Your Company has completed a landmark year which witnessed the fruition of ourlong-cherished dream of an integrated steel & power complex with completion of theongoing Phase III expansion. We have our dream of housing about 7 MnTPA of steel makingand processing capacity (4.7 MnTPA of primary and 2.2 MnTPA of secondary) within strikingrange, now that our Meramandali facility is poised to stabilize production in the fiscalyear 2013-14.
Challenging Business Environment
On the business front, we continue to live in challenging times. The year gone bytested the
tolerance level of global economy. World GDP growth rate came down to 3.2% in 2012 froma healthier 4% recorded in 2011. Emerging & developing economies, despite a moderategrowth of 5.1%, helped check the global GDP growth in a year that witnessed consistentrecovery in the US, turnaround in Japan and a moderate contraction in Euro zone economies.
Fiscal year 2012-13 tested the often flaunted sound foundations of Indian economy.Amidst headwinds of inflation, liquidity crunch, lowering consumption; Indian economyrecorded its decade-low GDP growth of 5%. While governments and policy makers swung intoaction in the latter half of FY13, relaxing FDI norms in select sectors and intensifyingdivestment efforts in select Public Sector Undertakings, the same yielded little tosupport growth.
The steel scenario remained subdued globally during the year gone by. World SteelAssociation estimated the world crude steel production to record a moderate growth of0.72% in CY2012 to reach 1547 MnT. This is in contrast with 6.7% growth in 2011 over 2010.India, the 4* largest crude steel producer with 77.6 MnT of production in 2012, remained anet importer of steel with 9.3 MnT of imports and 8.2 MnT of exports. Our per capita steelconsumption of just 56.9 Kg., against the world average of 216.4 Kg., augurs well forindustry's growth in coming years. The impending infrastructure and housing deficit willkeep adding the steel demand growth in India.
Creating Diverse Shades of Steel
Your Company's two-pronged growth strategy hinges on integrating to cover the entiresteel value chain on the one hand and diversifying its product mix of specialised steel atthe other. As a result, we are not only increasing our production volumes but alsoexpanding our end-user segments.
Amidst subdued business environment, we recorded a healthy 10% increase in our grossrevenues which reached ^11,800 in FY13, from Rs 10,793 crores in FY12 while our EBITDA toogrew by about 10% to reach Rs 3332 crores.
The road ahead
Now that we have successfully completed our backward integration program, we shall soonstabilize the recently added capacity under the third phase of our expansion. Anotherfocus area will be to integrate this with our already commissioned facilities under PhaseI and II. Additionally, we are intensifying our focus on expand our global business inorder to increase our export revenues from the current Rs 1813 crores (15% of our totalturnover). Power self-reliance is a major boost to our operations and profitability. Weare well on course to add 350 MW to take our total captive power capacity to 840 MW byFY14, including capacities under Bhushan Energy Ltd. Another area of our focus will be tostrengthen the uninterrupted and cost-effective raw-material supply.
I acknowledge the unwavering trust and support of our stakeholders - shareholders,lenders, technology partners, vendors and the exchequer-in our success. I am lookingforward to your patronage in our exciting journey ahead. I would also like to acknowledgethe invaluable contribution of our management team, employees and workers; andcongratulate them on accomplishing the expansion task.
B. B. Singal