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Essar Steel - Groundbreaking Performance and Technology

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June 27, 2017 | Iron & Steel Review Bookmark and Share  

Over the last two years, the Essar Steel team has been doggedly pursuing an efficiency enhancement and new product development programme.

In the year ended 31 March 2017, Essar Steel India substantially improved its performance. The total flat steel production was at 5.6 million tonnes-a growth of 47% when compared to the 3.8 million tonnes produced in the previous fiscal. Pellet production also grew by 60% to 9.3 million tonnes compared to 5.8 million tonnes in the same period last year.

At over 70%, Essar Steel's current capacity utilisation is more than double of what it was two years ago. The same applies to its sales volume. It has indeed been a quantum leap in operational performance. With all its downstream units already operating at capacity levels, the company is marching towards full capacity utilisation in the coming years.

Emerging from a downturn
Even two years ago, the situation was quite different. The entire Indian steel industry was caught in a commodity down cycle. This, and the dumping of steel at predatory pricing that was prevalent even a few months ago, have impacted the performance of all steelmakers in India, including Essar Steel. Essar Steel in particular could not ramp up production since its contracted gas supply was cut off by the Government of India. The plants were not producing enough to achieve economies of scale, and capacity utilization had dropped to 30%.

With the various measures taken by the Government of India, the dumping of steel at predatory prices were squarely addressed. Additionally, there is an improvement in steel prices globally, which has led to better capacity utilisation. The company has also benefitted from lower gas prices, even as it has reduced its dependence on natural gas by increasing production from the blast furnace, Corex and coke making. Essar Steel has increased raw material security through 14 million tonnes of captive pellet plants, and will soon be commissioning a further 6 million tonnes, which will take its pellet making capacity to 20 million tonnes, which is among the largest for any global steelmaker. It has also won an iron ore mine in Odisha that has a reserve of about 100 million tonnes

Propelled by new product development
Key to Essar Steel's phenomenal turnaround has been a gradual shift from being a commodity steelmaker to becoming a company that is propelled by the strength and premium appeal of value-added products that have impeccable quality and are supported by strong customer relationships.

Over the last few years, the company has invested in world-class technology and processes to make sure it can supply its customers with exactly the kind of steel they need-be it hot rolled and cold rolled coils, or plates and pipes, or colour-coated and galvanised variations, or specialty grades that can be used in automobile components, white & yellow goods, oil pipelines or even warships. This is why Essar Steel's new marketing mantra for its customers is "Steel... the way you want it." Essar Steel today offers more than 300 different grades of steel that are attuned to the needs of niche customers. In the year ending 31 March 2017, the share of value-added steel was 50% of the total production.

These "new products", the moniker that the company use to define the value-added grades in its FY'16-17 R&D Annual Report, are mostly import substitutes for various high-end critical segments, including Defence. In line with the Hon'ble Prime Minister's call to "Make in India", they are part of Essar Steel's efforts to help OEMs reduce their dependence on European or American steel by offering them a more cost-effective alternative of world-class quality.

R&D working in tandem with Marketing
Essar Steel has set up an R&D Centre at Hazira that is approved by the Department of Science and Technology, Government of India. R&D efforts are dedicated towards achieving cost efficiency at the plant level, as well as for new application and product development. The highly capable R&D team has been working closely with the Sales & Marketing teams to identify customer segments that have a requirement for specialty grade steel-or in other words "new products" that the company could develop.

Along with the development of new products, additional focus areas of Essar Steel's R&D team are raw material, process improvements and hastening the firm's transformation into a zero-waste company.

In FY 2016-17, the undertook 29 projects related to product, process improvement.

New product development
Nine new products were developed and commercialised in FY 2017 as explained in the table below.


Product type

Typical Applications


High Strength Quenched & Tempered Steel (Structor 900)

·         Support structure of artillery guns

·         Heavy duty crane booms


Bulletproof steel (ArmaPro 500)

Ballistic resistant armoured troop carriers


High strength heavy plates

Heavy structures, like boiler mounting structures


High strength steel plates

Earth-moving equipment


Hot forming grades, which develop very high strength after forming & heat treatment

B-pillar of passenger cars


Special low alloy steel

Clutch parts of passenger cars


High strength low alloy steel in hot rolled condition



High strength thin and wide steel plates-hot rolling trials successful

Construction and structural engineering


Roll bonded clad plates-plant scale trials successful

Boiler & pressure vessels

Raw material research and process improvement initiatives
The R&D team completed six projects related to process improvements and raw material at lab scale in FY 2017.

  • Established pilot scale production of self-reducing briquettes made from by-products of sponge iron plant and blast furnace. The briquettes were used as raw material for electric arc furnace
  • Fine-tuned the process of making man made sand from blast furnace slag
  • Established method of producing iron ore pellets with lower reduction degradation index in laboratory scale
  • Development of steady-state model of Melter-Gasifier of the Corex Process
  • Mathematical modelling of pellet induration furnace

Turning waste to wealth
One of the most stellar examples of how the R&D team is leading the charge for transforming Essar Steel into a zero-waste company has been its phenomenal success in developing sand slag, a product that is an eco-friendly alternative to sand and has huge demand in the construction.

The eco-friendly sand is essentially developed from slag, a by-product generated from iron-making furnaces. Slag sand is approved by BIS 2016 for use as fine aggregate in all construction applications.

The initial and final strength of the concrete made using the slag sand is better compared to natural sand. It can be used in all construction activities and can replace river sand.
This innovative slag sand, which is being produced in Essar Steel's Hazira facility, will help protect our rivers from sand mining and associated problems.

The product is aligned with the company's sustainability goals. Essar Steel also uses the coal fines and effluent gases generated from its pellet making operations for power generation and recycling treated water.

Towards becoming a zero-waste company
In addition to sand slag, Essar Steel is striding towards becoming a zero-waste company, with a slew of measures aimed at recycling, reusing and reducing waste. It recycles almost all the waste water generated in its plants, and even has a paper recycling unit at Hazira. Coal fines generated at its pellet making units, and iron ore fines generated from the sinter plant are recycled and reused in the steelmaking process. Effluent gas from these units is also used in power generation.

Essar Steel lays great emphasis on Sustainability and is aligned with the World Steel Association's (WSA) sustainability indicators. Essar Steel is a climate action member and signatory to the sustainability charter, WSA.

For its concerted efforts in the sustainability sphere, the company has been bestowed with awards from reputed institutions, including the Centre for Science and Environment, Water Digest, World Steel Association, Golden Peacock, Greentech Foundation, CII, Carbon Disclosure Project, Sustainable Development Centre, etc.

Supplier to marquee projects around the globe
Today, Essar's steel is used in some of India's, as also the world's, most prestigious projects. The company is enabling steel-consuming sectors to reduce their dependence on costlier imported steel and make use of indigenously developed Indian•steel, which is not only being used increasingly as an import substitute, but also being exported because of its superior quality.

The under-construction Chenab River Bridge project, the highest arch bridge (322 m) in the world, uses specialised steel plates from Essar Steel. The company will also be supplying steel to the Bogibeel Bridge in Assam, a combined road and rail bridge, which once completed will be the longest bridge of its kind in India and the longest across the Brahmaputra River. Some of the other key projects to which Essar Steel has supplied plates are:

Solan Oil Field Project: Essar Steel supplied plates that are subjected to the toughest underwater conditions at the bottom of the North Sea.

Saurashtra Narmada Avtaran Irrigation (SAUNI) Yojana, Gujarat: The project uses Essar Steel pipes that each measure 12-metres long and 120 inches in diameter-the biggest in the country.

Kochl Metro Car Membrane: The metro car's connecting membranes are the most critical joints and are made from Essar Steel.

Preferred supplier to India's Defence sector
Essar Steel has set up a 1.5 MTPA state-of-the-art 5-metre-wide steel plate facility at Hazira to meet the requirements of the Defence sector. The plant has three types of rolling capabilities that include thermo-mechanical controlled rolling, normalised rolling and temperature controlled rolling. Further, it has two types of heat treatment capabilities-quenching & tempering, and normalising. These capabilities make this mill a versatile mill that is capable of producing any grade of steel for Defence applications. The plate mill is backed by advanced steelmaking facilities and has better control over raw materials through its upstream pellet making facilities. Essar is known for producing high-end clean steel required for various sectors like auto, engineering, white goods, yellow goods, power sector, hydrocarbon sector pipe & tubes and Defence.

It has been developing products for the Defence sector for the past seven years, and focuses on application-based product development. The Defence grade steel developed by the company meets the standards of the Defence Metallurgical Research Laboratory, Combat Vehicle R&D Establishment, Directorate of Naval Architecture and Directorate of Naval Design.

The company is far from being a new entrant in the Defence segment. Since 2001, it has been supplying DMR 249A grade, a special steel for building warships, from its Hot Strip Mill. After commissioning of the extra-wide Plate Mill in 2009, several new grades were developed and the product range for the existing grades were enhanced. The Essar team collaborated with the Defence sector to produce grades, like CDA-99, ENlO025-6-S690QL, which are very tough steels used in heavy armored vehicles. However, the crowning glory has been the production of DMR-1700, an ultra-tough steel of yield strength 1500 Mega Pascal designed by Defence Research and Development Organisation. Essar Steel is the only steelmaker in the world that had produced this grade through continuous casting, a technological breakthrough made possible through positive attitude of its engineers.

Bulletproof steel
Essar Steel was the first steelmaker in India to launch the DMR- 1700, an indigenously developed high performance bulletproof steel, which can be used in light armoured vehicles and protective shields or structures. The steel is also ideal for bullet-proofing civilian vehicles of security personnel.

Today, manufacturing bullet proof steel is a highly specialised technology. In India, such steels have either been manufactured under the restrictive technology transfer agreements with foreign countries, or simply imported. Ballistic performance of this product was successfully tested at Gujarat Forensic Science Laboratory (FSL), as well as in IABG, an internationally renowned German laboratory.

State-of-the-art manufacturing facilities
Essar steel is well known for its diversified and value-added/ niche flat products. Its 10 MTP A Hazira facility offers wide product mix ranging from softest to toughest steel made in India. Grades include, but are not limited to, cold rolled IF-steel used in car bodies, ultra-pure steel for soft magnets used in neutrino research, electrical lamination steels, boiler quality steels, coated steel, abrasion resistant steels and steels for oil & gas pipelines. The steel is produced from virgin ore using a variety of iron making technologies, electric steelmaking, ladle refining and degassing technologies, resulting in product quality that is among the best in the world. Product forms include hot rolled/cold rol!ed/coated coils and sheets, heavy plates, large diameter pipes and welded structures.

Essar Steel is an integrated steel producer and has made prudent investments in creating facilities to complete the value chain and also address customer requirements. The investments in state-of-the-art facilities in steelmaking and downstream units gives it full control over its manufacturing process that ensures consistent quality of products. Hence, the company has been able to develop products that have great export potential or are import-substitutes.

Hazira Facility: Essar Steel India Limited is one of India's largest single-location integrated steel producer with a capacity of 10 MTPA located in Hazira, Gujarat on the west coast of India. This facility comprises three iron making facilities of Direct Reduced Iron (DRI), Corex and Blast furnaces, which gives it flexibility in the usage of raw materials and energy source. It uses two steelmaking technologies of Electric Arc Furnace (EAF) and Conarc and two rolling facilities of Hot Strip Mill (HSM) and Compact Strip Production (CSP). The Hazira facility has a rolling capacity of 7.1 MTPA. The products from this SBD comprise hot rolled, cold rolled and galvanized products. It is certified with ISO: 9001:2000, IS 9002 and TUV certifications, ISO 140001 and India Chiller Energy Efficiency Project (ICEEP) Protocol compliance.

Pipe Mill, Hazira: The pipe mill has an annual production capacity of 0.6 MTPA and is located in the Hazira complex. The mill produces both Helical Submerged Arc Welded pipes (HSAW) -0.275 MTPA and Longitudinal Submerged Arc Welded pipes (LSAW) -0.325 MTPA pipes. It has a well-equipped laboratory to ensure intensive inspection and testing facilities. The pipes conform to API, BIS and DNV certifications and are approved by international companies like Gasco, Shell. Global, ENI, So car, Occidental-Qatar, Ecopetrol, Pacific Rubiales, Fluor and Kvaerner

With the steel pipe industry being highly raw-material intensive, Pipe Mill has a distinct advantage in terms of easy access to raw material as the mill is located in the Essar Steel complex, Hazira. This in turn ensures a fast -delivery mechanism, leading to timely execution of orders.

Plate Mill, Hazira: The plate mill, with a capacity of 1.5 MTPA, is one ofIndia's widest plate mills producing 5-metre wide plates. It has world-class and highly sophisticated rolling processes and equipment with 100% online ultrasonic testing facilities. It is the first and only Indian mill -and sixth in the world -to be permitted to use the API monogram on its plate products as well as to have received an API certification.

It is also the first Indian private mill to be approved by the Defence authorities for commercial production of certain steel grades for armour and naval applications. The products undergo inspection by internationally acclaimed third-party testing. It has an excellent NACE facility with HIC (Hydrogen Induce Cracking) capability and the various plate products are branded based on their applications.

Essar Steel Pune Facility: The Essar Steel Pune facility is strategically located near Pune, Maharashtra, which is one of the largest industrial hubs in India. The facility comprises a 0.65 MTPA pickling line, a 0.6 MTPA cold rolling mill, a 0.45 MTPA galvanising line and a 004 MTP A colour coating line. Focussing on the colour coating capabilities, ESPF manufactures a wide range of value-added products catering to different customer segments and in domestic and international markets. Some of these innovative products are Wood Finish, Abrasion Resistant, Silicon Modified Polyester, Regular Modified Polyester, Super-durable Polyester, Poly Vinyl Di-fluoride, and Wrinkle Finish. The latest range in this segment is developing Tri Colour Coated, Camouflage, and Weather Durable products. This is a "zero-discharge" facility.

Hypermart & Steel Processing: Essar Steel Processing and Distribution (ESP D) is India's largest steel solutions chain with over 350 outlets across India and Dubai. It offers tailormade steel supply solutions and has the capability to process all kinds of steel with versatile production lines-cut to length, slitting, shot blasting, burnt to shape, trapezoidal, and factory-welded beams. Essar Steel has also launched Service Centres, which are special units where steel is processed to the specifications required by customers. The retail initiative is a pioneering venture that is aimed at supporting the SME segment who otherwise would not have access to direct mill material.

Pellet facilities: Pellets are one of the critical inputs for the steel plant at Hazira. Essar is the largest pellet producer in India with a capacity of 14 million tonnes and another six million tonne pellet capacity under completion. It operates two Pellet facilities, one each at Visakhapatnam in Andhra Pradesh and Paradeep in Odisha respectively and connected to pellet plant through slurry pipelines. The pellet plants are capable of producing DR and BF grades of pellets. These plant use iron-ore fines, a by-product from mining operations, as raw material to produce pellets. Iron ore fines, being an environmental hazard product, is transported in an eco-friendly way through the slurry pipelines, which helps to reduce cost and dependency on road/rail infrastructure and ensure faster delivery of material to the pellet plant.

Ancillary facilities: Essar Steel has invested not just in world-class manufacturing assets, but also in infrastructure to forward and backward integrate its steelmaking operations. Thus, it has set up captive power plants near most of its manufacturing locations to bring down costs and ensure reliable power supply. To ensure eco-friendly and cost-effective transportation of iron ore from the mines to its pellet plants, it has built two slurry pipelines that are among the longest in Asia. The company also uses the ports and terminals it has developed near its plants, as well as the fleet from Essar Shipping, to facilitate the transport of raw material and finished products.

Banking on long-term customer relationships
For the second consecutive year, Essar Steel signed a strategic long-term MoU with POSCO Daewoo. In accordance with the MoU terms, the company will supply 1.1 million tonne of flat steel products in FY'18, which is higher by 30% when compared to the contracted quantity in FY'17.

Essar Steel has similar arrangements with some of its customers from the automotive sector as well as overseas. Further, it uses almost 2 million tonnes of flat products in its downstream units, thereby limiting its products' availability in the spot market.

Such long-term arrangements help the company manage its working capital and finished goods inventory better. It also insulates Essar Steel against periods of low demand growth.
Steel trading sources say, the quality of Essar Steel products is consistent and compares well with imported alternatives, inducing many buyers to have long-term supply contracts.
Recently, Essar Steel's product quality received further validation when it bagged its second consecutive Best Supplier award from its client, Volvo-Eicher Commercial Vehicles.

Approvals, certifications and recognitions
Essar Steel's products conform to the standards of international quality certification agencies and are an approved supplier to reputed clients, both in India and abroad. Eminent automotive companies have bestowed awards, approvals and certifications to the company.

Essar Steel houses the first and only Indian plate mill, and the sixth in the world, to be permitted to use the API monogram on its products. Its plate and pipe mills have received API certifications 'for the products that are rolled and have application for usage in the pipeline segment. It is the first Indian mill to receive approvals from the Defence industry authorities for commercial production of niche steel grades for armour and naval applications. Essar Steel's products conform to the standards prescribed by Bureau of Indian Standards, American Society for Testing and Materials, American Society of Mechanical Engineers, Japanese Industrial Standards, European Standards, American Bureau of Shipping, Det Norske Veritas, Uyod's Register, etc.

Essar Steel also has the privilege to be India's first steel plant to be awarded IS014001 & OSHAS certifications for best practices

Also read

"Essar Steel has improved its operational performance significantly during 2016-17"

"Developing new grades of steel is a way of life at Essar Steel"


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