BETTER EVERYDAY
BETTER EVERYDAY
Dear stakeholders,
The world is seeing an uncertain geopolitical and economic environment with cross-border tensions, constrained supply chains and multi-decade high inflation and interest rates. Amid these uncertainties, India stands out with its vibrant economy, demonstrating its resilience in a volatile world, and strengthening its position in the global economy.
The government is focusing on increasing the share of manufacturing in India’s GDP, as global supply chains are getting realigned and multinationals are seeking to diversify their risk in terms of sourcing manufactured goods and components. India’s digital infrastructure is redefining last-mile delivery, from banking to welfare schemes. Further, the Government is concentrating on building and improving physical infrastructure to increase productivity and increase India’s competitiveness.
These factors bode very well for domestic steel demand, and JSW Steel is well positioned to serve India’s growing steel requirements.
In sync with India’s growth
India is forecasted to become a $10 trillion economy by 2033, growing almost three times. As India accelerates its growth trajectory in its ‘nation building’ phase, steel demand is expected to see a step up. The National Steel Policy envisages India’s installed crude steel capacity at 300 MTPA by 2030-31. JSW Steel’s growth aligns with this progress, which is reflected in our medium-term capacity target of 50 MTPA.
We take pride in innovating and manufacturing a diverse range of steel products that cater to the evolving needs of our customers, be it in Automotive, Packaging, Renewables, Infrastructure, Construction and General Engineering. While growing our capacities across locations, we are strategically building manufacturing capabilities and products for sectors where India is growing.
For the Infrastructure and Construction sectors, we have an array of products for lighter construction with enhanced durability. Our new facility of LRPC is aiding in faster construction with better resource efficiency. We continue to expand our value-added offerings in Advanced High-Strength Steels which help in light weighting of automobiles, across Renewable Energy, Infrastructure, Oil & Gas and General Engineering sectors. We have developed various speciality products for Forgings, Bearing, Fasteners and Wire applications for the domestic and international markets.
In our downstream facilities, we continue to build capacities of products which aid sustainable living like tinplate for packaging, electrical steels for better energy efficiency and reduced carbon emissions. With a strong focus on R&D and product development, our target is to maintain the share of Value Added and Special Product sales mix at over 50%.
JAYANT ACHARYA JOINT MANAGING DIRECTOR AND CEO
Volatile external environment
FY 2022-23 was a year of two halves. The first half witnessed high volatility in raw material costs, especially coking coal and energy, aggravated by supply chain bottlenecks. A series of aggressive interest rates hikes by major central banks to rein in runaway inflation dampened steel demand, leading to inventory build-up and softening steel prices. However, the third and fourth quarters saw improved sentiment with easing inflation and raw material costs, coupled with the reopening of China post its stringent ‘Zero COVID’ policy.
India too experienced high inflation for some time. Steel spreads came under pressure due to higher coking coal and other input costs. The imposition of export duty on steel in May 2022 made Indian steel uncompetitive in global markets while cheaper steel from overseas made its way into the country, putting pricing pressure on domestic steelmakers. However, buoyant steel demand in India throughout the year provided some respite. The withdrawal of export duty in November 2022 opened up opportunities to tap the overseas markets, though global demand remained a bit subdued.
Resilient performance in a challenging year
At JSW Steel, we continuously improved our operations and delivered a robust set of numbers for FY 2022-23. Our average capacity utilisation was at 90%, which demonstrates our ability to sweat assets even in a challenging year. While exports dropped, we strategically diverted volumes between domestic and overseas; one-third of our exports was recorded in the fourth quarter alone.
Our consolidated revenue from operations came in at ₹1,65,960 crore and EBITDA at ₹18,547 crore, despite lower export volumes and pricing pressure. Despite the challenging external environment, we did not compromise on our medium-term growth strategy to take our near-term India capacity to 37 MTPA, given the robust growth in Indian steel demand.
We maintained a healthy balance sheet, with our net leverage and gearing below the stated cap. Our strong cash flow from operations, coupled with access to a diversified funding pool, provides flexibility to drive value accretive growth.
Digitisation and innovation focus
At JSW Steel, we aspire to be a digital-first organisation. As part of our Digital Vision 2026, we are leveraging technology to make our facilities safer, sustainable and more efficient. Our AI-enabled safety surveillance platform at JSW Salem monitors plant safety and security compliance in real-time while providing geo-fencing features to enable swift responses to emergencies. We have deployed a ‘Digital Logistics Management System (DLMS)’ at our Odisha mines, resulting in faster truck turnaround, improved supply chain efficiency and cost reduction.
We have digitally enabled our 5 MTPA Vijayanagar expansion, where drones are being used for project monitoring. Mobile inspection requests have replaced the traditional manual methods. Dashboards and analytics provide a real-time view of the milestones, plans and actual project progress. We are working with an objective of end-to-end digital transformation of key functions and focusing on creating a future-ready digital workforce.
Sustainability at the heart of everything
During the year under review, we met all our sustainability targets and remained firmly on track to reduce our CO2 emission intensity by 42% by 2030 (from 2005 base year), to achieve 100% circularity in all the solid wastes generated, achieve no net loss for biodiversity and having more than 39% reduction in freshwater consumption by 2030.
As the world moves to a low-carbon economy, it would always remain a challenge to decouple growth from emissions in a hard-to-abate sector like ours. However, we remain focussed to reduce our emission intensities through conscious efforts by prioritising actions such as energy transition towards renewable energy, adoption and promotion of efficiency improvements in energy consumption, process optimisation, increased use of available scraps and support circularity through better resource management and adoption of Best Available Technologies (BAT).
We launched a specific programme called 'Sustainable Energy Environment and Decarbonisation' (SEED) at our Vijayanagar operations to bring in changes at the grassroot level to remain both operational and CO2 emission efficient. Steel being an infinitely recyclable and extremely versatile material, we are certain that it will remain the preferred choice for building a sustainable future.
Driving meaningful change for inclusive progress
At JSW Steel, we understand that sustainable growth can only be achieved when our communities flourish. In our pursuit of driving meaningful change, we have prioritised key areas such as education, healthcare, environmental sustainability and more, touching over a million lives across the country.
Our flagship education programmes provide quality education to over 30,000 children every year. Further, we have significantly enhanced access to quality healthcare services, benefiting half a million individuals. In line with our vision of building a sustainable and greener future, we have implemented environment and biodiversity interventions. These efforts have not only increased access to water for over 5,00,000 individuals but also facilitated the recharging of millions of litres of water and increased the overall green cover. Through an innovative India’s First Skill Impact Bond, we aim to skill and provide livelihood opportunities to over 50,000 youths in the next four years.
Nurturing our biggest asset
We have recalibrated our values with the strategic intent of providing a moral compass for our organisation and its people while pursing growth. With a strong emphasis on diversity and inclusion, we foster an environment that celebrates individuality, encourages innovation and embraces collaboration.
With an aim to place our people first, JSW Steel focuses on providing holistic wellness, rewarding long-term association and diverse career opportunities. Being a strong believer of building leadership pipelines, we have developed various leadership programmes in partnership with premier institutions across India and abroad.
Some of the highly invested initiatives in JSW Steel include Senior Leadership Development Programme, Future Fit Leaders, JSW Technical Leaders Programme, JSW Sales Leaders Programme, Young Leaders Programme.
At JSW Steel, women engineers today manage production lines at our Vijayanagar, Vasind and Tarapur plants. While over 5% of our workforce are women at present, we have resolved to increase this to over 15% within the next five years. We have started programmes like ‘Springboard’, which is designed to help high-performing women employees achieve their career goals and overcome barriers. This programme provides leadership training, mentorship and networking opportunities that can help them reach their full potential.
JSW Steel has been recognised among 'India's Best Employers Among Nation Builders' by Great Place to Work and as 'Leadership Factory' by Great Manager Institute.
In conclusion
As we forge ahead, guided by our unwavering commitment to excellence and sustainability, we remain steadfast in our pursuit of contributing to the growth and development of the Indian economy. We will continue to embrace innovation, pursue responsible business practices, and create value for all our stakeholders. I express my sincere gratitude to all our stakeholders for their continued trust and support. Together, let us chart a path towards a prosperous and inclusive future.
Warm regards,
JAYANT ACHARYA
JOINT MANAGING DIRECTOR AND CEO