Essar Steel's Rs. 1,000 crore cold rolling facility went on stream at its steel plant in Hazira, Gujarat. This 1.2 million tonne complex will make Essar a fully integrated producer of steel and enable the company to offer downstream products with considerable value enhancement.

"I am glad that Essar is fulfilling the commitments it made. The Gujarat government has initiated various steps to attract investments in the state and the government is extending all the cooperation and help to the investors. Anyone who sows a rupee in the state reaps a dollar. Our government is trying to cut the red tape to create an ideal climate for investment," said Narendra Modi, Chief Minister of Gujarat, here on Friday while inaugurating the plant.

Integrated complex

Shashi Ruia, Chairman, Essar group, said, "This complex showcases the latest technology and will offer a wide range of value-added, downstream products for both domestic and international markets. This is a significant milestone for us."

The manufacturing facility consists of two pickling lines (capacity 1.4 million tonnes annually), two cold rolling mills - a reversing mill and a tandem cold mill (capacity 1.2 mtpa), two galvanising lines (capacity five lakh tonnes), batch annealing furnace (capacity five lakh tonnes), and skin-pass mill (capacity one million tpa). In addition, the company has invested in finishing facilities that include slitting lines, cut to length lines and corrugation lines.

Locational advantage

"The plant has a debt component of Rs. 250 crore and the balance Rs. 750 crore was raised through internal accruals and equity," said Prashant Ruia, Managing Director, Essar Steel, while addressing a press conference prior to the inauguration of the plant. He said Indian steel companies had succeeded in bringing down the cost of steel making.

"Essar Steel is today the largest totally integrated steel plant on the Western Coast of India and will become India's largest flat producer when it completes its expansion to 4.6 million tonnes by next year. The locational advantages of the port based facility and the availability of high quality hot rolled products for producing cold rolled and galvanised steel, are other factors that will give further impetus to the company's increased presence in international markets," said Mr. Prashant Ruia.

The cold rolling process improves paint characteristics, coating quality and strength of steel. It also has excellent formability characteristics, hardness and enables close dimensional tolerances and improved flatness. These properties are essential requirements in industries with critical requirements, high quality and consistency.

With the inauguration of this plant, Essar Steel is now in a position to offer specialised products tailor-made for critical applications in the automotive, whitegoods, agricultural and construction industries, which were hitherto being imported. The company expects to gain a market share of 20 per cent in the cold rolling segment and it is expected that products from the cold rolling complex will constitute over 40 per cent of the company's revenues going forward.

Essar Steel is the flagship company of the Essar group and has a capacity of three million tonnes of steel annually at its modern steel plant at Hazira.

The company is one of India's largest fully integrated steel manufacturers - from iron ore to ready-to-market products. Essar Steel is India's largest exporter of flat steel products and focuses on value added products and a high degree of customisation.

The Essar group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors such as steel, shipping, power, oil and gas, telecom and constructions.

The group has an asset base of over Rs. 20,000 crore. Prashant Ruia also said that there was greater demand for iron ore in India, but the Indian resources are limited. This issue was a major concern for the industry and it had to be resolved for future growth. He also said that instead of exporting raw materials India should export the finished products so that the value addition will remain within the country.

On the question of steel from China, he said that "We are not very much concerned about steel from that country mainly because India is capable of producing good quality steel and the consumption is set to grow. China still imports value added steel."