Vol. 17 No.

January 2015

Editor & Publisher

NIRMALYA MUKHERJEE
Director
SHAMPA MUKHERJEE

Indian Steel Industry May Turn Around

in 2015

The positive note for the Indian steel industry to begin with 2015 rings off

Executive Assistant
ANKIT MUKHERJEE

the two major announcements made recently: one directly making impact

Editorial Advisor
MANORANJAN MUKHERJEE

The Central PSUs plan to set up to set up four steel plants in Chhattisgarh,

Sub-Editor
ARNAB MONDAL
DGM - PR
PRADIPTA SENGUPTA

to the steel industry, the other in a roundabout way.

Jharkhand, Odisha and Karnataka at the cost of Rs. 1,50,000 crore. The
government may invite other partners to join the projects. Should the projects by SAIL,
NMDC, and RINL see the light of the day, a capacity in excess of 20 million tonnes will add up
to the present steel production level.

Production Manager
DEO KANT JHA

On the other hand, in what is seemingly a referendum to

Design & Layout

SUMALENDU BASU

cent, turning the government PSUs to firms with government holding 50 per cent share tag.

Scanning & Processing

STEEL & METALLURGY

steel industry being a leading sector of them.

Regd. Office

the companies act, the

government has clarified to cut down the maximum share holding from 51 per cent to 50 per
The step is expected to interest many foreign players to invest in Indian industrial sectors, a
This prospective beef up of the Indian steel industry is likely to be equally backed by the Make
in India concept and expected resolutions of issues around the mining industry.

6,Upendra Nandy Road,

The healthy optimism is led by the expected reopening of the mining industry in coming

P.O. Sheoraphuli, Hooghly

months. Goa and Karnataka are likely to see some activity beginning by mid-2015, if not

Pin : 712223, Ph.: 2632-3313

early. Green and brown field steel expansion plans are right on track and will boost

Corporate Office

production growth by nearly 5 to 6 per cent.

#1A, SHAKTI
166, Rajdanga Nabapally,
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Web Site : www.steelmetallurgy.com
Printed by Nirmalya Mukherjee at
Aparajita Print House
91A, Baithakkhana Road,
Kolkata-700009

Issues surrounding steel dumping may get answered with higher taxes and anti-dumping
duties. Export duties and restrictions on iron ore may ease as the government has planned
and introduction of GST would help in easier and faster movement of finished goods within
the country.
Global iron ore and coal prices will remain low due to surplus availability while domestically,
the situation will open up after the restrictions are pulled down by the state governments
and apex court.
2014 has been challenging for the industry faced with regulatory issues and sluggish demand
from major steel consuming sectors like infrastructure and automobiles. India retained its
4th position among world steel producers in 2014 with a production growth of 2.4 per cent
over 2013, surpassing the global average growth of 1.8 per cent.
However, in 2015, with a production growth of 6-7 per cent with improved capacity

and published by him from

utilisation, India can overtake the US and jump to 3rd position, globally, in terms of crude

6, Upendra Nandy Road

steel production.

P.O. Sheoraphuli, Hooghly, West Bengal

The central government has set a wide array of infrastructure projects including major and

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Annual Subscription 1 year Rs. 7,000/= 500
Annual Subscription 2 years Rs. 12,000/= 900
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minor ports, highways, freight corridors and even construction and rural projects to boost
the consumption of steel and create a robust demand going ahead.
Hence, we hope the steel industry will stage a turnaround in 2015.

From The Desk

Furnace

Cover Story

Blowing down and Salamander tapping in Vizag

Steel

Essar Steel: Pioneering

Innovations, Promising
Excellence

Face To Face

14

Mr. Firdose Vandrevala,

Executive Vice Chairman,
Essar Steel
Mr. Dilip Oommen, Managing Director & CEO, Essar Steel
Mr. R. V Sridhar, CEO, Pune
Facility, Essar Steel

Mr Santosh Mundhada,
CEO, Plate Mill, Essar Steel

55

Company
Profile

58

Product
Profile

59

News Desk

61

Statistics

64

Optimize your Operation

Profit through Rotary
Machine Healthcare
Bearing Handling & Installation

2015 manus: On the lookout for challenging plain

bearing applications

Mr H S Bedi, CEO, pipe mill,

Essar Steel India
Dr. M. Venkatraman Sr.
Vice President &Head
(R&D ),Essar Steel India Ltd.
Financial Performance of
the Indian Steel SectorSome Selected Companies

Special
Feature

Oerlikon Leybold Vacuum

rings in a decade of technology in India

Mr. Ravi Singh, CEO, EssarHypermert

Overview

45

41

Cover Story

Essar Steel: Pioneering Innovations, Promising Excellence

E

ssar Steels core competency lies

not just in the fact that it offers high
quality flat steel products conforming
to international standards for diverse
industrial segments, but also in its enviable track record for pioneering many
firsts in the country- commissioning Indias largest single-location steel plant,
pioneering the development of new
high strength steel grade, raising the
level of product sizes specification, attaining international standard certification for both products and operations.
With 10 million tonnes steel production
capacity, essar Steel is one of the Indias leading flat steel producers. Essar
Steels operations comprise of stateof-the-art facilities for iron ore beneficiation, pellet making, iron making,
steel making and downstream facilities
including cold rolling mill, galvanizing,
pre-coated facility, steel processing,
extra wide plate mill and pipe mill.
It offers over 300 grades of flat steel
conforming to quality standards of
international certification agencies
and caters to a wide section of industrial segments that include automotive, ship building, white and yellow
goods, general engineering, power
plants, hydrocarbon industry, pipe
making and defense among others.
The company accord highest importance
to corporate governance standards.
Each of the operating units has been
converted into a Strategic Business Unit
(SBU), which enables it to to respond
to the customers requirement faster.
Essar Steel Hazira Complex houses

three SBUs: Hazira Facility, Pipe Mill

and Plate Mill. It has invested Rs.
37000 crore in building complex.

certified with ISO: 9001:2000, IS 9002

and TUV certifications, ISO 140001
and India Chiller Energy Efficiency
Project (ICEEP) Protocol compliance.

Largest Single Location Steel Plant at

Hazira:

Innovations in Pipe Mill

to Enrich Product Basket

Hazira Steel mill is Indias largest single

location flat steel plant. The facility
comprises three iron making facility of
Direct Reduction Iron (DRI), Corex and
Blast furnace, which gives it flexibility in
the usage of raw materials and energy
source. The facility also houses a 6.8
MTPA sponge iron plant (the worlds
largest gas based sponge iron plant in
a single location). The facility uses two
steel making technologies of Electric
Arc Furnace and Conarc and two rolling
facilities of Hot Strip Mill and Compact
Strip Production. The Hazira facility has
a rolling capacity of 7.1 MTPA. The plant
is certified with The Hazira complex is

Established in 2008, the pipe mill in the

Hazira complex is one of the modern
facilities, driven by the rapid pipeline
infrastructure development across
the globe. The mill produces both Helical Submerged Arc Welded Pipes
(HSAW) - 0.275 MTPA and Longitudinal
Seam Submerged Arc Welded Pipes
(LSAW) - 0.325 MTPA. The pipes conform to API, BLS and DNV certification.

STEEL & METALLURGY

JANUARY 2015

The large diameter pipe market (over

80) over the next two years is estimated to be over one million tonnes,
particularly driven by expansion of
the drinking water infrastructure

Cover Story
Joining Global League of
Extra Wide Plate Makers
with Plate Mill
The plate mill at Hazira complex is one
Indias widest plate mill producers
with 5 meter wide plate with a capacity of 1.5 MTPA. The mill has advanced
facilities and uses sophisticated processing techniques like TMCR coupled
with ADCO, Direct quenching (DQ),
indirect radiant heating for normalizing, roller water quenching and tempering, in-line ultrasonic testing for
producing steel plates for extremely
critical applications. The mill is Indias
largest and widest with a capacity of
producing plates in strength levels of
1500 MPa and width up to 5000 mm.
in western India and increased exploration of sour natural gas fields.
However, none of the units in the country had the ability to produce pipe in
excess of 100 and coat pipes over the
sizes of 60. Essar Steel upped its ante
to fulfill this ever increasing product
specification. As a result, it modified its
HSAW unit and the coating units (External and Internal) to manufacture pipes
in size up to 134 and coat pipes, the
size up to 120 in its pipe mill at Hazira.

Apart from the major domestic projects, the products rolling out of this
mill are approved by international companies like Gasco, Shell Global, ENI,
Socar, Occidental-Qatar, Ecopetrol,
Pacific Rubiales, Flour, Kvaerner etc.
The pipe mill has distinctive advantage
in terms of easy acces to raw material
from Hazira Steel Mill complex which
in turn ensure fast-delivery mechanism
leading to timely execution of orders.

The pipes are used for government

projects. One of Essar Steels competencies lies in its adept upgradation
efforts aimed at enhancing capacity of
the entire process chain involving basic
pipe making, welding, hydrotesting,
beveling application area, quenching
zone and the blasting area for coating.
Equipped with facilities to ensure
intensive inspection and testing,
the unit proved its mettle in improving the forming technologies
and testing facilities namely hydrotesting capability (enhanced from
350 bar testing to 600 bar testing).

STEEL & METALLURGY

JANUARY 2015

It is the first and the only Indian milland 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.

Bettering Future
Through Research
and Development
Essar Steel has a dedicated set-up
for in-house Research and Develop

Cover Story
it has also laid emphasis on its production process and financial performance to make the competitive.
Essar Steel has showed sood performance in the recent times.
Besides, the company proved its mettle
in its investment strategy. In recent
times both Hazira steel complex and
Paradip pellet facility proved to be the
lowest cost facilities in the country.

ment (R&D) at Hazira, Gujarat which

was formally established in 2006
and is approved by the Dept. of Science and Technology. The research
centre is equipped with sophisticated equipment and a highly qualified
team of engineers and technologists.
The research is conducted in various fields of applied research such as
product development, mathematical modeling and physical modeling,
failure analysis, process improvement, and waste management.

steels for petroleum line pipes for

sweet and sour applications (API X-80
sweet service, X-65 sour service). Process improvement team of R&D is focused on improvement of the process
efficiency, and innovations by Group
are being patented by the company.

Reaping Benefits
Through Financial
Prudence
Essar Steel has not only provided
competitiveness to its customers with its high quality products,

In order to reduce developmental

time and improve upon knowledge
gaps, R&D has entered into collaboration with educational institutions
such as Indian Institute of Technology (IIT), Annamalai University, and
research wings of CBMM Corporations.
The team has been instrumental in
development of various import substitute steel grades like Bake Hardening steel (BH -180/220) used for automobile panels, quench and tempered
abrasion resistant steels for yellow
goods (HRB 400 equivalent), steels
for naval ships and army vehicles, and

STEEL & METALLURGY

JANUARY 2015

In case of Hazira Steel complex, Essar

Steel incurred a cost of just US$750 per
tonne which is much lower than industry standard. On a like to like basis, Essar
Steel has managed to create this asset at
a significantly low capital cost. In some
cases, the costs are lower than other
steelmakers by as much as 50 per cent.
Recently, Essar Steel has dollarised its rupee debt into US$ 2 billion
through export securitization and
external borrowing. The company
reaped in significant benefits from the
step as it has resulted in large interest saving of Rs. 720 crore annually.

Flexibility in Raw
Material Securitisation
Essar has adopted an integration
and securitisation strategy that has

Cover Story
new products for various sectors as
well as catering niche segments. Some
of the recent indigenous developments
include indigenous development of ballistic steel, soft carbon magnetic steel
for nuclear energy sector and ultra-high
tough steel for automotive sectors.

enabled the steel giant to keep its

costs low even with the expanded capacity. A bulk of its iron ore needs
have been secured through offtake
agreements with NMDC and captive
mines in Jharkhand and Chhatisgarh.
In addition, the iron ore beneficiation
plants have been set up to facilitate
usage of low grade iron ore fines abundantly available in the country. Two
mega projects to this end are the pellet
making facilities in Odisha and Andhra
Pradesh. The Paradip pellet plant in Odisha is a much coveted 12 MTPA capacity project which is linked with iron ore
beneficiation facility at Dabuna with a
253 km long slurry pipe line. The 8 MTPA
Visakhapatnam pellet facility is linked
to iron ore beneficiation plant at Kirandul with a 267 km long pipeline. The
first phase of 6 MTPA of Paradip pellet
plant is complete and the company is
gearing up to raise upto nameplate capacity of 12 MTPA with parallel capacity upgradation of iron ore beneficiation
plant at Dabuna in the second phase.

Steel has long-term power purchase

agreements and 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
provide Essar the necessary raw material security to operate its steel plant
in the most cost-effective manner.

Foraying into Diverse

Sectors with New
Product Development
Essar Steel is a pioneer in developing

With the commissioning of these

two integrated complexes, Essar
Steel has become the largest pellet producer in the country with
14 MTPA pellet making capacities.
For its energy requirements, Essar

STEEL & METALLURGY

10

JANUARY 2015

It has pioneered the development of

high strength structural grade with
780MPa in Q&T conditions which was
not available earlier for defense sector and was imported to the tune of
100,000 tonnes annually for ballistic application and battle tank. Essar
Steel recently won an order of DMPL
to develop steel grade of 1700 MPa.
In the automotive sector, Essar Steel
has always been a forerunner among
globally approved suppliers for major
automakers. It is the first steel producer in the country in developing new
generation crash resistant steel, high
strength steel up to 440 MPa and dent
resistant steel. Essars newer version of
high strength steel grade with strength
of 700 MPa is used for making long
members of trucks offering a weight
saving potential of 17-20 per cent. Essar

Cover Story
defence-related requirements in the
next three to five years, Dr. M. Venkatraman, Senior Vice-President and
Head, R&D, Product Development
and Applications Engineering, ESIL
The company has constantly maitained
its export volume at 25-30 per cent. It
wants to focus in the supply of future
oriented niche segments like solar panels, tubular structural plates. On the
investment front, Essar Steel plans to
invest Rs.1, 500 crore over the next one
year. The company intends to complete
the second phase of a six million tonnes
per annum (mtpa) pellet plant at
Paradeep in Odisha and take up a 1.35
mtpa coke oven plant at Hazira, Gujarat.
Steel is also foreunner in the country to
develop a highest thickness of 20.6 mm
in X-80 grade for line pipe application.
In line with developing new products,
all of Essar steel products are customised grades for specific applications which provide customers with
added competitiveness and make
Essar Steel the preferred supplier.
Going forward, Essar Steel can meet
the entire requirement of Navy,
steel for aircraft and critical boilers.
All these steps pave the way for India to export value added steel and
earn precious foreign exchange.

Catering to Customer
Need with Largest
Processing and
Distribution Network
With one of Indias largest steel processing and distribution networks
with a capacity of 4 MTPA Essar Steel
caters to its customers on the go.
Essar Steels downstream facility at
Pune with a 0.65 MTPA pickling line,

0.6 MTPA cold rolling mill, 0.5 MTPA

galvanising line and 0.4 MTPA colour coating line offers tailor made
steel solutions to customers with
an emphasis on reducing inventory
levels and processing costs for customer with just in time supplies.
25 per cent of the products are channelised through dealers. Besides, Essar Hypermart, a well spread network with over 350 outlets across
locations is Indias largest retail
chain offering customised services to OEMs, retailers and SMEs.

Looking Ahead in
the Future
Looking ahead it is focusing increase
its share of value added steel up to 50
per cent of its products basket. Currently, ESIL manufactures
about 30% value-added
steel out of its total capacity of 10 million tons per annum (mtpa) at Hazira. We
would now gradually shift
our focus to utilize 70% of
Haziras capacity to manufacture special steel for

STEEL & METALLURGY

12

JANUARY 2015

It is also considering setting up a

270-MW multi-fuel captive power plant at Hazira, using imported coal fines and gas generated in
the Corex steel making process.
Firdose Vandrevala, Executive ViceChairman, Essar Steel, said having
made huge investments in Odisha,
the company will look for sustainable
business development in the State.
We may also consider investing in an
integrated steel plant in Odisha, if the
Government allocates iron ore mines
for captive use. The company has
signed a memorandum of understanding with the State government to acquire part of the land parcel required
for setting up a steel plant, he added.

Face To Face

The Prime Strategy Should be Building Brand Loyalty

which Should be Customer Specific, not
Geography Specific

From raw material to capacity enhancement, from steel dumping to value added products- Mr. Firdose
Vandrevala, Executive Vice Chairman, Essar Steel, shared an all round view with Mr. Nirmalya Mukherjee,
Editor, Steel & Metallurgy

NM: Chinese steel production

is slowing down a bit, of late.
In October 2014 production
figure was 67 million tonnes,
whereas the figure came down
to 62 million tonnes in November 2014. Chinas domestic
demand is also slowing down
which led to the surge in their
exports, particularly to India.
Do you think this instability
NM: Looking forward in in China could result in even
Mr. Firdose Vandrevala, Executive Vice
terms of raw material avail- more steel dumping in India?
Chairman, Essar Steel
ability, where do you ex- FV: There are already enough signs of
NM: Mr. Vandrevala, first of pect the raw material it. In 2012 the average export from Chiall, we will begin with the prices to stabilise in 2015? na to India was 4.3 million tonnes per
scenario which we are go- FV: Last 10 years the average raw materi- month. In 2013 the figure was 4.7 miling through right now. Indian al price has been $83 per tonne. I expect lion tonnes. In 2014, as yet the figure
steel industry needs some kind the prices to hover around this trend is 7.8 million tonnes per month. And
of consideration and rational- and not again back to the level of $100. last three months have seen exports to
ization in the face of overca- NM: How much raw material the tune 9 million tonnes per month.
pacity in steel production. will Essar be importing in 2015? So, this surge in exports is quite worWhat is a curtain production FV: We plan to fulfill our raw mate- rying for the Indian steel producers.
level you feel should be for ma- rial requirements from the domestic NM: Are you talking to steel
jor players in the next fiscal? market mostly. One important aspect ministry and commerce minisFV: In 2015, India is likely to turn into a of our business strategies is low trans- try for having a mechanism in
net steel exporter from a net importer portation cost. So, we can convert place to counter this situation?
material prices have gone down which
have pushed the product prices low.
So, once the raw material prices in the
country return at par with the international level, Indian steel producers will
again become competitive enough for
exports as well as in the domestic market. I expect domestic demand will improve in 2015 and hence I do not think
any major players are thinking of curtailing their production for the time being.

which was a case through the last few

months. In Indias case, mines have seen
reduction in raw material supply due to
ban, a situation which has forced the
domestic steel producers to import raw
materials. Consequently, the production cost has gone up and the product
prices have also gone up. On the other
hand, in the international market, raw

the Opex into Capex. Essar has put up

beneficiation plants and pellet plants,
connecting them with slurry pipelines.
If the company has to depend on the
import then that investment is useless. So, even if the domestic raw material prices go up marginally from the
international prices, using domestic
raw material will still be economical.

STEEL & METALLURGY

14

JANUARY 2015

FV: The steel industry members and

the government are already aware
of this upsurge in Chinese exports.
We have already had discussion with
steel ministry, commerce ministry
and Indian Steel Association regarding this. The government and industry are jointly working on this issue.

Face To Face
NM: We understand Essar
Steel is focusing on increasing
its share of value added products and Essars each SBUs is
designed for it. But as regards
the prices, Chinese value
added products still outrun
our value added products in
price war. To tackle this disparity, do you think it will
be a wise idea to operate in
markets or product segments
where China is not present?
FV: I do not think it is a feasible strategy to operate in any such market
where China in not present as once
Chinese steel producers will soon follow the trend and enter that market
segments also. And considering the
trend of their low prices they will have
an upper edge in that segment also.
It is more important to raise value
added product share in the niche segment rather than jumping into an untraded territory. It is more sustainable
to choose the customers, establish a
relationship and make sure that the experience cannot be replicated. This experience includes product, price, delivery and many other things. Therefore,
the prime strategy should be building
brand loyalty which should be customer specific, not geography specific.

NM: We understand that it

is not mandatory for Essar
Steel SBUs to source materials
from mother plant and promote mother plant. They can
source materials from other
players also. How far do you
rate this as a fair strategy?
FV: Apparently, the strategy seems to
be cross promoting the competitors or
other players and not contributing to
companys benefits. But, if we look from
a different perspective, it only proves
that the SBUs are still getting materials
at cheaper prices than mother units. It

will further lead the mother plant to

review its pricing policies and vie for
becoming competitive in pricing. However, the step looks absolutely precise
where cost effectiveness is concerned.
For example, Essars Hazira complex
can savefreight on supplying to closer
markets than supplying to Pune facility.
Likewise, Pune facility can save on opex
and processing time while sourcing
from local supplier than from mother
plant in Hazira. So, ultimately the company can save on two occasions: from
saving on freight and buying cheaper
raw material. Also, as our strategy is
customer specific, fast processing is
inevitable from companys point of
view which is only possible through
these strategies. It will provide the
company with long term sustainability.

than any other domestic steel producers. We produce hot rolled coils, cold
rolled coils, galvanized, pre-painted,
wide plates, HSAW and LSAW pipes.
No other steel producers produce so
wide range of product mixes in a single
location. We provide very high quality product with high level of testing
for very high level of application, high
level of accreditation. So, we are focusing more on quality, not on quantity.

NM: Where do you see

the steel consumption increase in the coming years?

FV: Though there is much hype about

the multifold increase in rural consumption of steel, the main growth in
steel consumption has to come from
rapid urbanisation projects only. Development is high where level of urbanisation is high. Against the world
urbanisation level of 50 per cent, Indias current urbanisation level stands
at 30 per cent. This has to change with
extending development. Rural consumption needs to be increased creating many new application of steel
in rural areas but even it increases it
will double from todays level of 6kg
person to 12 kg person whereas there
is scope for urban consumption to increase from 50kg to 100 kg per person.

NM: Essar Steel is yet to reach

its nameplate capacity of 10
million tonnes. We understand Essar Steel is not mulling any brown fieldexpansion
right now as the financial scenario is not very conducive
for any major investments. In
such case, what are the other
internal innovations that Essar Steel is planning to achieve
the rated nameplate capacity? NM: Though Essar Steel
has a special pricing agreeFV: There are plans for funding for
ment with NMDC for iron
ramping up productions. The investore fines, still the company
ment is to the tune of Rs. 1500 crores.
is yet to reach the raw mateNM: With JSW and JSPL aim- rial securitization that Tata
ing for 20-25 million tonnes Steel, Vizag Steel Plant and
in a single location plant, Es- SAIL get from government
sar Steel will not be in the through allotment of some
top bracket of steel produc- mines. Is Essar Steel looking
ers anymore. How do you at any geographical area for
see Essar in this scenario? raw material securitization?
FV: Essar Steel is not focused on raising
the production capacity; it is concentrating on increasing value added products to the product basket. Essar Steel
already produces more product grades

STEEL & METALLURGY

15

JANUARY 2015

FV: The iron ore problem in the

country is a short term problem.
We will look for long term linkages
with suppliers. That is why we have
put up the beneficiation plants.

Leading with Determination

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based on the experience of the operation by
Nippon Steel & Sumitomo Metal Group
over forty years.

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Experience

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Electric Tinning Line (ETL)

We are proud of having no.1 supply record
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improvement in tin coating distribution,
reduction in number of operators, and
flexible operation in strip processing schedule.

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Face To Face

I Expect in 2-3 Years Economy will Again Grow at 7-8

per cent and Steel Demand will Grow at 8-9 per cent

Mr. Dilip Oommen, Managing Director & CEO, Essar Steel discusses with Mr. Nirmalya Mukherjee, Editor,
Steel & Metallurgy his companys vision to transform itself as a valueadded product maker in the
Indian Steel Industry.

less tube mill as of now. Is

Essar Steel looking at the
possibility of setting up a
tube mill in the long term?
DO: We may opt for a seamless tube
mill in the long term but not right now...

NM: What level of capacity utilisation is Essar looking at in the next fiscal?
Mr. Dilip Oommen, Managing Director &
CEO, Essar Steel

NM: Of late, Essar Steel

has developed new product
grades for various applications which include even steel
for ballistic missile and battle
tank grades. Could you highlight the entire product mixes that Essar is looking at?
DO: Yes, we have developed high
strength steel for the Navy and the
Armed Forces. Some of these grades
are DMR, Alfa and Bravo which will
be used for ship building and submarines. We target to provide entire
high strength steel requirement of
the defense sector as total import
substitution soon. This will be a matter of pride as India will be capable of
producing its own steel for defense
sector which is a highly priority sector.

NM: No steel producers in

India are going for a seam-

DO: Our main strategy is to have

minimum six months of order book.
We are looking at big order book.

NM: In terms of exports,

primarily to the Middle
East, what volume range
are you looking at? And
what product mixes are you
planning for this market?
DO: Selecting the right geography and
adding value added products tothe
product basket are two very important
things. Middle East market has been
an area of focus for us for quite some
time now. We have received a good
order book for the plate mill and even
for other grades of hot rolled steel and
non-API grades. We are also keen on
US markets. Our sales and marketing
team has visited the US subcontinent.
Once exports are allowed, we will play
a major role in exports to the region.
There are also certain parts of Africa
where we have ample scope to cater to
certain qualities these markets demand
such asin thin hot rolled coils, thin cold

STEEL & METALLURGY

18

JANUARY 2015

rolled coils, coated steel products.

One of the interesting developments
we may catch up for Africa is this coating solution for roofing in the building
construction which can be conducive
to the extreme weather conditions in
the region. The coated steel significantly drops the temperature within
the building by as much as 120c. At
present, major importers of our coated steel solutions are Russia and Italy.

NM: Talking about the domestic demand scenario,

since our government is focusing on the development
in the north east region, do
you think there could be
substantial coated product
demand for roofing application in the north east region?
DO: No doubt, there is scope for demand
of coated steel in this category in the
north east region. Also after our prime
minister stressed on the development
of north east which is a focus area. We
have to keep in mind the freight issues
since transportation to the region is a
long way from west. We have to remain
competitive and we will work on that.

NM: Essar has received

all types of approvals for
API grades. For the API
grades what markets are
you looking at and what
will be the export volume?
DO: Our plate mill produces 80-

Face To Face
85 per cent of API products. But
we are also looking at non-API
grades for risk mitigation purpose

NM: Most of your competitors over the years have increased their branded product share whereas Essar
Steel in spite of having retail
chain Hypermart in place sell
roughly only 20 per cent of
its products as branded product. Do you plan to extend
share of your branded product in the entire product mix
both for institution sales as
well as retail sale segment?
DO: In plate product we have rolled
out branded products. We already
have branded products incolour
coated, galvanized, HR, CR segments.

In this regard, India should take cue

from USA where domestic steel producers are safeguarded through
non-allowance of steel dumping. It is
better to be proactive rather than reactive and likewise we should put in
some safeguard measures in place.

NM: What is your CRM output

NM: How much iron ore will
target?
DO: Now with our production ramp- Essar Steel be importing this
ing up, our first target would be to fiscal?
ensure maximization of value added
products. So, CRM capacity utilisation
will be maximized.Capacity utilization
will also be maximized in the plate
mill, the pipe mill and Pune facility.

DO: Both our Odisha and Vizag pellet plants will be fully operational
in the next fiscal. So, that will resolve ore issue to some extent. Besides, we are looking at roughly 3 to
4 million tonnes of iron ore import.

NM: In the face of surging Chinese steel exports, NM: What kind of capex are you
how do you see a mecha- planning for the next fiscal?
nism from the government DO: Fortunately, gas prices are coming
to weather off the issue? down. In the long term we will probDO: Chinese steel dumping is posing
threat, so are Japanese and Korean
steel dumping. Japan and China are
going through bad economic phase
which is one the reasons domestic
steel consumption has decreased.
The situation has resulted into steel
dumping in India. For Chinese steel
export, at least the export duty is 7.5
per cent, whereas Japan and Korea enjoy duty free export as part of the FTA.

ably look at putting up another blast

furnace depending on the prices of
gas. We have taken a prudent decision
through dollarising our debt which has
substantially provided us with interest
saving. We expect the interest rate to
be in the range of 6 to 6.5 per cent

NM: How long do you think

we have to sustain to tide
over the demand crisis?
DO: It depends on how fast the econ-

STEEL & METALLURGY

19

JANUARY 2015

omy improves. With the emphasis on

infrastructure by the government, steel
consumption is set to bounce back. As
of now, no investors are ready to invest in the Greenfield projects. I expect
in 2-3 years economy will again grow
at 7-8 per cent and steel demand will
grow at 8-9 per cent. A time will come
when steel consumption will catch with
supply and India may have import steel.

NM: What kind of plan does

Essar Steel have for raw
material
securitisation?
DO: We are working with government
for renewing the policy for allocation of mines. For VizagPellet plant,
we have long term agreement with
NMDC. The inherent advantage of the
Odisha project is that the beneficiation
plant is surrounded by mines. We are
prospecting a mine in Chattishgarh.

NM: What do you think

the government should do
to regulate the secondary
players who produce almost 50 per cent of the steel
produced in the country?
DO: Any producer, small or large, has the
right to produce steel provided he meets
the environmental norms, meets the
quality standards and ethical practices.

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Face To Face

We do not Make More Steel, We Make More of Steel

Mr. R. V. Sridhar, CEO, Pune Facility, Essar Steel throws light on the strategies and innovative products this SBU
is rolling out to nullify Chinese monoply in the global market
ty control room, and we are the only
plant with an environmental laboratory.

NM: Give us an overview of

the innovative products this
SBU offers?

NM: Could you please brief us

about the Pune facility?
RVS: In this SBU, we have three cold
rolling lines, two galvanising lines, and
two colour coating lines. This plant is
the first zero discharge plant in India.
The waste water of the plant is recycled
100 per cent with the multi effective
evaporator and RO process and is reused in the plant. The water is used for
gardening, cooling of equipment etc.
In 2011-12 fiscal we saved about 9,224
m3 water, in 2012-13 fiscal 13,210 m3
water, in 2013-14 13,375 m3 water and
2014-15 during 9 months the saving
has already surpassed 9,000m3 and we
hope by the end of this fiscal the figure
will surpass 15,000m3. At full capacity, we can save 1500-2000 m3 water
per month. Besides, we have facility to
reuse the hydrochloric acid completely
through our acid regeneration plant.
We also provide this service to outside
customers. We emphasize on safety
very much and hence we have arranged
for workers safety. We have a fire safe-

RVS: Essar Steel colour coated sheets

are available in a variety of paint systems like Regular Modified Polyester
(RMP), Silicon Modified Polyester (SMP),
Poly Vinyl Di-Fluoride (PVDF). The superior coating technology resists cracking
and peeling even during heavy forming
operations. PVDF paints offer outstanding resistance to ultra violet radiation,
sunlight, and coupled with excellent
formability and corrosion resistance;
provide outdoor life of up to 25 years.
Besides, we have many innovative
products to offer to various sections of
customers.
We offer tri colour coated sheet for
which we are already in conversation
with India Railways. Normally, asbestos
shades are used in platforms which can
be replaced with this tri colour coated
sheet which will aesthetically enhance
the outlook of the platforms as well as
give a national feel to the public place.
Essar Cool Roof is another innovative product which is used as rooftop
and is capable of decreasing the room
temperature by 8-10oC. We product
basket includes anti graffiti or anti dirt
sheets. We offer ARS (Abrasion Resistant System) which is scratch resistant
and wear resistant thin sheet system.
We have developed a product called
anti-bacterial paint which can be used

STEEL & METALLURGY

22

JANUARY 2015

for cladding and roofing purposes in

high sanitation is inevitable like hospital, cold storages, granaries etc. we
offer medium carbon high carbon
which has divers use in dry and wet
clutches of automobiles, bullet cartridge, hair pins, textiles drops, hangers, seat belts, motor cycles chains, etc.

NM: How do you see Chinas

position in the colour coated
product market? How do you
position your company vis-vis the Chinese suppliers in
the global markets?
RVS: Chinese invasion in the global
market is obviously a threat to many
economies and their industries, particularly steel industry. We are already
well placed globally to cater to over 100
countries. However, we make sure to
diversify our geographical presence to
avoid Chinese monopoly. Because, of
steep subsidies Chinese producers sell
at $60-$70 per tonne less than Indian
product prices in any market. So, primarily our strategy is to target Chinas
blind spot which are the markets where
China is not present. For example, China
does not export these products to small
countries such as Argentina, Venezuela
etc. China specialises on white shade
goods whereas we try to focus on nonwhite shades as much as possible. China produces standard thickness sizes
of 1,220mm and 1,250mm whereas we
deliberately offer in non-standard thickness sizes of 1065mm and 1087mm.
Also, we specialize in high end applications where China lacks the finesse.

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Face To Face

NM: Can give a break-up between the colour coating and

galvanizing products in terms
of tonnage?
RVS: Our total volume is roughly
40,000 tonnes out of which 24,000
tonnes is in the pre-painted product
segment, 3,000 tonnes in medium
carbon high carbon, 4,000 tonnes of
CRFH, 5-6 thousand HRPO and SGPA or
galvanizing in 4to 5 thousand tonnes.

NM: Give us a geographical

break up of your export volume.
RVS: Earlier our export was to the
tune of 90 per cent and domestic
sales were 10 per cent. Today, we sell

almost 60 per cent of our products to

the domestic market and 40 per cent to
global markets. Out of the 40 per cent
40 per cent is exported to Europe, 10
per cent to Russia, 10 per cent to the
Middle East region, 10 per cent to Africa, 10 per cent to the US and Latin
America and 10 to Indias neighbouring SAARC countries. Italy imports one
fourth of worlds total painted products and it is our largest customer. We
have delivered painted products for
Barcelona stadium. In the long term,
we will increase our offerings in the
domestic market more to avoid the
vagaries of the international markets.
Among

the

STEEL & METALLURGY

noteworthy

24

domes-

JANUARY 2015

tic projects, we supplied for Volvo

Bangalore, Delhi Metro Railways,
Kochi and Mumbai Airports etc.

NM: What are your future

looking statements?
RVS: Apart from focusing on regular
solutions, we will focus on the signage
segment where we will offer customized typical colour coated products to
companies who maintain brand identity through their unique logos and colours. We are looking into the prospects
of co-branding certain fabricated products and profiles. We will focus on rural
markets to increase steel usage through
various applications. We do not make
more steel, we make more of steel.

Face To Face

We would Like to Take a Pole Position Among

Fabricators in the Country in Terms of Volume

In conversation with Mr. Nirmalya Mukherjee, Essar Hypermart CEO Mr. Ravi Singh discusses how the SBU is
expanding its service spectrum to its customers.

NM: Mr. Singh, first of all

tell us how do you see service center business evolving as an individual entity
in India which will reduce
burden at customers end?
RS: Service centre business in India has
evolved in the last decade and is still in
its infancy stage, the reason being the
steel scarcity in the country even to this
day which continues to fuel competitive behavior of Mills. In case of steel
scarcity, there is very little premium
on supplying steel and much less on
timely delivery and quality skills. If the
economy becomes dynamic, product
mix, quality of the material needed for
making new products also becomes
dynamic. For example, the demand in
the automobile sector in India has kept
changing every 20 years towards lighter andstronger car bodies for creating
fuel efficient cars which has kept flat
products development evolving for the
sector. In case of no dynamism, there
is no need for a service center and the
focus is entirely on the cost instead of
quality and timely delivery. Today, India
is transiting from cost focused country
to value focused country. Due to the
lack of this dynamism in the manufacturing sector, customers in India
have focused on the cost rather than

the value. Service centreservices obviously increase the cost for a customer
at the outset. But in spite of increase
in the cost per unit, total saving goes
up. So, the customer gets benefit on
total cost of transaction, but we need
to look at the operations in a more
broad manner rather than in a narrow
way. The gap between Indias steel import and steel export has turned and
India has become a net Steel exporter
for last one year and may continue to
be so for a few more years. However,
theMake in India campaign will help
rampup infra development and again
require imports as the Greenfield
steel projects are going slow. Even if
India starts exporting steel outside India, it will again have to import certain
grades of steel into the country and
more and more service centers will be
set up to provide services to this end.
Wherever the supplier is away, local
representation of the supplier is inevitable to make sure that the supply
chain and the trust is not hampered.
Currently all the large service centers
in the country are mill backed out of
which we are the largest with Hypermart retail chain. The future of service
center business is also quite promising.

NM: Could you brief us about

Essars service centers?
RS: We have total
vice centres across
ning in Hazira, Bhuj,
Pune, Indore, Chennai

coils from 0.3mm to 3mm in thickness,

both galvanized and colour coated
products, plates from 5mm to 150 mm
in thickness. In all these products, Essar provides a wide range from narrow slitting of upto 1 wide to the full
width of the coil, length upto 12 meters
or more which can be customized. As
part of its fabrication service, Essar
already has constructed coal handling
plants, bridges, road over bridges and
flyovers. We are in the process of putting up the entire structure of a power
plant etc. In addition to these, Essar
service centers also provide ISI certified TMT bars which are sourced both
centrally and through contract manufacturing locally. Through contract
manufacturing we bring in added value to the customers as we can supply
the TMT bars manufactured through
contract at various locations closer to
the customer projects site on time.

NM: Do the TMT bars which

are sourced locally through
contract
manufacturing
pass through any stringent
internal
quality
checks?
RS: Yes, each and every batch of products has to pass a quality inspection of
an international inspection agency like
SGS before supply by EssarHypermart.

seven serIndia spanDelhi NCR,

and Kolkata.

NM: Is there possibility to

work on the profiling part in
tandem with Pune facility or
the fabricators especially for
NM: What is the volume Es- the colour coated segments?
sarHypermart service centers RS: Each of the SBUs reacts to the marhandle in terms of tonnage? kets in the best interest of its customRS: The total tonnage the service centers handle is about 2 million tonnes.
We handle hot rolled coils right from
1mm to 20mm in thickness, cold rolled

STEEL & METALLURGY

26

JANUARY 2015

ers. The market of roll forming in PPGI

is driven by local considerations, some
of them contractors considerations
and some mill considerations. Each of

Face To Face
the contractors has its own product
profile according to the local demands
for particular applications. It is not possible for the service centres to cater to
these small markets segments. EssarHypermart supports the Pune facility
as and when they require in terms of
slitting, cut-to-length, other types of
processing and marketing. But, we are
not looking at these services as a focus
segment for ourselves at this stage. For
EssarHypermart fabrication will remain
the focus area moving towards application support. As I have mentioned that
essarHypermartwas contracted to provide entire fabrication solutions for a
coal handling plant. The day is not far
when EssarHypermart will receive orders for the entire structural designs of
buildings and we will have to develop
our own profiles suited for our own
applications which we will provide.

NM: So, your service center

business is looking at providing complete solutions
even for turnkey projects
RS: Yes, we are already starting to do
thatfor which we are talking to a lot of
construction companies. We would like
to take a pole position among fabricators in the country in terms of volume.
We are supplying fabricated parts to
one of thetop mining equipment suppliers. We suppliedfor their India operations also.So, it will be a mix of market
requirements and value we bring to the
customers. We can execute the engineering part for customers, source material for customers from Essar mill or
from other suppliers. Today, we source
material both locally and from our
mother plant for the projects depending
on the proximity of the suppliers from
the project site. For example, we can
source material from SAIL, JSPL or JSW
for a plant in southern parts, SAIL for a
project in eastern parts, and from our
own mill for a project in western parts.

NM: Out of the 2 million

tonnes that you handle for
the service centre, give us a
break up percentage wise be-

tween your own mill products

and products from others?
RS: The proportion is roughly 70:30 in
sales which we would like to drive to 50:50.

Out of the total product volume Hypermart offers currently, 70 per cent
is our own mill produced products.
And out of the remaining 30 per cent
rebars are the second largest chunk.

NM: As of today, what are NM: Could there be a possibilthe numbers of Hypermart? ity where EssarHypermart can
RS: Essar has 52 Hypermart outlets and provide the entire solution for
300 Expressmart outlets in the country. a steel structure building?
NM: What is the total value of RS: Today, we provide the customHypermartand Expressmart- ers with engineering requirements
business
put
together? depending on the design of their
RS: The total value is roughly Rs. 6,000
crores.

structures. We have tie ups with designers who do the designing part for
our customers. Yes, we will be in a
position to provide entire solution.

NM: During the next fiscal

do you have the target of in- NM: What will be the share
creasing numbers of Hyper- of value added product
mart and Expressmart? What in your product basket?
kind of volumes are you talking about for the nest fiscal? RS: Out of the total products we ofRS: If there is scope for value creation
for the customers we may increase the
numbers. And, probably Hypermart
will handle more than 2 miliontonnes
provided there is better stabilization.

fer, 90 per cent will be value added

products in terms of customization
and about 20% in terms of metallurgy.

NM: In the long term, will

the service centres think
NM: How effectively do you of selling forged prodsee the retail business chan- ucts or the final products?
nels developing in the country? RS: We aim to provide those so-

RS: I think there has been a major

change in the customers demand and
perspective in the last decades. For example, products that were regarded as
innovative products in the 90s are commodity products of today.From a seller
centric market the market has turned
into a customer centric market, which
is a good change. To that extent there
will be a major change in the channels
of delivery. So, the retail market has
to transform itself to the emerging realities of customer experience, product availability and information.Trader
retail chain survived because of lack of
information on the customers end. We
expect to see multilevel growth in retail
channels in tune with customer needs.

NM: Traditionally, out of

therebars and your mill produced flat products, which
is the higher in volume?

STEEL & METALLURGY

27

JANUARY 2015

lutions in time. We are leveraging our experience for that.

NM: Looking at long term

demand supply mismatch,
what do you think EssarHypermart can offer to create demand in the country?
RS: Demand cannot be created, so to
speak it can only be substituted. If the
dynamism in the economy increases,
automatically dynamism in the steel usage intensity will also grow and hence
the service centres will play a major
role in offering best solutions to the
customers and make them more productive and efficient. Customers of service centres will also be more profitable
as they focus their attention and investments on their core activities. So yes,
a strong Service Centre industry may
help halt the substitution of steel by
other materials and reverse the trend.

Face To Face

Our Goal Is to Bring Our Nation to Self-Reliance,

Substituting All Imports

Mr. Santosh Mundhada , CEO, Plate Mill, Essar Steel discusses how the Mill has become global supplier of high
quality Plate products and provided import substitutes in the cuntry.
Forex. We have secured accreditations
and approvals from almost all certifying agencies, EPC, PMC as well as customers, covering a broad spectrum of
applications. Our Plate mill has successfully executed many prestigious and
challenging orders with stringent specifications and plates have been used in
very critical projects in India and overseas. Products developed are well accepted by the customers and mill has
been awarded several repeat orders.
Mr. Santosh Mundhada

NM. First of all, congratulations to you & your entire

team for running the plate
mill so successfully. Right now
there are quite a few feathers
on your cap with regard to executing challenging orders. If
you could highlight the journey of Plate Mill success and
the recent orders that you can
call as feathers on your cap?
SM: Essar Plate Mill has started its commercial production from 2010 and established good presence in domestic
as well international market. In a short
span of time, our plate mill has successfully developed & supplied various
niche products globally. These products
comply to the international standards
with superior quality, comparable with
worlds bench marking mills having decades of experience. Plate mill has successfully substituted imports from EU
and Japan, supplying critical products
to its customers first by an Indian
plate mill. This has helped country with

Presently, our mill is loaded with several orders in value added grades
which include long term contracts
with strategic customers. These orders are for various applications such
as Line Pipe, Boiler & Pressure Vessels,
High Strength structural, Defense, Ship
Building , Offshore Platforms. These include Domestic as well Export orders.
Our plates have played vital role in
many projects, some of which are Bogibeel Bridge project in Assam. Our
High Strength Structural plates are
used in 5km long double decker bridge
being built up by Hindustan Construction Limited on Brahmaputra river for
Northern Railway. This double decker
bridge is catering both Rail & Road,
one above other. This bridge is going
to consume over 70,000 MT of High
Strength Structural Plates. We have
successfully supplied about 15,000 MT
of plates which have been transported
from extreme west to extreme east.
Other projects include plates used in
building giant Oil tank submerged 130
M deep in the Sea by Dubai Dry Dock.
There are several Offshore platforms

STEEL & METALLURGY

30

JANUARY 2015

built up by McDoremett, Petrofac,

NPCC in Middle East from our plates.
Blast Furnaces of Tata Steel and NMDC
are built up by our Furnace Normalized plates. Our plates have been used
for War Ships. Several critical export
equipment have been built from our
plates by our elite customers. We have
long list of customers who used our
plates for critical applications both in
domestic and intetrnational markets.

NM. Please tell about your

Product Development andwhat are the new grades which
Essar Steel is planning to move
out of the commodity cycle?
SM: Essar Steel was always pioneer in
launching Value Added products. We
at Essar believe in creating value for
our customers. We have got strong
R&D and world class heat treatment
facilities (Normalizing, Quenching &
Tempering). At Plate Mill, we have already developed and serviced many
products in line with market requirement. Our immediate focus is is in defense and high end of Line Pipe grade.
We have already successfully entered
into supplying for defense. We have
made substantial supplies to defense
for war ships. We have developed the
toughest steel for them. We are the
only company to do it through continuous casting route. We are the only company in India supplying Sour Grade Line
Pipe plates. There are also some grades
where we want to attain higher tensile
properties through with same process
like through thermo mechanical and
direct quench machine and also go
towards more refined steel. We want

Face To Face
to totally migrate to High end plates.
We do very less of commodity grades.
Our goal is to bring our nation to selfreliance, substituting all imports. We
are leading Make In India concept.

NM: In terms of automa- NM: What will you regard as

tion level, Essar Steel is still the USP of your mill?
at level 2. Is there a plan SM: Our Mill is built by integrating the
to integrate with Level 3? worlds best in respective areas. We

NM: In this fiscal how much

you will be rolling out of this
mill in terms of capacity?

SM: We already have Level 3. We have

Level 2 in our operations, we have
Level 1 in control of equipment. Matter of fact, Essar Steel was the first to
implement ERP System that is SAP.
Level 3 system works as Business system where total integration takes place
at business level that is order receipt
from customer till it is fully delivered.
We use this system at Global level, integrating all our offices across the globe.

SM: This fiscal we are targeting to

end up with about 80 per cent product based capacity utilization and out
of that 10 per cent will go to the pipe
mill. Next fiscal we will go for 100 per
cent capacity utilization. We do substantial thermos mechanical rolling.

NM: In terms of cost savings, as NM: How much of your prodthe CEO of the plate mill what ucts are branded?
are the measures Essar Steel SM: We have branded most of our high
is making in its operations to end products such as Essar Rockstar
reduce energy consumption? for Hardened plates through Q&T route,
SM: This fiscal only we have made a
good achievement as far as reduction in
energy consumption is concerned. This
is regarding furnace gas and we have
optimized the heating cycles. Technology and process are important here.
Technology enables you to optimize
and second is the process in which you
have to heat with the right parameters.
So process design is very important
and then there is capacity utilization.
Capacity utilization helps heavy
mills like plate mill in big way. We
want to benchmark and lead benchmarking parameters. In this regard,
we have launched various initiatives involving each and every team
member through innovative ideas.

Essar Thermor for Boiler & Pressure Vessels, Essar Structor for High
strength structural, Essar Fluidor for
Line Pipe and for Sour Service it is Essar Acidor, and Ship building plates are
branded asEssar Shipor. Similarly we
have plates branded for very specialized applications such as for penstock
of Hydro Electric power plants Essar
Penstor, for Large and high strength
industrial fans its Essar Fanor. While
our Q&T product has picked up brand
name, we need to do a lot to popularize other by brand name. Customers
generally use International grade name
ue to global use and project licencing.

have all facilities under one complex

to cater any kind of plate. We have
great level of adoptability and flexibility in our mill. Our own Steel Making facilitates Steel slabs with great
level of cleanliness which is of prime
importance in Plate Rolling. There are
stringent requirements in special plates
like low sulphur, low hydrogen and low
phosphorus level. All these stringent
requirements we are able to meet.
There are very stringent products that
require two/three cycles of post heat
treatment cycles. All those kind of simulation mini mills do not do and let customers do at their end that causes lot
of rejections at customer end. We have
built that capability so that customer
gets 100% plates for their application.
We have an excellent accelerated
cooling system called ADCO System
in which water and air is mixed and
mist is used to control the cooling.
This enables very stringent cooling.
Our main USP is our highly motivated
and committed team having double
positive attitude. You need smart team
to handle smarter equipment. We work
with our customers as our partners. We
salute their trust and confidence in us.

NM: In terms of quality

standards, what are the stan- Since
you
are
plandards your are adhering to? ning 100 per cent capacSM: All our products are supplied ity utilization, what are your
NM: Out of the 80 per cent through international and local stan- plans for sourcing slabs?
capacity that you will be end- dards, at par with bench marking mill
ing up this fiscal with, how worldwide. We do execute orders where SM: As we are migrating to value addmuch you have earmarked customer requirements are more strin- ed products, we require value added
for exports? What is the gent than these. We have BIS, IBR Cer- slabs. These require very stringent controls. We want to source all these from
target for the next fiscal? tifications. We maintain other require- our own Melting Shops, we call Mother
SM: We will end the current fiscal with
exports to the tune 60 to 65 per cent.

ments from approving agencies such as

API Monogram, additional specification
requirement from local governments.

STEEL & METALLURGY

32

JANUARY 2015

Plant. For non-value added grades like

base grade we do source from market.

Face To Face

We Want to Build Our Expertise on the Very Large

Diameter Spiral Pipes

Speaking to Steel & Metallurgy, Essar Steel Pipe Mill CEO, Mr. H. S. Bedi Discusses how the Mill is Gearing up to
Cater to the Growing Pipeline Projects Worldwide.

Mr H S Bedi, CEO, pipe mill, Essar Steel India

NM: Your estimate is that

over a period of two years the
large dia pipe market will be
over a million tonne?
HSB: Pipe market is divided into domestic and international market. Domestic
market isfurther divided into two parts
, oil & gas and water. For water line segment mostly the requirement nowadays
is for very large diameter and the same
is produced as Spiral pipes. These pipes
are formed on a special machine set at
a helical angle so as get the desired diameter. These forming machines can
make different diameter from one
width just by changing the helical angle
For spiral pipes material can be stocked
in various standard thickness like 8mm,

10 mm, 12 mm and 17.5 mm. In the recent times there has been increase in
the demand of spiral pipes as lot of
projects in the water segment have
already been awarded for execution.
There has not been much demand for
the spiral pipes due to recession in the
requirement of pipes for Hydrocarbon
.Many spiral mills have been put up in
India in recent times. About 10 years
back GAIL approved the use of Spiral
pipes for Natural Gas transportation
also. GAIL and EIL both confirmed the
performance of spiral pipes equal to
that of Long Seam pipes. As per them
there is no distinct difference between
the qualities of both type of pipes.
API requirement diminished in the
country in the last 4-5 years because no new projects from GSPL,
GAIL, ONGC were in the market. This
year GSPL which was supposed to
lay 1200 km pipe line could not start
due to lack of funds and approvals.

NM: Can you highlight the recent major orders in your kitty?
HSB: As I was telling you, on the domestic front we want to build our expertise
on the very large diameter Spiral pipes.
For 3 meter diameter pipe required
in Sauni project, we modified both
the Spiral machines for manufacturing these pipes and also modified
Coating Plants both external and internal to coat these 3 meter diameter
pipes. These pipes require external
coating with 3 layer PE and internal

STEEL & METALLURGY

33

JANUARY 2015

coting with food grain epoxy.ESSAR

has always an edge over other pipe
manufacturers as it has its own coils.

NM: By when do you expect

to get your rated capacity?
HSB: To take the plant to capacity production one needs order in hand for
at least six months. We have only one
Coating plant and three units for bare
pipe manufacturing. As per capacity
of coating Plant we are booked for full
year. We are going to build up one more
Coating plant in the same premises so
as to run all the three pipe manufacturing units to the fullest capacity. For example, Sauni had a total requirement of
about 6 lacTon of pipes and we are satisfied with an order of only 1.2 lac Ton
as per our single coating plant capacity.
As far as API sector is concerned
there are hardly any new projects announced in the domestic market. However we have been able to get orders
in small tonnages having many sizes
from Reliance for their new refinery and kept ourselves busy. These
pipes arein ASTM grades and need
heat treatment in addition. In the
last fiscal we have had 180 km of orders from Reliance worth 350 crore.

NM: What kind of figure are

you going to achieve in terms
of tonnage this fiscal?
HSB: This fiscal we are going to end
with a figure of 2.5 lac tonnes. Next
fiscal we are going to increase to

Face To Face
400,000Tonnes . Out of this 180,000T
would be from overseas and in API
grade. To achieve this we are putting up another coating plant which is
likely to be ready by end march 2015.

NM: Against your rated

nameplate capacity of 100,
you have raised your capacity to 134. So, if you could
just highlight what are the
internal modifications you
made to your equipment?
HSB: Our spiral mill are 2 meter wide
and have helical angle range from 15
degree to 85 degree and the pipes
can be formed to 135. One needs
to modify all the structure to accommodate this large diameter. Major
modification is involved are in the
Submerged arc welding stations and
handling equipment. Further Bevelling and Hydrotesting machines have
also been modifiedto process these
large diameters. New shot blasting
station has been put up in the external coating plant besides modification
in the Induction unit, Epoxy booth
and high density Polythene Extruder.

NM: Will your new coating

mill entail any additional capex or that is accounted for?
HSB: The capex would be in the range
of 70 to 80 crore. We have started the
civil work etc and it will be available
for production in the next fiscal only.

NM: In terms of testing facility what is your USP?

HSB: All the pipes are Hydro tested to
the desired pressure as per requirement. Further we are also equipped
with state of the art Laboratory for
testing
mechanical and chemical
properties of Raw material like steel
plate/coils, welding consumable, coating materials etci We have also a very
special Lab called NACE LAB meant
fortesting HIC and SSC for sour grade

steel. We are successful in developing pipes in small diameter say 18 to

20 and high wall thickness meant for
sour gas transportation. In fact we are
the only pipe mill in the country to
have APIQ monogram for this purpose.

HSB: In the next fiscal we are concentrating

onprojects requiring pipes in high strength,
sour grade,and high wall thickness.

NM: In the next fiscal is there

plan to add any other facility
within the mill as you are exNM: How much of exports do pecting demand to rebound?
you target tonnage wise in
HSB: The demand for pipes for deep
the next fiscal?
HSB: Next fiscal around 1,80,000 tonnes
out of 4,00,000 tonnes will be for exports.

NM: Depending on the market demand next fiscal can

you go beyond the nameplate
capacity?
HSB: We have total capacity of 6,00,000
tonnes for LSAW and spiral pipes
both. Utilization of capacity is dependenton the number of project s and
size of pipes involved in the project.
We have atargetto produce 4,00, 000
tonnes of pipes in the next fiscal year.
Our motto is to move to the value added segment from the commodity market. We developed and modified both
the spiral mills to manufacture pipes
in diameter more than 3 meter and
also modified the external and internal
coating plants to carry 3 layer PE and
food grain epoxy coatingrespectively of these pipes. Also we increased
our range of manufacturing pipes
in LSAW to 20x 34mm X-70 grade.

NM: Is there any other new

grade that you are concentrating?

STEEL & METALLURGY

34

JANUARY 2015

sea water is going to increase. These

pipes need
heavy weight coating
which is called concrete coating. To
get our share in this market we would
add concrete coating mill at the earliest.We being in the proximity of our
port at Hazira has an added advantage
as the heavy weight pipes need to be
transported to the pipe lay barges.

NM: In terms of price realization how would you compare

the domestic market pricing
and the international pricing?
HSB: In terms of price realization overseas market is more conducive because
of less competitors. We have been able
to develop ESSAR brand in Quality and
fast delivery and have been favourites
of many important customers. ESSAR
is always preferred over others if pipes
are required for critical application and
if these are to be delivered in short time
We are targeting to reduce our spot
market and increase overseas market
presence for not only API pipes but also
for water pipes. We have recently received order from Tanzania for a water
project and have already shipped 3500
tonnes of externally and internally coat

Face To Face
ed pipes for this project. Total quantity
of the order is 20,000 tonnes and have
to be delivered within this fiscal year.
Freight becomes a major factor in
accepting a project. Pipes in diameter more than 56 fetch a very high
freight and becomes un viable to
execute if the project site is far of.

NM: Which are your focus

countries?
HSB: Iraq is our focus country where we
have already been qualified by SCOP
and are the only Indian pipe company
permitted to use our own steel in manufacturing pipes for critical application.
Recently we have Supplied pipes in X-70
GRADE to SCOP using ESSAR PLATE
and won appreciation from them.
We are also trying to focus on Nigeria and Algeria. Later we have plan
to focus on US market. All the major players like Welspun, Jindal were
saturated with orders in USA. So this
signals a very promising market for
Essar to win the new future projects

coils from our own plant only and we

need not build inventory while executing a project. We have recently sourced
material from Chinafor API grade as our
plant has been busy in other work. For
water projects we need steel with BIS
certified and for that we would like to
depend on our own plant. Only for API
requirement if our own plant is busy
we may have to look for sourcing coils /
plates from outside . We procure coils/
plates from our Mill on monthly basis.

NM: The Pipe Mill is SBU of

the company but it has to buy
NM: In terms of OEM approval material at the market price
from oil companies and engi- or it does not receive any
neering companies, what kind advantage in terms of price.
Does it impact your margins?
of approvals do you have?
HSB: We have OEM approvals from almost all oil companies. We are the only
company who have obtained APIQ license using Quench and Tempered
plates for manufacturing special grade
pipes. This process is needed to produce small diameter and high wall thickness sour grade pipes in high strength.
We have got the licence APIQ to produce pipes using this process route.

HSB: We buy the material from Essar at the market price We have the
freedom to buy the steel from any
mill in India or overseas. We can procure coils /plates from overseas
market to have maximum margins.

NM: To meet your coil requirements, would it be completely sourced from your mother
plant or you can source from
outside?

HSB: We are at level 2 automation system and do not require upgradation

right now in pipe mill. Besides steel
plate/ coils, we require special welding
consumables, inserts formachining of
the plates, lubricating oils etc. These inventories are well managed with level 2

HSB: We would prefer to source the

systems. Besides, these cannot be fully

controlled from automation platforms
because with changes in pipe size and
grades we need different consumables.
Some times projects having different
specifications need special requirements.

NM: In terms customer relations management, many

pipe makers adopt monitoring or tracking status of orders. Do you provide any such
service?
HSB: API has a special system known as
Q1 and calls for contract review. We
are audited by API surveyor every six
months for the Q1 system. As soon as
an order is booked, the order execution
cell gets in touch with the customer and
starts the project with the acceptance
of order. Daily progress report of the
order is sent to the customers and progress of the job is monitored very closely.
The project is delivered on time to the
complete satisfaction of the customer.

NM: In terms of automation NM: So according to you wawhat kind of automation level ter pipe market is bright while
are you at?
the API market diminishing.

STEEL & METALLURGY

36

JANUARY 2015

HSB: Because of the dipping crude oil prices, I dont see any major projects in next
two three years for lack of viability. But
keeping in mind our PMs promise to the
eastern region of the country for supply
of gas, I hope funds problem will be sorted out for Haldia-Jagdish Pur pipeline.

Face To Face

We not Only Developed Innovative Products, We

Created Innovative Applications

Speaking to Steel & Metallurgy Mr. M. Venkatraman, Sr. Vice President & Head, R&D Essar Steel India Ltd.
states how Essar Steel has been pioneering not only new products, but also new steel applications in the cuntry.
Which places the company ahead of other steel producers.
lelly, the auto industry was also gaining
momentum in India and was trying to
establish one of the hubs. The growth
of the auto industry was in tune with
steel company also. That is why our
thrust on application was emphasized.

Mr. M. Venkatraman, Sr. Vice President &

Head, R&D Essar Steel India Ltd.

NM: Primarily what product

mix have you developed recently? And what are the new
grades we can expect in the
coming fiscal?
MV: Earlier, Essar Steel was like any
other steel producers known for its
quality product of hot rolled distinct.
Essar Steel was having a monopoly
on the line pipe grade and hot rolled
product for general segment. The
general feedback was the quality was
good. Subsequently, cold rolling was
added to its Hazira complex. Then
other facilities like secondary refining
like vacuum degassing, RH degasser
which are clean steelmaking technology were augmented. This change in
scenario of the steel product expanded
the product to a wide spectrum. Paral-

So we took it consciously that we must

enhance product basket in order to be
strategically competitive in the market
and for sustainability. So, the initiative
started when the auto industry was
gaining momentum and cold rolling mill
was commissioned. So, every move Essar Steel made in product development
segment happened to be the first move
in India. Even Tata Motors used our
product before they started producing
the grade. The one was bake hardening
steel with high strength which was a first
attempt by Essar. Later it was copied by
othersthrough reverse engineering and
then dent resistant steel was developed and extra low carbon steel which
was possible through RH degasser.
We then developed crash resistant
steel. We made leadership in automotive industry. Parallelly, the plate
mill got commissioned and our leadership was established. Then our
compact mill also got commissioned.
The distinction of Essar with other steel
producers in India is that it has all down
stream value added facilities to produce products like coated, galvanized,
hot rolled, cold rolled, pipes, plates in

STEEL & METALLURGY

37

JANUARY 2015

all the ranges. And within each category

we have sub category of product mix.
In coated product we will introduce
super coats and cool steel which
will keep radiation out. After this
the construction industry was also
booming. Therefore there was large
demand for earth moving equipment, cranes, tippers and dumpers.
This needed wear resistant steel.
There were no technology providers
for the new grades. Being specialized
steel producer for specialized segment,
we cannot buy technical know-how.
Know-why is our R&D job and know
why is translating that into knowhow. Both of these are conducted in
Essar without paying a single penny.
Essar Steel developed for the first
time in India the steel for crane of
20 tonne load capacity. We have developed grade with a strength 700
MPa for long members of truck with
a weight saving potential of 17%.
We then immediately launched special steel for boiler quality segment
with creep resistance. Then we proposed launching of extra wide plates.
We then developed 1700 MPa ballistic
steels for Defence . The development
of weight saving, fuel saving and energy
saving steel was a tremendous boost
to plate mill focus. In the last 3 years
we have produced over 120 products.

Face To Face
Providing quality product is matter
of past. Today if any steel producer
says it provides quality product, it
has problem with the process because with the technology at hand,
quality is not the last word. We at Essar believe in providing not only what
you require but we develop products that exceed the user needs.
Its like one step ahead with providing what the customers have not
even anticipated. So, through our
application engineering and R&D.

NM: Why have Indian steel

producers not thought of producing electric grades steel?
MV: It is not that Indian producers do
not have the technological know-how
to produce electric steel. We are producing 5 types of extra low carbon silicon gardecarbon electrical steel( Non
Grain oriented). We import Grian oriented electrical steels. However, it is
the market demand for this grade vis
a-vis justification of the investment.

NM: Do you think the use of

flat products should increase
in construction like cladding,
and also in road barriers?
MV: Selling steel is not strategic survival. It is selling steel solution. First we
have made efforts to offer steel solutions in India prior to any other steel
producers. Steel solution is important
not only strategic for survival but for
selling steel because if you are going to
increase production, then we need to
create parallel demand for consumption. One model can be adopted is China. They put in a balancing act. Both the
urban and rural population matched in
steel consumption. We in India have got
a huge disparity here; in urban the consumption is 45-50 kgs per person and
rural consumption is 6-7 kg per person.
The government should make steel in-

tensive building, bridges, and roads. It

is also time effective. Ministry of Road
should be aware of the advantages
of steel. The myths related to steel in
public and buildings are that steel construction are expensive and they are
corrosion prone so cannot last for ages
which is a custom in Indian society. Today we have all weather corrosion resistant coated steel which is for life long.
In construction it increases the floor
space index and is less time consuming.
One important thing is that in other countries extreme weather has
led to the use of steel consumption
growth as a necessity but in India as
all weathers is conducive, there is no
real necessity or urge for steel usage.
Obviously, legislation can play a big role
here. For example, China has banned
loading labours with more than 50 kgs
of weight through legislature which has
led to the use of steel cart as load carrier. The model can be applied in India
even more successfully. Also, there is
scope in pandals, steel scaffoldings.
One important aspect is that rivers in
our country from where huge amount
of sand is mined. If it is banned builders
will move to the steel. Cement poses
health hazards for workers whereas
steel has no such issues and it is also

STEEL & METALLURGY

38

JANUARY 2015

less time consuming. Health Ministry should promote this awareness.

NM: Which are the areas

where Essar Steel would make
a foray in the next 2-3 years
where new application can be
introduced?
MV: We would like to focus on defense,
construction, coating, energy and automobiles.
We are prepared to face any challenges that we will encounter in terms
of material threat due to replacement
with other metals or in terms of totally radical products that are going
to come to India through imports.

NM: What are the emerging

areas in steel world?
MV: One important emerging area is
nano steel. This nano steel is a new
revolution where Japanese have put
in billion of dollars. This nano steel is
very high strength steel but the cost
is very less. Nano coating, nano tubes
of carbon coated on the steel which is
corrosion resistant are new emerging
areas. Japan has produced this nano
steel. USA has produced this grade,
though they are selling it in small
amount to the domestic car makers.
This nano steel gives wide range
of new applications which has tre

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Face To Face
mendous potential to replace aluminium and other light alloys.

NM: About your R&D, are you

only focussed on day to day
issues?
MV: We are open to new research and we
have tie-ups with foreign and Indian universities and we will come up with new
solutions. We keep up global standards.

NM: What are your views on

steel being improted in the
country? Do we import because of technical limitations?
MV: As far as imports are concerned, I
keep on telling Ministry in every forum
that there is no imported steel grades
that cannot be produced indigenously.
Some special gardes need to improtes
still bacuse the quantities required does
not make out a business case or special
facilities required. For example, army
ambulances thin plates with armourresistence in 2 to 4 mm sheet is which
is still improted. The 2to 4 mm sheet
for armoured personal carriers such as
ambulances is produced through special quenching tempered technology.
so here come the question of imports.
So unless the demand is there the
investment cannot be justified because steel companies have to see
techno-economic viability to produce
all grades currently being imported.

tre. Do you have any plan to

set up any R&D facility?
MV: We do have an exclusive centre for
R&D. We have a separate council of experts who are working on it. We do not
believe in having a centre just for namesake or ornamental purpose. You have
raised the issue that they have separate
units for decades but they have used the
units for incremental practice in their
existing operations and equipment.
But according to us R&D is putting your
acumen to make breakthrough and Essar Steel has done that more than any
other steel producers. We research

NM: your Views on Exports...?

MV: If India is looking at its own requirement it is not enough. When someone
invests in settting up a mega facility
like this he will be naturally looking to
competing in the international markets.

NM: All major Indian steel

producers have their research
and development centres
since long time separately but
Essar Steel has no such cen-

STEEL & METALLURGY

40

JANUARY 2015

and focus on the areas where we need

to and come up with ideas to produce
breakthrough. That is our core strength.

NM: Lastly, in the last few

years Essar Steel has developed 300 products. How much
of it is value added product?
MV: We have presently 30-35 per of
these as value added products. However,
we have plan to take it to 50 per cent and
then 70 per cent in future. We want to
be a market leader in niche segment and
value added segment. We dont want
to compete in commodity segment.

Overview

of the Indian Steel SectorFinancial Performance

Some Selected Companies
M.C. Das, ISS (Retd.)
Deputy Director General, MCCI

Indian Economy

ccording to latest IMFs latest

World Economic Outlook, India is
poised to become a $2 trillion economoy this year while its GDP size would
cross another milestone of $3 trillion
after five years in 2019. Indias ranking would also improve to the seventh
largest economy in the world, while
measured on current price basis in
US dollar, in 2019 from its tenth position currently. Latest data from The
International Monetary Fund (IMF)
show that Indian economy is set to be
worth $2.05 trillion this year; increasing its size from USD 1.88 trillion in
2013. Last year too, India was among
the ten largest economies in the world.
Going By the IMF, United States would
remain the worlds largest economy
with a size of USD 17.42 trillion; followed by China at USD 10.35 trillion.
Meanwhile, India is all set to cross the
$3 trillion milestone in 2019 with a size
of $3.18 trillion, surpassing Russia, Brazil and Italy. This would also make India
the worlds seventh largest economy.
However, GDP growth in India stood
in the region of sub 5% in FY14 on account of stalled investment against
the backdrop of tightening policies,
widening trade and fiscal deficit, high
inflation and weak FDI inflows.Further, FY14 was also a year of subdued
activity for steel intensive sectors in
particularly the auto segment. If interest rates remain high, it is expected
that the next fiscal will continue to

remain a challenging year for the automotive sector. However, decline in

fuel expenses may give some relief.

Indian Steel Industry

The Indian steel industry has entered
a new development paradingm since
2007-08 and is riding on the resurgent
economy and the growing demand
for steel. Indias 33 per cent growth in
steel production in the last five years
was second only to China. According to
data by World Steel Association (WSA),
India is the fourth largest producer of
crude steel and the largest producer
of spong iron in the World. It employs
about half million people. According
to the data released by Department of
Industrial Policy and Promotion, Indian
mining and metallurgical industries
attracted foreign direct investments
(FDI) in the order of US$ 1,467.88 million and US$8, 267.99 million, respectively in the period April 2000 - August
2014. Infrastructure sector which accounts for about 60 p.c. of countrys
total steel demand while the automobile industry accounts for 15 p.c. Steel
demand in India has remained sluggish so far in 2014 amidst weak activity and poor investment sentiments.
It is expected to accelerate modestly
in the coming years. Strengthening domestic consumption and improving external condition will help underpin the
growth of steel using sectors. A major
new national program Make in India
has been launched which is designed
to facilitate investment, foster innovation, enhance skill development, pro-

STEEL & METALLURGY

41

JANUARY 2015

tect intellectual property, and build

best-in-class manufacturing infrastructure. Considering all these theres never been a better time to make in India.

Financial Performance
Broad financial data for selected
25 companies of the steel sector for
the period April-June 2014-15 (Q-1)
and July-September 2014-15 are
presented at Table-1 and Table-2.
An analysis of financial performance
of 25 steel companies indicates that
although sales have shown to have registered a growth of 13.7 p.c., profitability has gone down in Q-1 of 2014-2015
by (-) 21.1 p.c. when compared with
the corresponding period of last year.
In the second quarter, the sales growth
has further down from 13.7 p.c. to 4.4
p.c. y-o-y basis. Profit after tax registered further fall (-) 21.7 p.c in Q-1 to (-)
38.9 p.c in the Q-2 period. Sales
growth of the two largest companies
JSW Steel and SAIL showed decline
from 29.0 p.c. to 7.0 p.c. and 1.5 p.c to
1.2 p.c respectively. Tata Steel showed
a negative growth in sales in the Q-2 (-)
2.4 p.c. Five companies showed
negative growth in each Quarter.
From the profitability point of view
measured from profit after Tax figure,
these 25 companies showed a negative growth of (-) 21.1 p.c. and (-) 38.9
p.c. respectively in Q-1 and Q-2. Six
companies incurred loss in Q-1 and five
units in Q-2 growth in Sales and PAT
during Apr-Jun (Q-1) & Jul-Sep (Q-2)

Overview
Company

NetSales PATJune
June
2013Rs.
2013Rs. Mill
Mill
36
24,909
322
220
3,701
2,257

1
763
207
79
1,187
186

Net
Sales
June
2014Rs.
Mill
76
28,017
101
232
4,239
2,969

1,537

305

768

432

50.1%

N.A

3,861
1,504
6,844
12.070
28,302
45,403

141
197
50
674
2,209
4,943

3,869
1,685
6,893
11,491
32,378
49,784

488
146
139
444
1,184
4,181

0.2%
12.0%
0.7%
4.8%
14.4%
9.6%

N.A
25.8%
177.8%
34.2%
N.A
15.4%

102,707
2,447
3,274

4,800
101
276

132,541
3,126
2,690

6,565
153
225

29.0%
27.7%
17.8%

36.8%
51.4%
18.6%

MONNETISPAT

4,802

525

8,937

174

86.1%

66.8%

MUKANDLIMITED

5,970

215

6,784

85

13.6%

N.A.

NALWASONSINV

29

18

29

89

2,911

300

3,494

385

20.0%

28.2%

102,679

5,388

113,412

5,299

10.5%

1.7%

1,644

180

2,031

443

23.6%

146.0%

328,048

11,213

364,272

5,998

11.0%

46.5%

9,287

41

11,553

214

13,368

42

16,191

96

21.1%

127.4%

718,135

27,895

816,365

22,005

13.7%

21.1%

AJMERAREALTY
BHUSHANSTEEL
BINANIINDUSTRIES
GANDHISP.TUB
GUJ.MINERALDEV.
HINDUSTAN
COPPER
INNOVENTIVE
INDUST.
ISMTLTD
JAICORPLTD
JAYASWALNECO
JINDALSAWLTD
JINDALSTAINLESS
JINDALSTEEL
JSWSTEEL
KALYANISTEELS
MAH.SEAMLESS

RATNAMANI
METALS
SAIL
TATASPONGE
TATASTEEL
USHAMARTIN
UTTAMGALVA
STEEL
SectorAggregate

PAT
YoY
YoY
June
Change Change
2014 Sales(%) PAT(%)
Rs.Mill
12
1,416
10
38
1,305
132

110.0% 1050.0%
12.5% 285.6%
68.8%
N.A.
5.3% 51.7%
14.5%
10.0%
31.5% 29.0%

0.5% 593.9%

24.4% 620.7%

Financial Performance of the Indian steel Sector: Selected companies

April to June (Q-1) 2014-15

STEEL & METALLURGY

42

JANUARY 2015

Outlook
The Indian metals
and mining sector
is currently facing a mulitiplicity
of challenges like
weak macro environment,
leveraged
balance
sheets and heightened
regulatory
risk. Steel sector
has suffered from
various
factors
like environmental and regulatory
concerns, cost increases, delayed
projects and high
cost of funds. Government
delays
in allocating coal
blocks for captive
consumption by
steel manufacturers seriously hurt
the
competitive
edge of the Indian
steel sector. The
situation of availability of iron ore
is no different although we have
sufficient iron ore
reserves. The delays in allocating
iron ore mines as
well as approval
for mining licenses
are seriously affecting the prospects of new investment in the
steel which in turn
affecting new capacity creation to
meet the growing
demand for steel.

Overview
CompanyName NetSales PATRs.
Rs.Mill
MillSept
Sept.
2013
2013
AJMERREALTY
46
9
BHUSHANSTEEL

NetSales PATRs.
Rs.Mill
MillSept.
Sept
2014
2014
88
11

YOY
Change
NetSales PATSept
Sept
92.3%

23.3%

22,675

601

29,640

2,972

30.7%

594.5%

BINANI
INDUSTRIES

326

336

152

69

53.3%

N.A.

GANDHISPTUB

231

55

271

54

17.0%

2.0%

GUJ.MINERAL
DEV.
HINDUSTAN
COPPER

1,752

464

2,682

551

53.1%

18.8%

3,351

620

2,208

172

34.1%

72.2%

INNOVENTIVE
INDUST.
ISMTLTD

839

378

932

1,437

11.1%

N.A.

4,258

119

4,072

631

4.4%

N.A.

JAICORPLTD

1,736

234

1,722

147

0.8%

37.4%

JAYASWAL
NECO

6,817

220

8,294

217

21.7%

1.1%

JINDALSAWLTD

12,294

550

15,914

796

29.4%

44.7%

JINDAL
STAINLESS

30,389

1,892

33,038

2,490

8.7%

N.A.

JINDALSTEEL

49,838

4,520

51,431

4,378

3.2%

3.2%

129,838

7,146

138,948

7,488

7.0%

4.8%

KALYANISTEELS

2,476

118

3,153

228

27.4%

92.4%

MAH.SEAMLESS

2,844

202

3,639

349

28.0%

73.2%

MONNETISPAT

5,062

602

8,362

782

65.2%

229.9%

MUKAND
LIMITED

6,239

78

7,638

127

22.4%

N.A.

129

118

131

118

1.0%

0.7%

4,381

492

52.4%

89.4%

JSWSTEEL

NALWASONS
INV
RATNAMANI
METALS
SAIL

2,875

260

115,355

1,922

116,787

6,495

1.2%

237.9%

TATASPONGE
TATASTEEL

1,828
366,449

183
9,167

2,111
357,771

225
1,093

15.5
2.4%

22.9%
88.1%

USHAMARTIN

9,272

11,580

54

24.9%

503.4%

UTTAMGALVA
STEEL

9,942

57

16,642

61

67.4%

7.7%

786,860

24,253

821,585

14,814

4.4%

38.9%

Sector
Aggregate

Financial Performance of the Indian steel Sector: Selected companies

July to September (Q-2) 2014-15

STEEL & METALLURGY

44

JANUARY 2015

However, there are

trends of demand
recovery in the real
estate and infra
sectors and the demand for infrastructure has also been
strong since the
new government
came to power.
Overall, steel demand is expected to
remain weak due to
the continuing economic crisis in the
developed
countries particularly in
the EU region and
the structurl shift in
the Chinese economy. Moreover the
world is reeling under the pressure
of large surplus capacity which will
remain a serious
cause of concern,
especially in times
of subdued global
demand. In the
coming days Indian
steel industry will
face severe competition from the
neighbouring countries like China and
others which are
trying to penetrate
the Indian market.
It is essential that
the Indian government should act
promptly to prevent
imports of spurious material which
would not only
impact the Indian
steel producers but
also
consumers
at large in future.

Furnace

Blowing Down and Salamander Tapping in Vizag Steel

KN Rao, DGM (O), S Modi, GM(BF-HOD)
R Ranjan, ED(W) I/c , Umesh Chandra, D(O)
RINL-VSP

Abstract

urnace blow down, salamander

tapping and quenching are essential steps before any blast furnace
rebuild. One of the challenges faced by
furnace operators during blow down is
to avoid explosive mix of gases inside
the furnace. Tapping of salamander
metal through salamander tap hole is
problematic because of various factors involved in the job like identification of tap hole location, hearth skull,
limited work space, choking of tap
hole etc. Incorporating more facilities
and instruments made the furnace
more informative which has given the
operator an excellent tool to operate
the furnace during blowing down and
prepare it for successful salamander
tapping. This paper deals with steps
and procedures adopted for blowing
down, salamander tapping and quenching before category-1 capital repair of
blast furnace no.1 of Vizag Steel Plant.

Introduction
Iron making facilities at Visakhapatnam
Steel plant primarily constitute three
blast furnaces. The first blast furnace
i.e. BF No. 1 christened as GODAVARI
was commissioned way back in March
1990. Commissioning of GODAVARI,
the 3,200cum useful volume furnace,
as a matter of fact, marked Indias entry
to the distinguished league of big blast
furnace operating nations in the early
nineties. The furnace built by Gipromez,
Russia was designed to produce 1.7 MT
of hot metal annually at a productivity

level of 1.52t/m3/day. The furnace in

its first phase of initial campaign, had
a successful run for more than 10 years
with metal throughput aggregating
in excess of 13MT, albeit a number of
challenges faced which included longer
stabilization period of downstream facilities, acute coke shortage in the face
of coke oven battery debacle and above
all technological problems in the furnace itself. Eventually the furnace was
put down for categoryII capital repairs
during May-June 2000 for 49 days following severe damage to the lining
in the lower stack and hearth area.
Post capital repairs, the performance
of blast furnace no. 1 had shown remarkable improvement over next few
years with incorporation of a number
of technological up-gradations and
process intensification measures e.g.
oxygen enrichment, humidification of
blast etc. supplemented by consistent
efforts to improve inputs quality and
focus on better cast house practices.
The performance parameters of BF No.
1 in last decade is shown In Table no.1

no. 3 (the new 3800 cub metre blast

furnace under 6.3 MT expansion of the
plant) in April 2012 and subsequent
failure in commissioning of Steel Melt
Shop-2 had forced the furnace to curtail production to 70% of its capacity.
Operation with restricted regime continued for about 11/2 years before
Vizag Steel Management had taken
the final call to blow out Blast Furnace No 1 on 19th Oct 2013 for categoryI capital repairs i.e. complete
rebuilding of the furnace. The furnace
by that time had registered a cumulative production of 37.74 MT and with
a campaign productivity of 11793.75
tons/M3 (useful volume) of hot metal
since inception, a feat probably unparalleled by any blast furnace world
over with all coke operation practice.

Furnace Condition Prior

to Blowing Out
By the end of the campaign, blast furnace no.1 was running with severe
damage to refractory linings particularly in lower stack, belly and hearth
areas resulting higher heat losses in-

* Throttling of furnace in view of global melt down

Table no.1. Performance parameters of BF no.1

After years of operation, the furnace

began to show signs of ageing with
increasing tendency of operational instabilities from beginning of 2012-13.
Coincidentally, commissioning of BF

STEEL & METALLURGY

45

JANUARY 2015

dicated by increase in T. About 90%

of the cooling plates in the belly zone
and 30% of the cooling plates in lower stack zone were completely burnt
and hence plugged as shown in Fig.-1.

Furnace
the campaign. Finally the go ahead
signal came from the Management to
blow out the furnace after ensuring the
adequacies of all the planning and preparatory activities for capital repairs.

Preparatory Activities
Basically,
preparatory
activities for blowing out operation revolved
around
the
following;
Technological conditioning of the
furnace before blowing down by
suitable adjustments in operational regime and cast house practices
Figure No. 1: cooling staves condition before blowing out

The estimated erosion in hearth

wall lining thickness was to the extent of 60-70% with merely 500800mm lining left out of the original thickness of 1800mm (Fig.-2).

sure at 1.5-1.6kg/cm2 and with a

daily production schedule of 3500
tons a day. Silicon in hot metal was
maintained in range 0.7-0.8% with
slag basicity in the range 1.03-1.07.

Arrangements for Cooling

of
top gas & stock rod measurement
Arrangements for chilling the furnace
Identification of tap hole location and
preparation for Salamander tapping
Logistic to handle salamander metal

Figure No. 2: Lateral erosion of carbon block

The calculated vertical erosion of

hearth pad of 4.9 metre thickness (consisting of the bottom most graphite
layer with five layers of mullite blocks
on top of it of thickness of 3.3m) was
little less than 90% (Fig.-3) which suggested that only the bottom most
mullite layer of 0.55 meter and a part
of the layer above it remained intact.
The furnace was running with restricted regime with blast volume
at around 3500 Nm3/min, top pres-

It cannot be overstated that the furnace

conditions were far from satisfactory
and in fact, was getting worse with each
passing day. The difficult and throttled
regime characterized by frequent delays and disruptions in furnace working
on account of poor off take was putting additional pressure on the already
deteriorated refractory lining. Regular
monitoring of furnace conditions with
a guarded approach towards maintenance of lower stack and hearth had
become a routine affair while stretching

STEEL & METALLURGY

46

JANUARY 2015

Technological conditioning of furnace

was initiated almost a month before
the blowing down. Clean up charge
in form of manganese and quartzite
were included in the burden in an incremental manner enhancing the dose
towards the end. A total quantity of
1415 tonnes of manganese ore and 450
tonnes of quartzite ore was dumped
into the furnace. Silicon was maintained
in 0.8-0.9 % and manganese 0.5-0.7 %
in hot metal. Furnace operation was
switched over to thin slag practice
with slag basicity gradually brought
down to 0.93 to 0.95 from 1.03-1.07 in
order to facilitate better hearth drainage. Other technological/operational
steps taken include the followings:
All 32 tuyeres were put into
operation
and
maintained
to ensure no water leakage.
Top pressure was increased to 2kg/cm2

Furnace
gas sampling line from the up take no.3
&4 for manual gas sampling to check
top gas composition during blow down
Arrangement for water level
measurement coupled with draining
system
during
quenching
through two tuyeres (T#1 and T#17).
Isolation of burnt coolers to minimize ingress of water in stack zone.

Salamander Tapping
Preparations
Figure No. 3 : Vertical erosion of mullite blocks

Nut coke charging was stopped.

Extra coke was charged in periphery to dislodge any possible scaffold or scabs from furnace wall.
Angle of tap hole drill was increased to 110 from original 90
to
maximize
hearth
drainage.
Twin tap hole practice was followed to facilitate better evacuation of hearth with rotation of tap
holes to ensure uniform drain out.

Metal
maintained

water at the throat level for quenching

the furnace after Salamander tapping.
Nitrogen supply was arranged at two
different elevations at furnace stack
(+30.4 m and +24.8 m) for reducing
top gas temperature and maintaining
O2 level in top gas in the desired range.

Tap hole no. 2 (out of 4 tap holes) was

taken out of operation 75 days before
the commencement of the capital repairs to initiate preparations for salamander tapping which is an important
aspect of blow out operation. Various
preparatory jobs undertaken were:
Erection of a specially designed platform
Fixing of flange around the salamander tap holes (as shown in Figure 5a & 5b )

Arrangement of temporary mechanical stock rod to measure the burden

level up to 26 metre inside the furnace.

Erection of specially designed runner

frame

Laying of 1 inch diameter temporary

Casting of runners on the platform

temperature
was
above
15000.

While adjustments in operational regime as mentioned above were continuing, the following preparatory jobs
were taken up to ensure necessary
infrastructural facilities and arrangements for successful blowing down.
As shown in Figure 4, the existing eight under dome spray nozzles
were connected to three booster
pumps to increase the water pressure to cool the top gas temperature.
Arrangement was made to supply

Figure No. 4: Water spray and Nitrogen injection arrangement

STEEL & METALLURGY

48

JANUARY 2015

Furnace
tom temperature etc.
Details of the calculation
method are given below:

Calculation
The furnace hearth was
equipped with air cooling system at the bottom which provided the
input for calculation.

Fig. 5-a : Salamander tap hole frame

Q = heat quantity passing

through hearth bottom =
V.Ca .T where,
T= Tinlet - T outlet = Air
temperature difference
V= Vol. of air flow for
under hearth cooling
= 55000 m3/hr
Ca= Heat capacity of air
= 0.310 Kcal/m3
Surface area= 3.14 x
(10.75)2/4=90.7 sq. m
Heat flux=q=Q/S=188T
K.cal/sq.m/hr
..(1)

Considering the isotherm

at
12000C
Q=(1200-Tb)/{ hg.1/ g+ hrm.1/m } ..(2)

Fig. 5-b : Salamander tap hole cross section

Modification of suction near the salamander tap hole for better ventilation
Checking of all utility lines like air, water and oxygen with valves made ready
Installation
viewing
from

Where,
hg = height of graphitized block = 1.6 m
g = heat conductivity of graphitized

block=120 K.Cal./m.hr
hrm= Height of remained layer of mullite block(to be calculated)
m = Heat conductivity of mullite
block=1.2K.Cal./m.hr
By using equation (1 & 2) and values
hrm = ( 7.66-0.0064 Tb)/ T (m)
Reference calculation:
Tb= 800C
T = t1- t2 = 45 -35= 100C
Hrm = (7.66-0.0064x80)/10 ~ 0.70m

Logistics
Based on hearth erosion programme,
the quantity of salamander metal inside the furnace was estimated to be
about 600 tons. To handle this quantity, a fleet of eight open top ladles
with interconnected bridge runners
(Fig. 7) were placed on the track underneath the Upper salamander tap hole.
To tap the lower salamander metal, four
specially made NPC wagons with inbuilt
refractory compartments (Fig. 8) were
kept prepared in view of the height
constraints of normal open top ladles
which would have fouled with the runner system from the platform to railway
track. All these ladles and wagons were
preheated before Salamander tapping.

Safety
During the whole project of blowing
out, safety was a matter of major concern as it had all the ingredients and

of camera for
control
room

It was extremely important to identify correct location of salamander tap

holes to accomplish effective drainage
of sub hearth liquid product. For achieving this it was necessary to know the
metal pool depth which was computed
with available information like water
flow rate, temperature difference of
cooling water and air and hearth bot-

Figure 6: Location of upper and lower salamander tap holes

STEEL & METALLURGY

49

JANUARY 2015

Furnace

All concerned persons were

provided
with
gas
monitor.
As a result of planned efforts and
continuous monitoring, the whole
exercise could be completed successfully without any safety hazard.
Figure 7: open top ladles with connecting
bridges

potential for risks and hazards. Taking cognizance of this issue, all possible measures were initiated to avoid
any dangerous occurrence. Some
of the initiatives undertaken were;

All the major activities were completed

successfully in time after careful observation of the site conditions and design
considerations. However, 36 hours
before blowing down the furnace was
required to be put down to complete
the following final preparatory jobs;

During blowing out, spare

blower was kept in operation

Shell cutting at identified locations (cooler plate

Nos. 2R-3 & 1R-27)

Induction & training of all concerned

personnel including contract workers

Cooler plate cutting and removal

Cordoning the BF-1 area and issue of special passes for entry

Putting the format

( two pieces of thin
plate)

Arrangement for fire brigade, ambulance and security guard

Inside branches
filling with castables

Availability of medical staff & support round the clock.

Fixing the blank plate with grouting

valve at centre

Deployment of gas safety personnel with lifesaving kits round the clock

Grouting with mortar through

grouting valve welded at the flange top.

Adequate illumination was ensured

in all areas

Installation and testing of drill machine

Necessary precautions ensured for

protecting top equipments in case of fire

Additional instrumentation facilities

for online gas analysis and installation
of ORSAT apparatus in control room.

After completion of all the preparatory work, clearance was given to

blow down the furnace on 19th October2013. The objective of blowing down exercise was precisely,
lowering of the stock down to 1

STEEL & METALLURGY

50

to control the top gas temperature below 4000C in order

to safeguard the BLT equipment
Limits of flammability of various explosive gases were thoroughly discussed
well in advance. Critical composition
& combination of blast furnace top
gas components are shown in Fig.9. It was decided to maintain the H2
content below 8% and oxygen content below 1% during blowing down.

Figure 9: Limits of flammability of mixed gases

Blowing Down

Figure 8: NPC wagons with refractory lining

meter above the tuyere level in a

safe manner without allowing the
inflammable gases produced in the
process to form explosive mixture

JANUARY 2015

Blowing down of the furnace started

at 18.00 hour when smooth driving
conditions were established after normalizing to full blast from pre-blow
out stoppage over a period of 42
hours. The series of actions undertaken in sequence were as follows;
The stock level was gradually lowered up to 2.5 m from normal operating
level of 1.1 m while maintaining the top
gas temperature below 3500C by initiating nitrogen injection at 2000 m3/hr
from at 30.4 m level from three points.
Ten batches of coke blank totalling
185 tons was dumped at 3 to 9 chute
positions with a batch weight of 18.5
tons. At the end of last coke batch, the
stock level reached above 3 meter with
increase in nitrogen flow to 4500 m3/hr.

Furnace

Burden charging was stopped.

Dome water spray was opened.

All the top charging equipments

were filled with nitrogen and isolated.

most 18 hours with consumption

200 cum of water. The trend of burden descend is shown in figure 10
with details of blow down parameters enumerated in Table No.2

Blast temperature was gradually brought down to below 7000C

Dome water spray and nitrogen

injection was continuously monitored to ensure top gas compositions
in safe limits i.e. H2 content below
8% and oxygen content below 1%

Blowing was regulated to control top gas temperature as well as

to sustain smooth movement of furnace without slips while allowing
the burden to descend continuously.

Salamander Tapping
Towards the end of blowing down, clearance was given to open the salamander
tapping when furnace was at 0.5Kg/
cm2 pressure with
wind volume 2000 m3/
min. Nitrogen purging
was in progress from
all points. Routine tapping was continuing
from tap hole No.4
with flow of slag only.

Figure 10: trend of stock descend

Water inlets of all burnt cooling

staves were completely closed with
the progress of burden descend to
avoid water ingress into the furnace.
Normal tapping schedule was followed.

After about 14 hours stock level had reached in excess of 23 meter inside furnace when furnace
pressure was down to 0.5 kg/cm2
Top gas analyses, were showing expected trend with oxygen level below
0.8% and Hydrogen level below 6%.
Tuyeres were either dull or blacked out.
At this stage, bleeders were opened and
clearance was given to isolate the GCP.
Subsequently, preparation started
for salamander tapping while normal
tapping was still continuing in TH 4.
Stock rod at this stage reached 24 meter.
Dust catcher was dried and isolated.
Completion of blow down took al-

STEEL & METALLURGY

Table-2: Blowing down parameters

52

JANUARY 2015

As mentioned earlier,
all the preparatory

Furnace
work related to salamander tapping
was already completed before start
of blowing down itself. The mechanism adopted for salamander tapping
was to drill the upper salamander at
a greater height to tap out majority
of iron followed by lower salamander
at a lower level to drain the hearth
as much as possible. Accordingly, upper salamander tap hole drilling was

lower salamander. Drilling was done at

two angles of 90 & 110 for a length of 3
meters, followed by lancing at the hole
made at 110. Efforts were made with
continuous lancing to tap hot metal
form lower salamander for next 21
hours. After penetrating the tap hole for
6 meters (3meters by drilling & 3meters
by lancing) finally lower salamander got
connected and around 50 tons metal

through two tuyeres as explained earlier.. The series of activities undertaken

& observations made during chilling
of the furnace are detailed out below.
Furnace was put under off blast
followed by
N2 purging
in hot
blast main & cold blast main.
Two out of three bleeders were
kept in open condition initially.
N2 purging through all pressure probe points at two levels were minimized to maintain
positive pressure inside furnace.
Three uptake manholes were opened.
Dome cooling and throat water was
opened @ cum/hr & increased stepwise.
Under dome spray was maximized
and chilling lines were opened.
Following heavy vent of steam
through
the
remaining
bleeders, the third bleeder was opened
to facilitate faster steam vent.
Water level & outlet temperatures were continuously monitored at both the tuyere drains
No.1 & 17 as shown in Table No. 3.

Table No.-3: Salamander metal quality

started and drilled up to 600 mm at an

angle of 3.500 in the carbon block followed by lancing. Finally, tapping could
be opened after 3 hours of prolonged
lancing and continued for another 4
hours. Total 6 no. of open top ladles
were filled with approximately 570 T
of metal. Metal temperature varied
in the range 1250-13500C with near
normal quality as shown in Table-3.
When slag appeared at upper salamander taphole while filling the 6th load,
clearance was given for opening the

and slag could be tapped. Thus, total

tonnage of salamander tapping was
about 600 tons, by and large in agreement with the quantity estimated.

Quenching of the
Furnace
By the time of completion of lower
salamander tapping, stock level was
at 26 meter and clearance was given
to prepare for quenching the furnace.
The quenching facilities principally involved addition of dome & throat water with provision of drainage made

STEEL & METALLURGY

53

JANUARY 2015

Steam was observed after 10 hours

at upper & lower salamander tap holes
Dome water &
was fully closed

throat water
subsequently.

Alternative big flanges of the tuyere

stock were opened to enhance the
drainage of water which could be
completed after 15 hours. Afterwards, nitrogen purging was completely stopped. Gas samples were
taken at up takes & tuyeres platform
and found within the normal range.

Furnace
ture of process gases
during blowing down.
The targeted one meter coke level above
the tuyere axis could
be achieved through
controlled emptying of
burden through continuous measurement
of stock level and monitoring the driving rate.
A near perfection Salamander tapping with
virtually no trace of solid residue in the hearth
could be achieved beTable No. 3 : Water temperature at drains
cause of flawless poThe entire quenching operation took sitioning of salamander tap holes with
almost 15 hours with consumption proper time management with regard
of 3000 M3 of water of which 70% to opening of tapping. During subsewas throat water and remaining was quent removal of debris and cleaning of
dome cooling water. Subsequently the furnace it was observed that, physicomplete isolation of furnace and cal erosion of the hearth was almost
its auxiliaries was executed in an- similar to the computed erosion patother 12 hours which marked the tern. Complete absence of scabs and
completion of blowing out exercise. scaffolds on the furnace wall (shown in
fig. 12 &13 ) stood testimony to a techThe sequence of events during blow nologically sound and efficient operaout operations is illustrated in fig. 11 tional regime throughout the campaign.

of caution to counter possible safety

hazards because of presence of explosive and inflammable process gases
and complexities of jobs involved in
salamander tapping. Successful blowing out of Blast Furnace 1 at Vizag steel
was the culmination of team work,
meticulous planning and efficient management aptly supplemented by a very
high level of commitment, technological discipline and safety consciousness.

Figure 12: condition of furnace wall at

un-cooled stack

Figure 13: condition of furnace wall at

lower stack

Figure 14: Condition of Hearth bottom

Mullite blocks

References

Fig11: Sequence of events during blow out operations

Conclusion
Effective nitrogen purging and continuous monitoring of dome water spray did
not allow formation of explosive mix-

Blowing out of blast furnace involves a

series of critical activities that demand
not only operators skill, understanding
and competence, but also a great deal

STEEL & METALLURGY

54

JANUARY 2015

1. Planning cell (Operation) BF(Works)

2. Furnace 1 log books
3. Production performance reports

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Rolling Bearings are precision products
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Handling

Block, Flange Units etc.) should be stored

flat on their bases, but the bearing inner rings should be rotated as per the
instructions for stationary equipment.

a)
b)
c)
d)

Vibration
Damp
Contamination
Direct Sunlight

Bearings supplied in housings (Pillow

STEEL & METALLURGY

55

JANUARY 2015

Importance of Correct Fit

An excessively tight fit between mating components creates reduction

of internal clearance. The result is increased operating temperature with
the potential for ring fracture. Increased mounting forces also result.

Special Feature
Check the bearing packaging prior to use. If it is unbroken, and the
preservative appears fresh and
free from contamination, the bearing should be suitable for use.
Proper Installation practices
are to be strictly followed during mounting of the bearing.
New bearing need not be washed prior to installation, unless compatibility
with the Lubricant to be used is an issue.

Bearing Installation
and Handling
Take care when removing old or
damaged bearings from their shafts
and housings so as not to damage the
shaft or housing bore surfaces where
the new bearings will be installed. Do
not use Hammers, chisels or Gas Torch
for removal of bearings, as this may
lead to irreparable damage to the shaft.
Use scientific dismounting tools such as
Mechanical / Hydraulic Pullers , Oil Injection Pumps etc., wherever possible.
Clean all housings, shafts, sleeves,
keyways, etc., before attempting to
install a new bearing. Do not use emery paper on shaft where the bearing will seated. Inspect the shafts and
housing bore for damage / taper /
ovality / out-of-roundness/ inaccurate
tolerance. Abutments on the shaft /
housing should be square to the axis.
Install new bearings in as clean and
dry an environment as possible. Do
not use cotton waste for any clean-

ing job in the bearing maintenance

room. Use of lint-free cloth for wiping metallic surfaces is recommended.
Ingress of any kind of contamination
into the bearing at this stage will result in a shorter bearing life cycle.
Use scientific mounting tools such
as Fitting Tools, Induction Heaters, etc,
as the case may need, in order to ensure safe installation of the bearings.

Initial Lubrication
Procedures
Never assume the manufacturer has
properly lubricated the bearing. The
new bearings are usually shipped with
a coating of a rust preventive oil only.
It is only Lubricated-for-life bearings
(indicated by a suffix 2Z or 2RS etc)
that are supplied along with a suitable quality and quantity of grease.
Follow the recommendation of the
bearing manufacturer regarding grade,
quantity and method of lubrication.

Re-Lubrication of
a Bearing
You must preferably use the
same lubricant as what is in use. Do
not mix different lubricants without ascertaining their compatibility.
How lubricant waiting for future use is
treated and stored will be a key factor in
the life expectancy of equipment. Lubricants should be stored in moisture- and
temperature-controlled environments,
free of dust and chemical exposure.

Contamination of a lubricant is likely

to happen during transfer from one
point to another. Failure to exercise
care in this process will nullify the attention given previously. There are
a number of ways to properly refill
grease guns. Using a scoop or paddle
from a container is the oldest technique. It involves spooning grease from
a storage container and tamping it into
the grease gun to remove air bubbles.
This method is most likely to introduce
contaminants into the grease, especially when performed in the field. It
is not a recommended method except
in the most dire of circumstances.

Contamination Control
Never allow dirt , dust on other
contamination to enter the bearing.
Bearings must be protected by suitable seals fitted in the bearing housing.
Never allow the seal to get dry at
the point where it in contact with
the shaft. This leads to wear of the
seal / shaft and subsequent ingress
of contamination through the gap.
A seal once removed, must be very
carefully examined before being reused.
A seal is also a wearable part
and needs maintenance. Follow
the recommendation of the bearing manufacturers in this regard.
A Bearing is the heart of a rotary machine. It needs the same kind of respect
and care as we accord to our own heart
or perhaps even better than that.

Company Profile

Vacuum Rings in a Decade of

Oerlikon Leybold
Technology in India

erlikon Leybold Vacuum celebrates the completion of a decade

of its Indian subsidiary. Although vacuum technologies from Leybold Vacuum
had been present in the Indian market
before, the subsidiary was founded
to deepen the engagement with local
market. Since inception, the focus has
been on offering complete application
support along with an augmented service portfolio. In 2013, Oerlikon Leybold
Vacuum set-up its India Head-office
in Bangalore, in order to work closely
with the Indian scientific community as
well as offer sales and service support
to neighboring South Asian markets.

Committed to Customers
Besides superior technology and service offerings, a major factor behind
Leybold Vacuums success in the India
region has been its strong customer relationships built on reliability and trust.
Be it large global companies or Indias
space research program, Leybold Vacuums technologies have been an integral part of the economic success of its
customers. Our Bangalore facility has
enabled us to be in proximity to key
customers as well as leverage the local

PHOENIX L300

solutions business. Our key customers like the Department of Space are
located in Bangalore and this facility
would enable us to better serve their
needs. Through our staff of trained engineers we offer complete solutions to
customers rather than merely selling
products, says Muniram Sreenivasulu,
General Manager Sales and Service of
Oerlikon Leybold Vacuum India, who
has been grooming the 10-fold growth
of this subsidiary for the last ten years.
We continue to invest proactively in
emerging markets, says Dr. Martin
Fuellenbach, CEO Oerlikon Leybold
Vacuum, We have further strengthened local leadership by appointing
industry veteran Mr. Parnandi Ravindranath as the new Managing Director.
This will leverage again the excellent
technological expertise of M. Sreenivasulu and strengthen
our decade long partnership with Indian
customers by offering them new products and solutions.

Traditional Dance

critical to Leybold Vacuums growth

ambitions and availability of skilled
manpower at a competitive cost is a
substantial factor gaining importance.
India is likely to emerge as a substantial manufacturing hub for many of
the regional customers and Oerlikon
Leybold Vacuums solutions and local system building capacity will contribute to serve the customers better
with superior technology and service.
Success stories in the fields of steel
degassing or aerospace are manifold
showing Oerlikon Leybold Vacuums
commitment to India. Local sales also
benefits from the decades of experience of the application experts from
the global headquarters in Cologne,
Germany, who are intensively involved
in further trainings and constantly offer technological consulting expertise.

Resonating
Make in India
TURBOVAC 350 i

TURBOVAC 450 i

STEEL & METALLURGY

The India region is

58

JANUARY 2015

Awaiting the Customers

Product Profile

the Lookout for Challenging Plain

2015 Manus: OnBearing
Applications

nternational
competition
for
plastic plain bearing applications is in its seventh year application entry phase is now open
A for automatic telescope, B for boring device, C for cross trainer ... right
through the whole alphabet, over 400
submissions competed for the 2013 manus award. Motion prevails in all these
machines and equipment - and that is
precisely where the lubrication-free
plain bearings are used. The application
entry phase for the 2015 manus continues until 20 February 2015, the competition where special applications with
plastic plain bearings are recognised
and rewarded. The awards carry prize
money worth up to Euro 5,000 and will
be presented at the 2015 Hanover Show.
They perform their service millions of
times in the truest sense of the word
silent. But since they are so inconspicuous, they attract little attention
to themselves. To counteract this,
the manus award was introduced for
the first time in 2003, and in the last
competition, 437 participants from 33
countries competed. Over the years
the manus awards threw up a lot applications showcasing the benefits of
self lubricating oil free bearing solutions. The dry-tech range of bearings
offer a host of benefits and are ROHS
compliant. Now, after twelve years, it
will be the seventh time that applications using plastic plain lubrication free
bearings will be examined, applications

2013 Local (India) Manus awards winners

are characterised by technical and economic efficiency and the creativity of

the developer. With this competition
we want to support innovation and
award bold applications, regardless of
the industry, says Gerhard Baus, authorised officer for plain bearings at
igus GmbH. Among the winners of the
2013 manus award were the developers of a pneumatic rotary piston engine
or a friction clutch, as well as the designers of a cross-country skiing exercise machine. An array of inventions
from a sausage toaster to a foldable
car were presented at the competition.
Apart from the global manus, there
will also be a local manus awards for
the best plastic bearing application
within the country. Entries for the

STEEL & METALLURGY

59

JANUARY 2015

global awards will be automatic entries for the local (India) manus awards.
Mr. Deepak Paul, National Sales
Manager dry-tech Bearings igus India says the response for the 2013
manus awards was humbling and
overwhelming, and we expect many
creative and path breaking solutions from India for this edition as
well using plastic bearing solutions
Gold Indian manus winner (INR
100,000/-) Late Mr. Harshwardhan Gupta from Neubauplan Automation for file
cutting machine with Drylin and many
other parts. Silver Indian manus winner
(INR 75,000/-) Mr. Munir Pansare from
Tata Motors was awarded for his application of noise reduction in steering

Product Profile
column using iglidur
JVSM. And finally
the Bronze Indian
manus winner (INR
50,000/-) Ms. Manjari Govankop from
Mahindra & Mahindra had a tractor
application where
igubal WGRM ball
and socket speThe manus award goes into the seventh round - the application cial part with seal
entry phase runs until 20 February 2015. (Source: igus GmbH)
and real VALVE
was incorporated.

for Composite Materials), the Industrieanzeiger (industry indicator) and

the Fachhochschule Kln (University
of Applied Sciences Cologne) invites all
developers and designers from around
the world to participate. After the application phase an independent jury
will select the winners. Whether for
applications for the industry or individual pieces, the only requirement
is that at least one built prototype of
the proposed application must exist.

Participants can apply online with a

short text, images
and videos of their
application.
This
joint initiative of
igus GmbH, Institut
In the last manus award in 2013, the golden manus went to a
manufacturer of cross-country skiing exercisers from Denmark. fr Verbundwerkstoffe
(Institute
(Source: igus GmbH)

The prize-giving ceremony of the

manus award will be held at the Hanover Show on the booth of igus
GmbH. The winners of the contest
will be rewarded with a prize of up to
Euro 5,000. Visit www.manus-award.
com and get all information, applications competing in the past years
and a link to our online registration.

a
a
a

Award Ceremony at the

Hanover Show

News Desk

Primetals Technologies Commences Operations

A

s announced in May 2014, Mitsubishi Heavy Industries (MHI)

and Siemens have established a new
joint-venture company named Primetals Technologies, Limited for the metals industry. With this joint venture
both partners are forming a globallyoperating complete provider of plants,
products and services for the iron, steel
and nonferrous industries. MitsubishiHitachi Metals Machinery (MHMM)
an MHI consolidated group company with equity participation by Hitachi, Ltd. and IHI Corporation - holds
a 51 per cent stake and Siemens a 49
per cent stake in the joint venture.
Our joint venture comes at a time of
challenging business environments and
high market price pressure and when
the steel industry has experienced a
strong regional shift to Asia. With the
combination of the competencies and
regional presence of both partners, we
have formed a high-performance company for the metals industry. Primetals
Technologies is a leading, innovative
and globally active technology provider and a reliable partner for its customers, backed by two strong mother
companies, said Yasukuni Yamasaki,
Chief Executive Officer and Chairman
of the Board of Primetals Technologies.
The joint venture will focus fully on
the iron, steel and nonferrous business
sectors. The two partners are uniting
their respective technological legacies
and industrial strengths in the joint
venture. Both companies complement
each other with regard to their product portfolios, production know-how
and geographical distribution. While

the technology strengths of the former

Siemens VAI Metals Technologies lie in
particular in iron and steel production,
continuous casting, automation, environmental technologies and lifecycle
services, MHIs technology competence is primarily focused on hot and
cold rolling, processing as well as production expertise. With the combined
portfolio, Primetals Technologies offers
its customers solutions for the entire
value chain in iron, steel, and nonferrous production that extends from
technologies for the treatment of raw
materials to processing and finishing
at the end of the production process,
including the related lifecycle services.
The shareholders have nominated five
directors to manage the new company:
three directors from MHI including the
CEO and two directors from Siemens.
The names and functions are as follows:
Yasukuni Yamasaki, Chief Executive Officer (CEO) and Chairman of the
Board
Peter Schraut, Chief Financial Officer
(CFO)
Heiner Roehrl, Chief Operating Officer (COO) upstream
Ryoichi Nishi, Chief Operating Officer
(COO) downstream
Etsuro Hirai, Chief Technology Officer
(CTO)
Primetals Technologies will operate
with 9,000 employees at more than 40
locations based in Asia, Europe, Rus-

STEEL & METALLURGY

61

JANUARY 2015

sia, the Americas and Africa to serve

customers in the global metals market.
The companys structures will be lean
and tailored to market requirements
and the international competitive environment. The company headquarters
will be located in London to underline
the intention of the two companies
to strike out on a new path together.
The headquarters of the business segments and operational responsibility
for the respective global business activities will remain in the principal locations of Linz (Austria), Erlangen (Germany), Tokyo and Hiroshima (Japan).
China, India, Japan, the U.S.A., Germany and Austria have been defined
as key regions for sales and services.
The company name and logo emphasizes that the new company is passionate about metals. Primetals Technologies is a combination of the English
words prime, metals and technologies.
Prime stands for the highest quality, metals stands for the passion of
the new company and technologies
shows the strength that results from
the partnership of two strong players
in the metals market. The name underlines the position of Primetals Technologies as the preeminent global authority for metals excellence. The logo circle
symbolizes the forging of two great
companies into a single, unified entity.
The orange color signifies the temperature at which liquid steel becomes solid
steel the point where the outstanding
technological strengths of Siemens VAI
Metals Technologies in the liquid phase
meet the rolling and processing excellence of MHMM in the solid phase.

News Desk

RINL Achieves 36% Growth in Exports

R

ashtriya Ispat Nigam Limited has

registered a 36 per cent growth in
steel exports during April-December
2014 as compared to the corresponding period of 2013. RINLs steel exports
have increased at a time when total
steel exports from India in the same
period have dropped by 5.3 per cent.
According to RINL officials, the steel
plant registered Rs 518 crore worth of
exports during April-December in the
2013-14 fiscal, whereas it increased
to Rs 732 crore in corresponding period of the 2014-15 fiscal. RINLs overall export turnover during 2013-14
was Rs 747 crore, with sources indicating that the Visakhapatnam Steel
Plant (VSP) is now targeting well over
Rs 1,000 crore in the current fiscal.
RINL said it has opened up markets
for its products in East African markets like Kenya, Ethiopia, Mozam-

bique, South Africa, Tanzania, and

Uganda, among other countries.

cus on South Asia, South East Asia,

Middle East and African countries

In order to increase its footprint in

the global market, RINL has already
opened an international marketing office in Colombo for marketing
its products in the Sri Lankan market and also to export them to nearby countries from there once it sets
up rolling facilities in that country.

Meanwhile, RINL in a release stated that

it has been awarded the star performer
award amongst large industries for its
export performance by the Engineering Export Promotion Council (EEPC)
under the Union ministry of commerce.

RINL sources said rolling facilities in

Sri Lanka will be operational from
next month onwards following which
raw materials such as blooms will be
transported to the island country and
the finished material will be shipped
from Sri Lanka to global markets.
With export products hitting the
market, RINL said it has started leveraging its shore-based location to increase exports with fo-

RINL chairman-cum-managing director P Madhusudan congratulated director (commercial) T K Chand and his
export department team for achieving
a strong growth in exports and the recognition received from EEPC. He urged
the marketing collective to bring more
laurels by increasing sales and strengthening RINLs market presence overseas.
Along with the products of RINL, Brand
Vizag also gets recognition in the international market, enhancing the image of Visakhapatnam as an ideal business destination, the release stated.

S AIL Plans to Invest Rs. 150,000 Crore by 2030-31

S

teel Authority of India Limited

(SAIL) has charted investment
of Rs. 150,000 crore till 2030-31 to
ramp up steel production from 23
million tonnes to 50 million tonnes.
SAIL chairman Mr. C. S. Verma said
that We have prepared an investment plan of INR 1,50,000 crore till
fiscal 2030-31 to increase the steel
production capacity to 50 million

tonnes from 23-24 million tonnes now.

Mr Verma said that the proposal would be presented before
the board shortly for approval.
He indicated that the investment line
up would encompass both brownfield
and greenfield expansion and about
INR 40,000 crore will be invested in
West Bengal in new capacities and
allied activities, including mining.

STEEL & METALLURGY

62

JANUARY 2015

Statistics

World Steel Association

World Crude Steel Production - Summary

January 2015
million tonnes (Mt)

2014

2013

%2014/2013

Europe

312.9

313.2

-0.1

169.2

166.3

1.7

CIS

105.3

108.3

-2.8

North America

121.2

118.9

2.0

of which:
EU (27)

of which:
United States

88.3

86.9

1.7

South America

45.2

45.8

-1.4

Africa

15.9

16.1

-0.7

Middle East

28.5

26.5

7.7

1 116.1

1.4

Asia

1 132.3

of which:
China*

822.7

815.4

0.9

Japan

110.7

110.6

0.1

5.6

-1.8

1 642.2

1.2

Australia/New Zealand

World

5.5

1 661.5

* - preliminary figures for 2013 and 2014 issued by China Iron and Steel Association in January 2015.
** - the world and regional production figures in this table includes estimates of other countries that only report annually.

STEEL & METALLURGY

64

JANUARY 2015

Statistics

World Steel Association

The Largest Steel Producing Countries

million tonnes (Mt)

January 2015

Rank

2014

2013

China*

822.7

815.4

%2014/2013
0.9

Japan

110.7

110.6

0.1

United States

India
South Korea
Russia
Germany
Turkey

88.3
83.2
71.0
70.7
42.9
34.0

86.9
81.3
66.1
68.9
42.6
34.7

1.7
2.3
7.5
2.6
0.7
-1.8

Brazil
Ukraine
Italy
Taiwan, China
Mexico (e)

33.9
27.2
23.7
23.3
19.0

34.2
32.8
24.1
22.3
18.2

-0.7
-17.1
-1.4
4.3
4.2

Iran
France

16.3
16.1

15.4
15.7

5.9
2.9

Spain
Canada (e)

14.2
12.6

14.3
12.3

-0.6
2.0

United Kingdom
Poland

12.1
8.6

11.9
8.0

1.8
8.4

Austria
Belgium (a)

7.9
7.3

8.0
7.1

-1.2
3.6

South Africa (e)

Netherlands (a)
Egypt
Saudi Arabia
Viet Nam
Argentina

7.2
7.0
6.5
6.3
5.7
5.5

7.3
6.7
6.8
5.5
5.5
5.2

-0.6
3.7
-4.0
15.0
4.1
5.8

Czech Republic
Malaysia (e)

5.4
5.0

5.2
4.7

3.7
6.5

Slovakia
Australia

4.7
4.6

4.5
4.7

4.3
-1.7

Sweden

4.5

4.4

3.3

Finland
Kazakhstan
Thailand (e)

3.8
3.7
3.5

3.5
3.3
3.6

8.3
12.3
-2.2

Romania (a)

3.2

3.0

6.4

Qatar (a)

3.0

2.2

36.3

Indonesia (e)
Byelorussia

2.8
2.5

2.6
2.2

5.9
12.0
-17.0

United Arab Emirates

2.4

2.9

Others

28.5

27.9

World

1 661.5

1 642.0

a - estimate based on 11 months

e - annual figure estimated using partial data or non-worldsteel resources
* - preliminary figures for 2013 and 2014 issued by China Iron and Steel Association in January 2015
* * - the world production figure in this table includes estimates of other countries that only report annually

STEEL & METALLURGY

65

JANUARY 2015

2.2

1.2

Statistics

World Steel Association

Monthly crude steel production in the 65 countries included in the report, in thousands of tonnes.

Dec.

Dec.

2014

2013

December 2014

% change

12 months

Dec.-14/13

2014

2013

% change

Austria

607

673

-9.7

7 859

7 953

Belgium

585 e

507

15.3

7 345

7 093

3.6

Bulgaria

55 e

43

621

523

18.8

Croatia

0 e

19

26.7

-1.2

-100.0

159

135

18.0

Czech Republic

461

406

13.7

5 360

5 171

3.7

Finland

310

311

-0.4

3 807

3 517

8.3

France

1 113

1 188

-6.3

16 143

15 685

2.9

Germany

3 259

3 459

-5.8

42 946

42 645

0.7

Greece

60 e

75

998

1 030

-3.1

-20.0

Hungary

100

64

56.3

1 152

883

30.5

Italy

1 480

1 780

-16.9

23 735

24 080

-1.4

165 e

155

2 226

2 090

6.5

Luxembourg

6.8

Netherlands

603

617

-2.2

6 964

6 713

3.7

Poland

730 e

634

15.2

8 620

7 950

8.4

Slovakia

424

395

7.5

4 705

4 511

4.3

Slovenia

30

44

-32.6

615

618

-0.5

Spain

902

938

14 163

14 252

-0.6

Sweden

-3.8

380

352

United Kingdom

742

1 126

Other E.U. (28) (e)

450 e

425

12 457

13 210

75

68

9.6

Macedonia

Norway

50 e

Serbia

70

European Union (28)

Bosnia-Herzegovina

Turkey

8.0

4 549

4 404

3.3

12 065

11 858

1.8

5 209

5 201

0.2

169 243

166 311

1.8

793

722

9.7

..

188

100

88.6

49

1.5

595

605

-1.6

..

583

396

47.4

-34.1
6.0

-5.7

2 715

2 899

-6.3

2 910

3 016

-3.5

Byelorussia

225

159

Kazakhstan

274

278

Moldova

21

Russia

5 949

5 798

Ukraine

1 903

2 662

Other Europe

Uzbekistan
C.I.S. (6)

42

50

54

8 422

8 993

STEEL & METALLURGY

66

34 654

-1.8

36 194

36 477

-0.8

2 514

2 245

12.0

3 678

3 275

12.3

344

190

81.3

2.6

70 651

68 856

2.6

-28.5

27 170

32 771

-17.1

731

746

-2.1

105 089

108 083

-2.8

41.8

-1.5
-49.7

-7.3
-6.3

JANUARY 2015

34 035

Statistics
Monthly crude steel production in the 65 countries included in the report, in thousands of tonnes.
November 2014

Dec.

Dec.

% change

2014

2013

Dec.-14/13

2014

2013

% change

2.1

12 595

12 349

2.0

11 months

Canada

970 e

950

Cuba

35 e

35

0.9

331

322

2.8

El Salvador

12 e

13

-4.3

121

118

1.8

Guatemala

40 e

41

-1.8

393

385

2.1

Mexico

1 500 e

1 542

-2.7

18 977

18 208

4.2

-36.2

483

616

-21.5

Trinidad and Tobago

37

57

United States

7 383

7 120

3.7

88 347

86 878

1.7

North America

9 977

9 758

2.2

121 247

118 876

2.0

Argentina

446

434

2.9

5 488

5 186

5.8

Brazil

2 628

2 655

-1.0

33 912

34 163

-0.7

Chile

95 e

98

1 119

1 323

-15.4

Colombia

115 e

1 269

1 236

2.7

Ecuador

50 e

48

4.1

662

570

16.1

Paraguay

5 e

-1.5

45

2.5

Peru

110 e

95

15.8

Uruguay

10 e

10

-4.1
48.7

Venezuela

52

-3.2
120.7

130 e

87

3 589

3 485

Algeria

35 e

35

Egypt

658

562

Libya

85 e

67

26.1

Morocco

11

27

-59.9
0.3

South America

South Africa

3.0
0.0
17.0

610 e

608

Africa

1 399

1 299

Iran

1 362

1 350

Qatar

270 e

162

66.7

Saudi Arabia

547

509

7.5

United Arab Emirates

93

1 069

7.0

91

2.2
-31.5

1 466

2 139

45 201

45 822

-1.4

415

417

-0.4

6 485

6 754

-4.0

968

712

35.8

501

558

-10.2

7 210

7 253

-0.6

7.6

15 579

15 694

-0.7

0.9

16 331

15 422

5.9

3 047

2 236

36.3

6 291

5 471

15.0

2 390

2 878

-17.0

2 262

5.8

28 059

26 007

7.9

China

68 090

67 083

1.5

822 700

815 361

0.9

India

7 071

6 922

2.2

83 208

81 299

2.3

Japan

8 999

9 339

-3.7

110 665

110 595

0.1

South Korea

5 766

5 861

-1.6

71 036

66 061

7.5

Taiwan, China

2 170 e

1 841

17.9

23 250

22 282

4.3

Asia

92 095

91 046

1.2

1 110 860

1 095 598

1.4

Australia

391

368

4 607

4 688

-1.7

80

79

881

900

-2.2

470

448

5 488

5 588

-1.8

133 712

133 516

1 636 960

1 618 456

1.1

New Zealand
Oceania
Total 65 countries*

240

1 144

2 393

Middle East

214

47

-11.0

6.1
0.2
5.0
0.1

* - the 65 countries included in this table accounted for approximately 98% of total world crude steel production in 2013 e - estimated

STEEL & METALLURGY

67

JANUARY 2015