WHY INVEST IN JHARKHAND?

1
WHY INVEST IN JHARKHAND?
2
Jharkhand has been integral to industrial growth

• 1907 Steel Works set up at Sakchi
• Jharia Division begins operations
• 1923 The Tinplate Company of India is established
• 1925 Noamundi Mines commence supply of iron ore
• 1927 Tata Pigments is formed
• 1948 West Bokaro collieries acquired by Tata
  Steel
• Tata Motors establishes plant in Jamshedpur
• 1953 Indian Tube Company is set up, now a part of
  Tata Steel
• Uranium Corporation of India established
• Heavy Engineering Corporation
• 1959 MECON Ranchi established
• TRF Limited set up by Tata Group
• 1964 Bokaro Steel Plant commences operations
• 1985 Tata Sponge sets up base in Joda
• 1962- 1968 Tayo Rolls, Tata Growth Shop and
  JAMIPOL
• Central Coal Fields formed, a miniratna company
• Timken establishes base in India
• 1991 Indo Danish Tool Room established
• Tata Power sets up thermal power plant

3
Since its creation the state it has set in place
a range of enablers for investment
4
Jharkhand is a leader in key industries

• 3.3 of Indias Gross Value Added in Industry

• 72 of the value addition came from manufacturing
  of Basic Metals

• Top five industries contributed 90 to the value
  added by Industry

• Home to one of the worlds tenth largest steel
  producers

• Has the second largest auto ancillary hub in Asia

• With expertise in geology, mining and immense
  power potential, Jharkhand has the potential of
  becoming the most financially viable state in the
  country

5
PARTNERING GROWTH IN THE STEEL INDUSTRY
6
Growth in Global Apparent Steel Use is expected
to be steady
Apparent steel demand in Mn.T (yoy growth)
The total demand will be 1.44bn mt in 2012, a
growth of 6 over 2011
Source WSA, SRO_April 2011
7
Belief in the potential of the steel industry in
India
China and India are the centres of economic
growth and Steel demand GDP growth estimated
between 8-10 in the next 3-5 years Strong Steel
demand in India 10-12 on back of robust growth
in Auto and Construction India is an attractive
destination for both imports and setting up of
new facilities by 2015 55 mt of capacity is
expected to be added by domestic steel companies
as well as the global players
8
Steel is the backbone of the India Growth Story
To achieve its growth targets India will need
steel

• Indias per capita consumption is 30 kgs of steel
  
• Indias steel consumption is expected to reach
  300 mtpa by 2025, it has set a production target
  of 110 mt by 2020
• India needs one integrated steel plant every
  year, for next ten years to meet its demand

9
Indian steel demand is expected to grow at 8-9
in FY12
Major steel consuming sectors are expected to
post lower growth rates in FY12
Carbon steel ASU (Mn. T)
Growth rates yoy ()
8.5
67.3
11
62.1
56

• Drivers for change
• Revisions in sector growth rates are based on
  slowing economic momentum due to inflationary
  pressures, high borrowing costs and global
  economic turmoil.
• As a result of expectations of lower sector
  growth rates and changes in other macroeconomic
  parameters steel demand growth for FY12 is
  downgraded slightly to 8-9.

After JPCs revised estimates added 3 MT to
FY10 ASU
10
The steel industry is expected to be a driver of
economic growth in India
It is the first and fastest to provide return on
investments and further value creation Steel is
leading the change for mineral based
industries The steel industry is expanding
markets through new age applications and growth
through operations in diverse geographies Steel
is 100 recyclable therefore it is a sustainable
industry
11
The steel industry is a growth multiplier given
the opportunities it generates for Allied
Industries
Manufacturing Spares (Mech / Elect / Hydraulic
etc.) Steel Service Centre Slag Cement Sponge
iron Rolls Pumps Tools Tackles Mobile
Equipment Foundry Forge Lubrication oils Rubber
Belts / Cables Safety appliances Stationary
items Furniture Paints Power generation
distribution
Service Handling agents / Couriers 3 PL Transport
contracts Maintenance -contracts Hospitality Medic
al Retail Realty
12
The 12th Five Year Plan has given impetus to the
steel industry
Proposed investment of around US 1 trillion in
infrastructure in the 12th plan, half of which
would come from the private sector Efforts to
increase the share of manufacturing sector from
15 per cent to 25 per cent of GDP by 2020 This
will lead to high demand of steel It will be a
challenge to meet the targets of the 12th Five
Year Plan India's steel demand is likely to grow
10.3 per cent per annum, and will reach a level
of 113 million tonnes by the terminal year (2016
-17) of the 12th plan In a business-as-usual
scenario, domestic supply of steel will
significantly fall short of domestic demand
13
Growth plans of the global steel industry for
India
14
Key enablers for growth of the steel industry in
India
National Mineral Policy emphasises The need for
conservation and judicious exploitation of finite
mineral resources through scientific methods of
mining, beneficiation and economic utilisation
Development of mineral resources by taking into
account national and strategic considerations To
ensure adequate supply and best use keeping in
view present needs and future requirements To
ensure indigenous availability of basic and
strategic minerals to avoid disruption of core
industrial production
15
Key enablers for growth of the steel industry in
India
National Steel Policy is expected to be released
soon. The task force has brought together
stakeholders from all areas The policy will
focus on regulatory hurdles, taxation issues and
infrastructure bottlenecks It will look into
boosting capacity expansion due to soaring
imports and to address issues which are hindering
capacity expansion Measure for optimum
utilisation of raw materials including
beneficiation
16
Jharkhand Industrial Policys focuses on growth
of mineral based industries in the state

• Features specific to the Mining and Minerals
  Sector
• Simplify procedures and expedite granting of
  mining leases
• Provide certain relief to make mining activities
  easier
• Encourage use of modern exploration techniques to
  set up a resource inventory of various minerals
  in the State
• Encourage joint venture projects with State
  Mineral Development Corp
• Clear mining lease applications and project
  report within 60 days
• Encourage Foreign investment and technological
  collaboration by OCBs and NRIs in selected
  sectors including Mineral development
• Encourage Private Sector participation in Mining
  Activities

Source Jharkhand Industrial Policy 2011
17
According to the steel ministry assessment
report Of the 22 MEGA steel projects planned
eight are located in Jharkhand the maximum
for any state in India
18
Growth of the contribution of steel and steel
based industries industrial value

• Iron and Steel accounts for more than 50 of
  Jharkhands industrial out put.
• Steel industry has grown by 24 in the last
  decade
• Auto and its ancillaries which use steel as a
  principal input have become the second largest
  contributor to industrial output.
• Further growth and Value Creation can take place
  if idle mineral resources are utilised

19
The investments which have led to this growth
26 mega industries, 106 large and medium
industries and 18,109 micro and small industries
have been set up The approximate value
investments is Rs 28,424.06 crore Industries
have been able to acquire about 8,000 acres of
land through direct negotiation with raiyats the
State government has provided 3000 acres of
land Around 17 mega industries have already come
into production and several other industrial
units are likely to be commissioned during the
financial year 2011-12 Steel production in the
State has increased from 8 million tonnes to over
12 million tonnes per annum during the 11th Plan
period
Source Jharkhand Industrial Policy 2011
20
Why Jharkhand is seen as an emerging steel hub?
Steel is leading the change for mineral based
industries 25 of the steel produced in India is
made in Jharkhand The proposed projects by Tata
Steel, Bokaro Steel, Essar, etc will add 25 MTPA
to steel making capacities in Jharkhand An Auto
Cluster is being made operational at
Jamshedpur An Automobile Vendor Park will be
established under PPP or Private Mode by Mega
Automobile Manufacturing Units Skill development
and training in activities like driving, vehicle
maintenance will receive financial support from
the State
21
In 1867 J.N. Tata attended a lecture by Thomas
Carlyle (British writer) in Manchester. Carlyle's
statement "the nation which gains control of
iron, soon acquire control of gold" had a
profound effect on J.N. Tata, exposing him to the
idea of setting up a steel mill in India.
He chose Jharkhand - we believe you should too