Saturday, October 31, 2020

Interview-Vikram Amin (Essar Steel)

We are on the course to soon be a company with zero-waste discharge


Essar Steel is today one of the leading names in the steel sector. The company has its footprint in India, Canada, USA, the Middle East and Asia. VIKRAM AMIN, EXECUTIVE DIRECTOR-STRATEGY & BUSINESS DEVELOPMENT, ESSAR STEEL INDIA LTD, responded to queries from CONSTRUCTION OPPORTUNITIES on his company’s expertise in delivering high-quality products and its approach towards market opportunities.


On the products range and application areas: Essar Steel is a fully integrated flat carbon steel manufacturer from iron ore to ready-to-market products. We are the only domestic steel producer offering the entire gamut of flat steel products like hot rolled coils and sheets, cold rolled, galvanised, coloured-coated, heavy plates and large diameter pipe products. Our wide product range has helped us to cater to all end-user segments like oil and gas, construction, shipbuilding, wind power, defense, yellow goods, white goods and automobiles.


On the market’s demand-supply scenario: Currently, the ratio between demand and production in India is evenly matched. However, imports at dumping prices have made inroads into the Indian market. This is considerably impacting the capacity utilisation of Indian mills. But, few government measures like increasing customs duty and imposition of safeguard duties on hot rolled coils are the steps being initiated in the right direction. Such measures can ease the onslaught of cheap imported steel. We haven’t seen a major spurt in infrastructure spending due to which construction activity is still tepid. The proactive government approach and positive initiatives being implemented have resulted in a growth in few economic sectors.


On the manufacturing units, investments and strategies to improve market share: Essar Steel India is an integrated steel player with a 10 MTPA steel plant. In order to provide raw material for the plant, we have set up two pellet plants with 20 MTPA capacities, of which 6 MTPA is under implementation. Our rolling capacities are 7.1 MTPA for hot rolled, 2.1 MTPA for cold rolled, 1 MTPA for galvanising, and 0.4 MTPA for colour-coated. We also have a 1.5 MTPA plate mill and a 0.6 MTPA pipe mill. We also have processing and distribution centres located near industrial and auto hubs. With a capacity of 4 MTPA, these centres support a pan-India network of retail outlets to cater to the SME segment.
On the performance front, we are seeing a significant improvement in FY15. The Company has registered as Profit after Tax of `648 crore. To achieve this growth, we have focused on consolidation, enriching product mix, cost reduction and stablising operations. Despite the negative impact of rising imports that lowered prices, we were able to get a premium on our products when compared with the products offered at market rates. This was made possible due to our strategy to move away from commodity grade to value-added grade steel.


On the technologies and best practices contributing high-end quality: We constantly improve our efficiencies and develop new value-added products. Our R&D focuses on three areas, which are raw material, process improvements and product development. This is supported by superior technology that we use across our facilities. I can go to the extent of saying that our technology is among the best in the country. We are amongst the few Indian steelmakers that can manufacture steel pipes of more than 11.16 ft diameter. In addition, the state-of-the-art 5 metre-wide Heavy Plate Mill with heat treatment facilities, and the Compact Strip production system that rolls hot band to as low as 0.8 mm, are both one-of-a-kind mills in India. We have developed over 300 grades of steel conforming to quality standards of international certification agencies, like API, ABS, NACE, Lloyd’s Register, to name a few. The products, many of which are import substitutes, cater to the requirements of a wide cross-section of industries. Our market share for value-added products has been steadily growing and currently stands at 62 per cent of sales. Our most recent products cater to defence applications like battle tanks, war ships, armed personnel carriers, and nuclear applications. Sustainability has been given due importance and the company is on course to becoming a zero-waste company.

On the future prospects of steel sector: According to World Bank projections Indian GDP is expected to achieve a growth of about 7.5 – 8.5 per cent during the current fiscal. We expect this to translate into a growth in steel demand by at least 9-11 per cent. Moreover, the government is also granting its approvals for numerous stalled projects. Even, the government’s ambitious ‘Make in India’ initiative is expected to augur well for our industry.


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