Growth mode

Hazira, Gujarat, Jan. 4: Essar Steel today said it had completed expansion at its Hazira steel complex, which would take the total capacity to 10 million tonnes per year.

The Ruia group company will be able to generate at least Rs 40,000 crore in revenues following the expansion, which will make the Hazira complex the largest single location flat steel producer in India and the fourth largest globally.

It will also enable the unit to offer the entire range of flat products from thin strips and thick plates to pipes, cold rolled and coated items.

Essar group chief executive Prashant Ruia said Essar Steel was among the lowest-cost producers, and this had been achieved by focusing on raw material security.

In India, it is targeting a 20-million-tonne (mt) pellet capacity, which includes an 8mt iron ore pellet unit in Vizag.

Besides this, the company is setting up a 12mt pellet unit in Paradeep of which 6mt will come up by March, while the second phase of equal capacity will be ready within a year.

Upon completion, Essar Steel will be the third largest pellet producer in the world. “Moreover, we are now largely self-sufficient in our gas requirement and close to 40-45 per cent of this need is met through captive supply,” he said.

Essar Steel has invested over Rs 37,500 crore in the steel business in India, including the recent project expansion. This has been done through a debt equity ratio of 2:1.

Ruia said the company’s debt levels — total debt in its books stands at around Rs 20,000 crore — would come down with the expansion strengthening its financial position. The company does not plan to further expand the capacity at Hazira, but consolidate at the present levels.

According to Ruia, the Hazira complex will operate at 85 per cent capacity in the next fiscal. Though he said it was “too early” to comment on the relisting of Essar Steel, he added that the operations had grown five-fold since the delisting.