Essar Steel opens new service centre

Shashi Ruia, chairman, Essar Group, said, “This investment is part of our strategy to be closer to our customers and would help us achieve several goals simultaneously. Service centres are an independent business in western countries. We are developing this concept in India.”

Vikram Amin, executive director (sales & marketing), Essar Steel, said: “This is one of the most modern steel processing facilities that will cater to various user segments like automobile and auto components, white goods and SME segments in South India.” According to Ravi Singh, vice-president (service centre and business development), Essar Group, “The Chennai centre will cater to automotive clients including Ashok Leyland, Hyundai, TVS and Wheels India. We already have a 10,000-tonne order worth Rs 30 crore.”

The facility has a CR slitting line, CR narrow cut to length line, CR wide cut to length line and HR cut to length line. It will enable the company to cater to even single-sheet customers, provide small lots and customised deliveries for ready-to-use steel.

Amin said, “Chennai is a large growing market and one of the largest auto hubs. It is also a growing market for electrical steel. Thanks to its excellent connectivity by road, rail and sea, Chennai is an ideal destination. The centre will provide value-added service on basic hot-rolled and cold-rolled steel products to customers, who will save around five percent on logistics and the inventory costs might also come down. The service centre has the capability to slit coils to narrow widths, cut them to the desired blank size, process cold-rolled and hot-rolled products, and provide steel in sheet sizes that are smaller than a regular full-size paper. We have many automotive clients in and around Chennai and by setting up this facility we would be delivering our products to their doorstep. This facility would offer customised products, mainly to leading vehicle manufacturers such as Ashok Leyland, TVS and Hyundai Motor, which are among our clientele.”

One-stop steel shop

Today’s steel buyers are looking for a one-stop-shop which will provide them with just-in-time supply of consistent and good quality processed steel as well as reduce procurement and coordination costs. This will also help the customers to meet their emergency requirements, eliminating the need to maintain high levels of inventory. Above all, customers need an efficient and transparent steel supply chain.

Recognising this opportunity, the company has augmented its steel service centre capacity to handle over two million tonnes from the current 1.2 million tonnes at Hazira by setting up three state-of-the-art service centres located in the key auto clusters of Chennai, Pune and the NCR region. Each of these service centres, which are equipped with world-class equipment and facilities, will carry more than 20,000 MT of steel inventory at any point in time to cater to regular, urgent and complex customer needs. These centres have a fully integrated and efficient supply chain which is linked with upstream steel-making facilities and further backed by ERP such as SAP and i2. Also, customer-focused MIS will help in material traceability and optimise the overall supply chain.

Key facilities include plate cutting capacity of over one million tonnes, HR/HRPO skin-passed capacity of 1.2 million tonnes, CR processing equipment with stringent tolerances, table top flatness and capability to handle ‘new-age steel’ and wide range of process capabilities for materials including CR, HR, colour-coated, stainless steel, galvannealed and galvanised with zero-spangle feature.

Amin said, “It will improve our customer centricity, reliability of delivery and thus support us in becoming the steel maker of choice for large and small customers. It is a step towards improving the competitiveness of Indian steel users through just in time deliveries.”

Auto vertical

The auto vertical, set up in 2006, performs a varied number of functions including analysing customer requirements, performance monitoring of the trial material at regular intervals, and providing feedback to the plant for improving new products. Other aspects include coordinating the supplier, laboratory, technical service and manufacturing activities to ensure timely response to customer needs. The division also provides weekly, monthly, quarterly and annual reports to ensure accurate information is available for strategic planning and decision-making. It also participates in cross-functional teams with plant representatives to promote continuous improvement activities and development of new grades of steel.

The company manufactures steel grades for wheel application conforming to international specifications. This class of steel is intended for applications involving rims and discs of wheels for passenger cars and commercial vehicles. High strength, high fatigue life, good weldability and cleanliness are the major requirements for this class of steel. Through careful control of Mn to Si ratio and inclusion control, the desired cleanliness is achieved. Typical buyers in South India include Wheels India and Ashok Leyland.

Application engineering

This arm is the key driver for the company’s thrust into automotive steels. The Application Engineering Team (AET)aims to provide synergy between the plant and marketing, quality control, R&D, product development and process control. The AET's key function includes the enhancement of operational excellence by providing technical support to operations based on performance feedback from customers. It is also involved in new product development and product failure analysis as well as offering solutions for sustained value creation with customers. It supports sales staff by providing technical solutions to the customer product team and supports activities such as metallurgical analysis and testing of competitor samples.

The AET also assists customers by facilitating the smooth tuning of their assembly lines which use Essar steel. Finally, the team also provides cost breakdown by value addition and value engineering activities at the customer end.