Essar Steel Pune unit eyes Rs 3,000 crore turnover in FY17

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PUNE: Riding high on increasing demand for pre-coated steel in domestic as well as international markets, Essar Steel Pune Facility (ESPF) is eyeing a 43 per cent jump in turnover to Rs 3,000 crore in the ongoing fiscal.

The unit is located at Sanaswadi, Maharashtra.

“We are looking at achieving a turnover of Rs 3,000 crore in FY17 compared with Rs 2,100 crore achieved in FY16. We expect our sales volume of PPGI (Pre-Painted Galvanised Iron) products to grow by 35 per cent to 6,25,000 tonnes per annum and turnover by 45 per cent in the current fiscal,” ESPF CEO R V Sridhar told PTI here.

ESPF offers innovative products like camouflage steel, wood finish, abrasion resistant systems and wrinkle finish products, which caters to customers from automobile, defense, home appliances, construction and industrial sector.

The company’s sales volume rose 71 per cent to cross 4,62,000 tonnes in FY16 compared with 2,70,000 tonnes in the previous fiscal. Total revenue was Rs 2,070 crore, a growth of 45 per cent as against a revenue of Rs 1,425 crore in FY15.

The growth of ESPF is in line with the rising capacity utilisation in Essar SteelBSE 0.41 % India’s overall operations — the company had a capacity utilisation of 70 per cent in the last quarter of FY16.

ESPF’s capacity utilisation in the current quarter ending June 2016 has already shot up to well over 98 per cent, Sridhar said.

ESPF’s turnaround has been triggered primarily by process innovations, operational excellence, low rework, expansion into new international markets, and a renewed focus on the domestic market and the value-added product range.

Increased productivity as a result of record capacity utilisation across all lines led to higher yields, he said.

Commenting on exports prospects, Sridhar said, the emphasis was on value added products and making inroads into geographies like Africa, NAFTA & EU. The company expects to export 100,000 tonnes in the current year.

During FY16 ESPF added over 125 customers in international market. It also doubled its customer base in the Middle East and some other regions. ESPF exports its products to more than 110 countries across the world.

Sridhar pointed out that the company exports 14 per cent of production in international market and 86 per cent in domestic market and hope to maintain the ratio due to higher domestic demand for its products.

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Domestic steel industry may see gradual recovery: Care Ratings

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Lower input costs and improvement in domestic realisations due to reduction in imports may lead to gradual recovery in the domestic steel industry, Care Ratings has said in a report.
The domestic steel industry has been struggling for the last couple of years owing to a combination of factors like rising imports particularly from China, a subdued domestic demand, excess domestic capacity and decline in realisations due to availability of cheaper imported steel.
However, there have been some positive developments in recent times with government intervention in the form of imposition of minimum import price (MIP) in February 2016 for six months and levy of 20 per cent safeguard duty in September 2015, which has been further extended till March 2018, the report said.
These measures have arrested the rise in imports to a great extent, thereby leading to improvement in realisations for the domestic players. Further, the lower prices of key raw materials have also supported the improvement in realisations of steel products.
However, the continuation of protection measures for some more time and sustained revival in demand would remain crucial for the prospects of domestic steel industry in the medium to long-term, the report said.
However, domestic steel demand continued to remain sluggish with demand showing signs of marginal improvement.
The domestic finished steel consumption grew by 4.3 per cent in 2015-16 as against a growth of 3.9 per cent during the previous fiscal.
The marginal improvement in steel demand was fuelled by the growth in construction sector, which, according to latest GDP data, grew by 3.7 per cent y-o-y in the 9-month period ended December 2015.
Nonetheless, the growth rate of steel consumption is still on a lower side when compared with the average growth rate of 10.3 per cent over FY07-FY11 — the period which marked a healthy pace of economic growth as reflected by average GDP growth of 8.6 per cent, the report said. The report also said that after a continuous decline, global steel prices have strengthened, largely due to an increase of prices in China owing to production cuts and re-stocking for meeting the demand of peak season in second quarter of 2016. The price differential between imported steel and indigenously produced steel post-implementation of MIP provides the much-needed headroom to major steel producers for increasing prices between Rs 3,350 and Rs 5,025 per tonne depending on the type of the products, it said.

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Ministry of Steel

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Introduction

The Ministry of Steel is under charge of the Minister of Steel. The Ministry is responsible for planning and development of iron and steel industry, development of essential inputs such as iron-ore, limestone, dolomite, manganese ore, chromites, ferro-alloys, sponge iron etc. and other related functions.

Vision, Mission and Objectives of Ministry of Steel

Vision
Transforming India into a global leader in the steel sector, both in production and consumption

Mission
Promoting policies and initiatives for attaining a national steel production capacity of 142.3 million tonnes by the end of Twelfth Five Year Plan. Streamlining the regulatory environment particularly for mineral policy and environmental clearances, promoting the development of infrastructure required for enhancing steel production. Boosting domestic demand for steel through promotional efforts. Improving technological capacity, techno-economic efficiency of operations of steel industry.

Objectives

  • To facilitate creation of steel making capacity and growth in steel production.
  • Ensuring adequate availability of raw materials for steel industry from domestic and overseas sources,articularly iron ore and coal by PSUs under the Ministry of Steel.
  • Improving the performance of Iron & Steel industry through R&D and Technology intervention, Quality Control, Export Promotion and Improvements in techno-economic parameters.
  • Promoting the development of infrastructure for enhancing steel consumption.
  • Monitoring performance of commitments made in the MOUs and modernisation and expansion programme of PSUs.
  • Finalisation of New Policy Initiatives
  • Creating and updating a comprehensive data base for various segments of the steel industry.
  • Assessment of the skill gap and follow-up action points for bridging the gaps.
  • Proactive steps for environmental enhancement and pollution control

Key Functions of the Ministry of Steel

  • Development of Steel Plants in Public and Private Sectors, the re-rolling industry and ferro-alloys.
  • Development of iron ore mines in the public sector and other ore mines like manganese ore, chrome ore, limestone and other minerals used in the iron and steel industry (but excluding mining lease or matters related thereto).
  • Providing a platform for interaction of all producers and consumers of steel in the country.
  • Identification of infrastructural and related facilities required by steel industry.
  • Overseeing the performance of 8 PSUs, their subsidiaries and one Special Purpose Vehicle (Joint Venture Company) called International Coal Ventures Pvt. Ltd. (ICVL).

**source :http://steel.gov.in/ (ministry of steel)