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Essar Steel Completes Capacity Expansion at Hazira
01/05/2012 - Essar Steel has completed its expansion of its Hazira complex, doubling the facility’s annual capacity to 10 million tonnes and making it the largest single-location flat steel producer in India.
Essar Steel has completed its expansion of its Hazira complex, doubling the facility’s annual capacity to 10 million tonnes. The 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. The expansion also enables the complex to offer the entire range of flat rolled products, from thin strips and thick plates to pipes, cold rolled and coated products.
”We would like to dedicate this plant to the nation. When I first ventured into Hazira, it was my desire to put India on the global steel map and today that dream has come true,” said Mr. Shashi Ruia, Chairman of Essar Group, at the opening. “Our world-class steel complex is a testament to the hard work put in by the Essar family and our small contribution to the steel industry and India’s growth story.”
In managing the construction and startup of the expanded plant, Essar has incorporated a number of unique features and technologies, as described below.
Raw Materials and Energy — To maximize raw materials security and flexibility, the company adopted an integration and securitization strategy that enabled it to keep costs low even with the expanded capacity.
A bulk of its iron ore needs have been secured through offtake agreements with key players like NMDC and captive mines in Jharkhand and Chhatisgarh. The company also set up its iron ore beneficiation plants to accommodate the use of the low-grade iron ore fines that are abundantly available in the country.
For its energy requirements, Essar has long-term power purchase agreements and will soon have access to source cheaper coal-based power from its captive plants. The offtake agreements combined with the captive mines and easy availability of low-grade iron ore dumps provides Essar the necessary raw material security to operate its steel plant in the most cost-effective manner.
Ironmaking— Essar employs three ironmaking technologies – HBI/DRI, Corex and Blast Furnace. These technologies give them flexibility in their raw material inputs, whether iron ore or energy, in the following ways:
Ironmaking— Essar employs three ironmaking technologies – HBI/DRI, Corex and Blast Furnace. These technologies give them flexibility in their raw material inputs, whether iron ore or energy, in the following ways:
· The complex uses varying grades of iron ore inputs, including lump ore, fines, slimes, sinter and pellets
· The complex also uses different energy sources, including natural gas, coking coal, coke, Corex gas, blast furnace gas and non-coking coal
· Raw material costs are optimized to deliver the best value to the customer
Low capital investments — Essar Steel has invested over Rs 37,500 crore in the business including the recent project expansion, which represents a cost of just US$750 per tonne of steel (which in addition to steelmaking also includes beneficiation, pelletization and downstream capabilities). According to the company, this investment compares to an industry standard for steelmaking of US$ 1 billion per million tonnes of production.
Low cost of production — According to the company, the Hazira Complex will be in the bottom 25% of the global cost curve due to a number of technological and process advantages that have been incorporated into the facility:
Low cost of production — According to the company, the Hazira Complex will be in the bottom 25% of the global cost curve due to a number of technological and process advantages that have been incorporated into the facility:
· Essar has the ability to use low grade iron ore fines through its own 20 million tonne pellet and beneficiation plants, which provide raw material security
· Power requirements have been tied up through captive coal- and gas-based power plants
· Different ironmaking technologies provide flexibility in raw material usage
Complete portfolio of flat steel products — The expanded complex will enable Essar Steel to offer a complete range of flat rolled products based on:
· New compact strip production (CSP) mill capable of producing thin gauge strips of thicknesses as low as 0.8 mm
· CSP along with the hot strip mill, plate mill, pipe mill and other existing downstream facilities offer the ability to produce the entire range of value-added flat steel products
· Over 70% of products are value added, thus positively impacting margins
· Caters to all customer segments
World-class sustainability standards — On most parameters, the company is either on par or better than the peer group of World Steel Association (WSA) Sustainable Development charter, which evaluates economic, social and environmental sustainability of an organization. In 2010, the company conducted the Life Cycle Impact Assessment of Hot Rolled Coil (HRC) as per ISO 14040:2006 and ISO 14044:2006.
Key sustainability accomplishments in FY 2010-11 include:
· 8.72% reduction in Greenhouse gas emissions in India
· 99% reuse of by-products in Hazira
· Lifecycle Impact Assessment completed for HRC
· Over 130,000 cubic meters of water conserved through rainwater harvesting in Hazira
· 91% of solid waste utilized in Hazira
· 5.2% reduction in specific water consumption of crude steel at Hazira
The company noted that it continues to strive to be the most sustainable steel company in the world.
A responsible corporate citizen — Essar Steel, through the Essar Foundation, has been designing their CSR programs to address various social challenges and add value to the society. Programs are classified under different heads that broadly encompass the guiding philosophy of the UN Millennium Development Goals (MDG). Key focus areas are Livelihood Creation, Welfare of Women, Education, Infrastructure, Environment and Health.
According to the company, the Hazira Complex will play a major role in making Gujarat a global industrial hub catering to the needs of capital and consumable goods, shipbuilding and automobile sector. Being a port-based plant, its strategic location makes it an ideal gateway for meeting the global demand for steel. Domestically the complex will provide world-class steel to meet the diverse needs of various industries, while also making the Hazira Steel Complex a national hub for Essar Steel to provide a range of steel products to the rest of the country. This is in line with the Vision 2020 that envisages taking India’s annual steel capacity to 200 million tonnes.
“It is a moment of great pride for us to complete the expansion,” said Essar Steel CEO Mr. Dilip Oommen, commenting on completion of the expansion. “Besides bringing down our costs, this will offer operational flexibility in terms of usage of raw materials and product mix. While expanding, we have ensured that the safety and environmental aspects are given due importance in the design, construction and operations of the plant.”
Essar Steel, a 14 MTPA global producer of steel, is a fully integrated flat carbon steel manufacturer—with presence in Canada, USA, India and Indonesia. It is a versatile flat steel producer with integrated facilities making pipes and extra wide plates, as well as hot and cold rolled, galvanized and color coated steel.
The Essar Group is a multinational conglomerate and a leading player in the sectors of Steel, Energy, Infrastructure and Services. With operations in more than 25 countries across five continents, the Group employs 75,000 people, and has revenues of US$ 17 billion.
