Essar Steel India Q1 performance improves significantly

Essar Steel India has made significant performance improvements in the quarter ended 30 June 2016 on the back of robust production growth. The gross revenues of Rs 4,482 crore in the quarter saw a 12% jump when compared to the revenue of Rs 4,006 crore clocked in the corresponding quarter in FY2015-16.

The flat steel production in the first quarter was 1.22 million tonnes. This translates to a growth of 48% when seen in comparison with the 0.824 million tonnes produced in the same period last year. Even pellet production grew by 58% to 2.02 million tonnes, as against 1.28 million tonnes in the same quarter last year.

By the end of FY 2016-17, Essar Steel India expects to record a marked increase in its capacity utilisation, and produce 80% of its rated capacity. Essar Steel‘s efforts to de-commoditise its steel production and focus on developing value-added grades are bearing fruit. The Company focuses on producing steel that is tailored to customer requirements. This ensures that there is low finished goods inventory, thus saving on working capital.  In the last one year, Essar Steel has developed 17 new grades, which have given it a first-mover advantage in many industrial segments. The new grades enable Essar Steel customers to substitute imported products with indigenous Made in India steel, and make substantial savings.

Commenting on the performance, Dilip Oommen, MD & CEO, said, “Over the last few months, we have taken several steps to strengthen our operations. We have also been able to maintain higher operating margins. In addition, the markets have been stable and customer response has been encouraging. This gives us the confidence to aim for full production going forward.”

Essar Steel’s downstream facility in Pune clocked its highest ever quarterly production. Essar Hypermart has recorded a 40% growth in sales volume. With the natural gas price plummeting to US $6/mmbtu (from a high of US $20/mmbtu), Essar Steel has been able to contain cost, improve margins and ramp up production. The company is looking at restarting all its gas-based DRI units in the current fiscal.

For more information
Web: www.essarsteel.com