New Delhi, May 6 Essar Steel will complete its expansion, adding 5 million tonnes per annum capacity of steel at its plant in Hazira, Gujarat by June 2010. This will take total capacity to 9.6 mtpa.

 

While its overseas plans in Vietnam, Trinidad and Tobago, and North America are temporarily being put on the back burner, Mr Shashi Ruia, Chairman, said India plans were on track. The pellet plant near Paradip, Orissa was on track, but plans in Jharkhand and Chhattisgarh awaited Government’s procedures on land and allotment of mines.

 

Essar Steel launched its Rs 75-crore third service centre at Bahadurgarh in Haryana on Wednesday. It will offer more customised steel. “Customers will not have to carry huge inventories, and can use steel processed to their specification directly on line instead of having to process it themselves,” said Mr Ravi Singh, VP, Service Centre and Business Development.

 

Like in Chennai and Pune, the North Indian facility will serve the auto hub here.

 

Maruti, Honda, auto component makers and white good companies LG and Whirpoool are clients. According to Mr J. Mehra, CEO, Essar Steel, last year 53 per cent of delivery was through these facilities, and demand for off the shelf steel will grow.

 

This downstream initiative, says Mr Mehra, will also help the company distribute steel from its expanded capacity of 9.5 mtpa. High end users as well as smaller rural consumer can eventually buy steel to their requirement, through a network of 175 hubs with 8-9 warehouses attached to each of them.

 

The Rs 1,000-crore investment into these over the next three years, also includes similar facilities in West Asia and North America. It has set up one in Indonesia.

 

The Hazira plant running on gas has also sought gas from the Government’s quota from the KG basin. It currently runs on 3.3 mmscmd and would need 9 mmscmd at full capacity. Shortage of gas had affected production last year when it produced over 3 mtpa , said Mr Mehra.

 

“With the demand from North American guzzlers having dropped, gas supply is not likely to be an issue,” added Mr Mehra. It expects to produce 4.5 mtpa this year.

 

The $2.7-billion expansion at Hazira is for coal-based steel. The mix of raw materials, of gas and steel, the company is hoping will help it better ride price turbulences. –Business Line