World Steel Dynamics — Speech
Good Morning Everyone,
Let me begin by thanking the World Steel Dynamics for giving me this opportunity, to share my views with the industry stalwarts from across the globe.
I am glad to share with you the Growth Prospects of Indian Steel Industry in general and the expansion plans of Jindal Steel & Power Ltd in particular.
While all of us of would have concerns on the global economic scenario, I can confidently say…. India Growth Story is very much intact and is here to stay. Against the backdrop of the global economic situation, I am sure India will come out as a good performer and emerge as of one of the top Economies in times to come.
A recent Goldman Sachs reiterates that by 2050 India would emerge as the second largest economy in the world (After China). A recent World Bank study also says and I quote, “There is indeed a big opportunity for India to expand its trade significantly without hurting the development prospects of other Economies.”
In fact just yesterday at the G20 Summit our honorable Prime Minister, Dr. Manmohan Singh said and I quote: “The fundamentals of the Indian economy remain strong and we are confident of bringing back the rhythm of high growth of 8-9% per annum.…..We are focusing heavily on infrastructure investment and in this context we have set ambitious targets to keep infrastructure investment on track and also put in place a problem resolution mechanism to overcome implementation bottlenecks.”
To stimulate the Growth Story, our Government has given a big boost by allocating US$ 1 Trillion for the infrastructure development in 12th five year plan.
This will indeed provide a big opportunity for the Indian Steel sector. The Indian steel industry entered into a new development stage from 2007-08, riding high on a resurgent economy and rising demand for steel. Rapid rise in production today has resulted in India becoming the 4th largest producer of crude steel and the largest producer of sponge iron or DRI in the world.
The future of the Indian Steel industry is very promising and India is expected to contribute 12% to the Global Economic Growth by 2020.
Some salient features of India’s growth story are:
- The Government has planned large amount of investments in Infrastructure, Construction and Automobile Sectors.
- As per the Boston Consulting Group, India has achieved a status of Top Four wealth creating countries in the world.
- The Purchasing Power Parity in India is the fourth largest in the world.
- Per capita steel consumption in India is 55 kg as against 476 kg per capita of China. This confirms that there is ample scope for the industry to grow.
- Growth in Manufacturing Sector is planned from 8% today to 12% in the next few years.
- India’s urban population is slated to rise to 600 million by 2030 from the current level of 400 million. The strong middle class population will increase the demand in each sector.
- Though, the current slowdown in the World Economy is a matter of concern, Indian steel producers are optimistic that the GDP will grow at the rate of 8-9 % and the steel sector will grow at 10-11%.
- Since domestic demand for steel will be around 200 million ton per year by 2020, there is ample scope for the existing players and for new entrants to increase Liquid Steel production up to 200 million ton by 2020.
The Jindal Group was started by my father, Mr. O.P. Jindal who started his business with a Tube Manufacturing unit and always had a passion towards developing new technology. India was under Control regime at that time and the access to new technologies was limited to only bigger companies.
My father chose to develop indigenous technologies suitable for Indian conditions. He, on his own, built the Coal-based DRI kilns to produce steel through the Electric Arc Furnace (EAF) route. We commissioned our steel plants partly with used machines and partly with home grown technologies.
Times changed and we graduated to adopting the best technologies available in making and rolling of steel. Today at Jindal Steel, we are proud to partner with WORLD’s BEST TECHNOLOGY/ EQUIPMENTS suppliers. Some of our major Technology partners include SMS, Danieli, Siemens VAI, Outotec, SMS Meer, HYL, Lurgi, Air Liquide, UDHE, Paul Wurth, Danieli Corus, Sino Steel, SPCO Japan, Metso and many more world-class, state-of-the-art technology suppliers.
At the O.P. Jindal Group, our annual sales turnover is around Rs 80,000 crores, which is equivalent to approximately US$ 16 billion. We are growing and expanding continuously and several projects are on the anvil as of now. Our current capacity is 18 million tons and by 2020 we will reach to 40 million ton in steel making.
As a part of the O.P. Jindal Group, my company JSPL is currently producing 3 million ton steel and have undertaken projects in the states of Odisha, Jharkhand and Chhattisgarh in Central and Eastern India.
Work is going on in full swing in all these locations. By 2016, our total steel making capacity at JSPL will become more than 12 Million ton in India and 2 million ton in Oman.
In Odisha in Eastern India, we are putting up a Syn gas based 1.8 MTPA Midrex DRI plant, a 250 ton SMS make EAF, a plate mill of 5000 mm wide from Siemens VAI, a 490 square meter Sinter plant, a 3.6 MTPA Coke Oven, 2x 4019 cubic meter Blast furnaces and a 3×250 tons BOF shop and a Hot Strip Mill. Apart from this we are also adding one more DRI plant based on Coke Oven gas for the first time in the world from HYL-Techint having a capacity of 2.50 MTPA.
Comment: Sir this is hitting competition below the belt will suggest to skip this.
All of the above plans and equipments will make our plant in Odisha one of the largest steel plants in the world.
This plant is in the same state where Posco and Arcelor Mittal had declared their steel plants with a capacity 12 MTPA each. Due to some local issues related to land etc., they have yet start construction.
At another location in Patratu in the state of Jharkhand, we are adding a Blast Furnace of 4019 cubic meter, a coke oven plant of 1.7 MTPA, a 490 square meter Sinter plant, a 2×250 ton Converter Shop and 2 billet casters and 3 long products rolling mills.
JSPL is very aggressively increasing its global footprints across Asia, Africa, Australia and South America. Our group is always exploring INTRESTING opportunities in global markets. Our first manufacturing unit overseas was commissioned about 1.5 years back in Oman. We have a Midrex make Mega module DRI plant and a steel melt shop of 2 MTPA under installation from Danieli in the Middle Eastern nation.
We are already doing Coal Mining in South Africa, while coal mines in Mozambique, Australia and Indonesia are under development. Similarly, the world’s largest single location iron ore mine at EL Mutun in Bolivia is also in the development stage.
Though times are tough, India will continue to bring in new opportunities for existing players as well as for outside investors.
I extend a warm invitation to all those who want to see our facilities and see the India Growth story with their own eyes, to plan a visit to our great and hospitable country.