|Traded as||BSE: 500295
|Headquarters||Goa, Karnataka, Odisha - India|
|Key people||P K Mukherjee, Managing Director|
|Revenue||62.84 billion (2010)|
|Net income||26.29 billion (2010)|
|Employees||Approx. 4,100 (2010)|
Sesa Goa Limited (BSE: 500295) is multinational iron-ore producer and exporter with operations in the states of Goa and Karnataka in India and in Liberia, West Africa. It is India's largest producer and exporter of iron ore in the private sector, with production of above 21 million tonnes of iron ore in fiscal year 2010.
For more than five decades, it has been engaged in exploration, mining and processing of iron ore. The company was founded in 1954, as Scambi Economici SA Goa. Since then, it has grown to be one among the top low-cost producers of iron ore in the world. During 1991-1995, it diversified into the manufacture of pig iron and metallurgical coke. It has also developed indigenous and environment-friendly technology for producing high quality metallurgical coke.
In 2007, it became a majority-owned subsidiary of Vedanta Resources Plc, listed on the London Stock Exchange, when Vedanta acquired 51% controlling stake from Mitsui & Co., Ltd. In June 2009, Sesa Goa Limited acquired VS Dempo & Co. Private Limited (now Sesa Resources Limited) along with its fully owned subsidiary Dempo Mining Corporation (now Sesa Mining Corporation Limited) and 50% equity in Goa Maritime Private Limited. In 2011, Sesa acquired 51% stake in Western Cluster Limited, Liberia.
Sesa Goa Limited’s operations are located predominantly in Goa and Karnataka, with offices in various locations across India. Its head office in India in Panaji, Goa, while its Liberia office is in Monrovia and China office is in Shanghai.
History & Milestones
Scambi Economici Societa Anonyma (SESA), owned by Baron Ludovic Toeplitz, with the financial backing of Alessandro Vassalo, obtained the Orasso Dongor mining lease in Sirsaim, Goa in 1954 and Sesa Goa Limitada was formed. It was bought over in 1955, with equal shareholding, by Gewerkeshaft Exploration e Bergbau and Ferromin S.p.A., a subsidiary of Finsider S.p.A. (of IRI group), which eventually acquired the other half stake in 1963.
Sesa Goa Limitada was incorporated as a private limited company in 1963 under the Indian Companies Act 1956. In 1979, Sesa Goa Private Limited was formed, with the merger of Sesa Goa Limitada with another mining company in Goa, Mingoa Sociedade Miniera Goesa S.a.r.l. In 1981, Sesa Goa Limited became a public limited company with 60% equity with Indian shareholders. In 1996, Mitsui & Co. Ltd. of Japan acquired Finsider International, along with its 51% stake in Sesa Goa Limited .
In 2007, Vedanta Resources plc, acquired the controlling stake in Sesa Goa Limited from Mitsui & Co. Ltd .
By 1965, Sesa Goa and Mingoa were incorporated as a private limited company under the Indian Companies Act 1956. The merger happened in 1979 and the new, unified company was called ‘Sesa Goa Pvt Ltd’. The company went public in 1981 with 42,000 Indian shareholders, holding 60% of its shares and the remaining 40% held by Finsider International, which later became ILVA International. Sesa Goa had started with iron mining as its core business but slowly, it ventured into barge construction in 1984 at Sirsaim, located in the Bardez taluka of North Goa. Since then, the barge construction unit has been developed into a shipbuilding division.
Growth in the 90s: In 1992, the first phase of a 150,000 ton pig iron plant was commissioned. In the same year, Sesa introduced India’s first low-phosphorus foundry grade pig iron in India and subsequently formalised the business under pig iron division. The pig iron plant is located at Amona, Goa. This plant has an annual production capacity of 250,000 tonnes per annum. Other alliances were formed in the nineties - in January 1995, Sesa Shipping was launched by acquiring transhipper M.V. Orissa. The year also saw the inclusion of 84 new coke ovens. When Mitsui & Co. of Japan bought Finsider International in 1996, it gained 51% stake in Sesa Go. By 1997, Sesa Kembla became a 100% subsidiary of Sesa Goa.
In 1997, A Narrain mines located in Chitradurga, (Karnataka) were purchased. This mine is currently the company’s second largest mine in India. A Supreme Court directive in August 2011 led to suspension of mining activities in the region. In 1999, Sesa Goa started mining operations in Barbil, which has the fifth largest deposit of iron ore and manganese in the world. They started producing high grade iron ore which was exported from the port towns of Haldia and Paradip.
Along with these business ventures, in 1998, the company started the Sesa Community Development Foundation that supported the NCM Sesa Technical School and a new Sesa football academy. The company promoted SESA F.A.
Mergers and Acquisitions - 2000 onwards: Sesa Kembla completed the creation of an indigenous and environment-friendly technology that produced high-quality metallurgical coke. This technology generated power as a by-product. In 2002, Sesa Group becomes the first business of its kind to be certified with OHSAS 18001. In 2003, the Sesa Goa equity in Sesa Industries was raised to 88.25%, impacting the shareholding pattern.
In 2007, Vedanta Resources Plc, a diversified metals and mining group founded by Anil Agarwal, acquired 51% controlling stake in Sesa Goa Ltd. from Mitsui & Co. Ltd. Vedanta Resources is listed on the London Stock Exchange and a constituent of FTSE 100 Index. The deal was worth 40.7 billion, making it the largest M&A deal in the industry so far. In 2009, Sesa Goa acquired Goa-based Dempo Group’s mining and maritime businesses for 17.5 billion in an all-cash deal. This was the second largest acquisition in India’s iron-ore industry, and it gave Sesa Goa access to Dempo’s 70 million tons of iron-ore mineable resources in Goa. In 2011, Sesa Goa purchased 51% stake in Western Cluster, Liberia for $90 mn. The Liberian Gola Forest community people who also suffered from the civil war believe that the coming of Western Cluster will help to allievate their sufferin g and provide employment.
Products and Operations
Iron Ore: China is Sesa Goa’s largest client, accounting for 80% of its sales. The Goa operations for iron or mining consist of two areas—Codli and Sonshi. They also get their ore from several satellite mines across Goa. Codli is the largest iron ore producing mine of Sesa Goa with a current production capacity of more than 7.0 mtpa. The Sonshi mine has a capacity of more than 3.0 mtpa. Both the mines are certified as per international standard—ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007.
The company also runs operations for Sesa Resources Mines that extracts iron ore from different mines situated in Goa. The two major mines of Sesa Resources are in Bicholim and Surla, both located in North Goa. Current production capacity of Sesa Resources is nearly 3.5 mtpa.
Metallurgical Coke: Approximately 65% of total production is consumed by Sesa group, for its pig iron production. The remainder is sold to customers located in India. Sesa Goa has patented a technology that provides high quality output and produces power. It is a patented and follows a two-product process with metallurgical coke as the main product and the sensible heat of the exhaust flue gas as a co-product. This heat can be used for producing clean electricity. The company uses non-polluting, non-recovery Australian Technology. At the plant in Amona, negative pressure in the ovens ensures no polluting leakages.
Pig Iron: This business is skewed towards catering to the steel mills and foundries of the Indian market, in particular the Western and Southern India. The division manufactures basic, foundry and nodular grade pig iron and also sells slag. The annual production capacity is 250,000 tons per annum.
Sesa Goa’s corporate office is located in Patto Plaza, Panaji. The name of the building is ‘Sesa Ghor’, which means the ‘House of Sesa’. It has two international offices, one each in Shanghai, China and Monrovia, Liberia. In India, 6 offices are located outside Goa – Delhi, Bengaluru, Bhubaneswar, Mangalore, Krishnapatnam and Jamshedpur. In Goa, there are different offices, based on operations. The ship building division is in Sirsaim and River Fleet & Shipping office is in Vasco-da-Gama. The metallurgical coke division is in Sanquelim and the pig iron division is based out of Marcela. The Goa Iron Ore division is in Codli, Sanguem and the Karnataka office is located in Chitradurga.