Steel Authority of India Limited

Corporate Presentation
 Presentation Structure

•SAIL - Overview

•Modernisation & Expansion Plan

•Performance trend of SAIL
•Performance 9M 2016-17

•Initiatives for Turnaround

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SAIL - Overview

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 Integrated Producer with Strategically Located Operations

Total current saleable steel capacity 12.9MTPA Steelmaking facilities

FY14 saleable steel production 12.9MT
Planned
Total saleable steel capacity post expansion 20.2MTPA installed
Plant capacity (MT)
Integrated Steel Plants

Bhilai Steel Plant (“BSP”) 6.6

Bokaro Durgapur Steel Plant (“DSP”) 2.1

Steel Chasnalla
Plant Jitpur
Bhawanathpur
Tulsidamar Ramnagore
Madhya Pradesh
Jharkhand IISCO Steel Plant Rourkela Steel Plant (“RSP”) 4.0
Kuteshwar Chhattisgarh West Bengal
Hirri Alloy Steel Plant
Purnapani Bolani Durgapur
Nandini Baraduar
Bhilai Barsua
Chiria, Gua,
Kiriburu
Steel Plant Bokaro Steel Plant (“BSL”) 4.2
Steel Taldih Rourkela Steel
Meghahatuburu
Maharashtra Plant Kalta Plant
Odisha
Dalli-Rajhara IISCO Steel Plant (“ISP”) 2.4

Special Steel Plants

Kenchapura
Bhadigund

Visvesvaraya Integrated steel plants Salem Steel Plant (“SSP”) 0.3

Iron & Steel Plant
Karnataka
Alloy and special steel plants
Alloy Steels Plant (“ASP”) 0.4
Salem Ferro alloy plant
Steel Plant

Tamil Nadu
Iron ore mine Visvesvaraya Iron & Steel Plant (“VISP”) 0.2
Limestone mine
Dolomite mine Total 20.2
Coal mine
Note: Capacity numbers refer to saleable steel capacity
Note: Map not to scale (1) After implementation of modernisation and expansion plan scheduled to be completed by FY 2016

Five integrated steel plants and three

Easy and cost efficient access to Ready supply of substantial portion of
special steel plants located principally
captive raw materials raw materials from captive sources
in eastern, central and southern India
 SAIL – OVERVIEW
• SAIL is the largest steel producer in India;

• Ranked 13th as a World-Class Steel Maker. (WSD 2014 &

2015 ranking)

• Ranked 26th in terms of Crude Steel Production (WSA 2015

rankings)

• Authorized Capital: Rs.5,000 crore, Paid up capital: Rs.4,131

crore.

• One of the only seven CPSEs accorded the ‘Maharatna’ status.

• 2nd largest Iron Ore Producer in India – about 25 MT in 2015-16.

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 SAIL – OVERVIEW

• Widest range of steel products amongst all Indian manufacturers

- over 1000 qualities and 5000 dimensions.
• Pan India Marketing & Distribution Network – 38 Branches, 67
Ware houses, & over 2142 Dealers spread across the country.
• International presence through exports.
• Largest Ferrous Metallurgy R&D Centre for Steel in India, in-
house Consultancy & Design unit and Management Training
Centre.
• SAIL has around 84,000 employees on its rolls.

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With an Established and Successful Operating Track
Record

Several decades of experience in

the steel sector
 Upgradation at
Salem, IISCO,
Bokaro & Bhilai
Steel Plants
 Completed merger  Over a period of
with MEL time, formed JVs
 IISCO merged with SCI Shipping,
with SAIL  Entered into JV with
RITES, Tata Steel
Kobe Steel
 SAIL initiated the NTPC, Jaypee Group
 SAIL accorded modernisation and etc.
expansion plan
 Listing of SAIL on Navratna status
National Stock
 Visvesvaraya Iron & Exchange of
 SAIL became an
Steel Ltd (“VISL”) India (“NSE”)
operating company
taken over as a
 Hindustan Steel Ltd  Demerger of HSCL subsidiary
(“HSL”) established and NMDC
 HSL comprised  Indian Iron & Steel
Bhilai Steel Plant, Company (“IISCO”)
Durgapur Steel taken over as
Plant, Rourkela Steel a subsidiary
Plant and Alloy
Steels Plant

 Partial commissioning  Integrated

of new facilities at Commissioning of
IISCO Steel Plant and Expansion Plan of RSP
Rourkela Steel Plant (except finishing lines
 Transfer of refractory of Plate Mill)
unit of Burn Standard
 SAIL accorded
Company Limited at
Maharatna status
 VISL merged Salem to newly formed
with SAIL subsidiary of SAIL
 Listing of SAIL
GDRs on the London
 SAIL incorporated as
 Listing of SAIL on Stock Exchange
a holding company
Bombay Stock
for HSL, Bokaro  Maharashtra
Steel Ltd, Salem Exchange (“BSE”)
Elektrosmelt Limited
Steel Ltd, Hindustan (“MEL”) taken over
Steel Works as a subsidiary
Construction Ltd
(“HSCL”), Bharat
Coking Coal Ltd
(“BCCL”),
NMDC Limited
 Share holding pattern

GoI FIs / Banks / MFs / FIIs /GDR Individuals Companies / Trusts

3.40 0.59
21.00

75.00

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 SAIL STOCK PRICE MOVEMENT
SAIL's Share Price (Rs.) Sensex Points
28865
27828 27780 28052 27866 27930
26657 26668 26653
Closing Share
26283 26118 28452
27011 28115 2487125342 27656 Price and Sensex
27000 26627
26155 26146 as on the last day
70 25607
66 of the month
61 23002
57 64 61 * As on February
51 53 52
50 47 48 49 22, 2017
46 49 43 43 45 47 46
52
43
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Dividend
Interim Final Total Dividend Tax
(%) (%) (%) (Rs. crore) (Rs.
crore)

FY16 - - - - -
DIVIDEND
PAYOUT FY15 17.5 2.5 20 826 165

FY14 20.2 - 20.2 834 142

FY13 16 4 20 826 134

FY12 12 8 20 826 134

 SAIL Steel used in INS VIKRANT

SAIL Steel in PSLV-25 for Mangalyaan (MOM)

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 Bandra Worli Sea Link in Mumbai

SAIL Steel used at AJC Bose Road, Kolkata

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Koparkhairane Railway Station, Mumbai

Pontoon Bridge, Kumbh Mela, Allahabad

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SAIL Steel used at New Airport, Raipur

NTPC Power Plant, Sipat, Bilaspur, Chhatisgarh

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 Product Development
In SAIL, every year more than 20 new products are developed.

Some significant products developed in the recent past include:

 High Seismic Resistant Grade TMT Rebar
 Steel for lighter LPG Cylinder
 High strength quenched and tempered plates like DMR 249
Gr. BK Grade for shipbuilding
 Boiler quality grade like ASTM A 387 Gr. 11

In 2015-16, 24 products have been developed primarily for the

construction, boiler, heavy machineries and defense sectors.

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 SAIL – Board
Chairman

Shri P.K.Singh
Chairman

Government Directors
Shri Sarawati Prasad Shri Sunil Barthwal

Addl Secretary & FA, MOS/GOI Jt. Secretary (Steel), MOS/GOI

Functional Directors

Shri A.K. Chaudhary Shri Kalyan Maity Shri Binod Kumar Dr. N. Mohapatra Shri G. Vishwakarma Shri Raman
Director (Finance) Director (RM& Director (Commercial) Director (Personnel) Director (Projects & Director (Technical)
Logistics) Business Planning)

Independent Directors

Shri P K Dash Ms. Anshu Shri Parmod Prof. Ashok Dr. Samar Singh Shri Nilanjan Sanyal
Vaish Bindal Gupta
 SAIL

Modernisation & Expansion

Plan
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SAIL’s Expansion & Modernisation Plan
in million tonne

Actual After
production On-going
Particulars
2015-16 Expansion
Hot Metal 15.72 23.5
Crude
14.28 21.4
Steel
Saleable
12.38 20.2
Steel
Total investment of ~ Rs. 78,005
crore
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 Capital Expenditure

YEAR CAPITAL EXPENDITURE

(RS. CRORE)
2011-12 11021

2012-13 9756

2013-14 9890

2014-15 6840

2015-16 6034

2016-17 (up to Dec ‘16) 3461

Cumulative Capital Expenditure since 2011-12 ~

Rs. 47,000 crore 13
 Modernization & Expansion Plan

• Largest ever modernization and expansion plan undertaken

by a Steel Producer in the Country.

• Simultaneous Modernsiation & Expansion in all integrated

steel plants and in Salem Steel Plant.

• Saleable steel capacity to be increased by about 70%

(addition of around 9 Mtpa capacity).

• Modernisation and Expansion Plan completed at RSP, ISP,

BSL, DSP & SSP. Expansion at BSP to be completed in the
current fiscal.
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Modernisation & Expansion Plan

• The M&E work included :

• Civil work of 3 million cubic meter (equivalent to

construction of about 1500 km of 8 lane highway)

• Structural work of 7 lakh Tonnes (sufficient for

construction of a 71 km long steel bridge).

• 5.7 lakh Tonnes of equipment erection.

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 Modernization & Expansion Plan

• Facilities at Rourkela and Burnpur dedicated to the

nation by the Hon’ble Prime Minister in April & May’15
respectively.

• New 4160 m3 BF at ISP & New 4060 m3 BF

at RSP operationalised - the largest in the
country.

• Capital Expenditure of around Rs. 64,562 crore has

been made under Modernisation & Expansion till Dec
’16. 16
M&E Plan – Expected Outcomes

 Globally Competitive

 World class technology and products coming from New Facilities.

 Increased Market Share.

 Improved Product Mix, higher proportion of value added products

 New facilities to operate at Global Efficiency Parameters in terms

of Energy Efficiency, Labour Productivity, yield, etc.

 Latest Pollution Control measures, with Environmental

Conservation
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 M&E Plan – New Products

 Longest single rail in the world-130 m. Welded panels of 260 m

with a capability to make 520 m long panels in the future. Largest
Rail Mill in the world (1.2 Mtpa) and highest rail making capacity
of ~2.0 Mtpa at one location (Bhilai)
 Head Hardened Rails
 Auto grade CR Products, Galvanized Coils /Sheets.
 Plates to meet up to API 100 Grade specification.
 H Beams of up to 750 mm and other universal profiles to support
increasing Infrastructural requirements.
 High quality Rebars and Wire rods.

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 Manpower Profile
Average Age
(As on 01.01.2017) (as on 01.04.2016)
Total Employees : 84092
(Exec: 13084 ; Non Exec: 71008) Executives 45.3
Existing Manpower Ratio
[Total SAIL] Non Executives 46.6
Exec : Non Exec. 16 : 84
Total 46.4
Works : Non Works 82 : 18
400
315 317
300 258
215
200 134
Labour 89 98
Productivity
100
(TCS/Man/Yr)
0
97-98 00-01 04-05 08-09 12-13 15-16 16-17

176147 156719 126857 122043 101878 88655 84092

Manpower
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Performance of SAIL

2012-13 to 2015-16

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 MoU Performance
YEAR CATEGORY
2002-03 Excellent
2003-04 Excellent
2004-05 Excellent
Navratna Status 2005-06 Excellent
2006-07 Excellent
2007-08 Excellent
2008-09 Excellent
2009-10 Excellent
2010-11 Excellent
2011-12 Excellent
2012-13 Excellent
Maharatna Status
2013-14 Excellent
2014-15 Very Good
2015-16 Very Good *
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 SAIL: Production performance during last four years
Growth FY 16 over FY 13
Hot Metal increase by Crude Steel increase by 7%
10%

14.3
13.6 13.9
15.4 15.7 13.4
14.3 14.5

2012-13 2013-14 2014-15 2015-16 2012-13 2013-14 2014-15 2015-16

Production through high
efficiency route increased
Saleable Production by 14%
increase by 3%

10.8
10.3
13.5 9.8
13.1 13.0 9.5
12.6
2012-13 2013-14 2014-15 2015-16
2012-13 2013-14 2014-15 2015-16 23
 Financial Performance (Rs.Crore)
Turnover Net Worth
42666 43505
41025 39281
51866 50627
49350
43337

12-13 13-14 14-15 15-16

12-13 13-14 14-15 15-16

Profit After Tax

EBITDA
5909 2616 2093
5621 5586 2170
-4137
-3052

12-13 13-14 14-15 15-16

12-13 13-14 14-15 15-16
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 Reasons for Lower Profits from 2012-13 to 2015-16
Increase in Salary and Wages Decrease in Net Sales Realization (NSR)

Impact: Rs. 1256 cr Impact: Rs. 9617 cr.

Increase in Royalty rate of iron ore Capital Related Charges
and levy of DMF under MMDR
Impact: Rs. 2449 cr
Impact: Rs. 404 cr

Other major contributors :

Decline in deposits (with consequent decrease in interest income) and
Increase in Borrowings (with consequential increase in interests expenses) to
fund CAPEX
Depreciating Rupee against the US $ (for every Re 1 depreciation, on an
annualised basis, adverse impact of more than Rs.100 crore)

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Contribution by SAIL Stakeholders (Rs.Crore)

Dividend Paid by SAIL on Contribution to National

Cash Basis Exchequer

12122 11560 11110

1000
991
8496
723

103
12-13 13-14 14-15 15-16

12-13 13-14 14-15 15-16 This includes excise & custom duty,
corporate income tax & FBT, dividend &
dividend tax sales tax, royalty and other
taxes.

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Performance for 9M 2016-17

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Performance Highlights : 9M FY17
 Net Sales : Rs 31330 Crore
 EBITDA : Rs 529 Crore
FINANCIAL  PBT : Rs (-) 3432 Crore
PERFORM
ANCE  PAT : Rs (-) 2062 Crore

 Hot Metal Production : 11.7 MT

 Crude Steel Production : 10.7 MT
PRODUCTI
 Saleable Steel Production : 10.2 MT
ON &
 Semis component in production : 24.9% of
SALES saleable steel
PERFORM  Value Added Production : 4.3 MT
ANCE  Production through concast route : 8.6 MT
 Saleable Steel Sales : 9.7 MT
FINANCIAL PERFORMANCE

Rs. Crore
9M FY 17 9M FY 16
(INDAS Compliant figures)

Gross Sales 35101 30701

Net Sales 31330 27278
EBITDA 529 -1586
Depreciation 1936 1511
Finance Cost 1808 1647
PBT Before Exceptional Items -3215 -4743
Exceptional Items (VRS) -217 0
PBT After Exceptional Items -3432 -4743
Tax -1370 -1907
Profit After Tax -2062 -2837
Initiatives for Turnaround

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 Initiatives for Turnaround

 Focus on maximising production from new facilities and

rationalising production from older inefficient process routes.

 Improvement in NSR by
 Increased proportion of finished steel
 Value added / Special Steels
 Sales channel optimisation ( higher retail sales)
 Expanded basket of branded products
 Enhancing sales in regions with natural freight advantage

 Aggressive operating cost reduction through measures like

– Reduction in energy consumption
– Higher yield
– Coal blend optimisation 35
 Initiatives for Turnaround

 Higher production and sales planned for 2016-17.

 Liquidity Management :
– Optimisation of stocks
– Debtors management

 Rationalising manpower cost :

– Selective recruitment
– Rationalising of subsidies
– VR scheme

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Thank You