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WHY INVEST IN JHARKHAND?

WHY INVEST IN JHARKHAND?. 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

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WHY INVEST IN JHARKHAND?

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  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 • 1925Noamundi 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- 1968Tayo Rolls, Tata Growth Shop and JAMIPOL • Central Coal Fields formed, a miniratnacompany • Timken establishes base in India • 1991 Indo Danish Tool Room established • Tata Power sets up thermal power plant • 2003 Tata Steel takes over ISWP

  3. Since its creation the state it has set in place a range of enablers for investment Regulatory framework Incentives to industry Procedures for entry and exit of firms Industrial regulation, labour regulation, other government regulations Certainty about rules and regulations Security, law and order situation Tax incentives and exemptions Investment subsidies and other incentives Availability of finance at cost-effective terms Incentives for foreign direct investment (FDI) Profitability of the industry

  4. Jharkhand is a leader in key industries • 3.3% of India’s 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 world’s 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) CIS NAFTA 9% EU - 27 8% 5% 4% 11% 6% 5% 5% China 140 China 185 161 14% 818 13% India Asia, Oceania & Africa (ex-China) C & S America 8% Rest of Asia 6% 8% 7% 86 62 429 The total demand will be 1.44bn mt in 2012, a growth of 6% over 2011 Effective crude steel capacity (Mn.T) in 2011 (f) **ASU depicted is for carbon + alloy steel 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 India’s per capita consumption is 30 kgs of steel India’s 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 FY’12 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 JPC’s 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 • Medical • 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 Policy’s 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 Jharkhand’s industrial out put. • Steel industry has grown by 24% in the last decade • Auto and it’s 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

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