ESSAR STEEL
Let’s begin
Europe Steel Trade 2013, Stresa (Italy)
8th – 9th April
Presented By:
William Magnasco
Essar Steel - Sales Chief Manager Europe
(PMP + Infrastructure)
Contents
• Global overview of coated product market.
• India: domestic steel market outlook.
• India: Galv & PPGI exports into EU
• Essar Steel’s strategy.
• Overview of coated product applications.
• Global Installations.
• Indian Installations.
3
Global overview of coated product market
Global Overview of Coated Products
Total Flat Coated Steel Consumption 06‘
(In Million Tonnes)
Galfan, Galvalume, Galvannealed
Galvanized
19.48 MT
69 MT
Electro Galva
23.52 MT
Total: 112 Million Tonnes
Source: Metal Bulletin /CRU
5
Major Producers of Coated Products
(In Million Tonnes)
Others
38 MT
USA
14.7 MT
Europe
18 MT
JAPAN
11.60
India
4.2 MT
China
15.4 MT
Taiwan
2.0 MT
S. Korea
5.6 MT
Japan
11.6 MT
Canada
2.4 MT
Total: 112 Million Tonnes
Source: Metal Bulletin /CRU
6
World Galvanised Steel Growth
Year-wise growth in global steel consumption
140
128.3
120
112.2
98
100
80.4
80
85.5
99.5
90.3
79.3
Million tonnes
60
% CAGR
2006/2000~5.7%
2010/2006~3.4%
40
20
0
2000
1
2001
2
2002
3
2003
4
2004
5
2005
6
2006
7
2010
8
Source: Metal Bulletin Feb08 /CRU
7
Galvanised Steel Growth in US vs India & China
DEVELOPED COUNTRY
Galvanised Steel growth in US
25
As the economy matures,
consumption of galvanized
products increases.
20
19.6
18
21.1
19.5
19.2
18.7
17.1
18.2
Million
tonnes
15
%CAGR
2006/2000-(-)
2.2%
2010/2006-1.5%
10
5
0
2000
DEVELOPING COUNTRY
2001
2002
2004
2005
2006
2010
Galvanised growth in India
Galvanised growth in China
6
25
23.4
20
14.7 15.4
15
12.4
9
10
5
2003
6.5
4.1
4.5
Million
tonnes
%CAGR
2006/200024..4%
2010/2006-11.1%
5
3.9
4
3
2
2.4
2.8
5.7
4.2
3.1
1.9
1.4
Million
tonnes
%CAGR
2006/200017..8%
2010/2006-10.9%
1
0
0
2000 2001 2002 2003 2004 2005 2006 2010
2000 2001 2002 2003 2004 2005 2006 2010
Source: Metal Bulletin Feb08 /CRU
8
End-use Markets for Galvanized Sheet (%)
Market
USA
Europe
China
India
Automotive
40
64.2
9
2
Construction
40
24.3
64
56
Appliances
-
7.3
12
13
Furniture
-
2.0
6
5
Packaging
-
2.0
2
12
Engineering/Fabrication
-
-
-
12
Others
20
0.2
7
-
Total
100
100
100
100
Note: Globally 70% consumption of HDGI is in automotive , 20% in construction
Source: Metal Bulletin /CRU
9
India – Domestic steel market Outlook
Apparent Steel use per capita
Apparent steel use per capita 2005 to 2011
GEO/Period
2005
2006
2007
2008
2009
2010
2011
European Union (27)
338.2
384.5
404.4
372.2
243.5
294.4
310.0
Turkey
253.7
287.8
317.9
283.0
234.7
302.9
341.8
Others Eastern Europe
170.9
219.2
207.5
198.9
157.1
162.3
162.1
Other Europe
225.6
264.7
280.8
255.4
209.4
257.4
284.1
CIS
160.8
189.7
219.4
195.3
140.7
189.0
212.3
NAFTA
316.7
353.2
319.9
291.7
184.8
243.7
263.0
Central and South America
74.8
84.9
92.7
97.7
74.1
97.9
98.6
Africa
33.7
33.9
34.5
39.6
43.0
38.8
34.8
Middle East
186.0
184.4
227.9
233.9
209.1
231-6
233.9
China
266.0
287.4
316.5
336.0
412.0
436.0
459.8
India
36.6
41.2
45.8
45.1
50.0
55.4
57.0
Japan
601.6
619.5
637.0
612.1
415.6
500.9
506.7
South Korea
981.6
1,042.6
1,144.1
1,210.7
936.1
1,077.2
1,156.6
Taiwan, China
877.1
870.0
790.9
737.8
491.0
772.6
784.4
Other Asia
53.6
49.5
55.6
55.2
52.2
58.1
59.7
Asia
165.6
174.6
189.2
194.9
210.7
228.6
238.8
Australia and New Zealand
322.9
316.9
332.2
330.7
231.6
298.7
261.6
World
173.5
187.5
198.4
196.4
181.9
205.5
214.7
Kg per capit a
Source: Eurost at , WSO
11
Crude steel production & consumption
Source: CRU
12
Growth Driving Sectors
Sector
Key Opportunities
Source: Ernst & Young
13
Product
Wise
Indian
Poduction
FY 2012-13
Apr-Jan
14
Galvanized Indian market 2012 (1)
15
India – PPGI Installed capacity
Major Players
Installed Capacity ( MT/ annum)
ESSAR
450,000 *
JINDAL
110,000
UTTAM
80,000
ISPAT
100,000
BHUSHAN
120,000
NATIONAL
80,000
TATA
150,000
CRIL
60,000
MANAKSIA
60,000
ASIAN COIL
60,000
VARDHAMAN
30,000
TOTAL
1,300,000
* ESPF (400,000) + SCG (50,000)
Total capacity in India is being expanded upto 1,5 Mn
Source of Data : Interview with coil manufacturers
16
India – PPGI Market Growth
Segments
2010-11
2011-12
2012-13
Construction
White Goods
Others
10%
8%
10%
10%
10%
10%
10%
12%
10%
Product
Segment
Expected
Growth By 2013
Remarks
Construction
374,420
Although Construction industry expected to
grow by 10%, usage of PPGI for newer
applications and untapped demand & like
Decking, barricading , Doors , and door
,window frames etc will be close to 20 %,
therefore ESPF growth in this segment is
shown as 30 - 35%
White Goods
72,000
Growth - 10 to 12%, (Source CEAMA)
Others
13,800
Total
460,220
Others include : Bus Body , AHUs ,Generator Canopy, Signage, Solar Heaters, Lighting Fixtures , Furniture , metal doors & Frames & Decking Profilers etc
Source of Data : Interview with coil manufacturers
17
Galvanized Indian market 2012 (2)
18
India: Galv & PPGI exports into EU
EU Coated Steel – Market Supply 2007 - 2011
Source of Data : Eurofer
20
EU Coated Steel – Imports 2012 (P)
Coated Imports 2012 by destination
GEO
Coated Imports 2012 by origin
GEO
HDGI
PPGI
China
South Korea
679.691 mt 461.316 mt
222.702 mt 275.495 mt
India
Turkey
100.724 mt
63.378 mt
77.726 mt
23.984 mt
Total general
1.141.007 mt
498.197 mt
178.450 mt
87.362 mt
Taiwan
38.220 mt 32.950 mt
71.170 mt
Others
83.655 mt 56.366 mt
140.020 mt
Total general 1.188.369 mt 927.837 mt 2.116.205 mt
HDGI
PPGI
Total general
Belgium
331.521 mt 155.912 mt
487.433 mt
Italy
196.534 mt 189.484 mt
386.017 mt
Utd. Kingdom
162.180 mt
48.504 mt
210.683 mt
Spain
111.081 mt
91.134 mt
202.215 mt
Romania
65.251 mt
90.864 mt
156.115 mt
Poland
31.736 mt
92.818 mt
124.554 mt
Slovenia
98.770 mt
6.150 mt
104.921 mt
Sweden
22.643 mt
61.081 mt
83.724 mt
Fr Germany
22.937 mt
37.500 mt
60.437 mt
145.716 mt 154.392 mt
300.108 mt
Others
Total general 1.188.368 mt 927.837 mt 2.116.205 mt
Extra UE 27 imports
Extra UE 27 imports
Source: Eurostat provisional data
Source: Eurostat provisional data
21
Essar Steel’s Strategy
How to succeed vs economy deceleration
• What we have to face:
Temporaly economic deceleration due to:
• Inflation vs anti inflationary policy
• Weak external demand + forex 20% Rs. vs $ vs €
• Long term: economy needs modern infrastructure
• Others
• What we made, what we do, what we are planning to do:
• Business units in key driving sectors
• Global - > Rural focus (i.e.: mining -> hyper & expressmarts)
• Internationalization & innovation
23
Essar Global
Essar Global
Essar Energy plc*
Essar Oil
Increasing current
capacity from 3,910
MW to 6,700 MW by
2014
Significant
development and
exploration upside in
India and abroad
Current operating
plants
Total capacity: 3,910
MW
Securing international
distribution/access to
maximise margins
Marketing
c.1,630 retail outlets
Plants under
construction
Total capacity: 9,870
MW
Plants under
development
Total capacity: 5,900
MW
Coal Blocks
500 Mn coal reserves
across mines in India,
Indonesia &
Mozambique
Integrated company
spanning the oil & gas
value chain
Essar Shipping &
Logistics
Essar Projects
Aegis
BPO Business
Essar Telecom
Essar Power(a)
Upstream
Total reserves and
resources (incl.
unrisked): 2,132
mmboe
Refining
20MMTPA capacity
today
Essar Steel
Over a decade of
experience in the Indian
power industry
Source: Company information
* Listed on London Stock Exchange
(a)
Capacities stated represent gross capacity
India
Hazira Steel Complex
10 MMTPA integrated
steel plant
Essar Hypermart
Steel distribution chain
North America
Algoma Steel,
Canada
4 MMTPA integrated
steel plant
Minnesota Steel
Iron ore mine with
resources of 1.4 bn
tonnes & 4 MMTPA
Pellet Plant
Trinity Coal Block
188.6MT coal reserves
across 6 mines in
eastern Kentucky and
southern West Virginia
Essar Ports
Operational
Dry Bulk: 70 MMTPA
Liquid: 46 MMTPA
Under Construction
Liquid: 12 MMTPA
Essar Shipping
Owns and operates 25
ships.
One semi-submersible
rig and 12 land rigs.
Fleet of lighterage and
transhipment assets.
12 new ships and 2
new Jack Up rigs being
delivered
Indonesia
P T Essar Indonesia
0.4 MMTPA cold rolling
complex
Integrated, global steel
producer
Essar Projects India

Engineering

Procurement

Construction

Fabrication
Fully geared to execute
turnkey EPC projects in
India and overseas
Essar Offshore
Subsea Ltd
Engaged in marine
offshore construction
Global Supplies FZE
(UAE)
(Essar owns 25%)
Global procurement
company
Essar Yu
Essar Telecom East
Africa
GSM services in
Kenya, Uganda, Congo
(Brazzaville)
Indus Towers
(Essar owns 14%)
One of the world’s
largest tower company
102,000 towers
The Mobile Store
Chain of over 900
retail outlets
Aegis - BPO
One of the leading
Global player in BPO
and Service sector
Caters to:

Telecom

Healthcare

Financial services

Travel & hospitality

Consumer products
Employee strength
47000+ employees
globally
The Electronic Store
Large format stores for
Consumer Durables &
IT products
Project Management
& Consultancy
International logistics
provider to the steel, oil
refining and power
industries
Leading EPC contractor
with 40 year track
record
global player in the
communications
sector
Provider of multichannel CRM solutions
to a blue-chip,
multinational client
base
24
Think global, act local
25
Continued positive actions
Overview of coated Product Applications
Key Differentiators
• Versatility of Colors
• Non White Shades.
• “Non Standards” Widths.
•
Lower Gauges.
•
High End Applications.
•
Market Diversification.
28
Product Diversification
• Anti-Skid , Anti-Wrinkle ,ARS RAL 8004 – for Shutters & Door
Panels
• RAL 9006 Metallic Coatings
• Double Coated Surfaces
• “SOFT” OEMs / White Goods , Like Deep Freezers, Washing
Machines.
• PVDF / Metallic PVDF
• “High Value” OEMs / White Goods for Customers
High Reflective, High Gloss paints for Luminaries
29
Product Diversification
• Supply to various Service Centers
• Signage Boards for Companies like DHL, Ikea, Castorama
• Versatility & Flexibility in colors developed
• Supplying over 4500 shades
• Dead Matt Finish
• Sparkle Finish
• Slits
• Food Grade Paints.
30
Product Diversification
Studs Market in
Europe
Minimized Spangle, Skin
passed for Pre-painted
End Use.
Gypsum Boards
Profiles.
Channels ,T Sections and
Capping Materials
False Ceilings /
Acoustic Ceilings.
Telecom Shelters /
Cold Storage.
31
Product Applications Industry Wise
• Pharmaceuticals
• Floriculture
• Super Markets
• Tissue Culture
• Hospitality
• Agriculture
• Processed Food Industry
• Refrigerated Containers
• Fisheries
Further Initiatives
Penetration
into tier 2 &
tier 3 Indian
Cities.
Bus Stands /
Bus Shelters.
Slum
Rehabilitation.
Develop Lower brands to
Tap Rural / “Replacement
Markets” of Galvanized with
Pre-painted Steel.
Indian Railways
33
Products at a Glance – HDGI – Grain Silos
Galvanized steel with 450 GSM coating.
Target business of 24000 MT with Food Corporation of India.
34
Products at a Glance – HDGI
(Solar Panel–sun rise industry)
35
Products at a glance – HDGI for Dish Antennae
& Set top Boxes
Galvanized Skin passDish Antennae.
*Set top Boxes switching to digital,
36
Products at a Glance – HDGI for Bus Body
Commercial supplies to Tata Marcopolo
ACGL Goa.
Ashok Leyland Limited
37
Products at a Glance - HDGI
(Cable Trays & Tubes)
Galvanized product for
Cable Trays. New segment
currently developed.
Galvanized Tubes Replacement
market
38
Disaster Management
• Shelter for people affected by natural
calamities.
•
Shelter of 80 x 20 Sqm = 16 MT of PPGI.
400 people can take shelter under one roof
• Bamboo Shelter = 2 Months , PPGI = 10 days for
erection
• Metecno developed PPGI prototype for Police
jawans in M.P
170 shelters supplied (Police jawans)
39
Defense
• 20 – 25 % reduction in energy cost
by using sandwich panels.
Budget Allocation
Rs 5000 Cr.
Roof & shelter needed
500,000 sqm
• Prototype are developed by shelter
Potential
manufactures.
– Metecno
– Acme
– Lloyds
5,000 MT
40
Essar Initiatives Towards Excellence
Low Cost PPGI
Developed with 10 micron top coat
and 4-5 micron bottom coat
• More cost viable for rural market
• Benefit to reach untapped market
41
New Initiatives
PPGI for Small Refrigerator
PPGI for Wine Coolers
42
Modular Building Solutions
Modular Solutions facilitate:
• Scale
• Speed
• Standardization
• Thermal & Sound Insulation
• 20-25% Savings in Energy Bill
• 4-6° Lower Temperature than ambience
•
•
•
•
•
Ease of alterations/repairs
Aesthetics
Elimination of Bricks & Mortar
Shortened Supply Chain
Middlemen are eliminated
Fast emerging as big opportunity to increase margins and enhance
market share.
43
New Value Added Products - PPGI
‘Tube light Patti's’ - Simple (but
highly effective) currently being
replaced with PPGI .
Mapping of Ultra Violet
Radiation prone areas of world.
Target PVDF coatings PPGI
supplies to high UV radiation
prone areas.
44
New Value Added Products - PPGI
Uni coat
paint system
Wood finish coat
Beckry therm
paint shade
45
New Value Added Products - PPGI
Anti- Graffiti
Lead and chrome free
paints
Abrasion resistant
system
( ROHS norms)
46
New Value Added Products - PPGI
Clean coat
Marble Finish
Beckry shield antistatic paint system
47
New Value Added Products - PPGI
RAL 9006 –
• Replacing the product (RAL 9006)
with conventional roofs.
Solar Geysers
• New segment -
Alternate source
of heat. PPGI supplied to Racold
Thermo Ltd.
PPGI for Power Plant Segment:
• SMP (silicon modified Polyester)
coating and with high zinc coating
(275 GSM).
SMP coating with
higher zinc coating gives higher
corrosion resistant and longer life.
48
False Ceilings
49
Generator Canopy
Kirloskar
Kala Genset
50
Solar ( Tata BP Solar) Heaters
51
Bus Body
• Eicher
• ACGL
• Ruby Bus Body
• JC Coach
• Kamal Coach
• Swaraj Mazda
• JCBL – Punjab
• Azad Body Builders
52
Low Hanging Fruits
Railway
Defence
Metal
Doors &
Windows
Furniture
Portal
Cabins
Cold
Rooms
Industrial
Sheds
Teletronics
Decking
White
Goods
Telecom
Bus Body
53
Global Installations
RCD Espanyol Stadium, Spain
55
Some of Installations of ‘PVDF’
56
Mercedes Showroom, Spain
57
‘Ship Lap’ Metal Garden Sheds
Garage Sheds. UK
• Wood-like appearance with 12 year anti rust guarantee.
• Flat packed and easy to transport.
58
False Ceilings ( Hunter Douglas)
59
Indian Installations
Tile Roofs in Kerala
61
62
Bus Stands & Shelters
63
Cempetitors but partners 
Bhushan Steel
64
SARLA BIRLA Academy , Bangalore
65
Stadiums, Hyderabad
66
Cochin Airport
67
Kalzip
68
THANK YOU!
Let’s begin