In a bid to grab a higher share of the growing automotive steel sector in India, Ruias-owned Essar Steel is increasing its thrust on producing special steel for the automotive industry. The steel major, which currently has a technical partnership with Japan?s Kobe Steel, is on the look out to produce more value-added steel with better technology. Essar Steel has also appointed a consulting firm for this, which is expected to submit its suggestions over the next three to four months.
When asked whether Essar Steel is looking for more technical tie-ups, Malay Mukherjee, CEO, without giving specifics said, ?India is expected to have 10 million vehicles by 2020, from 2.3 million currently. Auto makers in India are importing 50% of the steel they require. We are one of the largest suppliers of steel to the auto industry and we want to keep our market share,? he said. In 2008, Essar Steel entered into a technical tie-up with Japan?s Kobe Steel to gain operational technology to manufacture higher quality steel products. Last year, JSW Steel also partnered with Japan?s JFE Steel Corporation to get access to JFE?s technology for producing steel used in automobiles. Similarly, Tata Steel early this year, entered into a joint venture with Japanese steel major Nippon Steel to meet localisation needs of Indian automotive customers for high-grade cold rolled steel sheets.
Experts say, with the world moving towards small cars from big ones, domestic steel majors do not want to miss out on a huge opportunity that lies in supplying automotive steel.
Meanwhile, Essar Steel further said that its 10 million tonnes expansion in Hazira, Gujarat, from 4.6 million tonnes, will be completed by March 2011, at an investment of Rs 30,000 crore. It has commissioned a blast furnace with a capacity of 1.73 million tonnes per annum (mtpa), a direct reduced iron (DRI) module of 1.7 mtpa and the 2.5 mtpa first phase of a five mtpa steel melt shop. Also, its phase I of 6 mtpa pellet plant in Orissa will also be completed by March 2011.
With the total planned manpower of 3,300 employees, infrastructure at Hazira comprises a 30 mtpa all-weather port and captive power plants to support the operations. As on date, Essar Steel has total debt of about Rs 18,500 crore in its books.
?We remain committed to the growth of steel capacity in India. It is a moment of great pride for us to commission these iron-making units at this plant,? said Mukherjee.
Moreover, the company currently has 592 retail distribution centres called as Hypermarts, which it will increase to more than 750 next year.