Wire Rod and Primary Metal Overview

3rd May 2012

Vision-Wire rod and Primary Metal Business

Volume Statistics
Actual BP Actual BP BP Actual

2008-09 2009-10 2010-11 2011-12 2011-12 2012-13 April'12 April'12 Wire Rod 127536 148451 160930 177337 168187 181476 Ingot Total 170123 50745 26460 10385 7504 593 15139 517 15656 14728 382 15110

297659 199196 187390 187722 175691 182069 Value Added Products

Alloy Rod Export Rod

5834 897

9397 1458

11455 1645

12000 3000

11422 3018

15000 6000

1250 500

1010 670

Volume Statistics
350000

300000

250000

200000 Wire Rod 150000 Ingot Total

100000

50000

0 2008-09 2009-10 Actual 2010-11 2011-12 BP 2011-12 Actual 2012-13 BP

Cost of Production
ACTUAL Description CH-1 CH-2 Avg COP Deviation COP Weighted VAL STL COP CH-1 FY 11-12 FY 11-12 and CH-2 FY11-12 BAL v/s VAL 11-Feb 1553 4081 5634 1941 3299 5240 1718 3748 5466 0 -386 -222 1146 2581 3727 102 0 572 1167 1739 -102 -222 0 892 3462

Total variable cost Total fixed cost Net cost S & d cost Other Income

Total COP

5248

5240

5245

3829

1416

4354

Production-wire rod AWR

96454 11438

71515

99528

10156

Improvement Projects
Increase in Furnace capacity Increasing Plant availability and Utilization Increase in production of Export and Alloy Rod Reduction in CG-2 volume VOLUME INCREASE (1.7 to 2 lacs MT)

Additional NSR

Reduction in Furnace Oil consumption Outsourcing of WRM-3 Rationalization of manpower

COP (target 4000 Rs/MT)

QUALITY (Zero Return)

SOP adherence

Achievements in FY 11-12
Ever highest Wire Rod production in a year Ever highest Export Rod production Ever highest EC Capture rate in a year : 168187 MT : 3018 MT : 91%

Zero LTIFR in Cast house-2 for past 39 months.

Furnace Capacity enhancement from 35 Mt to 55 Mt each of

H-3 and H-4 furnaces in Cast House-2 Development of 12mm dia Wire Rod

Thank You

Avg COP Deviation COP COP Description CH-2 Hindalco STL REMARKS Weighted VAL COP CH-1 FY 11-12 FY 11-12 n CH-2 FY11-12 BAL v/s VAL 11-Apr 11-Feb Melt Loss 88 779 382 421 -39 1082 475 Alloying element 606 348 565 -217 50 85 Furnace Oil 859 1196 1002 0 1002 667 2670 Oil rates of Hindalco and STL are Steam 3 0 0 0 not relevant in todays scenerio Power 142 221 176 232 -56 134 529 Less Dross realization -145 -255 -192 -72 -120 0 -297 Total variable cost 1553 1941 1718 1146 572 1933 3462 Manufacturing Exp 1036 1815 1368 1002 366 336 372 Mannpower 1806 1097 1504 571 933 928 287 Administration Exp 278 387 324 418 -94 Packing exp 155 0 89 590 -501 14 Allocated Exp 806 0 463 0 463 Total fixed cost 4081 3299 3748 2581 1167 Rep & maint 0 106 219 Depreciation 0 63 Net cost 5634 5240 5466 3727 1739 1433 892 S & d cost 0 102 -102 Other Income -386 -222 0 -222 0 0 Total COP 5248 5240 5245 3829 1416 3366 4354 Production-wire rod 96454 71515 99528 10156 ingot 7504 AWR 11438 Note In VAL, furnaces are electrically heated and operation is outsourced . No fce oil is used Allocated expenses in CH-1 are of manpower cost of enabling team. In STL, operation and maintenance is out sourced, no packing as use is in house and no consumption of Boron At Hindalco, boron master alloy is not used, mill are 6B which require less maintenance. packing cost is booked in sales. administrative expenses are not booked in WR.Manpower cost is less because of wage structure.

ACTUAL CH-1

Wire Rod COP Benchmarking

KEY PARAMETERS Rolled Products Production Melt Loss Furnace Oil Steam Power Less Dross realization Net Variable Conversion Costs Manufacturing Expenses Manpower Cost Admin Expenses Packing Expenses Allocated Exp Total fixed cost Rep & maint Depreciation TOTAL OVERHEADS S & D Cost other income Total COP Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT 5465 0 -222 5,243 3727 102 0 3,829 UNITS MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Rs/MT Balco Korba 167969 382 1002 0 176 -192 1,717 1368 1504 324 89 463 3748 Remarks VAL 99528 421 0 0 232 -72 1,146 1002 571 418 590 0 2581 1264 106 63 3366 5,299 -1061 7,604 4354 0 0 4,354 673 219 14 134 0 1,933 336 928 529 -297 3,462 372 287 1082 667 HINDALCO STL 10156 475 2670 Oil rates of Hindalco and STL are not relevant in todays scenerio

In VAL, furnaces are electrically heated and operation is outsourced . No furnace oil is used In STL, operation and maintenance is out sourced, no packing as use is in house and no consumption of Boron At Hindalco, boron master alloy is not used, mill are 6B which require less maintenance. packing cost is booked in sales. Administrative expenses are not booked in WR.Manpower cost is less because of wage structure.