File_2012_Document1

84 Jindal Steel & Power Limited Business Leadership Sustainable Operations Excellent Governance Robust FinancialsDirectors’ ReportAnnual Report 2011-1285Technology Absorption, Adaptation and Innovation:a) Efforts in brief, made towards technology absorption, adaptation and innovation and benefits derived asa result:1. Development of safe and standard mechanism for Tuyers Pulling in Blast Furnace.2. Eliminating unwanted stoppage due to Pinch Roll in Plate Mill.3. Realisation of burnt lance pipe in Blast Furnace.4. Coke Flow control device in Coke oven.5. Development of online replacement methodology of hearth spray cooling header in Blast Furnace.6. Minimising deviation in product quality due to sagging of Coal Throw Pipe in DRI.Foreign Exchange Earnings and Outgoa. Activities relating to Export:I) INITIATIVES TAKEN TO INCREASE EXPORT:Further to the initiatives taken in 2010-11 to improve upon the offering of the Company’s products in the export markets,significant progress was achieved in various areas.The total tonnage of steel products exported in the year 2011-12 was 2,69,000 MT against 2,00,000 MT last year registeringa Year on Year growth of 34%. Last year we could capture significant market share in the neighbouring countries of theIndian subcontinent including Nepal, Bangladesh and Sri Lanka. Against the general trend of lower international prices visa-visthe domestic market, prices in the neighbouring countries usually being governed by the domestic market sentimentsare more remunerative. Further, the lower freight incidence for these markets compared to those for EU and MENA regionsmake them more attractive markets for exports.7. Modification in flow meter in transport air line in PCI in Blast Furnace.8. Boost production (quality & quantity) via innovative wireless system for kiln temperature monitoring in DRI.9. Process improvement for productivity & waste utilisation in DRI.10. Process improvement for productivity of CTL-1 by innovative idea with in-house material utilisation in Plate Mill.11. Innovative practices for longer sequence in Slab Caster in SMS.12. Add new gauge led display board in FM area in Plate Mill.b) In case of imported technology (imported during the last 5 years reckoned from the beginning of the financialyear) following information may be furnished.1. Technology Imported:2007-08 2008-09 2009-10 2010-11 2011-121) RH degasser 1) 100T Electric Arc 1) Medium Light 1) New straightening NILFurnace, LadleFurnace and FESfrom Sarrale,SpainStructural Millsupplied by M/SDaniellemachine installedto straightenBeams beyond700mm.Technologyand equipmentsupplied by SMS_Meer2) Slag grinding unitfor productionof cement usingfly ash and blastfurnace slagII)In the cast round market internationally, which forms a large percentage of total exports, this year the Company exportedhigher quantities of value added alloy grades over the last year. Further while the Company generated more business in theSeamless Pipe Industry, the Company has also been successful in tapping into overseas forging industry. More efforts will bemade in this direction so that the Company is perceived as a producer of value added steel and is able to carve out a nichein the international market.Another significant development has been restrengthening of the Company’s presence in the MENA region for structuralsection product range. A renewed effort has been directed at promoting medium and heavy parallel flange beams andcolumns for which MENA region offers a natural market. The Company has been able to consistently register sales ofstructural sections last year in this region, clocking 15,000 MT sale during second half of the financial year 2011-12. Theendeavour is to reach a level of approximately 5,000 MT per month of sales on a consistent basis in the coming year.Regarding the development of rail business, while the order of Iranian Railways system continued to be serviced duringthe year, discussions are underway for supply of rails to other countries including Ethiopia, Brazil, Saudi Arabia and Tunisiawith many being in advance stages of sales cycle. Experience gathered from supply of rails to Iranian Railways System andaforesaid new avenues will enable the Company to obtain international recognisation and certifications for development ofrail business.Last but not the least, establishment of a separate port recognition and ship chartering desk at the Company has enabledit to streamline shipping operations and commence a gradual shift of the business terms from FOB to CNF, which, goingforward, will be important in attracting greater buyer interest from the international market.DEVELOPMENT OF NEW EXPORT MARKET FOR PRODUCTS AND SERVICES AND EXPORT PLANS:This year the Company intends to have a special focus on the MENA region. As per World Steel Association, steel use inMENA is forecast to resume growth in 2012 at a rate of 7.9%. Other markets of special interest will include countries in LatinAmerica and South East Asia region. The focus on MENA region will be aided by setting up of a service center in Dubai andincreasing the Company’s presence through new offices in the region to strengthen the end customer base.The Company’s upcoming state-of-the-art Plate Mill facility at Angul which is equipped with latest wide plate rolling,finishing and heat treatment facilities, will enable the Company to tap value added plate segment in the internationalmarket. Advance production capabilities combined with proximity to a port location makes it ideal for the high end plateexport market.2. Year of import: as given above3. Has technology been fully absorbed? Yes4. If not fully absorbed, areas where this has not taken place, reasons thereof and future plan of action: N/Ab. Total Foreign Exchange used and earnedI) FOREIGN EXCHANGE USED : ` 256.83 croreII) FOREIGN EXCHANGE EARNED : ` 1,428.84 crore For and on behalf of the BoardPlace: New DelhiDated: 27th April, 2012Naveen JindalChairman and Managing Director