Ejvind Vgg Own Man in India

The Indian Steel Industry

DIBD OMII

Own Man In India

May 2012

Ejvind Vgg Own Man in India

Introduction to the Indian Steel Industry

Market situation Key players in the Indian Steel industry

Investments in the Indian Steel industry

Danish Case SWOT

Ejvind Vgg Own Man in India

Current market situation

The Indian steel market is one of the fastest growing markets in the world. The steel industry in India play such a significant role that they have their own Ministry of Steel (MoS) According to MoS and other recent sources, the Indian steel industry has emerged as the 5 th largest steel producing country in the world between

1. China 2. Japan 3. United States 4. India 5. Russia The Indian steel production was around 72.2 million tones in 2011.
Furthermore, according to MoS, the Indian steel industry is expected to become the 2nd largest steel producing country in the world by 2015.

Ejvind Vgg Own Man in India

Current market situation

The Indian steel industry per capita consumption is around 55 kg compared to the worlds average consumption of 206 kg of steel. The steel sector contributes to nearly 2% of the GDP and employs over 500.000 people

In order to preserve iron ore resources for domestic use on cheaper rates, export duty on iron ore has been increased to 30% ad valorem on all varieties of iron ore in 2011
The Indian steel industry is making a mark in the Asian region with Indias leading steel company, TATA Steel being the 10th largest steel producing company in Asia between Shougang in China on the 9th and Shandong Iron and Steel Group in China on the 11th position.

Ejvind Vgg Own Man in India

Growth Drivers
The Indian steel industry is strong because of easy availability of raw material and workforce The growth of the construction industry, which is growing at a rate of around 89% is one of the major consumers of steel in the country. The 12 five-year plan by the Indian government, has allocated investment of US$ 1 trillion for the core infrastructure sector, comprising power, roads, railways, ports, airports, which are some of the major consumers of steel. The expansions in the Indian automotive industry and the oil and gas sector.

Ejvind Vgg Own Man in India

Key government players in the Indian steel industry

Company name Products Manufactured Manufacturing locations Total group turnover in USD $ Turnover in India in USD$

Steel Authority of India Limited (SAIL)

Alloy steel, Ferro steel

Bhilai, Durgapur, Rourkel, Bokaro, Raipur, Salem, Visvesraya Vishakhapatnam, Andhra Pradesh Hyderabad, Kolkata

10.87 billion

9.7 billion

Rashtriya Ispat Nigam limited (RINL) Hindustan Steelworks Constructions Limited MEOCON Limited Maharashtra Elektrosmelt Limited (Subsidiary of SAIL)

Crude steel

2.3 billion

2.1 billion

Crude steel, Rolled steel

161 million

140 million

Rolled steel Crude steel

Orissa Chandrapur

136 million 86 million

110 million 75 million

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Key private players in the Indian steel industry

Company name Products Manufactured Manufacturing locations Total group turnover in USD $ Turnover in India in USD$

Arcelor Mittal

Stainless steel such as slabs, coils, coated steel Crude steel Cold rolling, galvanized steel Flat steel

Orissa, Jharkhand

65 billion

690 million

TATA Steel Limited JSW Steel Limited

Jamshedpur, Jharkhand, Orissa Vijayanagar, Tarapur, Raigarh Hazira, Bailadila, Visakhapatnam, Dolvi Orissa, Mumbai, Chandigarh, Derabassi, Kolkata

23 billion 4.2 billion

5.6 billion 2.8 billion

Essar Steel Limited

2.8 billion

2.2 billion

Ispat Industries Limited Bhushan Steel Limited

Hot rolled steel Hot rolled steel

1.8 billion 941 million

1.6 billion 770 million

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Key European steel manufacturers in India

Company name Outo Kumpu India Private Limited Parent company Products Manufactured Stainless steel products Office locations New Delhi Turnover in India in USD $ 150 million

Outo Kumpu

Danish Steel Clusters (Private) Limited ASSAB Sripad Steel Limited

Steel Partner Denmark A/S

Mild steel & Stainless steel

Bangalore

30 million

Associated Swedish Steels AB (ASSAB)

Stainless steel

Chennai

10 million

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Key European consumer companies of steel in India

Company and country of origin Alfa Laval India Limited (Sweden) Atlas Copco (Sweden) Segment HVAC A/C, Construction and Mining, Industrial tools Engineering components Automotive Automotive Automotive City Pune Pune Turnover in India in USD$ 208 million 290 million

Sandvik Asia Limited (Sweden) Car-O-Liner AB (Sweden) SKF India (Sweden) Outo Kumpu (Finland)

Pune New Delhi Pune New Delhi

421 million 80 million 355 million 150 million

Alumeco India Extrusion Limited (DK)

Carl F International (DK) Danfoss Industries Private Limited (DK) F L Smidth Limited (DK) Sanistl

Aluminium
Steel products HVAC Building and Construction

Medak
Mumbai Chennai Chennai

13 million
75 million 50 million 67 million

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Major steel clusters and steel plants in India

Major steel plants: 1. Bokaro (SAIL) 2. Durgapur (SAIL) 3. Jamshedpur (TISCO) 4. Bhelia (SAIL) 5. Raipur (SAIL) 6. Rourkela (SAIL) 7. Vishakhapatnam (RINL) 8. Salem (SAIL) 9. Visvesraya (SAIL) 10.Vasind (Jindal) 11.Ahmedabad 12. Orissa (Arcelor Mittal) 13. Jharkand (Arcelor Mittal)

13

11 10 9 7

4 3 2 12 6 5

- Steel

clusters in India

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Investments in the Indian steel industry

Rashtriya Ispat Nigam Ltd has announced that US$ 961.54 million worth of new units would come up in the plant as a part of its expansion project. Steel Authority of India Limited (SAIL) is planning to set up a 12 million tones plant in Jharkhand, North West India. In UIC Udyog Ltd, a leading manufacturer of steel wires and wire products, plans to set up a facility for manufacturing of steel wires with a total investment of US$100 million Stainless steel manufacturer and exporter, Varun Industries, is setting up a US$ 171.8 million stainless steel-cum-alloy steel plant in West India. Jindal Steel Works (JSW) has invested around US$ 1.6 billion and plans to increase capacity of its Bellary plant in South India from 7 mn tpa to 10 mn tpa by theend of 2010-11.

JSW Steel plans to expand its annual capacity to 32 million tones by 2020. JSW Steel has recently made a joint venture with Japans JFE Steel, which would lead to a joint construction and operation of a 10 mn tpa steel plant in West Bengal in India.

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Danish steel representation in India

Steel Partner A/S is a manufacturer of sheet metal parts and assembles in mild steel and stainless steel.
Steel Partner Denmark A/S is a Danish owned joint venture between two investors, where one is a steel manufacturer and the other being a sub supplier within the Danish market.

Danish Steel Cluster in India is the subsidiary of Steel Partner Denmark . Danish Steel Cluster (P) Limited was founded in 2005 and has been operating from Bangalore, which is the export oriented unit.

Danish Steels major activities in India includes manufacturing parts and sub assemblies mainly for exports.
Danish Steel has around 60 highly skilled employees in India. Danish Steel started its operations in India with a mission to become market leader by providing the customers superior quality products at reasonable price. Danish Steel Clusters in India has a vision to be a successful player in the global market of manufacturing and machining.

Ejvind Vgg Own Man in India

SWOT Analysis
Strengths Availability of iron ore and coal in bulk quantity Low cost efficient and abundant labor Strong managerial capabilities Modern new plants and modernized old plants Weaknesses Dependence on imports for steel manufacturing equipments and technology Low R&D investments Inadequate infrastructure Slow statutory clearance for development of mines

Opportunities Unexplored rural markets Rapid urbanization Growing domestic demand and increased level of exports Indian steel producers looking for overseas acquisitions in steel as well as raw materials Strong growth in steel heavy industries e.g. the automotive industry and within the infrastructure Increasing interest of foreign steel producers in India

Threats Slow growth in infrastructure development Market fluctuation and increase in Chinas export possibilities Global economic slow down Higher duties and taxes CSR related issues: increased focus on the environment and labor conditions

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Danish contact in India

If you are interested to hear more about India and the rising steel industrys possibilities do not hesitate to contact: Ejvind Vgg director of the DI office in India: E-mail: ejv@di.dk Phone: +91 9930 562729/ +45 2728 0486