Essar Group doubles steel capacity at Hazira, Gujarat

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The Ruias-controlled Essar Group has doubled its steel-manufacturing capacity at this port town in south Gujarat to 10 million tonnes annually, making the unit the fourth-largest such facility at a single location globally.

"With this expansion, the steel complex will be able to offer the entire range of flat products from thin strips and thick plates to pipes, cold-rolled and coated products," said Essar Group chairman Shashi Ruia.

"This expansion makes the Hazira Steel Complex the largest single-location flat steel producer in India and the fourth-largest single-location flat steel producer globally," Ruia added.

The Essar group's flat-steel making capacity now goes up to 14 million tonnes, taking into account the 4 million tonnes per annum capacity of the Algoma Steel unit located in the northeast of Ontario province in Canada. The century-old company was acquired in 2007.

According to Dilip Oommen, managing director and chief executive of Essar group, some $7.5 billion were spent to create the 10 million tonne fully integrated steel unit at Hazira, along with the linkages that span raw materials to the final customer.

Oommen told IANS that only three other steel-producers had higher capacity at a single unit -- Boasteel's 18.6 million in Yunnan province of China, Posco's 18.1 million unit in South Korea and Gruppo Riva's 12.9 million unit at Taranto in Italy.

In terms of sourcing iron ore, Essar Group has long-term agreements in place with the state-run National Mineral Development Corp and several private miners in Orissa, that will create value from low-grade iron ores.

"On completion of the Odisha (Orissa) project, we will be the largest pellet producer in India," Oommen said, adding the product will be transported to Hazira via ships from the port city of Paradeep. Essar group also has interests in shipping.

The group already has an 8 million tonne per annum benefication plant at Kirandul in Chhattisgarh's Dantewada district that converts the ore into slurry and sends it via a 267-km pipeline to Visakhapatnam.

The further value addition happens at Visakhapatnam where the raw material is converted into pellets, ready to be shipped to Essar's own facility in Hazira or any other steel maker.

"The fact that the pellet unit is connected to the Visakhapatnam Port Trust through conveyors increases logistical efficiency. This apart, we also have an added advantage of our own port at Hazira, next to the steel unit," Oommen said.

A similar project for benefication and pelleting is underway at Odisha with a 12 million tonne plant each at Dabuna and at Paradeep.

"The project has been planned to use low-grade ore that are unused and not easily consumable," the chief executive said.

In terms of infrastructure, Essar group has a capacity to produce over 1,000 MW of power at Hazira, of which 300 MW goes to the grid, a 30 million tonnes per annum all weather port there and a 12 million tonne port at Paradeep.