The Essar Steel Pune Facility (ESPF), a manufacturing unit that is integral to Essar Steel India’s value-added steel portfolio, announced that it has recorded a turnaround performance in the financial year ended March 2016. ESPF’s sales volume rose 71% to cross 4,62,000 tonnes, as compared to 2,70,000 tonnes in the previous fiscal. The total revenue was at Rs 2,070 crore, a growth of 45% when compared to a revenue of Rs 1,425 crore in the previous year. ESPF is India’s first and largest single location pre-painted galvanized iron (PPGI) manufacturing plant. It is a market leader with 51% share share in the domestic PPGI market. The unit has 650 kpta pickling, 600 kpta cold rolling and 490 kpta galvanizing facilities.

ESPF’s capacity utilisation has risen to 77% in FY 2015-16 from just 45% in FY 2014-15. This is in line with the rising capacity utilisation in Essar Steel India’s overall operations— the company had a capacity utilisation of 70% in the last quarter of FY 2015-16. In fact, ESPF’s capacity utilisation in the ongoing quarter of the current fiscal has already shot up to well over 98%. The current year’s production target is set to cross 6,25,000 tonnes, translating into a 35% volume growth compared to the FY 2015-16 number.

“ESPF’s remarkable turnaround has been triggered primarily by process innovations, operational excellence, low rework, expansion into new international markets, 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 and eventually fast order execution and on-time supply. This led to repeat orders and deliveries. ESPF’s position on the customer satisfaction index and its employee engagement ratings are among the highest in the country. Consequently, in spite of continued emphasis on newer products and niche applications like medium carbon/high carbon cold rolled steel components, the unit has emerged as an industry leader in terms of the on-time delivery index,” a press note stated.

“This is a remarkable achievement considering the challenges that the steel industry faced last year, including issues like the dumping of steel, subdued demand and volatile market conditions. This is also ESPF’s best ever performance since Essar took over the unit in 2009,” said Dilip Oommen, CEO and MD, Essar Steel India. “Our performance is the result of our employees’ single-minded focus on achieving excellence in all areas of operations. We have set new industry benchmarks in production, marketing and cost efficiencies,” added R V Sridhar, CEO, ESPF. Elaborating about the increase in production and revenues, Sridhar said, “The Chinese are a great challenge with its low cost steel. However, the introduction of MIP and BIS standards by the Indian government has curbed Chinese imports of steel at predatory prices, leading to better sales realisation in the Indian markets.”

ESPF has made a renewed thrust on marketing activities to overcome the odds it faced in a sluggish market. Not only did it fortify its stronghold in its home market of western India, it reached out to the last mile user, sometimes in the remotest parts of the country, by leveraging its vast HyperMart network across the country. “We are now targeting those areas where the Chinese companies have not penetrated,” Sridhar said. The year was also marked by zero quality complaints and ESPF’s environment-conscious drive to replace asbestos roofing with PPGI products.

In exports, the emphasis was on value-added products and making inroads into geographies like Africa, NAFTA and EU. During FY 2015-16, ESPF added over 125 customers. 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. A range of innovative product offerings like camouflage steel, wood finish, abrasion-resistant systems and wrinkle finish products are manufactured at the Pune facility, and cater to different customer segments and markets. Essar Steel products conform to standards like ASTM, BIS and SA. Further, the Pune facility is a zero-discharge unit that uses eco-friendly production processes and implements HSE best practices on the shop floor. In FY 2015-16, ESPF received several awards such as the Gold Award in Safety, Gold Award in Environment and Gold Award in CSR activity, all from Greentech Foundation.

Essar Steel India is one of India’s leading integrated steel producers with an annual production capability of 10 MTPA supported by a 20 MTPA pellet facility. The state-of-the-art facilities comprise iron ore beneficiation, pellet making, iron making, steel making, and downstream facilities, including a cold rolling mill, a galvanizing and pre-coated facility, a steel processing facility, an extra-wide plate mill and three pipe mills with coating facilities. Essar Steel uses information technology extensively to ensure consistent product quality. It produces over 300 grades of steel conforming to quality standards of international certification agencies like API, ABS, NACE, and Lloyd’s Register. The products, many of which are import substitute products, cater to the requirements of a wide cross-section of industries.

- Huned Contractor