Essar Steel's sales Volume up by 32% in Jan-Mar, 2003
April 21, 2003
Financial Performance
Essar Steel Limited (ESL) has ended January - March, 2003 quarter with a higher turnover and record level of exports. The sales grew in volume terms by 32% at 4.73 lakh tonnes compared to 3.59 lakh tonnes in the previous year. Exports have registered a rise of 319% at 2.46 lakh tonnes (0.59 lakh tonnes in the corresponding period of the last year.
ESL reached the pinnacle of its performance in the last quarter. The company had a healthy growth in its production in the last quarter ended March, 2003. The production of hot rolled coils has grown over 35% at 4.77 lakh tonnes (3.53 lakh tonnes in previous year) resulting in a capacity utilisation of 95.4%. This is the highest production ever achieved during a quarter since inception
Debt Restructuring
During the quarter under review, Financial Institutions, under the aegis of CDR committee, have approved the debt restructuring proposal of the company. This is aimed at strengthening the Balance Sheet of the company through buy back of un-secured debt and improving networth. When completed, this will also reduce the average finance cost of the company to 11.6% and lengthen the maturity of the debt by 12 years after a moratorium of two years.
Essar Steel continues to focus on manufacturing value added grades which are less prone to market volatility. During the quarter, value added grades accounted for 40% of its sale. The value added manufactured by Essar Steel include API, low carbon grades, high strength low alloy grade, interstitial free steel, corten steel etc.
Industry Scenario
The long overdue price correction in the steel market has finally taken place during the last year. Steel market has seen a tremendous growth both in quantitative terms and in price. It has witnessed price going up from USD 200/tonnes to USD 360/tonnes. Chinese market contributed to the growth in exports steel from around the globe.
However, as a prudent strategy, Essar's exports are not China-centric. Essar's exports to China is only 15% of its total exports mainly in value-added grades.
Modern Steel Complex at Hazira
Essar Steel is a modern integrated steel complex ideally located at Hazira, Gujarat. Based on state-of-the-art technology with highly automated facilities with a capacity of 2.4 million metric tonne per annum hot rolled coil and hot briquetted iron (HBI) plant.
Downstream complex of two slitting and shearing lines of 0.4 mmtpa and a 1.2 mmtpa hot skin pass mill (HSM) demonstrates Essar's commitment to quality and excellent customer service by ensuring superior surface finish and cuts for client-specific requirements. The infrastructural facility at the steel complex include a 5 mmtpa captive port with modern material handling equipment, captive lime and oxygen plants, 215 MW assured and quality power supplies from Essar Power's 515 MW plant, own gas and water pipeline and a township in Hazira.
Essar Steel is a part of Rs 17000 cr Essar Group having interest in core sector areas of steel, shipping, power, telecom & oil & gas and constructions.
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