JSW Steel’s integrated operations with industry-leading capacity and scale, wide portfolio of products that caters to a diverse customer base across 100 countries and robust execution discipline positions us well to benefit from the global steel super cycle and increasing domestic demand. Our capacity expansion plans, upon completion, will not only consolidate our leadership in the Indian steel industry, but will also become immediately value accretive. Further, our continued to focus on cost leadership, growing share of high-margin value-added products in the sales mix, and integration of ESG factors into growth strategies will enable us to continue creating sustainable value for all our shareholders, as well as other stakeholders.
01
The National Steel Policy (2017) envisages crude steel capacity of 300 MnT by FY 2030-31 from ~140 MnT in FY 2020-21. In the short term as well, the Indian steel demand is expected to grow by 19.8% and 5.9% in 2021 and 2022 respectively.
At JSW Steel, we are well-poised to benefit from expected growth in steel demand from infrastructure, construction and automobile industries as we ramp up capacity by 70% over the next 5 years from 18 MnT to 30.5 MnT. The salient features of this expansion are:
02
Over the years, we have made strategic changes in our processes to adapt to a changing environment, rationalised our cost structure, and implemented measures to enhance productivity. We have emerged as a leader in our industry with one of the lowest conversion costs globally at ~US$110/tonne in FY 2020-21.
World Class Steelmaker Ranking**
In India
In Asia
Globally
** On the basis of weighted average score out of 10 across 23 different parameters from World Steel Dynamics’ World-Class Steelmaker Rankings as of October 2020
We deploy best-in-class technology, leverage data analytics and focus on innovation to improve our overall operational efficiency. Cost-saving projects such as the pellet plant and coke oven facilities at Vijayanagar and Dolvi are a few examples. Further, we have implemented a pipe conveyor system to transport iron ore fines, which not only provides significant savings on logistics costs but also reduces our carbon footprint.
Source: World Steel Dynamics (World-Class Steelmaker Rankings as of October 2020)
Note: Rank on a scale of 10
*All quoted numbers are scores assigned out of 10 on World Steel Dynamics’ World-Class Steelmaker Rankings as of October 2020
Select parameters where JSW Steel was assigned a high score. The aggregate ranking is on the basis of weighted average score across 23 different parameters
03
We have a broad range of innovative products and services catering to a variety of markets and customers around the globe. Our product portfolio has evolved over the years, owing to our best-in-class technology and sustained R&D initiatives which help deliver innovative solutions to our customers. We have always focused on enriching our product mix by increasing volume and including high-margin VASP in our product range. These products have performed well in the market and contribute to increasing profits.
Value Added and Special Products
Other Products
Sales contribution from VASP (Value-added and special products)
Exclusive and non-exclusive retail outlets
Domestic-to-export sales mix
Distribution centres
Export footprint
JSW Shoppe spread across urban areas
JSW Shoppe Connect to cater to semi-urban and rural areas
04
We aim to produce superior-quality products while keeping the health of our environment and society in mind, promoting circularity in our operations and fostering growth and betterment for communities. We are committed to deep decarbonisation and are actively pursuing a climate change agenda. This has been induced and carried forward by our strong governance policies and further inculcated into our culture by our top management, who steer our journey strategically.
Biodiversity at our operating sites
Note: All improvement figures pertain to performance between FY 2004-05 and FY 2020-21. Specific performance across indicators are mapped in the 'Sustainability at JSW Steel' section of this Report
05
We are governed by a strong team of experienced and diverse professionals visionaries who take strategic decisions keeping the best interests of the Company and its stakeholders in mind. Our Board and management team have diverse backgrounds and specialisations.
Our efficient governance has been the key driving force in achieving our strategic focus of increasing profits, maximising efficiency and mainstreaming sustainability. Our core values and thought leadership has percolated to every stage of our organisation
Committees headed by Independent Directors
Average Board meeting attendance
Rated at Leadership Level (A-) by CDP
06
Our record has been consistent, and our growth has been prudent through several steel cycles through strong planning, execution and consistent delivery. We have grown from a capacity of 1.6 MTPA to 18 MTPA through a combination of organic and inorganic projects. We have delivered a capacity growth CAGR of 13% since FY 2001-02 and a total revenue CAGR of 21%.
Key acquisitions during FY 2020-21
07
We have maintained an impeccable track record by not only increasing our production but also reducing waste and costs.
We have maintained our low-cost position and strong EBITDA margins on the back of cost efficiency and growing share of value-added products. We have emerged stronger and better after each downturn in the cycle.
Consolidated saleable steel(Mnt)
Crude steel production(Mnt)
EBITDA (` crore)
EBITDA margin (%)
08
We have also focused on maintaining a robust balance sheet through prudent and disciplined deployment of capital. Our net gearing at 1.14x is well below our stated cap of 1.75x. Similarly, our leverage at 2.6x is comfortably below our stated cap of 3.75x.
Our access to diversified pool of funding and liquidity and proactive debt management have made our financial profile stable.
Our Total Shareholder Return (TSR) CAGR of 24% over last 10 years reflects our ability to deliver sustained profitable growth through economic cycles.
We have made sure that the business generates consistent cashflows, and our dividend flow to shareholders continues to grow with each passing steel cycle.
3-year TSR
dividend per share
In FY 2020-21 vs `2.25 in FY 2016-17
10-year TSR
Net gearing under our long-term cap of 1.75x
Net debt to EBITDA, with leverage under the stated cap of 3.75x
Strong credit ratings
CARE: AA- (Stable outlook), IndRa: AA (Stable outlook), ICRA: AA- (Positive outlook)
