JINDAL STEEL WORKS VASIND

Vasind Plant has come a long way since its inception, when it started with commissioning of 20 – Hi cold rolling mill in 1983. The Last quarter was full of accomplishment and milestones. Various production landmarks were achieved and significant progress made in the ongoing projects.

A CRCA product which was a closed unit for few months, has recommenced operations in the last quarter and is running with the same product quality. Energy efficient Drives have been started and commissioned as a part of energy saving initiative which has helped to create awareness on energy and resource conservation. It has also given a momentum to their energy conservation efforts. The drive has also helped lower the product conversion cost.

‘Natural Gas Project” and “Railway Siding Project” are in their advanced stages and are expected to be completed by the end of the current financial year. On completion of both the project they will be able to reduce their product conversion cost by Rs 500 per tonne.Apart from this they are in touch with various agencies for development of various value added products in this location. This step will help them gain a competitive edge over our competitors and add new market segments in the company portfolio.

LOGISITICS

JSW has re-adjusted their strategies to deal with problems caused by the short supply of Railway Wagons. Recognizing that the slow and inefficient movement of raw material is a potential hurdle, JSW has drawn up a number of projects to lower freight costs and enable timely deliveries with expanded capacity.For Steel Companies, the requirement for Railway wagon is more for the movement of Raw Material and not the Finished Products.

As with any problem group has adopted a hands-on approach to solving this seemingly insurmountable obstacle that has got most of corporate India sitting helplessly in quiet frustration.

JINDAL’S FOUR TECHNOLOGICAL CALLS

1) Corex Technology:- Disgusted by seeing the workers with soot on their faces, JINDAL’S search for a cleaner alternative leads him to Corex Technology. When Blast Furnace is the popular technology, they opts for Corex.

2) Blast Furnace:- Corex is cheaper and cleaner than Blast Furnace, but it doesn’t enable scale. When JINDAL oulines a rapid expansion, he choses Blast Furnace.

3) Cold Rolled Steel Mills:- Wanting to save costs JINDAL essentially suggested a new way of processing CR steel to his team-one that was just as effective as the conventional method but cheaper.

4) ISPAT Industries:- Jindal uses Iron Ore, ISPAT imports iron pellets-one step down. JINDAL proposes supplying iron pellets to ISPAT, saving on import duty. Also, instead of buying Power from the government, ISPAT will tap into the JINDAL’S surplus power.

Tryst with technology

One year time that’s the time Sajjan Jindal says he needs to turn around ISPAT industries, the sinking steel company he bought in December 2010. the same that has not made the profit for the last two years that has accumulated losses of Rs 2465 Cr and a debt burden of Rs 10,000Cr that was about to be taken over by its lender before it found a saviour in Jindal

High up on the list that give 50 year old Jindal the confidence to accomplish that tall task is the compatibility of ISPAT and JSW steel, his Rs19,074Cr company.Jindal has designed a steel mill, innovated on another and backed an alternative technology in nascence. “Amongst Indian Steel promoters, Jindal is the most hands-on in technological issues.”

ISPAT uses a steel making technology called ConArc, while JSW uses Blast Furnace and a variant, Corex. Yet, Jindal saw it as complementary than contradictory. While Blast Furnace converts iron ore into steels, ConArc uses iron pellets, which is basically iron ore that is processed one step. For its plant in Dolvi, Maharashtra, ISPAT was importing iron pellets, which meant it was paying more on account of transportation and import duties. Now it will buy those pellets from JSW’s Plant in Vijaynagar, Karnataka. Also, instead of buying power from the government, ISPAT will tap into the surplus power that Jindal’s power arm has in Ratnagiri, about 200km from Dolvi.

“ISPAT will Save 10% on pellets cost and 25% on power costs” that’s a combined saving of about Rs 500Cr. That year ISPAT Industries posted a net loss of Rs 323 Cr. The synergy will help ISPAT post a positive EBIDTA by the first quarter of the next fiscal.

In 2006, JSW made design cum intervention when JSW was putting up a 1 mtpa cold rolled (CR) steel plant. CR steel is more durable version of the metal. Jindal essentially suggested a new way of processing CR steel- one that was Just as effective as the conventional method but cheaper. The experiment succeeded and JSW has since applied for a patent on that design.

Corex has three other advantages over Blast Furnace.1) It uses inferior, and therefore cheaper (20% less than Blast Furnace), coking coal2) It produces gas as a by products which can be channelled to make power3) It does not release gas into atmosphere and earns the company carbon credits.

But Corex works only for capacities of upto 1 mtpa, anything larger has to be blast Furnace.

CORPORATE SOCIAL RESPONSIBILITIES (CSR)

1) SHG’s gets trained in account keeping2) Providing the water of life3) Recycling Plastic for Greener Environment4) Eye check-up camps.

JSW GROUP POLICY

CORPORATE SUSTAINABILITY

JSW Group encourages its companies to:

1) Be Responsible & Sensitive to Environment by ensuring that gaseous & liquid effluents, if any, are superior or equal in quality compared to inputs & treat solid wastes to make them value added products.

2) Be complaint plus with the norms & upgrade technology to address Climate Changes issues proactively. Assist supply-chain partners to achieve similar goals.

3) Continuous improvement in process efficiency to optimize usage of natural resources. Encourage Recycle, Reuse and Reduce.

4) Proactively support the community through Social Programmes in Sanitation, Health, Education, Women empowerment, Skill building, Livelihood enrichment, Water conservation, youth development etc.

5) Ensuring financial growth of the enterprise along with improvement of Human, Social & Natural wealth.

6) Encourage all its employees &their families in Volunteering Programme to enable them participate in building the society.

7) Ensure Safety & Health of All engaged in Operations, Projects, Logistics & Other activities across all locations.

1. FINANCIAL RESULTS Rupees in crores Standalone Consolidated F.Y. F.Y. F.Y. F.Y. Particulars 2009-10 2008-09 2009-10 2008-09 Net Turnover 18,202.48 14,001.25 18,957.17 15,934.84 Other Income 532.84 259.56 536.00 271.66 Total Revenue 18,735.32 14,260.81 19,493.17 16,206.50 Profit before Interest, Depreciation, & Taxation (EBIDTA) 4,805.74 3,092.67 4,606.67 3,253.50 Interest 862.68 797.25 1,108.01 1,155.62 Depreciation 1,123.41 827.66 1,298.66 987.77 Profit before Taxation & Exceptional Items 2,819.65 1,467.76 2,200-00 1,110.11 Exceptional Items - 790.13 - 794.78 Profit before Taxation (PBT) 2,819.65 677.63 2,200.00 315.33 Tax including Deferred Tax 796.91 219.13 646.71 72.60 Profit after Taxation but before minority interest and share of profit of Associates 2,022.74 458.50 1,553.29 242.73 Share of Losses of Minority - - (33.21) (20.53) Share of Profit of Associates (Net) - - 11.05 11.65 Profit after Taxation (PAT) 2,022.74 458.50 1,597.55 274.91 Profit brought forward from earlier year 3,883.15 3,505.86 3,676.02 3,482.32 Amount available for Appropriation 5,905.89 3,964.36 5,273.57 3,757.23

Appropriations Transferred (to) / from Debenture Redemption Reserve (125.00) 20.45 (125.00) 20.45 Transferred to Capital Redemption Reserve (9.90) - (9.90) - Dividend on Preference Shares (28.92) (28.99) (28.92) (28.99) Proposed Final Dividend on Equity Shares (177.70) (18.71) (177.70) (18.71) Corporate Dividend Tax (34.31) (8.11) (34.31) (8.11) Transfer to General Reserve (202.28) (45.85) (202.28) (45.85) Total (578.11) (81.21) (578.11) (81.21) Balance carried to Balance Sheet 5,327.78 3,883.15 4,695.46 3,676.02