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Essar Steel Completes Acquisition of Color Coating Facility
11/16/2009 - Essar Steel has completed the acquisition of steel assets of Shree Precoated Steels Ltd. The facility—claimed to be the only plant in India that uses near-infrared technology for color coating—has since become part of Essar Steel.
Essar Steel has completed the acquisition of steel assets of Shree Precoated Steels Ltd. The facility—claimed to be the only plant in India that uses NIR (near infrared) technology for color coating, which extends product life—has since become part of Essar Steel.
Exports account for 80% of the plant’s production. Essar Steel says that the domestic market for color-coated products is growing at more than 30% due to increasing urbanization. The company will utilize its network of Service Centres and Hypermarts as a distribution channel to market the products.
Acquired assets include the plant comprising the color coating line (annual capacity 400,000 tonnes), cold rolling mill (annual capacity of 600,000 tonnes), galvanizing line (annual capacity of 500,000 tonnes), and pickling line (annual capacity 650,000 tonnes). The plant is located at Sanaswadi near Pune, Maharashtra.
The total value of the fixed and current assets acquired is about Rs. 1200 crores, funded through a mix of debt and equity.
With the completion of this acquisition, Essar Steel says it will have the largest cold rolling capacity (2 million tonnes), the largest color coating facilities (0.4 million tonnes), galvanizing capacity of 1.0 million tonnes, and pickling capacity of 2.2 million tonnes in the country.
“Going forward, it is important for the steel companies to widen the product base,” said Malay Mukherjee, CEO, Essar Steel. “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.”
Exports account for 80% of the plant’s production. Essar Steel says that the domestic market for color-coated products is growing at more than 30% due to increasing urbanization. The company will utilize its network of Service Centres and Hypermarts as a distribution channel to market the products.
Acquired assets include the plant comprising the color coating line (annual capacity 400,000 tonnes), cold rolling mill (annual capacity of 600,000 tonnes), galvanizing line (annual capacity of 500,000 tonnes), and pickling line (annual capacity 650,000 tonnes). The plant is located at Sanaswadi near Pune, Maharashtra.
The total value of the fixed and current assets acquired is about Rs. 1200 crores, funded through a mix of debt and equity.
With the completion of this acquisition, Essar Steel says it will have the largest cold rolling capacity (2 million tonnes), the largest color coating facilities (0.4 million tonnes), galvanizing capacity of 1.0 million tonnes, and pickling capacity of 2.2 million tonnes in the country.
“Going forward, it is important for the steel companies to widen the product base,” said Malay Mukherjee, CEO, Essar Steel. “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.”
Essar Steel is a fully integrated flat carbon steel manufacturer—from iron ore to ready-to-market products. The company has an expanding global steel production capacity of 14 million tonnes per annum. Its products find wide acceptance in consumer sectors such as automotive, white goods, construction, engineering and shipbuilding. It has India’s most extensive and the largest Service Centre capability with an annual capacity of 2.5 million tonnes per annum, and the largest network distribution channel with more than 230 branded Essar Hypermarts.
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