Dilip Oommen, MD & Chief Executive Officer, Essar Steel India

“We are investing Rs 42bn to set up an integrated facility as part of ongoing investments in the state of Odisha.”

May 15, 2012 05:05 IST India Infoline News Service

Dilip Oommen, MD & Chief Executive Officer, Essar Steel India joined the company in 2003 as Chief Operating Officer (COO). He is an metallurgical engineer from the Indian Institute of Technology, Kharagpur, Mr. Oommen has a rich experience of over 29 years in the steel industry.Prior to joining Essar he was the Head of Operations at Hadeed (SABIC). Some of his outstanding achievements in that organization included the commissioning of the flat product plant in record time and operating at 150% capacity in just 24 months.He had a brief stint at Essar Steel at Hazira as Vice President SMP before he took up the assignment at Hadeed. He is also a Director on the Board of Essar Steel Ltd and other group companies.

 

Essar Steel, a 14 MMTPA global producer of steel, is a fully integrated flat carbon steel manufacturer—with presence in Canada, USA, India and Indonesia. It is the most versatile flat steel producer with integrated facilities. It makes pipes and extra wide plates, as well as hot rolled, cold rolled, galvanized and colour coated steel. It has an integrated distribution business with Service Centres and Steel Hypermarts. It operates seven Service Centres in India and Indonesia with an aggregate capacity of over 4 million tonnes. Essar has the largest retail distribution network. Its products find wide acceptance in highly discerning consumer sectors such as automotive, white goods, construction, engineering and shipbuilding.

 

Replying to Yash Ved of IIFL, Dilip Oommen says “We are investing Rs 42bn to set up an integrated facility as part of ongoing investments in the state of Odisha.”

 

Brief us about the commissioning of Phase-I of India’s largest pallet plant?

The company has commissioned a 6 MMTPA pellet making facility in Odisha. This is the first phase of the 12 MMTPA pellet plant to be commissioned by 2013.

 

We are investing Rs 42bn to set up an integrated facility as part of ongoing investments in the state of Odisha. The integrated facility includes a 12 MMTPA iron ore beneficiation plant at Dabuna and a 253 km slurry pipe line connecting Dabuna and Paradip.

 

It will reduce the operating costs per tonne and improve the cost competitiveness. The slurry pipeline apart from being a cost reduction initiative is also the most environment friendly way of transporting raw material for the pellet plant.

 

The pellet plant in Paradip along with Vizag’s capacity of 8 MMTPA will fully secure the iron ore requirements for Essar Steel in India.

 

Once the 12 MMTPA Paradip facility is completed, along with pellet capacity of 8 MMTPA at Vizag, Essar Steel will have a total pellet making capacity of 20 MMTPA making it the largest pellet producer in the country.

 

Are you planning to set up iron ore beneficiation plant at Dabuna?

Essar Steel is setting up a iron ore beneficiation plant at Dabuna  to upgrade the quality of low grade iron ore fines from 54% fe content to over 63% fe content. The iron ore fines will then be supplied through 253 km slurry pipe line from Dabuna to Paradip.

 

What is the outlook of the steel industry?

The steel industry is definitely going to grow and the demand will exceed supply over the next 3 to 5 years.

 

What will be the focus area going forward?

The focus of the group over the next two to three years would be to consolidate business and to ramp up production capacities.

 

Brief us about your international plans?

We are looking to expand our market presence in NAFTA region, Middle East, Africa and Dubai.

 

What is your current debt?

Our current debt stood at Rs200bn out of total investment of Rs 375bn. The capital cost per ton is very competitive at US$750 per ton as against US$1000 per ton for similar plant.

 

Do you expect to increase steel prices?

Steel prices are market driven and are determined by demand and supply situation.

 

What kind of increase in revenues do you expect?

At full capacity the company expects to have revenues of Rs400bn by FY14.

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