2013 Gujarat Special: INTERVIEW Dr M Venkatraman

As a supplier of automotive grade steel, Essar Steel is just seven years old. What plans do you have in taking the business forward?
Our initial focus was to meet the 100 percent substitution of imported steel with our products. We demonstrated our technical capabilities at Essar in substituting imported steels. We also gave innovative products to customers. In our next phase, we not only want to exceed customer expectations. Essar Steel has plans to develop products which automakers abroad would not have thought of. Towards that end, we have embarked on a phase – new to India – where various special advanced steels like supercoat, hot forming or nano grades will be made.

Can the company meet all the steel requirements of an OEM today?
If one considers local automakers who design here as well as Japanese and Korean automakers, very few automakers, Volkswagen, for example, use entirely coated steel. Some carmakers use small amounts of high-strength steel. For about 95 percent of the automakers, the maximum strength limit used in hot rolled steel is 700 MPa (mega pascal). The maximum strength used in cold-rolled steel is 450 MPa. This constitutes the majority of steel or more than 95 percent of the steel used by all OEMs. The import is less than two percent of it. We are capable of making and are supplying these grades of steel. There is no steel left in the car where a piece of Essar Steel cannot reach.

How is hot formed steel better than CAL?
The continuous annealing line (CAL) is a steel grade that through the process acquires strength. With normal conventional facilities, you cannot exceed 450-500 MPa. With CAL, you can go up to 980,000 MPa. This high-strength steel is difficult to form into intricate shapes for components. There’s a likelihood of cracking and in addition, handling becomes costlier. The manufacturing of high-strength steel making is costlier because it involves the addition of expensive alloying elements. In addition, the capital costs for making high-strength steel is over Rs 2,000 crore. As regards hot-forming, it will give you the same advantage in the finished component like the CAL steel. The sub-state is normal steel. It is rolled in a conventional way. So, without adding any expensive alloying elements, we can give you steel that is amenable for you to form and you can do forming in hot condition and achieve the strength by subsequent cooling and heat treatment operations. So the customer gets the benefits of lower costs by buying this material and sophisticated precision control and complex shapes.

What is the consumption of steel in the Indian automotive industry?
I would estimate that around 60-70 percent is normal mild steel. Around 25 percent is high-strength steels and 5 percent is advanced high-strength steel (used for manufacturing cars for exports). We make both mild and high-strength steels. We do not make advanced high strength steel. Going forward, this 60-70 percent will come down to 50 percent and high-strength steels will go up to 20-25 percent. After 10-15 years, advanced high-strength steels will become popular. I would say slowly mild steel will be almost eliminated and be used, perhaps, only for panels. Doors and panels are only 0.6 or 0.5mm. You cannot go less than that as is the case with white goods. There will be handling issues. There won’t be any possibility of high-strength steels there. That will remain. That will contribute to 30-40 percent. The rest will be high strength and advanced high strength steel.

Does Essar Steel have any plan to produce advanced high-strength steels?
We plan to establish a continuous annealing line and galvanised line. We are also thinking of other possibilities to augment existing lines and to go in for high-strength steels. If we have to stay in auto, we have to go into this area.

How do you meet the requirements of customers who are very aggressive in reducing weight of products?
I don’t consider it as a challenge. This has been already there. Steel can only be substituted but never be replaced. Some components can be replaced. The fuel tank is one example. If we consider the environment, plastic may not be a right choice. If there’s mass usage of plastic by automakers, handling plastic waste may well become a major problem. Also, components are mainly based on technical grounds like fire emission for something like plastic fuel tanks. It is better that the steel tank breaks and the fuel comes out. The plastic fuel tank will bulge and will burst once the pressure inside reaches bursting point. You need a material which breaks when it needs to break. In many cases, existing lines which are meant for steel, plastics can never be used. The welding, stamping procedures, the current, all are set (for steel products). It is a massive expenditure to change all this. Therefore, I don’t see any threat to steel at all.

What is Essar Steel doing for weight reduction of its automotive grade steel?
Weight saving should also be done in areas other than body and steel. We need ideas in terms of engine designs. We are reaching saturation point in the use of steel. Automakers can concentrate on smaller engines with higher power. That will result in major weight saving. Steels will have a limit, beyond which it will not go. Engines can follow the size reduction path of a computer. If I were an engineer, I would like to give a thesis on reducing engine size by 40 percent. I can have a small battery size engine and solid propellant. Why do you need an engine propellant? The rocket is going on solid propellant. I can use non-coking coal. It needs radical thinking. Saving weight through new designs is an important aspect.