STRATEGIC MANAGEMENT AT VEDANTA GROUP

Prepared By : Submitted To : Prof. Hiren Patel

Tasneem Sutarwala(55)Jigna Thakkar (56)Ram Thakur (57)

Topic involve in presentation

• About Vedanta• Group Structure• Policies• Strategy implementation• Vision • Mission• Values• SWOT analysis• Strategy towards CSR• Future operation

About Vedanta

• ANIL AGARWAL Executive Chairman

Vedanta Group primarily engaged in copper, zinc, aluminum and iron ore businesses. Our business is principally located in India, one of the fastest growing large economies in the world.

• In addition, Vedanta Group have operations in Zambia and Australia with

29,000 Employees • Vedanta Group are also well positioned to take advantage of the significant

growth in industrial production and investments in infrastructure in India, China, Southeast Asia and the Middle East, which we expect will continue to create strong demand for metals.

Timeline

• 1986 - The Vedanta group had started its operations with Sterlite Industries (India) it has acquired several large companies in India such as Madras Aluminium ... (India) in 1986. India such as Madras Aluminium Company (Malco), Bharat Aluminium Company (Balco), Hindustan Zinc (HZL) and Sesa Goa. Vedanta Alumina and Konkola Copper Mines are the other subsidiaries of the company.

• Mar 13, 2008 - Kolkata: The $ 6.5-billion turnover Vedanta Group will set up aluminium manufacturing capacities in Burdwan district of West Bengal at an ... A `Memorandum of Development' in this regard was signed here today between the Vedanta Group and the West Bengal Industrial Development ...

• Jun 11, 2009 - Panaji, June 11 (IANS) Goa's biggest family-owned mining company, the Dempo group, has sold all its mining assets to Sesa Goa Limited, a majority-owned subsidy of the London-listed Vedanta Resources, for Rs.1750 crore (Rs.17.50 billion/$368 million) in an all-cash deal. ...

Group Structure

Policies

• Develop, implement and maintain environment management systems aligned with our commitments and beliefs and consistent with world-class standards

• Conserve natural resources, raw materials, water and energy by process improvements, recycling and reducing and re-using waste

• Seek continual improvements through setting and reviewing targets,

assessing and reporting environmental performance, applying best practices and providing all employees with relevant training

• Encourage contractors and suppliers to adopt our principles and practices • Implement regular health surveillance and risk-based monitoring of

employees.

Vision: -• We believe our experience in operating and expanding our

businesses in India will allow us to capitalise on attractive growth opportunities arising from India’s large mineral reserves, relatively low cost of operations and large and inexpensive labour and talent pools.

Mission :-• Our mission is to be a world-class metals and mining group

and generate superior financial returns.

Values :-• Entrepreneurship • Growth • Excellence • Trust • Sustainability

Strategies Implementation

Our strategic goal is to create a world-class metals and mining company and to generate strong financial returns. Our strategy is based on the following four key pillars:

• Continuing focus on asset optimization and reducing the cost of production.

• Increasing our capacities through Greenfield and Brownfield projects.• Consolidating our corporate structure and increasing our direct ownership

of our underlying businesses to derive additional synergies as an integrated group.

• Seeking further growth and acquisition opportunities

Present Strategy Maker Gilbertson quits Vedanta

• Mr. Gilbertson has become a highly-paid corporate hired hand.He is a consultant to Lonmin, and was appointed chairman of Vedanta last year. It's rumoured he has been offered a lucrative position at Sual, the Russian aluminium producer, although investors in that company will now legitimately question how long he plans to stick around. But his departure only adds to our misgivings about Vedanta.

Strategy Towards CSR

• ENVIRONMENT, HEALTH AND SAFETY• Conserve natural resources, raw materials, water and

energy by process improvements, recycling and reducing and re-using waste

• Seek continual improvements through setting and reviewing targets, assessing and reporting environmental performance, applying best practices and providing all employees with relevant training

• Implement regular health surveillance and risk-based monitoring of employees

• PEOPLE AND COMMUNITY• Be a significant contributor to addressing social needs within the

communities in which we operate• Create sustainable partnerships to support our local communities• Strive to actively enter into dialogue and engagement with our

stakeholders• Provide employees with the opportunity to report matters which

transgress or contravene our Code of Conduct; • Ensure that our supplier and customer relationships are

conducted in a fair, proper and transparent manner; • Strive to achieve and drive forward industry best practice in our

social stewardship• Ensure that our supplier and customer relationships are

conducted in a fair, proper and transparent manner; • Strive to achieve and drive forward industry best practice in our

social stewardship; • Uphold and honour all ongoing commitments, following

acquisitions and mergers, ensuring a smooth integration of both organisations and sharing of best practices;

SWOT Analysis• Competitive strength

– A leading diversified and the largest non-ferrous metals and mining company in India

– Vedanta is a leading diversified and the largest non-ferrous metals and mining company in India based on revenue. We have substantial market share across the copper, zinc and aluminum markets in India. We are India’s largest iron ore producer-exporter by volume in the private sector. Specifically market share in sterlite, hzl, sesa goa.

• High quality assets and resources making us a low-cost producer • We are seeking to further lower our costs across all of our operations. Factors

contributing to our success in lowering our costs of production include:– our focus on continually reducing manufacturing costs and seeking

operational efficiency improvements;– our building and managing captive power plants to supply a substantial

majority of the power requirements of our operations; and– Our access to relatively large and inexpensive labour and talent pools in

india and zambia.

Weakness• The Vedanta group’s attempt to simplify the holding structure

of its businesses has baffled investors and analysts alike. The promoter group’s stake in its biggest aluminium company (in terms of assets), Vedanta Aluminium Ltd, should rise after the restructuring.

• Problem of Unionized Workers affecting Company structure.

Opportunity• We owe our accomplishments to our strong and effective

workforce of over 29,000 people including over 7,000 engineering, technical and business professionals. Vedanta is very serious about attracting the best-in-class talent for its operations in India, Zambia and Australia within its Group companies.

• A young and dynamic organization with some of the most creative, forward-thinking employees in today’s business world.

• Attract talent in mining, metallurgy, geology, smelting and corporate social responsibility for our operations in India, Australia and Zambia.

Threats

• Many of the opposition from local people and human activist at launch to new plant in orrisa.

• Major threat from Balco mineral company • And Last affect from the US Recession which

has still left with its share prices falling by 11%.

What We Do• We currently operate in India, Zambia and Australia, with extensive

interests in aluminum, copper, zinc and lead. We employ over 29,000 people in our various locations. In December 2003, we proudly became the first Indian company to be listed on the London Stock Exchange.

• We have undertaken several Greenfield and Brownfield expansion projects in a number of locations in order to achieve this goal. The capital expansions completed in the first phase involved fairly complex project technologies, and an investment of $2.2 billion. We completed these expansions in record time, at costs significantly lower than international benchmarks, and now, the next phase of the expansion pipeline is currently underway.

• For thirty years, we have continually demonstrated our ability to deliver major value-creating projects, offering unparalleled growth at lowest costs and generating superior financial returns for our shareholders. At the same time, we continue to ensure that our expansion projects meet high conservative financial norms and do not place an unwarranted burden on our balance sheet and financial resources.

Where We Operate

• We currently operate in India, Zambia and Australia through our various subsidiaries.

Future Operation

• The London-listed Vedanta may invest in Sterlite Gold, which is now controlled by the Anil Agarwal -- Volcan Investments. Sterlite Go"'s Armenian operation currently require $70-80 m for expanding its operation. Vedanta is likely to step in by investing the money and thereby picking up a stake in the company.

THANK YOU