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ASSOCHAM Role of EPC Contractor in Growth of Steel Industry Achievements & Unfinished Agenda By : Mr. D.M.Shah Vice President & Head Minerals and Metals.

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Presentation on theme: "ASSOCHAM Role of EPC Contractor in Growth of Steel Industry Achievements & Unfinished Agenda By : Mr. D.M.Shah Vice President & Head Minerals and Metals."— Presentation transcript:

1 ASSOCHAM Role of EPC Contractor in Growth of Steel Industry Achievements & Unfinished Agenda By : Mr. D.M.Shah Vice President & Head Minerals and Metals Business Unit Larsen & Toubro Ltd.

2 ASSOCHAM Steel production, Mt Growth of Indian Steel Industry Exponential Growth Controlled Regime Decontrol

3 ASSOCHAM Steel Capacity in India Present Capacity – 63 MTPA Growth Rate – 7.5% CAGR ( ) Apprx. Projected Growth Rate- 10% CAGR Apprx. By 2015 India Second Largest Steel Producer

4 ASSOCHAM Major Steel Expansion Projects / New Projects Steel Authority of India Limited Tata Steel RINL Bhushan Group Jindal Group Essar Steel NMDC POSCO Arcelor Mittal

5 ASSOCHAM PSU Present Projects – Mode of Execution SAIL /RINL–Presently Undertaking Complete Iron making Area under EPC Route Material Handling Beneficiation Pellet Plant Sinter Plant Blast Furnace Coke Oven Successful completion of EPC Packages clearly demonstrate the choice of packaging

6 ASSOCHAM PSU Present Projects – Mode of Execution NMDC –Following Packages Envisaged thro EPC Route Material Handling Beneficiation Sinter Plant Blast Furnace Coke Oven Steel Melting Shop Rolling Mill Complete Steel Plant under EPC Route - Emerging Scenario of Project Execution

7 ASSOCHAM Private Producers – Mode of Execution Tata Steel/ Bhushan Steel – Packages under EPC Mode Material Handling Beneficiation Pellet Plant Sinter Plant Blast Furnace Coke Oven Clear and Evident Advantages Observed

8 ASSOCHAM Emergence of EPC Companies Traditional Steel Plant Engineering Agencies Pre 1990s Strong Construction & Execution Parties Large Manufacturing & Fabrication Units Huge Time and Cost Overrun Observed

9 ASSOCHAM Emergence of EPC Companies Domestic / International Engineering & Procurement Parties Post 1990s Construction & Erection Agencies Emergence Full or Part EPC Companies Relative Improvement of Project Deliveries

10 ASSOCHAM Achievement - EPC Concept Dominant Role of EPC Players in Iron Making 2008 to Present and Beyond Very Significant reduction of Project Schedules and Quick Achievement of Plant Performances Increased Awareness of Customer and Graduation of Major Players into EPC

11 ASSOCHAM Reasons of Increasing Trend towards EPC Committed Delivery - Single Point Responsibility Superior and Optimized Engineering Solutions Reduced Interface between multiple agencies Shortened Schedule /Savings on Interest Costs Base Contract Price – Fix on Estimates /Budgets Clarity of Sharing of Liabilities Faster Ramp-up and Achievement of PG Core competence of Engineering and Project Management - best in hands of Experts

12 ASSOCHAM Challenges for EPC Players Fighting the High Cost of EPC Myth Changing the mindset of Traditional Fragmented Approach Suitable partnering for both – Techologist / Local Executer Enhancing Engg Manpower / Manufacturing Resources Recruitment/ Training /Retaining Construction Engineers Standardization of Commercial Terms Rationalisation of Taxation Structure Low Entry Barriers for Outdated Technologies Customer Support Required to Strengthen EPC Route

13 ASSOCHAM Unfinished Agenda Steel making /Rolling and Finishing Mill areas under EPC Mode Ensuring Downstream Steel Making Units to be similarly packaged like Iron Making so as to ensure interfacing and integration of the total plant. Encourage Technologists as well as Indigenous Players to come together to provide EPC solutions.

14 ASSOCHAM We look forward to a more pragmatic approach wherein the huge challenge of increasing the steel capacity of the country to 160 MT is taken up in a manner which could not only ensure faster and quicker completion but overall could also help in saving the total project costs. Way Ahead …

15 ASSOCHAM Thank You


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