FROM CHAIRMAN AND MANAGING DIRECTOR
Emerging as Steel Conglomerate
It is my pleasure and privilege to reach you through this momentous Annual Report &
share with you the highlights of our Companys performance during the year 2011-12.
This occasion merits pride and celebrations and I am sure that you all share the same
feeling. Your company has transformed itself from a domestic player to one of the leading
Global Steel Conglomerate. I am delighted to inform you that your company has scaled a new
height in top line and registered a healthy performance during Financial year 2011-12 with
a almost 25% growth in revenue to Rs 10011.63 millions as compared to previous years &
highest ever top line registered in any other FY.
Steel Industry Overview
The global economy is witnessing another period of uncertainty due to the Euro-pean
Sovereign debt crisis. The increase in inflation in emerging economies has led to a sharp
hike in interest rates, which has resulted in slowdown in demand. The global financial
uncertainty has also resulted in volatility in exchange rates. The global Steel industry
has witnessed reasonable demand growth and Steel making capacities have gradually shifted
to emerging markets such as China and India. However, the high cost of raw materials and
increased volatility in prices has put pressure on margins.
The Indian economy is expected to grow at 7.6% in 2012-13 against 6.9% in 2011-12. The
economy is likely to grow significantly over the next decade driven by the infrastructure
(power, road, railways, ports etc.) and consumption (automobile, real estate etc.) sectors
which will result in sustained growth in demand for various Iron and Steel products.
India has immense potential for creating new steel capacity. Indian per capita steel
consumption is presently very low compared to world average which further re-confirms the
opportunities for steel demand to continue accelerating in the times ahead.
Your Company is focused on its vision to emerge as a low cost producer of value added
Steel products with captive mineral resources and captive power. The Company is also
focused on mining its own iron ore in order to improve margins and also to set up a
Beneficiation Plant to exploit the resources.
Company Strategic Measures
Iron Ore Mines
Your Company is in dialogue to acquire 50% stake, in Buxwaha Iron Ore mine spread over
150 Hectares in Chattarpur area of Madhya Pradesh, India with a view to secure its raw
material requirements and integrating backwards into mining of Iron Ore. The mines have a
substantial resource base of superior quality iron ore with high Fe (iron) content and
bulk density. The Fe content varies between 63 to 66 per cent, which makes it one of the
best quality materials available in the country. The mining operations are mechanized,
adopting state-of-the-art technology and equipment namely hydraulic drifter, in-pit
crusher, cone crushers and mobile crushers. Flexibility in operations enables the division
to maximize the utilization of resources, as well as cater to the needs of diverse
Beneficiation & Pelletization Plant
Your Company is also planning to set up a Beneficiated & Pelletizing plant with an
installed capacity of 12,00,000 TPA in area of Madhya Pradesh, India for Agglomeration of
beneficiated and ground iron ore into spherical shaped green balls and subsequent heat
hardening them is termed as Pelletizing.
Pellets thus produced to desired physical and chemical properties are much superior to
the conventionally sized iron ore lumps. Iron ore Pellets are in very high demand. The
company has also acquired adequate land near to mines for setting up of a Beneficiation
& Pellatization plant for exploiting the mining operations & maximizing profits.
Solar Grade Silicon
Your Company as a group is diversifying by going into manufacturing of solar grade
Silicon ingots and bricks, which are the vital component of Solar cells. With the dying of
natural resources, solar energy, though in its infancy still, has enormous potential to be
the leading energy supplier in the near future. In this regard, we have taken a few
positive steps in assessing about the need, the resources available and various other
factors which would influence the setting up of a manufacturing facility for Silicon
ingots and bricks. In this regard a lot of groundwork has gone into the appraisal of
various parameters and the requirements for setting up such a facility, Such as the
company have established contact and have gone into various contracts with leading
manufacturers of equipments required for the facility like GT Solar, Centrotherm, ALD
Vacuum Tech., Schmid Silicon, Cyberstar and various other reputed conglomettes & have
detailed our project to them and have received instructive quotations and estimates
regarding the equipments.
Your company is committed to conforming to the highest standards of Corporate
Governance by ensuring transparency, disclosures and reporting as required under various
laws, regulations and guidelines, including those issued by the Department of Public
Enterprises, Government of India.
I gratefully acknowledge the guidance and support extended by the various Ministries
particularly the Ministry of Steel under the Government of India and State Government of
Kerala. I would also like to thank all the stakeholders of the Company for their continued
support in all our endeavors.
I express my sincere appreciation for the invaluable contribution and cooperation of my
colleagues on the Board in charting the road map of the Company for growth and
profitability, thereby steering it to greater heights.
As I conclude, it is indeed satisfying to witness a fulfilling journey of an enterprise
that is deeply motivated by its commitment to create value for its stakeholders and
society. Your Company looks to the future with confidence, driven by an inspiring Vision,
Values of Trusteeship and Vitality powered by a dedicated world class team of human
SIEL owns its sustained success to its trusted relationships with customers, employees,
banks and of course with you, our shareowners. I would like to sincerely thank you for
your confidence, for being a pillar of support in helping to accomplish our shared
aspirations. We will continue to make every effort in years to come to justify your
confidence. As we move on new thinking will lead us to new horizons.
As always, I am looking forward for your continued support and encouragement.
Chairman and Managing Director
Date: 26th November, 2012
Place: Palakkad, Kerala