Corporate Presentation - AceAnalyser Meet/132286_20101026.pdf · Dongamahua, Chhattisgarh,...

Copyright © 2010 Jindal Steel & Power Ltd.


Corporate PresentationSeptember 2010


Disclaimer

Certain statements in the presentations and, if applicable, the subsequent question and answer session and

discussions concerning our future growth prospects, are forward looking statements which involve a number of risks,

uncertainties and other factors that may cause our actual results, performance or achievements to differ materially

from future results, performance or achievements expressed or implied by such forward-looking statements. The

risks and uncertainties relating to these statements include, but are not limited to, general political, social and

economic conditions in India, Bolivia, and elsewhere, accidents, natural disasters or outbreaks of disease,

government policies regarding the steel ,power and diamond industry(ies), including industrial licensing,

environmental regulations, safety regulations, import restrictions and duties, excise duties and sales taxes, our

ability to successfully implement our strategy, our growth and expansion plans and technological changes,

increasing competition in, and the conditions of the global and Indian steel , power and diamond industry, changes

in laws and regulations that apply to the Indian and global steel, power and diamond industry, significant

movements in the prices of key materials, terms on which we finance our working capital and capital and product

requirements affecting our company and our industry and other development expenditure requirements, general

economic conditions factors beyond our control.


Corporate snapshot

Steel

Power

Other

Current capacity

3.0 MTPA integrated steel plant

at Raigarh, Chhattisgarh

1.4 MTPA sponge iron plant

1.7 MTPA pig iron plant

Expansion plans


at Angul, Orissa


at Patratu, Jharkhand

3.0 MTPA brownfield expansion

at Raigarh, Chhattisgarh

1.5 MTPA steel plant at Oman

Mining

Captive coal mine at

Dongamahua, Chhattisgarh,

extracting about 12.0 MTPA

Captive iron ore mine at Tensa,

Orissa, extracting about 3.0

MTPA

Captive power plants (CPP)

354 MW operational CPP for the steel plant at Raigarh

540 MW CPP under implementation with the coal mine

at Tamnar

810 MW CPP under implementation for the steel plant

at Angul

Independent Power Plant (IPP – Jindal Power Ltd.)

1,000MW operational thermal project at Tamnar in

Raigarh,

10,480MW new capacity under implementation

4,180MW under planning

Coal to Liquid

Ramchandi Coal Block in Odisha allotted

Estimated reserves of 1,500 MT

Production capacity of 80,000 barrels per day (4.0

MTPA)

Technical tie-up with M/s Lurgi of Germany

Total project cost : INR 420 billion

Cement

Plans to set up a 2.0 MTPA slag and fly ash cement

plant at Raigarh.


Steel business overview

Power business overview

Financial overview

Growth drivers

Sustainability Initiatives


(a) Calendar year

Source: World Steel Association

Top 10 crude steel producing countries (MTPA)

Crude steel production growth trend

Source: World Steel Association

Top 10 steel producing countries


South Korea

Japan Italy Germany US China Russia Turkey Ukraine Brazil India World

936

419

320345

187

405

176

235

86 9348

179

Source: World Steel Association, Annual Report 2010

Per capita finished steel consumption (Kg) (2009)

Global steel consumption


FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

54 52 56 6065 69

7580

8692

99106

114123

Long products (FY2008)Flat products (FY2008)

Pipes24%

Oil & Gas9%

Automobiles22%

Capital Goods

9%

Consumer Durables

5%

Construction5%

Others26%

Construction64%

Others20%

Automobile4%

Capital Goods

6%

Railways6%

Source: CRISIL Research

Source: Steel and Natural Resources Strategy Research (SNRSR) Estimates based on Joint Plant Committee (JPC) and industry information

Demand at a 8% GDP growth rate

Source: CRISIL Research

Sectoral steel consumption in India


Jindal Steel & Power Limited (“JSPL”) is

a leading player in steel, power and

mining

Perseverance, firm commitment towards

all stakeholders and the community at

large coupled with an enterprising spirit

have been the driving force behind the

company's growth over the last decade

JSPL has consistently tapped new

opportunities by increasing production

capacity, diversifying investments, and

leveraging its core capabilities to

venture into new businesses

■ Iron ore mine 3.00 MTPA

■ Coal mine 12.00 MTPA

■ Pellet Plant 5.0 MTPA

■ Sponge Iron (coal based) 1.37 MTPA

■ Hot Metal (Pig Iron) 1.65 MTPA

■ Total Steel 3.00 MTPA

Rails, Beams & Structurals 0.75 MTPA

Plates & Coils 1.00 MTPA

Slabs, Rounds, Blooms & Billets,

Wire Rods1.25 MTPA

■ Total Captive Power Plant 354 MW

■Wind Power 24 MW

■ Jindal Power Limited 1,000 MW

Core operational capacities

JSPL – A young and dynamic company


(a) Captive Power Plant supplies power to all facilities

JSPL integration

Sale

FINES

Iron Ore from

Mines

Coal from

Mines

Coal Washery

BF

Coking

Coal

Pig Iron

POWER

PLANT(a) CSEB/OTHERS

EAF

RAIL &

UNIVERSAL BEAM

MILL

ROTARY

KILNS

Rails Structurals

Washery

Rejects

Sponge

Iron

Char/Flu Gases

Rounds/

Blooms/

Slabs/

Billets

Sale

Sale

Sale

Sale

Sale

SINTER

PLANTSale

PLATE MILL

PLATES &

COILS

Sinter

COKE

OVEN

COKE

Sale

Wire Rod &

Rebar

Pellets

Sale

Pelletization

plant


Sponge iron / Pig iron / Pellets

Semis

– Slabs, Blooms, Rounds,

Billets

Beams and Structurals

Rails

Wire Rods and Rebars

Plates & Coils

Product mix of JSPL


354MW

540MW

270MW

1,164MW

540MW 1,708MW

2012

Tamnar Coal

Mine CPP

540 MW

(4x135 MW)

Balance Angul

CPP

540 MW

(4x135 MW)

JSPL Captive power plants

2011

Angul CPP

405 MW

(2x135 MW)

Existing

Operational

Raigarh

Project




Financial overview

Growth drivers



India Power sector – a story of high demand growth and continuing supply deficits

Source: CEA

By ownership By source

Break up of installed capacity (159,398 MW as of Mar-10) Power deficit scenario

Source: CEA

Capacity addition targets and achievement (From 1st -11th plan) Projected demand supply gap(GW)

Source: CEA

State

49.8%

Private

18.2%

Central 31.9%

Thermal

64.7%

Hydro

24.0%

Nuclear

2.7%

Renewable

8.7%

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

546 559 591 632 691 739 774 830

Energy requirement (BU) Energy deficit Peak deficit

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th FY08 FY09 FY10

1.33.5

7.0 9.312.5

19.722.2

30.5

40.2 41.1

16.311.1

14.5

Target (GW) Achievement (%)

Capacity Addition required till 2017 is

estimated at 275 – 300 GW

Estimated additions in 11th and 12th plan are

60GW and 100 GW respectively

Hence estimated shortfall in 2017 is

estimated to be 140 GW

Source: McKinsey & Co. Report, Powering India, The Road to 2017

84.6%

64.3%

64.2%

49.6%

81.6%

72.3%

96.2%

53.8%

47.5%

51.5%

56.7%

31.2%

66.1%

8.8% 7.1% 7.3% 8.4% 9.6% 9.9% 11.0%10.1%

12.2% 11.2% 11.7% 12.3% 13.8% 16.6%12.0%

13.3%


FY05 FY06 FY07 FY08 FY09 FY10

1214 15

21

44

66

FY05 FY06 FY07 FY08 FY09 FY10

2.32

3.23

4.51 4.52

7.31

5.20

Demand-supply gap is driving up tariffs

Source: CERC Source: CERC

Further growth expected with the emergence of Indian

Energy Exchange and Power Exchange India Ltd

National Electricity plan (April 2007) estimates that

approximately 10,000 –12,000MW capacity will be

developed through merchant power route

Trading trends clearly reflect an overall increase in

power tariffs

Market to also pick up price signals from long/medium

term bids

Quantum of power traded (BU) Weighted average price of power trading (INR/unit)


Location

Fuel

Commissioning

Dates

Original

Debt:Equity

Debt:Equity

(as on 30th June

2010)

Technology

Implementation

Strategy

JPL Operational Project – Tamnar I (4x250MW)

Actual cost

(INRm)

Tamnar

Tamnar, Raigarh, Chhattisgarh (4 x 250 MW)

80:20

0.09

Subcritical BHEL Units

JPL implemented the project by procuring

equipment in various packages (No EPC)

JPL is operating the plant

43,384

Captive coal mines

– Geological reserves of 246MT

– Excavated 5.2 mn MT in FY10

Unit 1 (250 MW) – Dec 2007

Unit 3 (250 MW) – Apr 2008

Unit 2 (250 MW) – Jun 2008

Unit 4 (250 MW) – Sep2008

Location

Sale Strategy75% Power is sold through short term

(3 months to 1 year) bilateral agreement

Copyright © 2010 Jindal Steel & Power Ltd. 16

TAMNAR I PROJECT (OP Jindal super thermal power plant)

Main Plant 258 km transmission line from Raigarh to Raipur

6.9 km cross country pipe conveyor belt for coal transportation Captive Coal Mine


Track Record of Power plant operation

(a) The first 250MW unit achieved commercial operation on 8 December 2007. The remaining three 250MW units

achieved commercial operation on 16 April 2008, 15 June 2008 and 5 September 2008, respectively

FY08 FY09 FY10 Engaged in power generation since Dec, 2007

– Tamnar I Project fully commissioned in Sep 2008, as compared to planned schedule of July 2010

Experience of establishing infrastructure for operation of power projects

– 6.9 km pipe conveyor belt for transport of

coal

– 258 km long 400 kV double circuit

captive transmission line

– A pipeline and a 18 m high dam at Kurket

river

Track record of efficient power plant operation

Exacavation of 5.2 mn MT captive coal in FY10

Installed

capacity

(MW)(a)

250

1,000 1,000 1,000

Gross units

generated

(MU)(a)533

6,1528,148

2,210

PLF 77.2% 84.4% 93.0% 101.0%

Auxiliary

consumption

(%)

12.2%8.9% 8.9% 8.5%

Q1 FY 11

JPL – An Established power generating company




Financial overview

Growth drivers



Consolidated PAT (INR Billion)Consolidated revenue (INR Billion)

Consolidated gross fixed assets (INR Billion) Consolidated capex vs cashflows (INR Billion)

Strong financial performance


Growth Trajectory: Quarterly net profits

31 trailing quarters (consolidated, INR Crores)

60 80

122 147 151

190

203

250

319

444

765

900

988

808

874

963 957

Dec-0

2

Mar-

03

Jun-0

3

Sep-0

3

Dec-0

3

Mar-

04

Jun-0

4

Sep-0

4

Dec-0

4

Mar-

05

Jun-0

5

Sep-0

5

Dec-0

5

Mar-

06

Jun-0

6

Sep-0

6

Dec-0

6

Mar-

07

Jun-0

7

Sep-0

7

Dec-0

7

Mar-

08

Jun-0

8

Sep-0

8

Dec-0

8

Mar-

09

Jun-0

9

Sep-0

9

Dec-0

9

Mar-

10

Jun-1

0


Consolidated financials at a glance

Note: EPS adjusted to reflect a 1:5 stock split w.e.f 27 Dec,07

Note: EPS adjusted to reflect a bonus issue of 5:1

* Net worth and Book value not stated as these are results for part of the year

(Rupees in Crores) FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

Income Statement

Gross Turnover 1,001 1,403 2,467 2,905 3,948 6,260 11,694 11,679

Net Turnover 889 1,272 2,271 2,617 3,548 5,538 10,913 11,151

Net Profit After Tax 145 305 515 572 703 1,251 3,007 3,634

Cash Profit 267 434 765 858 1,174 1,810 4,193 4,759

Gross Turnover rose 11 times in 7 years

Net Profit after tax rose 25 times in 7 years

Balance Sheet

Gross Fixed Assets 1,504 1,966 2,875 4,389 5,866 10,679 14,927 21,109

Networth 571 853 1,317 1,837 2,475 3,722 7,021 10,386

Borrowings 885 1,026 1,495 2,745 3,507 6,996 8,113 8,605

Equity 14 15 15 15 15 15 15 93

Significant Ratios

Operating Margin (%) 39% 40% 40% 40% 41% 41% 48% 53%

Net Profit to Sales (%) 16% 24% 23% 22% 20% 23% 28% 33%

Return on Net Worth (%) 25% 36% 39% 31% 28% 34% 43% 33%

Long Term Debt Equity Ratio 1.41 1.09 1.11 1.20 1.07 1.74 1.03 0.59

EPS (INR/Share) (a) (b) 1.73 3.34 5.58 6.31 7.64 13.54 32.44 39.05




Financial overview

Growth drivers



Project CapacityProject Cost

(INRm)

Expected date of

CommissioningFinancial closure

Plate Mill 1.5 MTPA 26,000 June, 2011 Achieved

DRI 2.0 MTPA 31,410 March, 2012 Achieved

Power 810 MW 34,820 November, 2010 - January,

2012

Achieved

Steel melting shop 1.6 MTPA 35,770 March, 2012 Achieved

Total 128,000 Achieved

Facilities under implementation (Flat Products)

Resources

Coal mine, estimated reserves 228 MT, allotted. Mining expected to start from August 2011

Iron Ore mine, to be allotted as per MoU with the Govt. of Odisha

Coal gasification &

gas based DRIBlast furnace

Steel making

facilities

Flat products (Plates

and HR coils) Power Plant

4.0 MTPA 3.0 MTPA 6.0 MTPA 6.0 MTPA 810 MW

6 MTPA integrated steel plant & captive power plant at Angul, Odisha

JSPL’s greenfield expansions


Project CapacityProject cost

(INRm)

Expected date of

commissioning

Financial closure

Steel Making

(Wire Rod and

Rebars)

Power Plant

3.0 MTPA

100 MW

128,000 September, 2013 Under process

Other Major Facilities

Coke Oven, Blast Furnace, Sinter Plant

and Steel Melting Shop

Facilities under implementation (Long products)

Resources

Two coal mines, combined estimated reserves of 320 MT, allotted

Iron Ore mine, with estimated reserves of 80 MT, allotted

Blast furnace Steel making facilities

(BOF Route)Flat products Long products

6.0 MTPA 6.0 MTPA 3.0 MTPA 3.0 MTPA

6 MTPA integrated steel plant & captive power plant at Patratu, Jharkhand

JSPL’s greenfield expansions (continued)


Project Capacity

Project cost

(INRm)

Expected date of

commissioning Financial closure

Power Plant 540 MW 22,000 Sep 2010 / March,

2011

Achieved

Medium section mill 0.6 MTPA 5,500 Oct, 2010 Achieved

Total 27,500

Facilities under implementation

Coal gasification &

gas based DRI Steel making facilities Medium section mill Power plant

2.0 MTPA 3.0 MTPA 0.6 MTPA 540 MW

3 MTPA integrated steel plant & captive power plant at Raigarh, Chhatisgarh

JSPL’s Brownfield expansions (continued)


Expansion plans of Jindal Power Limited

Overview of power projects Project portfolio of 15,660MW at various

stages of operation, implementation and

planning

Tamnar I Project (1,000MW) was the

first private sector project to achieve

Mega Power Project status in India

Track record of robust profitability,

achieved via a strategy of selling power

through short-term PPAs

Name (Size) Type Control

Operational Project (1000 MW)

Tamnar I (1,000 MW) Thermal 100%

Under Implementation Projects (10,480 MW)

Tamnar II (2,400 MW) Thermal 100%

Dumka (1,320 MW) Thermal 100%

Godda (660 MW) Thermal 100%

Etalin (4,000 MW) Hydro 74%

Attunli (500 MW) Hydro 74%

Subansiri (1,600 MW) Hydro 74%

Under Planning Projects (4,414 MW)

Jharkand (2,640 MW) Thermal 100%

Angul (1,320 MW) Thermal 100%

Nepal (454 MW) Hydro 100%


Location

Fuel/Technology

Capacity (MW)

Expected COD of

1st unit/ Expected

COD(a)

Amount deployed

as of Apr-10

(INRm)(c)

Debt:Equity

Fuel source /

supplier

Project Status

Projects under implementation (Thermal)Tamnar II Project Dumka Project Godda Project

Tamnar, Chhattisgarh Dumka, Jharkhand Godda, Jharkhand

Coal/Sub-critical Coal/Super-critical Coal/Super-critical

2,400 (4x600) 1,320 (2x660) 660 (1x660)

Unit 1 – Jun 2012

Unit 2 – Dec 2012

Unit 3 – Jun 2013

Unit 4 – Dec 2013

Jan-14/May-14 Jan-14/Jan-14

8,293 49 35

75:25 70:30 70:30

Received coal linkage

for 1,200MW

Coal linkage applied for

remaining 1,200 MW

Coal to be

supplied from

JSPL captive

mines at Cost

Coal to be

supplied from

JSPL captive

mines at Cost

BTG contract awarded

to BHEL

Financial closure

achieved

Invited bids from various international

equipment suppliers sanctions

134,100 72,240 36,660Estimated cost(b)

(INRm)

(a) Based on the respective financing documents for each of the projects

(b) Estimated costs for projects under implementation as appraised by SBI Capital Markets Limited. Actual cost for Tamnar I Project

(c) For thermal projects, as per the certificate of Lodha & Co., Chartered Accountants dated December 22, 2009

Location sites of projects

Tamnar

Dumka

Godda


Location

River

Capacity (MW)

Expected COD

Estimated

cost(a) (INRm)

Amount

deployed

as of

Apr-10 (INRm)(b)

Debt:Equity

Etalin

Etalin, Arunachal

Pradesh

Tangon, Debang

4,000

2020 (split in

stages)

218,200

2,430

70:30

Attunli

Attunli, Arunachal

Pradesh

Tangon

500

2020

41,720

134

70:30

Subansiri

Middle

Subansiri Middle,

Arunachal Pradesh

Kamla

1,600

2018

112,030

800

70:30

Projects under implementation (Hydro)

(a) Estimated costs for projects under implementation as appraised by SBI Capital Markets Limited.

(b) In the nature of loans and advances to subsidiaries, including for the payment of an upfront fee (including processing fee) to GoAP


Etalin

Subansiri

Attunli

Status DPR to be received

from NHPCDPR work awarded to SNC Lavlin


Jharkhand

Project

Angul

ProjectNepal Project

Location JharkhandAngul,

OrissaChainpur

Seti, Nepal

Fuel Coal Coal Hydro

Capacity

(MW)2,640 1,320 454

MoUMoU

signed

MoU

signed

Survey

license

obtained

TechnologySuper

Critical

Super

Critical ----

Projects Under Planning


Angul

Jharkand

Chainpur Seti


Strategic location of power projects of JPL


Thermal

Hydro

Nepal

Tamnar

Dumka

Godda

EtalinAttunli

Jharkhand

Angul

Chainpur Seti

Subansiri

Resource rich

regions

Projects located in the Western, Eastern and

North-Eastern grids of India which reported

peak deficit of 17.7%, 6.3% and 17.9%,

respectively, for the financial year ended on 31

March 2010

Source: CEA

Dumka, Godda and Tamnar II thermal power

projects proposed to be located in Chhattisgarh

and Jharkhand which account for c. 45% of

India’s coal resources

Hydroelectric power projects located in

Arunachal Pradesh which has abundant supply

of water


Capacity build-up timeline of JPL

Cumulative capacity build-up (for projects under implementation)(a)

1,000

2,200

3,400

5,380 5,3806,180

6,980 6,980

11,480

FY14 FY15 FY16 FY17 FY18 FY19 FY20Existing

500MW

Attunli

660 MW

Godda

1,320MW

Dumka

4,000MW

Etalin

800MW +

800MW

Subansiri

Middle

Second two

units of

Tamnar II

(1,200MW)

Operational

Tamnar I

FY13

First two

units of

Tamar II

(1,200MW)

(a) Projects under planning (4,414MW) have not been considered for the above timeline


Project Capacity

Projected

investment

(INR m)

CTL Plant 80,000 bbl / day 320,000

Coal mining 50 MTPA 25,000

Power Plant 1350 MW 75,500

Total 420,500

Facilities under implementation

Coal to Liquid (CTL) Project

Objective

■ To enhance energy security of the country

■ Reduce dependence on import of crude oil/

petroleum products

■ Maximize Diesel production (60-70 % Diesel)

■ Establish environment friendly CTL Project with

a strategic fit to Indian Coal (High Ash)

Environment ManagementSulphur Recovery

■ 99.5% of the total Coal Sulphur is recovered as elemental Sulphur & will be used for the fertiliser

industry.

Nitrogen Recovery

■ 1.9% of N2 present in the coal will be converted to NH3 during the process and will be recovered as

Liquid NH3 for the fertiliser industry.


Resource pool to fuel JSPL’s growth

Mine State

Geological Reserve

(Mn MT) Purpose

Domestic Iron Ore

Tensa Orissa 20 Steel

Jiraldaburu Jharkand 80 Steel

Bailadila Chhattisgarh 80 Steel

Total Domestic Iron Ore 180 Mn MT

Overseas Iron Ore

El Mutun Bolivia 20,000 Steel

Total Overseas Iron Ore 20,000 Mn MT

Coal

Gare IV / 1 Chhattisgarh 141 Steel & Power

Gare IV / 2 & 3 (JPL) Chhattisgarh 246 Power

Gare IV / 6 Chhattisgarh 158 Steel & Power

Jitpur Jharkand 81 Power

Amarkonda Jharkand 205 Power

Utkal B 1 Orissa 224 Steel & Power

Urtan North M.P. 55 Steel & Power

Ramchandi (CTL) Orissa 1500 Coal to Liquid & Power

Total Coal 2610 Mn MT




Financial overview

Growth drivers



Sustainability Initiatives and Awards

Initiatives

Action Location

R&R Colonies All

Fly Ash brick plant Angul, Odisha

O.P. Jindal Institute of Technology & Skills Angul, Odisha and Patratu, Jharkand

Medical Camps Local villages in Odisha, Jharkand, Chhattisgarh

O.P. Jindal Hospital & Research Centre Raigarh, Chhattisgarh

O.P. Jindal School Raigarh, Chhattisgarh

Modernization of High School Patratu, Jharkand

O.P. Jindal Industrial Park Raigarh, Chhattisgarh

Awards

“Innovating Sustainability” – CSR Excellence Award by ASSOCHAM - 2010

Think Odisha Leadership Award in Corporate Social Responsibility – 2009, 2008

FICCI Award in recognition of Corporate Initiatives in sports

National Energy Conservation Awards - 2007, 2005, 2004, 2003, 2002, 2001


Awards

Features in Forbes Fab 50 list

CNBC Award for “Most Promising New Entrant in Big League” – 2009

Among Top 20 "Best Companies To Work For" by Business Today – 2009

Ranked 16th among BT500 India’s most valuable companies (private sector) - 2009

“Innovating Sustainability” - CSR Excellence Award by ASSOCHAM - 2010

Think Odisha Leadership Award in Corporate Social Responsibility – 2009, 2008

National Energy Conservation Award – 2007, 2005, 2004, 2003, 2002, 2001

Ranked 1131 by Forbes in 2009-10 (as against 1793 in FY09) in Global 2000 (World’s biggest

listed companies list)

Achievements

Manufacturer of longest rail of 121 meter long in the world

Largest coal based sponge iron facility in the world

First Company to produce power from waste heat recovery boiler from sponge iron

Part of Nifty 50 and Sensex 30

Awards and Achievements


Thank you

Corporate Presentation - AceAnalyser Meet/132286_20101026.pdf · Dongamahua, Chhattisgarh,...

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