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INDUSTRIAL METALS, MINERALS & MINEABLE ENERGYINVESTMENT SUMMIT
IRONMONGERS’ HALL, CITY OF LONDON ● THURSDAY, 3 NOV 2011
www.ObjectiveCapitalConferences.com1
India: Growing energy needs to fuel growthDeepak Lalwani OBE – LalCap
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OBJECTIVE CAPITALCONFERENCE, LONDON
“INDIA – GROWING ENERGY NEEDS TO FUEL GROWTH”
PRESENTED ON 3 NOVEMBER 2011
DEEPAK LALWANI OBE
DIRECTOR – INDIA, LALCAP LTD
copyright: Lalcap Ltd 2011
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WHERE IS THE INDIANECONOMY HEADED?
1ST $ 1 TRILLION OF GDP TOOK OVER 60 YEARS TO REACH BY MARCH 2008 : REASONS
NEXT TRILLION BY MARCH 2015 : DRIVERS/RISKS
BY 2020 GDP OVER $ 4 TRN
CHINA EXPERIENCE; INDIA LAGS BY ABOUT 10 YEARS
FOREX RESERVES: 1991 - $ 1 BN
OCT 2011 - $320 BN
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ECONOMIC JOURNEY SINCE INDEPENDENCE
1.0%
3.5%
5.4%
5.9%
7.3%
Phase 1 Reforms
Phase 2 Reforms
KEY PHASE 1 & 2 REFORMS: DISMANTLED CONTROLS; LOWERED TARIFFS & TAXES; OPENED ECONOMY TO TRADE & INVESTMENT; BROKE STATE MONOPLIES
•closed economy until 1991 reforms….growth accelerates after 2003
•In 2 decades moved from state-dominated to increasingly
open market economy
EFFECTS OF SUSTAINED GROWTH
CORPORATE GROWTH
INDIVIDUALS - WEALTH
SOCIETY
GDP PER CAPITA, AUTOS, MOBILES
GROWTH OF MIDDLE CLASS
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ENERGY CONSUMPTION PATTERN
Source: BP statistical review of World energy 2011
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ENERGY &COMMODITIES
2015- INDIA’S PRIMARY ENERGY NEEDS + 50% & METALS + 80%
BY 2030 PRIMARY ENERGY DEMAND +400% FROM 2010 LEVELS. METALS + 500%
DOMESTIC OUTPUT WIL NOT KEEP PACE WITH DEMAND
AS CHINA’s GROWTH SLOWS, BY 2025 INDIA OVERTAKES USA AS 2ND LARGEST METALS CONSUMER
Source: Barclays Capital 2010
INDIA: ENERGY NEEDS (GOI Planning Commission)
8 Source : India 2011 Energy Handbook ; IEP=Integrated Energy Policy
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Table 1-2. Total Energy Requirements (MTOE)
Year Hydro Nuclear Coal Oil N.Gas Total
2011-12 12 17 283 186 48 546 2016-17 18 31 375 241 64 729 2021-22 23 45 521 311 97 997 2026-27 29 71 706 410 135 1,351 2031-32 35 98 937 548 197 1,815 Source:GOI, Integrated Energy Policy Report, Page 28, Table 2.10
INDIA: TOTAL ENERGY NEEDS
INDIA: ENERGY RESOURCE MAP
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•Concentrated mainly in East India, Gujarat and S. India
• Mainly public sector
• 84 minerals
•Fuel: 82%•Metallic: 8%•Non-Metallic: 4%•Minor: 6%
Source: Powergrid
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STEEL/ALUMINIUM 2010- INDIA 4TH LARGEST GLOBAL STEEL PRODUCER PRODUCES 7% OF GLOBAL OUTPUT CONSUMES 5% 50% IS EXPORTED TARGET PRODUCTION: 2011-12: 124 mt DRIVERS: INFRASTRUCTURE & HOUSING
ALUMINIUM: HIGHLY CONCENTRATED – 5 COMPANIES PER CAPITA: INDIA : 1 KG CHINA : 3 KG US/EUROPE : 30 KG JAPAN : 15 KG
GOLD
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• INDIA IS WORLD’S LARGEST GOLD CONSUMER : c. 800 mt• BARELY PRODUCES ANY• STATUS AND SECURITY• RECORD 800 mt vs 557 mt in 2010• GOLD BUYING + 38% in Q2 2011• ONLY 40% OF POPULATION BUYS• 60% UNTAPPED DEMAND
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WHICH IS THEREAL INDIA?WHICH IS THEREAL INDIA?
INDIA IS ON A JOURNEY OF “CATCH UP”
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INDIA: RETAIL CONTRASTS
RETAIL SECTOR: 97% UNORGANISED & 3% ORGANISED VS 20% IN CHINA & 40% IN THAILAND MARKET SIZE: EST. $450bn IN 2011,$637bn BY 2015 (SOURCE: TECHNOPAK ADVISORS)
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Deepak N. Lalwani OBE | Director - IndiaChartered FCSI, FCCALalcap LtdLevel 7, Tower 42, 25 Old Broad StreetLondon EC2N 1HNE mail: [email protected] ....pursuing excellence
DISCLAIMER : This presentation is made solely for knowledge purposes and does not constitute investment advice. It is not solicitation or inducement to lead to or enable transactions. Attendees should make their own investment decisions. The presentation may therefore not be suitable for all recipients and does not constitute a personal recommendation to invest. If you have any doubts about the suitability of this service, you should seek advice from your investment adviser. Lalcap Ltd does not offer a share dealing service. The past is not necessarily a guide to future performance. The value of shares and the income arising from them can fall as well as rise and investors may get back less than they originally invested. The information contained here has been obtained from sources which Lalcap Ltd believes to be reliable. The Company does not warrant that such information is accurate or complete. All estimates and prospective figures quoted are forecasts and not guaranteed. Opinions included in this presentation reflect the Company’s judgement at the time of presentation and are subject to change without notice. If the investment(s) mentioned in this report are denominated in a currency different from the currency of the country in which the attendee is a resident, the recipient should be aware that fluctuations in exchange rates may have an adverse effect on the value of the investment(s). Lalcap assumes no fiduciary responsibility or liability for any consequences financial or otherwise arising from trading in securities if opinions and information in this document may be relied upon. COPYRIGHT : Lalcap Ltd 2011 Registered in England & Wales No.: 07245347 Registered Address: Level 7, Tower 42, 25 Old Broad Street, London EC2N 1HN, UK
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