Slide 1: Analyst / Institutional Investor Meeting - Outcome
PROUD TO BE INDIAN PRIVILEGED TO BE GLOBAL, HEG/SECTT/2017 8th December, 2017 1 BSE Limited 2 | National Stock Exchange of India Limited 25 Floor, P J Towers Exchange Plaza, 5th Floor Dalal Street Plot No.C/1, G Block, Bandra - Kurla Complex MUMBAI - 400 001. Bandra (E), Scrip Code : 509631 MUMBAI -
Slide 2: Proud to be Indian, Privileged to be Global - December 2017
PROUD TO BE INDIAN PRIVILEGED TO BE GLOBAL December 2017
Slide 3: HEG is part of LNJ Bhilwara Group
HEG IS PART OF LNJ BHILWARA GROUP A DIVERSIFIED, REPUTED AND LARGE INDIAN BUSINESS HOUSE HAVING MORE THAN FIVE DECADES OF INDUSTRIAL EXPERIENCE AND PRESENCE IN Power Generation & IT Enabled Textiles Graphite Electrodes Power Consultancy Services 2 2
Slide 4: Nationwide Presence: Plants & Office Locations
NATIONWIDE PRESENCE Plants & Office Locations • Group has 5 of its companies listed on Indian Stock Exchanges, with over one million stakeholders. • Corporate office & Production units at 37 locations with over 25,000 workforce. LNJ Group - Key Financials 2016-17 Turnover USD 989 mn Listed Companies
Slide 5: World's Largest Single Site Graphite Electrodes Plant
WORLD’S LARGEST SINGLE SITE GRAPHITE ELECTRODES PLANT 4 4
Slide 6: Highlights
HIGHLIGHTS 1977 - Established in Financial (appx 25% equity) / Technical participation of Pechiney, France 1992 - Pechiney sold their Graphite business to SGL, Germany & Indian Promoters bought these shares in HEG 1995 / 2011 – Kept expanding from 10,000 mt in small tranches & in 2011 took a q
Slide 7: Graphite Electrodes Industry - Our Unique Strengths
GRAPHITE ELECTRODES (GE) INDUSTRY – OUR UNIQUE STRENGTHS GE- An indispensable material for Electric Arc Furnaces (EAF) for Steel production EAF accounts for appx 45% of total World Steel Production (Without China) High Entry Barrier – HEG the last new entrant in the world -1977 Uses 100 % Ca
Slide 8: R&D Center
R&D CENTER R&D Centre R&D set up to corroborate the Quality & Improvement Drives with small scale production facilities The focus is also on development of new product lines Development is focused towards Carbon 7 7
Slide 9: Capacity Build Up
CAPACITY BUILD UP 120 100** 100 (In ‘000 tonne) 80 77 77 77 80 66 60 52 44 40 30 20 14 14 0 Graphite Electrode Captive Power (MW) 1990 2002 2006 2009 2011 2020 ** Probable 8 8
Slide 10: Industry Overview - India's Rising Share (Without China)
INDUSTRY OVERVIEW – INDIA’S RISING SHARE (WITHOUT CHINA) 40 35 33 32 32 31 32 30 30 26 26 25 23 22 20 15 14 10 5 3 0 Americas Europe Japan/Malaysia India 1990 2010 2017 9 9
Slide 11: Graphite Electrodes Capacity Evolution (W/O China & Russia)
GRAPHITE ELECTRODES CAPACITY EVOLUTION ( W/O CHINA & RUSSIA) S. No. Company Name 2010 2014 2017 No. of plants 1 SDK 105 105 115 + 110 = 225 2+3 2 Tokai 100 100 65 + 30 = 95 3+1 3 NCK / SEC 60 60 60 2….. Sub-Total 265 265 240 + 140 = 380 7+4 Japanese 4 GTI 245 185 160 3 5 SGL 230 180 0 0 Sub-Total 74
Slide 12: Notes
NOTES SGL closed three plants in Italy, Canada, Germany between 2010 & 2016 GTI closed three plants in S. Africa, Brazil, USA between 2010 & 2016 SDK acquired SGL’s three plants in 2017 in Spain, Austria & Malaysia & reduced capacity in Japan & increased capacity in USA between 2015 & 2016 T
Slide 13: EAF World Production - With & Without China
EAF WORLD PRODUCTION –WITH & WITHOUT CHINA Figures in mmt 550 550 500 +50 mmt (10%) 500 454 448 +64 mmt (15%) 450 431 429 429 430 436 422 409 397 400 357 407 +23 mmt (6%) 383 383 380 384 350 373 366 372 +35 mmt (10%) 360 353 356 349 300 301 250 EAF World EAF World without China 12 12
Slide 14: China's EAF Growth
CHINA'S EAF GROWTH 180 170 160 (+ 150,000) 140 Figs in mmt 120 116 (+ 80,000) 100 87 80 (+ 104,000) Increase in electrode demand in tons 60 49 40 2015 2016 2017 2020 13 13
Slide 15: Needle Coke Scenario
NEEDLE COKE SCENARIO With the sudden increase in demand of GE, needle coke availability has become a bottleneck. The Maintenance shut down schedule of some of the large refineries have coincided further affecting the needle coke availability Due to excess capacity of needle coke in the recent
Slide 16: Chinese Crackdown on Polluting Industries
CHINESE CRACKDOWN ON POLLUTING INDUSTRIES In January 17, Chinese Government identified some highly polluting industries, which included small, outdated Induction Furnaces and Mini Blast Furnaces asking them to close down by June’17. China has closed capacity totalling in the range of 100-120 mil
Slide 17: China Reduces Export of Steel
CHINA REDUCES EXPORT OF STEEL China has been exporting appx. 110 mmt of finished Steel globally for past couple of years leading to reduced production in these countries. Due to closures of steel capacities & continuing growth of steel demand within China, their exports of steel in first 9 month
Slide 18: China's EAF Steel Growth
CHINA’S EAF STEEL GROWTH Chinese EAF production in first 9 months of 2017 has grown by 25% (to 81 mmt), which is expected to grow by 33% (to 116mmt) in the full year 2017 China is likely to add additional new EAFs capacities of 30-50 mmt in near future This major shift towards electric arc fur
Slide 19: Recent Changes in Graphite Industry Led by China
RECENT CHANGES IN GRAPHITE INDUSTRY LED BY CHINA Source: Platts Due to substantial capacity closures of electrodes, the exports of electrodes are likely to fall by appx 100,000 mt There is no stock on the ground and demand from mills -- particularly EAFs -- has increased sharply, taking electrod
Slide 20: Recent Developments in Graphite Industry
RECENT DEVELOPMENTS IN GRAPHITE INDUSTRY GrafTech has invoked force majeure suggesting disruption in supply of electrodes in November and December due to Hurricane Harvey impacting its needle coke facilities in Texas recently Some large steel companies like Outokumpu, AK Steel and Republic Steel
Slide 21: Thank You !!
Thank You !! 20 20