Essar becomes largest cold steel roller with completion of Shree Precoated Steel acquisition
12 November 2009
Mumbai: With the completion of the acquisition of Shree Precoated Steel, Essar Steel has announced having emerged as the country's largest maker of cold roll steel, which typically commands a premium of above 30 per cent over hot rolled coils.
In August this year, Essar Steel had announced its agreement with Mumbai-based real estate developer, Ajmera Group, to acquire.
Essar Steel has completed the acquisition of steel assets of Shree Precoated Steels Limited, enhancing its presence in the value-added steel market.
This Shree Precoated Steel facility at Ranjangaon near Pune has since become part of Essar Steel.
This acquisition will make Essar Steel the most versatile flat steel producer with integrated facilities from heavy plates, hot rolling, cold rolling, galvanizing and colour coating, with a full distribution business with Service Centre and Steel Hypermarts. This is only plant in India that uses NIR (near infra red) technology for colour coating which extends the life of the product.
"The colour coated products from this plant are well accepted both in the domestic and export market with exports accounting for 80 per cent of its production. Essar Steel said in statement.
It added, "The domestic market for colour coated products is growing at over 30 perc cent due to increasing urbanisation. Essar Steel will utilise its network of Service Centres and Hypermarts as a distribution channel to market the products from this plant."
Malay Mukherjee, CEO, Essar Steel said, ''Going forward, it is important for the steel companies to widen the product base. This acquisition is aimed at achieving that objective. We will be able to capitalize on the synergies offered by this plant through technical expertise of Essar Steel.''
The assets that have been acquired include the plant comprising colour coating line (annual capacity 4,00,000 tonnes), cold rolling mill (annual capacity of 6,00,000 tonnes), galvanizing line (annual capacity of 500,000 tonnes) and pickling line (annual capacity 650,000 tonnes). The plant is strategically located at Sanaswadi near Pune, Maharashtra, which is one of the largest steel consuming centre.
The total value of the fixed and current assets acquired is approx. Rs1,200 crore, funded through a mix of debt and equity.
With the completion of this acquisition, Essar Steel will have the largest cold rolling capacity (2 million tonnes), the largest colour coating facilities (0.4 million tonnes), galvanising capacity of 1.0 million tonnes and pickling capacity of 2.2 million tonnes in the country.