Escolar Documentos
Profissional Documentos
Cultura Documentos
83
208
175
128
92
2008 Capacity Expansions 2015f Gap (imports) 2015f New Demand 2008 Demand
Capacity Demand
800
(finished steel)
600 Japan
•Seamless tubes
Competitiveness in today’s environment requires flexibility and
innovation
• Flexibility in approach:
– Partnerships
– Integration across the value chain
– Synergies
858
702
558
327
135
1.213
1213
782
500
395 371 400
169 217
67 72
1 2 3 4 5 6
Raw Material Primary iron Service centers Service centers
Steelmaking Rolling
(Pellets) (DRI) (Heavy applications) (manufacturing)
*
Source: McKinsey and Vale's experts from Steel division, team analysis
Once scale is achieved, and there is a market opportunity, downstream
should be a natural development
Sohar position in
the value chain
Local
footprint
Create, utilize
“Harvest times”
Attract, promote
“Sowing times”
Global
Iron ore / mining Logistics up to DRI / Metallics Semi & Finished Service centers Service centers
footprint steelmaking steel (long / flat) (Heavy (Manufacturing)
aplications)
Typical scale
(Mt) > 100 Mt > 40 Mt 3 – 5 Mt 3 – 5 Mt 0.5 - 1 Mt 0.1 – 0.5 Mt
Note: Average values for each phase in the direct reduction / electric furnace production route
Source: Vale, Clarksons, Metal Bulletin, team analysis
Sohar has all success factors to develop a steel cluster and offers a
good investment climate, tax benefits and incentives in Sohar SEZ
Upstream
Access to raw material Sohar is a Pellets hub, part of Vale's world class global supply
chain
Competitive logistics for Sohar provides economies of scale to bulk material logistics
bulk material allowing the usage of large size vessels
Downstream
Competitive logistics for Sohar has a port with full distribution capabilities,
interconnection with roads and a railway project potentially
distribution linking it to Abu Dhabi
Source: Mckinsey
Conclusions