, etc.
 The consumption of real steel has grew at a CAGR of 5.69 per cent
during FY08-FY18
 India’s per capita consumption of steel grew at a CAGR of 4.75 per
cent from 45 kgs in FY09 to 65.25 kgs in FY17. The figure stood at
68 kgs (P) during April-February 2017-18.
Consumption of finished steel (in million tonnes)
CAGR 5.69%
Source: JPC India Steel, Ministry of Steel, Aranca Research
Note: MT - Million Tonnes, FY18*-Up to February 2018, 2CAGR- up to FY17, P – Provisional, kg - kilograms
45.00
58.20
59.30
59.56
61.15
63.99
65.25
68.00
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
FY09 FY12 FY13 FY14 FY15 FY16 FY17 FY18P*
Per-capita consumption of steel (in kgs)
2CAGR 4.75%

TRENDS IN IMPORTS AND EXPORTS OF STEEL
 Indian Government imposed Anti-Dumping Duty on 47 steel products
for five years beginning from August 2016.
 In 2017-18, the country’s finished steel exports increased 17 per cent
year-on-year to 9.62 million tonnes (MT), as compared to 8.24 MT in
2016-17.
 During the same period, the country’s finished steel imports rose 3.5
per cent year-on-year to 7.48 MT, as compared to 7.23 MT in 2016-
17.
6.86
7.93
5.45
9.32
11.71
7.23
7.48
4.59
5.37
5.99
5.60
4.08
8.24
9.62
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
FY12
FY13
FY14
FY15
FY16
FY17
FY18
Imports Exports
Finished steel exports and imports (in million tonnes)
Source: Joint Plant Committee, Aranca Research
Note: FY - Indian Financial Year (April - March)

KEY PLAYERS OF THE INDUSTRY
Source: Aranca Research
Company Products
Tata Steel Ltd Finished steel (non-alloy steel)
SAIL Finished steel (non-alloy steel)
JSW Steel Ltd Hot-rolled coils, strips and sheets
Jindal Steel and Power Ltd Iron and steel
Ispat Industries Ltd Hot-rolled coils, strips and sheets
Welspun-Gujarat Stahl Rohren Ltd Tubes and pipes
Bhushan Steel Ltd Cold-rolled coils, strips and sheets
Visa Steel Ltd Ferro Chrome, coke and special steel

KEY STEEL PLANTS IN INDIA
Alloy and special steel plants
under SAIL (Bhadrawati and
Salem); iron and steel plant
at Visvesvaraya
Steel integrated plants
under SAIL (Bhilai, Rourkela,
Bokaro, Durgapur and
Burnpur)
Tata Steel’s largest steel
plant, based in Jamshedpur
RINL steel plant in
Vishakhapatnam
Source: Company websites, Aranca Research

PORTER’S FIVE FORCES FRAMEWORK
Positive Impact
Neutral Impact
Negative Impact
 Low - Aluminium and plastics are being
used in few cases in automotive and other
consumer durable sectors. However, it
still does not pose significant threat to
steel
Threat of Substitutes
 Medium - The steel industry is highly
concentrated, with the top five players
accounting for more than 70 per cent of
the market share
 Steel companies usually compete on the
basis of production capacity, economies
of scale, access to raw material, etc.
Competitive Rivalry
 Medium - Major steel consumption
sectors, such as automobiles, oil and gas,
shipping, consumer durables and power
generation, enjoy high bargaining power
and get favourable bulk deals. Smaller
customers, however, do not enjoy this
benefit
Bargaining Power of Buyers
 Low - Capital intensive, industry players
are large and enjoy economies of scale.
Some have their own mines for sourcing
key raw materials
 Several regulatory clearances required,
including environmental, land acquisition,
etc.
Threat of New Entrants
 Medium - Large integrated companies
have their own mines to source key raw
materials
Bargaining Power of Suppliers

Steel
RECENT TRENDS
AND STRATEGIES

NOTABLE TRENDS IN THE INDIAN STEEL INDUSTRY
… (1/2)
Source: Ministry of Steel, Ministry of Railways, Aranca Research
Notes: MTPA - Million Tonnes Per Annum
 Most of the companies in the industry are undertaking modernisation and expansion of plants to be more cost
efficient. E.g. SAIL has undertaken modernisation and expansion for its 6 plants
 An Inter-Ministerial Group (IMG) functioning under the Ministry of Steel, is monitoring and coordinating major
steel investments across the country
 The production capacity of SAIL is expected to increase from 13 MTPA to 50 MTPA in 2025 with the total
investment of US$ 24.88 Billion
Growing investments
 SAIL and Arcelor Mittal are going to form a joint venture to set up a 1.5 million tonne per annum steel plant.
 The consortium of SAIL and National Fertiliser Ltd. (NFL) has been nominated for revival of Sindri Unit of the
Fertiliser Corporation of India Ltd
 RINL, Vishakhapatnam Steel Plant and the Power Grid Corporation of India Ltd (POWERGRID) signed an
MoU to set up a JV company to manufacture transmission line towers and tower parts including R&D of new
high-end products
 Attracted by the growth potential of the Indian steel industry, several global steel players have been planning
to enter the market
 National Mineral Development Corporation (NMDC) has signed an MoU with Russia’s 3rd largest steelmaker,
Severstal, for a greenfield steel plant in Karnataka
Strategic alliances
Entry of international
companies

NOTABLE TRENDS IN THE INDIAN STEEL INDUSTRY
… (2/2)
Source: Ministry of Steel, Aranca Research
 Indian steel companies have now started benchmarking their facilities and processes against global standards,
to enhance productivity
 These steps are expected to help Indian companies improve raw material and energy consumption as well as
improve compliance with environmental and pollution yardsticks
 Companies are attempting coal gasification and gas-based Direct-Reduced Iron (DRI) production. Other
alternative technologies such as Hlsmelt, Finex and ITmk3 being adopted to produce hot metal
 Ministry of Steel has issued necessary direction to the steel companies to frame a strategy for taking up more
R&D projects by spending at least 1 per cent of their sales turnover on R&D to facilitate technological
innovations in the steel sector.
 Ministry has established a task force to identify the need for technology development and R&D
 Ministry has adopted energy efficiency improvement projects for mills operating with obsolete technologies
Increased emphasis on
technological innovations

STRATEGIES ADOPTED
Source: CCI, Ministry of External Affairs
 Companies in the steel industry are investing heavily in expanding their capacity. Major public and private
companies, including Tata Steel, SAIL and JSW Steel, are expanding their production capacity. The
government is targeting a steel production capacity of 150 million tonnes by 2020.
 India is the 3rd-largest crude steel producer in the world with production reaching 101.4 million tonnes in 2017.
 Tata Steel is expanding the capacity of its Kalinganagar plant from 3MTPA to 8MTPA with an estimated
investment of Rs 23,500 crore (US$ 36.46 billion). The capacity expansion is expected to improve margins
and lead to cost effectiveness.
 The Ministry of Steel is encouraging R&D activities by providing financial assistance from Steel Development
Fund (SDF) and Plan Scheme of the Central Government. Furthermore, the government has allowed 100 per
cent FDI through the automatic route in the Indian steel sector
 A long term perspective is to achieve capacity of 300 mtpa by 2030, as per National Steel Policy 2017
 SAIL is increasing its production capacity by 60-70 per cent in the last leg of its US$10.79 billion programme.
 JSW Steel is looking at starting activity in the next fiscal on its 12 million tonnes mega steel plant proposed in
Odisha.
Capacity expansion
 In the last few years, rapid and stable growth in demand has also prompted domestic entrepreneurs to set up
fresh greenfield projects in different states of the country. Mittal Steel announced two 12 mtpa greenfield steel
projects, one each in Jharkhand and Orissa
 As India surges ahead in building infrastructure, investments in steel pave the way ahead
Greenfield projects –
focus on downstream
value-added products
Note: GDP – Gross Domestic Product, MTPA – Million tonnes per annum

STRATEGIES ADOPTED
Source: CCI, Ministry of External Affairs
 Steel companies are strengthening their position through cross border mergers and acquisitions. The focus is
on improving existing technology to upgrade production process and developing new value added-products.
 In 2014, Arcelor Mittal along with Nippon Steel and Sumitomo Metal Corporation acquired ThyssenKrupp
Steel USA. Notable deals include Essar Global’s acquisition of Canada-based Algoma Steel.
 On 1st August 2016, Kirloskar Ferrous Industries Ltd has announced to acquire pig iron plant of VSL Steels
Ltd. for US$ 23.68 million. Also on 18 August 2016, JSW Steel Ltd. has acquired 74 per cent stake of Praxair
Oxygen Pvt. Ltd. in their joint venture for US$ 36 million
 As on December 01, 2016, JSW Steel, the flagship steel company of JSW Group, entered into a consortium to
acquire 35 per cent stakes of Ilva steel plant, in Italy.
 Tata Steel has executed an agreement with Creative Port Development (CPDPL) for the acquisition of the
majority stakes, i.e., 51 per cent in CPDPL in January 2017
 Italy’s Marcegaglia ArcelorMittal have offered to buy Italy’s troubled Ilva steel plant, for an amount of US$ 2.4
billion and will boost production
 In March 2017, Central Government permitted sale of SAIL’s 3 units including Alloy Steels Plants,
Visvesvaraya Iron and Steel Plant, Salem Steel Plant with the transfer of management in these plants for the
strategic disinvestment.
 ArcelorMittal SA is looking to set up a joint venture (JV) factory in India with state-owned Steel Authority of
India Ltd (SAIL), to manufacture high-end steel products which could be used in defence and satellite
industries.
 In March 2018, Tata Steel won the bid for acquisition of Bhushan Steel and is awaiting approval from National
Company Law Tribunal (NCLT) and Competition Commission of India (CCI). Acquisition of Bhushan Steel will
help Tata Steel increase its capacity to over 18 MTPA.
Mergers and Acquisition
Note: MTPA – Million Tonnes Per Annum

STRONG DEMAND AND POLICY SUPPORT DRIVING
INVESTMENTS
Growing demand in the
construction industry
Growing demand in the
automotives sector
Rising demand for consumer
durables and capital goods
Growing demand
100 per cent FDI in the steel
sector
Encouragement of sector-based
R&D activities by the
government
Reduced custom duty and other
favourable measures
Policy support
Rising investments from
domestic and foreign players
Increasing number of MoUs
signed to boost investment in
steel
Foreign investment of nearly
US$ 40 billion committed in the
steel sector
Increasing investments
Inviting
Resultingin
Notes: FDI - Foreign Direct Investment, MOU – Memorandum of Understanding

CAPITAL GOODS, CONSUMER DURABLES AND
AUTOMOTIVES FURTHER DRIVING STEEL GROWTH
Source: SIAM, PWC, CEAMA, Aranca Research
Notes: F- Forecast, FY - Indian Financial Year (April - March)
 Over 2017-22F, the appliances and consumer electronics (ACE)
sector will expand at a CAGR of 9 per cent as growth in disposable
income is expected to result in increase in demand for such
products.
 The appliances and consumer electronics market is estimated at
US$ 31.49 billion in 2017 and is forecasted to reach US$ 48.37
billion by 2022.
 Automobile production in India expanded at a CAGR of 7.08 per cent
during FY13-FY18.
Appliances and Consumer Electronics Industry (US$ billion)
Total automobile production in India (million units)
31.49
48.37
0
10
20
30
40
50
60
2017
2022F
CAGR 9%
2.36
2.98
3.15
3.23
3.09
3.22
3.41
3.79
4.01
0.57
0.76
0.93
0.83
0.7
0.7
0.78
0.81
0.89
11.13
14.15
16.31 16.58 17.71
19.45 19.76 20.71
24.17
0
5
10
15
20
25
30
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
Passenger Vehicles Commercial Vehicles Two & Three Wheelers

POLICY SUPPORT AIDING GROWTH IN THE STEEL
SECTOR … (1/2)
Source: Ministry of Steel, Aranca Research
 New National Steel Policy has been formulated by the Ministry of Steel in 2016, which will retain the objectives
included in National Steel Policy (NSP) 2005. It aims at covering broader aspects of steel sector across the
country including environment and facilitation of new steel projects, growth of steel demand in India and raw
materials
 Under the policy, the central government stated that all the government tenders will give preference to
domestically manufactured steel and iron products. Moreover, Indian steel makers importing intermediate
products or raw materials can claim benefits of domestic procurement provision by adding minimum of 15 per
cent value to the product.
 The New steel policy, 2017 aspires to achieve 300MT of steel making capacity by 2030. This would translate
into additional investment of Rs 10 lakh Crore (US$ 156.08 billion) by 2030-31.
 New Steel Policy seeks to increase per capita steel consumption to the level of 160 kgs by 2030 from existing
level of around 60 kg.
National Steel Policy 2017
 ‘The scheme for the promotion of R&D in the iron and steel sector’ has been continued under the 14th Finance
Commission (2019-20). Under the scheme, 26 projects have been approved with financial assistance of Rs
161 crore (US$ 24.98 million) from Ministry of Steel.
 The Ministry of Steel is also actively participating in the Impacting Research Innovation & Technology (IMPRINT) &
Uchchatar Avishkar Yojana (UAY) Schemes launched by Ministry of Human Resource Development. IMPRINT scheme
aims to solve major engineering and technology challenges and UAY is promoting industry sponsored, outcome-oriented
research projects.
 Ministry of Steel is setting up an industry driven institutional mechanism - Steel Research & Technology Mission of India
(SRTMI) – with an initial corpus of US$ 30.89 million. The institute will facilitate joint collaborative research projects in the
sector.
R&D and innovation
Note: MT - Million tonnes

POLICY SUPPORT AIDING GROWTH IN THE STEEL
SECTOR … (2/2)
Source: The Economic Times, Ministry of Steel, Business Standard, Make In India, Aranca Research
 The government hiked the export duty on iron ore to 30 per cent ad valorem on all varieties of iron ore (except
pellets)
Rise in export duty
Reduction in custom duty
on plants and equipment
 The government has reduced the basic custom duty on the plants and equipments required for initial set up or
expansion of iron ore pellets plants and iron ore beneficiation plants from 7.5/5 per cent to 2.5 per cent
 Customs duty on imported flat-rolled stainless steel products has been increased to 10 per cent from 7.5 per
cent
 Basic customs duty on steel grade dolomite and steel grade limestone is being reduced from 5 per cent to 2.5
per cent. Basic customs duty is being reduced from 10 per cent to 5 per cent on forged steel rings used in the
manufacture of bearings of wind-operated electricity generators
 Going forward, the Make in India initiative and policy decisions taken under it are expected to augment the
country’s steel production capacity and resolve issues related to the mining industry
 100 per cent FDI through the automatic route is allowed in the Indian steel sectorForeign Direct Investment
Push due to Make in India
initiative

STEEL SEZs IN INDIA
Source: Formal approvals granted in the Board of Approvals after the SEZ rules coming into force, Special Economic Zones in India website, www.sezindia.nic.in
Developer Location Product
Viraj Profiles Ltd Thane, Maharashtra Stainless steel engineering products
SAIL Salem SEZ Pvt Ltd Salem, Tamil Nadu Steel
Orissa Industrial Infrastructure Development
Corporation
Jaipur, Orissa
Metallurgical-based engineering and
ancillary/downstream industry
Tata Steel Special Economic Zone (TSSEZ) Gopalpur, Odisha Steel and allied downstream industries

THE SECTOR WITNESSED RISING INVESTMENTS IN
THE LAST DECADE
Source: Thomson ONE Banker, “Fact Sheet on Foreign Direct Investment (FDI)”, Department of Industrial Policy and Promotion
Date announced Acquirer name Target name Value of deal (US$ million)
May-18 Tata Steel Ltd Bhushan Steel 5,461.60
Dec-17 Tata Steel Ltd Bhubaneshwar Power 39.5
Jan-17 Tata Steel Ltd Creative Port Development Pvt Ltd -
Aug-16 JSW Steel Ltd Praxair Oxygen Pvt. Ltd. 36
Aug-16 Kirloskar Ferrous Industries Ltd VSL Steels Ltd. 23.68
Aug-14 JSW Steel Ltd Welspun Maxsteel Ltd 165.85
Apr-14 JSW Steel Ltd Vallabh Tinplate Pvt Ltd 7.63
Mar-14 Lalitanjali Group Pvt Ltd Centom Industries Ltd -
Dec-13 Venus Insec Pvt Ltd Goodluck Steel Tubes Ltd 23.73
Oct-13 JSW Projects Ltd IST Steel and Power Ltd
Aug-13 Readymade Steel India Ltd Kridhan Infra Solutions Pvt
Jul-13 Swelect Energy Systems Ltd Amex Alloys Pvt Ltd
Apr-13 Metallurgica Siderfoge S.r.l AMW-MGM Forgings Pvt Ltd
Feb-13 Wayzata II Indian Ocean Ltd Ramkrishna Forgings Ltd 51.90
Cumulative FDI inflows
Period: April 2000 to December 2017
 Sector
• Metallurgical industries US$ 10.56 billion

PLANNED CAPACITY ADDITIONS BY 2017-18
Source: Ministry of Steel Annual Report, Joint Plant Committee
Notes: MTPA - Million Tonnes Per Annum
Company Existing capacity
JSW Steel Ltd 18.00
Tata Steel Ltd 12.59
Essar Steel Ltd 10.00
Bhushan Steel Ltd 5.60
Bhushan Power and Steel Ltd 2.50
Electrosteel Steels Ltd 1.88
Monnet Ispat and Energy Ltd 1.80
Jindal Stainless Ltd 1.15
Jindal Stainless (Hissar) Ltd 0.86
Visa Steel Ltd 0.50
97.02
102.26
109.85
121.97
128.28
134.60
0
20
40
60
80
100
120
140
160
FY13 FY14 FY15 FY16 FY17 FY18
Crude Steel Production Capacity (in million tonnes)

OPPORTUNITIES … (1/2)
 The automotive industry is
forecasted to grow in size by
US$ 74 billion in 2015 to US$
260-300 billion by 2026
 With increasing capacity
addition in the automotive
industry, demand for steel from
the sector is expected to be
robust
 In 2017, India overtook
Germany to become the fourth
largest automobiles market
globally.
Automotive
 The capital goods sector
accounts for 11 per cent of
steel consumption and
expected to increase 14/15 per
cent by 2025-26 and has the
potential to increase in
tonnage and market share
 Corporate India’s capex is
expected to grow and generate
greater demand for steel
Capital goods
 The infrastructure sector
accounts for 9 per cent of steel
consumption and expected to
increase 11 per cent by 2025-
26.
 Due to such a huge investment
in infrastructure the demand
for long steel products would
increase in the years ahead
Infrastructure
 More and more modern and
private airports are expected to
be set up
 In FY18, passenger traffic at
Indian airports stood at 308.75
million and number of
operational airports stood at 94
in July 2017.
 Development of Tier-II city
airports would sustain
consumption growth
 Estimated steel consumption in
airport building is likely to grow
more than 20 per cent over
next few years
Airports
Source: Make In India, SIAM, Ministry of Steel, Airport Authority of India
Source: Capex – Capital Expenditure, P - Provisional

OPPORTUNITIES … (2/2)
Source: Make In India, Ministry of Power, Aranca Research
 The Dedicated Rail Freight
Corridor (DRFC) network
expansion would be enhanced
in future
 Gauge conversion, setting up
of new lines and electrification
would drive steel demand
 PPP Investments in railways
are expected to grow from Rs
24,000 crore (US$ 3.72 billion)
in 2017-18 (RE) to Rs 27,000
crore (US$ 4.19 billion) in
2018-19.
Railways
 Oil and gas amongst major
end-user segment accounted
for ~34.4 per cent of primary
energy consumption in FY16
 This would lead to an increase
in demand of steel tubes and
pipes, providing a lucrative
opportunity to the steel
industry
Oil and gas
 The government targets
capacity addition of 100 GW
under the 13th Five-Year Plan
(2017–22)
 Both generation and
transmission capacities would
be enhanced, thereby raising
steel demand from the sector
 Power capacity addition of
17,200 MW achieved in 2017-
18.
Power
 Rural India is expected to
reach per capita consumption
of 12.11 kg to 14 kg for
finished steel by 2020.
 Policies like Food for Work
Programme (FWP) and Indira
Awaas Yojana, Pradhan Mantri
Gram Sadak Yojana are
driving growing demand for
construction steel in rural India
 In FY16, per capita
consumption of steel in rural
India is estimated at 9.74 kg.
Rural India
Note: RE – Revised Estimates

JINDAL STEEL AND POWER LTD: REAPING BENEFITS
OF PRUDENT INVESTMENTS … (1/3)
4.60
4.80
4.50
4.55
4.60
4.65
4.70
4.75
4.80
4.85
FY 16 FY 17
 Incorporated in 1979, Jindal Steel and Power Ltd. (JSPL) is an
integrated steel producer and the largest coal-based sponge iron
manufacturer in the world. The company has an installed steel
production capacity of 3 MTPA at Raigarh in Chhattisgarh. JSPL is
engaged in manufacturing long products and is specialised in
producing long rails for railways and large sized H-beams as well as
columns for the infrastructure and construction sector
 JSPL also has significant presence across the mining, power
generation and infrastructure sectors
 New and expansion projects include setting up of a 7 MTPA
integrated steel plant in Chhattisgarh, 12 MTPA integrated steel plant
in Jharkhand and a 12.5 MTPA integrated steel plant in Orissa.
 Achievements:
• 2014 - Company has commissioned the billet caster plant with
capacity of 6 MTPA at Angul with record time of 1 year
• 2015 - Company has created history with its Raigarh steel facility
producing 10,000 tonnes of crude steel in a single day
• 2017 – Launched a 6 MTPA integrated steel plant in Odisha.
• 2018 – Raised Rs 1,200 crore (US$ 186.19 million) through issue
of equity via QIP.
Visakhapatnam port traffic (million tonnes)Total steel production (million tonnes)
CAGR 4.35%
Source: Ministry of Steel, Company website (www.jindalsteelpower.com), Aranca Research
Source: E- Estimated, QIP – Qualified Institutional Placement

JINDAL STEEL AND POWER LTD: REAPING BENEFITS
OF PRUDENT INVESTMENTS … (2/3)
671
816
1,488
1,803
1,596
2,287
3,315
3,007
3,199
3,218
2,813
3,542
103
197
431
438
395
634
818
721
958
910
532
727
0
500
1000
1500
2000
2500
3000
3500
4000
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Gross Revenue PBIDT
Financial growth (US$ million)
0.3
0.2
0.7
1.0
1.2
1.6
1.9
2.1
2.2
2.3
2.5
0.5
0.8
1.4
1.6
2.0
2.3
2.8
3.0
2.9
3.1
3.5
2.8
3.8
4.0
4.2
3.2
4.6
3.27
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Finished Steel Products Semi - Steel Products Pellets
Sale of steel (million tonnes)
Source: Company website (www.jindalsteelpower.com)
Note: Company clubs iron and steel segment ‘s performance; PBIDT (Profit Before Interest, Depreciation and Tax)

Steel
KEY INDUSTRY
ASSOCIATIONS

INDUSTRY ASSOCIATIONS
L-22/4, DLF Phase-II
Gurgaon, Haryana –122 002
Phone: 91-124-4375501
Fax: 91-124-4375509
E-mail: nissda@gmail.com
Indian Stainless Steel Development Association

GLOSSARY
 CAGR: Compound Annual Growth Rate
 FDI: Foreign Direct Investment
 FY: Indian Financial Year (April to March)
• So FY10 implies April 2009 to March 2010
 JV: Joint Venture
 MoU: Memorandum of Understanding
 MT: Million Tonnes
 MTPA: Million Tonnes Per Annum
 NPAT: Net Profit After Tax
 SEZ: Special Economic Zone
 TMT: Thermo Mechanically Treated
 US$ : US Dollar
 Wherever applicable, numbers have been rounded off to the nearest whole number

EXCHANGE RATES
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year INR Equivalent of one US$
2004–05 44.95
2005–06 44.28
2006–07 45.29
2007–08 40.24
2008–09 45.91
2009–10 47.42
2010–11 45.58
2011–12 47.95
2012–13 54.45
2013–14 60.50
2014-15 61.15
2015-16 65.46
2016-17 67.09
2017-18 64.45
Year INR Equivalent of one US$
2005 44.11
2006 45.33
2007 41.29
2008 43.42
2009 48.35
2010 45.74
2011 46.67
2012 53.49
2013 58.63
2014 61.03
2015 64.15
2016 67.21
2017 65.12
Source: Reserve Bank of India, Average for the year

DISCLAIMER
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation
with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced,
wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or
incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval
of IBEF.
This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the
information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a
substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do
they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.
Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any
reliance placed or guidance taken from any portion of this presentation.

Steel Sector Report May 2018

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Steel Sector Report May 2018