WHY INVEST IN JHARKHAND?

Jharkhand has been integral to industrial growth

1907 Steel Works set up at Sakchi1910 Jharia Division begins operations1923 The Tinplate Company of India is established1925 Noamundi Mines commence supply of iron ore1927 Tata Pigments is formed1948 West Bokaro collieries acquired by Tata Steel1950 Tata Motors establishes plant in Jamshedpur1953 Indian Tube Company is set up, now a part of Tata Steel1957 Uranium Corporation of India established 1958 Heavy Engineering Corporation1959 MECON Ranchi established1961 TRF Limited set up by Tata Group1964 Bokaro Steel Plant commences operations1985 Tata Sponge sets up base in Joda1962- 1968 Tayo Rolls, Tata Growth Shop and JAMIPOL1975 Central Coal Fields formed, a miniratna company1998 Timken establishes base in India1999 1991 Indo Danish Tool Room established• Tata Power sets up thermal power plant2003 Tata Steel takes over ISWP

Regulatory framework

Procedures for entry and exit of firms

Industrial regulation, labour regulation, other government regulations

Certainty about rules and regulations

Security, law and order situation

Incentives to industry

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

Since its creation the state it has set in place a range of enablers for investment

Jharkhand is a leader in key industries

PARTNERING GROWTH IN THE STEEL INDUSTRY

Growth in Global Apparent Steel Use is expected to be steadyApparent steel** demand in Mn.T (yoy % growth)

Source: WSA, SRO_April 2011Source: WSA, SRO_April 2011

Effective crude steel capacity (Mn.T) in 2011 (f)

NAFTA

Rest of Asia

China

EU - 27CIS

9%8%

China

Asia, Oceania & Africa (ex-China)C & S America

India 14%13%

8%

5%5%

8%

11%4%

6%

6%5%

7%

818

86

161

**ASU depicted is for carbon + alloy steel

185140

42962

The total demand will be 1.44bn mt in 2012, a growth of 6% over 2011

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

Belief in the potential of the steel industry in India

Steel is the backbone of the India Growth Story

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

To achieve its growth targets India will need steel

Indian steel demand is expected to grow at ~8-9% in FY’12

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%.

5662.1

67.38.5%

11%

Major steel consuming sectors are expected to post lower growth rates in FY12…

Growth rates yoy (%) Carbon steel ASU* (Mn. T)

* After JPC’s revised estimates added ~ 3 MT to FY10 ASU

25.0%

6.5%

19.2%

26.2%

27.5%

8.1%

15.0%

14.0%

12.0%

8.5%

10.0%

11.0%

Auto

Constn

Cap Gds

Consumer Durables

FY10 FY11 FY12 F

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

The steel industry is expected to be a driver of economic growth in India

Manufacturing Spares (Mech / Elect / Hydraulic etc.)Steel Service CentreSlag CementSponge ironRollsPumpsTools & TacklesMobile EquipmentFoundry & ForgeLubrication oilsRubber Belts / CablesSafety appliancesStationary itemsFurniturePaintsPower generation & distribution

Manufacturing Spares (Mech / Elect / Hydraulic etc.)Steel Service CentreSlag CementSponge ironRollsPumpsTools & TacklesMobile EquipmentFoundry & ForgeLubrication oilsRubber Belts / CablesSafety appliancesStationary itemsFurniturePaintsPower generation & distribution

ServiceHandling agents / Couriers3 PLTransport contractsMaintenance -contractsHospitalityMedicalRetail Realty

ServiceHandling agents / Couriers3 PLTransport contractsMaintenance -contractsHospitalityMedicalRetail Realty

The steel industry is a growth multiplier given the opportunities it generatesfor Allied Industries

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

The 12th Five Year Plan has given impetus to the steel industry

Growth plans of the global steel industry for India

Key enablers for growth of the steel industry in IndiaNational 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

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

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

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

Jharkhand Industrial Policy’s focuses on growth of mineral based industries in the state

Source: Jharkhand Industrial Policy 2011

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

Growth of the contribution of steel and steel based industries industrial value

56.02

15.25

7.7

21.03Share of industries

Iron & Steel

Auto & Auto Components

Coke oven product

Others

• 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

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

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

Why Jharkhand is seen as an emerging steel hub?

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