AcquisitionofMillenniumSteel,Thailand.pptVIP

Acquisition of Millennium Steel, Thailand Tata Steel Strategy Thai Economy Brief profile of Millennium Steel Transaction structure and values Areas of value unlock and integration Timelines Build stronger base in India De-integrated dispersal of facilities in select geographies Ownership and development of raw material sources Access to captive ports and other dedicated logistics facilities Size of 20 - 25 mtpa by 2015 ‘More from Steel’ via branding and value added products Pursue strategic acquisitions Tata Steel Strategy Thai Economy Brief profile of Millennium Steel Transaction structure and values Areas of value unlock and integration Timelines Thai Economy GDP expected to grow @ 5.4% in 2006 (from 4.6% in 2005). Thai economy affected by various shocks in 2005, including Tsunami, a severe draught and surge in fuel prices Per Capita GDP (2004 USD PPP) of Thai economy : US$ 8,020 Sovereign Credit Rating of Thai Economy : Baa1 (by Moody’s) and BBB+ (by Standard Poor’s) Thailand Market Market characteristics Average capacity utilisation in Steel Industry is ~ 58% in Thailand The infrastructure plan laid out by the Government is the key to the future demand growth Thailand Long Products Market Outlook The Thai long products market is expected to grow at a rate of 6%-8% over the next five years Two drivers of growth for the long products: Spending on infrastructure by the government: will be a significant source for growth in demand for rebars and construction grade wire rods Growth of the auto industry: this is expected to boost the demand for higher and specialty grades of long products The Thai market is poised to change in terms of quality mix Government slated to prescribe stringent norms for construction steel Demand for specialty grades increasing on the back of growth of sophisticated user industries like auto and engineering Thailand Infrastructure Spending Programme Almost half of the spending will be in the mass-transit and transportation segme