Essar Group

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Essar Group
Type Private
Industry Conglomerate
Founded 1969
Founder(s) Shashi Ruia
Ravi Ruia
Headquarters Mumbai, Maharashtra, India
Area served Worldwide
Key people Shashi Ruia[1] (Chairman)
Ravi Ruia[1] (Vice-Chairman)
Prashant Ruia[1] (Group CEO)
Products Steel, oil and gas, power, communications, shipping, ports and logistics, projects, mineral, Real estates
Revenue Increase US$ 39 billion (2013)
Employees 73,000 (2013)
Subsidiaries Essar Steel, Essar Steel Algoma, Essar Oil, Essar Shipping, Essar Hypermart, The MobileStore
Website www.essar.com

Essar Group is an Indian multinational conglomerate with investments in the sectors of steel, energy (oil & gas and power), infrastructure (ports, projects & concessions) and services (shipping, telecom, realty and outsourcing and technology solutions). With operations in more than 25 countries across five continents, Essar employs over 73,000 people and has revenues of $39 billion.[2]

Essar began as a construction company in 1969 and diversified into manufacturing, services and retail. Essar is managed by Shashi Ruia – Chairman, and Ravi Ruia – Vice Chairman.[3]

History[edit]

Essar House, Essar Headquarter, Mumbai

Essar began its first operation with the construction of an outer breakwater in Chennai port. The name Essar is derived by combining the first letter of the Chairman's and Vice-Chairman's names – Shashi and Ravi, i.e. S plus R sounds like Essar. The company was incorporated in June 1976 under the name of Essar Construction Limited and was engaged primarily in core sector activities, including marine construction, pipeline laying, dredging and other port related activities. In 1984, the company ventured further into other core sectors mainly the field of exploration and development, drilling onshore and offshore oil and gas wells for Indian Public Sector oil exploration companies. The company's name was then changed to Essar Offshore and Exploration Limited in May 1987.

In August 1987, the company's name was changed to Essar Gujarat Limited, to reflect its highly diversified business interest. In 1988, the company made an initial public offer for its shares, which are now listed in Bombay Stock Exchange, National Stock Exchange of India and two other Indian stock exchanges.

In the 1990s the group entered into steel making with its Hazira plant in Gujarat and a pellet plant in Visakhapatnam. During the same decade the Essar expanded its scope into other businesses gas exploration, oil refinery, construction and GSM telephony.

As part of its business strategy of focusing on the iron and steel sector, the company hived off its unrelated business to a series of different companies. Offshore and energy operations were transferred to Essar Oil Limited in May 1992, Civil and mechanical construction business were transferred to Essar Projects Limited in March 1993.

With a vertical integration program in mind, construction of a technology Hot Rolled (HR) sheets and coil plant began in 1992. The plan commenced trial production in April 1995 and commercial production in April 1996.

The name of the company was changed from Essar Gujarat Limited to Essar Steel Limited in December 1995. The company operates the following facilities at Hazira, Gujarat state: MMTPA gas based Hot Briquetted Iron (HBI) plant; and MMTPA Hot Rolled Coils (HRC) plant.

Steel[edit]

Essar Steel is a global producer of steel with presence in Asia, Europe, Africa and North America. It has an annual capacity of 14 million tonnes. The product includes pipes, plates cold rolling, galvanizing and pre-coated segments.

It is India's largest exporter of flat steel with 10 million tons per annum (MTPA) of capacity in India and 4 million tons per annum (MTPA) in world wide facility.[4] Essar Steel is fully integrated from mining to retail and has specialised plants for value-added steel products like pipes and plates.[5] On 11 June 2012, Essar Steel India commissioned a 19 MW heat recovery power plant at Hazira.[6]

Essar Minerals owns iron ore and coal mines in India, Indonesia, Mozambique and the USA. The company has access to over 2.0 billion tonnes of iron ore reserves in India and USA and 450 million tonnes of coal reserves.[citation needed]

Current Operations

Hazira, Gujarat, India: A 10-million tonne steel plant at Hazira, largest in Western India. The plant is supported by a captive port, power plant, lime plant and oxygen plant.[5] Downstream facilities :

  • Cold Rolling plant: 1.4 million tonnes
  • Galvanizing plant: 0.5 million tonnes
  • Annealing (CRA) plant: 0.66 million tonnes
  • Extra-wide plate mill :1.5-million tonnes
  • Pipe mill: 600,000 tonnes

Visakhapatnam, Andhra Pradesh, India: 8-million tonne pellet plant [5]

Bailadila, Chattisgarh, India: 8-million tonne iron ore beneficiation plant [5]

Pune, Maharashtra, India:[5]

  • 600,000-tonne cold rolling plant
  • 500,000-tonne galvanising plant
  • 400,000-tonne colour coating plant
  • 650,000-tonne pickling line

Paradip, Orissa, India: 12-million tonne pellet plant of which 6-million tonnes is operational [5]

Sault Ste. Marie, Ontario, Canada: A 4-million tonne steel plant [5]

Essar Steel Algoma, Sault Ste. Marie, Ontario

West Java, Jakarta, Indonesia:[5]

  • A 400,000-tonne cold rolling mill
  • A 150,000-tonne galvanizing line

Retailing (across India): Over 400 steel retail outlets branded Essar Hypermart and Essar Expressmart [5]

Steel Processing Facility (across India & UAE): Largest steel processing & distribution facilities in India with an annual capacity of 4 million tonnes located in Pune (Maharashtra), Hazira (Gujarat), Bahadurgarh (National Capital Region), Chennai (Tamil Nadu), Bhuj (Gujarat) and Dubai (UAE)[5]

Dudley, West Midlands, UK: 500,000-tonne steel processing centre [5]

Indonesia: 200,000 tonnes [5]

Under Execution

Jodha-Barbil area, Orissa, India: A 12-million tonne iron ore beneficiation plant [5]

Minnesota, USA: A 7-million tonne pellet plant, a concentration plant and a direct-reduced iron plant [5] The Minnesota plant is under construction and not yet producing. Additionally, financing has not been secured and contractors are not being paid and have filed liens against the mine. <http://www.twincities.com/localnews/ci_25270272/1-7b-minnesota-taconite-development-still-sitting-partially>

Zimbabwe (Africa): Essar will expand its newly launched steel company, NewZim Steel Private Limited,[5] in two phases:

  • Phase 1: Plant will deliver a production capacity of 0.5 MTPA within 12–18 months
  • Phase 2: Increase production capacity to 1.2 MTPA, including a Greenfield multi-fuel cogeneration power plant of 50 MW and an oxygen plant, scheduled to be completed within three years

Energy[edit]

Essar's primary business is in the power and oil sectors. Most of this is handled by Essar Energy, which is approximately 76% owned by Essar Group, is today India's 2nd largest power generation company in the private sector.[7] Its current generation capacity of 1,600 MW is being expanded to 8,070 MW.[8] Power generation comes from a combination of gas, coal and liquid fuel based power plants. Essar Energy holds a controlling stake in Essar Oil.

Essar Oil is an oil & gas company with onshore and offshore oil & gas blocks, with about 35,000 km2 available for exploration. Total reserves and resources across these blocks is 2,109 mmboe. The refineries are Vadinar in Gujarat India; Stanlow in Cheshire,United Kingdom and 50% controlling stake in Kenya Petroleum Refineries. It has retail and direct sales in Kenya. The company does marketing of all products to SAARC countries. The company has about 750,000 bpsd (barrels per stream day) of crude refining capacity across three continents. It is the first private company in India to enter refined products marketing sector. It is the largest coal bed methane (CBM) player in India. It supplies bulk products to traders and direct customers. Essar also has a country-wide marketing network of over 1,400 retail outlets in India. It has tie-ups with other oil marketing companies that gives Essar Oil access to product and right to use their terminals and facilities for placing and marketing its products. This gives the company pan-India presence with more than 30 supply locations.[9]

Current Operations

  • Exploration &Production
    • Asia & Africa: offshore and onshore Oil & Gas blocks as well as CoalBed Methane blocks
  • Refining
    • Vadinar, Gujarat,India: World-class 20-million tonnes or 405,000 bpsd refinery  producing fuels; accounts for 10% of India's refining capacity.
    • Stanlow, UK: Essar Energy acquired Stanlow Refinery, with a nameplate capacity of 296,000bpsd, in  2011. The Stanlow Refinery is UK's second biggest oil refinery, meeting approximately 15% of the country's transportation fuel requirements.[citation needed]
    • Mombasa, Kenya: Fifty percent controlling stake in an 80,000 bpsd refinery run by the Kenya Petroleum Refineries Ltd (KPRL); the remaining 50 percent is owned by the Kenyan government

Essar Power is one of the lowest cost power producers and has a current generation capacity of 3,910 MW that is being expanded to 6,700 MW. It has gas, coal and liquid fuel-based power plants. Including two gas-based plants and one liquid fuel based plant in Hazira, a co-generation plant in Vadinar and a coal-based plant in Visakhapatnam. Two 1200 MW power plants in Tori, Jharkhand and Mahan, M.P. It owns about 500 million tonnes of coal reserves and resources in blocks spread across four continents.[10]

Essar Power was listed on the London Stock Exchange in 2010. Essar Oil is listed on the Bombay Stock Exchange and the National Stock Exchange of India.

Current Operations

Hazira, Gujarat, India

  • 515 combined cycle MW plant, gas-based;
  • 215 MW captive to Essar Steel's Hazira steel plant and
  • 300 MWsupplied to Gujarat Urja Vikas Nigam•                    
  • 500 MW combined cycle plant, gas-based; captive to Essar Steel's Hazira steel plant   ·                    

Vadinar, Gujarat, India      

  • 120 MW refinery residue-based multi-fuel; captive to Vadinar Refinery; meets steam and power demand of the refinery                   
  • 380 MW natural gas-fired combined- cycle plant; captive for Vadinar Refinery                   
  • 510 MW imported coal fired plant; to supply power to Essar Oil and Essar Steel

Mahan, Madhya Pradesh, India

  • Unit I of 600 MW coal-fired plant; to supply to Essar Steel and MP state 

Salaya, Gujarat, India

  • 1,200 MWimported coal fired plant

Algoma, Ontario, Canada

  • 85 MW,co-generation; captive to Essar Steel Algoma plant 

Under Execution

Hazira, Gujarat, India

  • 270 MW multi-fuel plant

Mahan, Madhya Pradesh, India                    

  • Phase I: Unit II of 600 MW, pit head coal based                   

Tori, Jharkhand, India                  

  • Phase I: 1,200 MW, pit head coal based·                    
  • Phase II: 600 MW, pit head coal basedOrissa, India                 

Paradip, Odisha, India

  • 120 MW coal-based plant to supply power to Essar'supcoming pellet plant in that location [10]

Services[edit]

Under the services domain, the group caters to shipping, business process outsourcing (BPO), telecom and realty.

Essar Shipping is an integrated logistics solution provider with presence in sea transportation, logistics and oilfields services. The company currently has a fleet of  26 vessels, with an additional 12 new ships on order. It provides contract drilling services to global oil majors, with a fleet of 13 onshore rigs and one semi-submersible offshore rig; two new jack-up rigs on order.[11]

  • Current Operations
    • Sea transportation: Diversified fleet of 26 vessels including VLCCs, Capesize, Mini-capesize, Supramaxes, mini-bulk carriers &tugs.·                    
      • Provides crude oil and product transportation services·                    
      • More than 225 ship years of service to leading Indian and global oil majors and commodity traders; tonnage presently stands at 2 million tonnes•                   
    • Logistics: Provideslogistics services – from ships to ports, lighterage services to plants,intra-plant logistics and dispatching finished products to the final customer.
      • Owns transhipment assets to provide lighterage support services, onshore & offshore logistics services·                    
      • Manages a fleet of 4,200 trucks for inland transportation of steel and petroleum products
    • Oilfields services: Provides contract drilling and Integrated Project Management services to oil and gas companies worldwide, operating both offshore and onshore in diverse countries.·                    
      • Owns a fleet of 14 rigs, which includes 1 semi-submersible rig and 13 onshore rigs[11]
  • Under Execution
    • Sea transportation: On order book of 4 new building vessels 
    • Oilfields services: Two new jack-up rigs on order

Essar has Business Process Outsourcing services, employing over 55,000 people across 13 countries. It has the Telecom services in Africa with over three million subscribers. It also has India's largest Telecom retail network, with over 725 outlets in more than 125 towns and cities.

Aegis official logo
  • Aegis Limited (doing business as Aegis) is Essar’s BPO arm founded in 1992 in the United States and currently based in Mumbai. It was acquired by Essar in 2004 and it caters to clients in the telecom, BFSI, travel & hospitality, consumer goods, gaming, application software, retail & healthcare domains as well as engineering services; with 56 locations across 13 countries. In 2008, Aegis merged and later acquired PeopleSupport, a known BPO company founded in 1998 at Delaware, United States and based in Los Angeles. It primarily operates in the Philippines as ' Aegis PeopleSupport ' (later shortened to as simply ' Aegis ' in 2012) under the banner of the Aegis Services Philippines, Inc. division. Aegis Limited has also BPO offices in Costa Rica, New Zealand, Australia, Argentina and others to name a few.[12]
    • Aegis also owns a majority stake in AGC Networks, a leading global information and communication technology solutions provider with experience in unified communications, network infrastructure, data center, virtualization, security solutions, and enterprise applications development & integration.
  • Telecom Services & Retail
    • “Yu”: A GSM-based mobile services network in Kenya with more than three million subscribers      
    • Telecom Retail: Operates over 725 TheMobileStore outlets across India. Largest telecom retailer within the organized sector.

Equinox Realty has operations in the Indian state of Maharashtra, Karnataka, Gujarat and Madhya Pradesh; and has a portfolio of approximately 16 million sq ft.

Infrastructure[edit]

The company's infrastructure scope falls under managing ports. They have also been involved in handling complex engineering, procurement and construction projects.

Essar Ports is one of India's largest operator of ports & terminals operating from strategic locations in west and east coast of India. The company is building a cargo handling capacity (dry, bulk and liquid cargo) of over 181 million tonnes. [13]

Current Operations       

  • Ports & Terminals: One of the largest port companies of India, with a current capacity of 104 MMTPA, offering a comprehensive range ofport and terminal services for liquid, dry bulk, break bulk and general cargo·                  
    • Vadinar, Gujarat, India: A58-million tonne liquid terminal facility to provide handling, storage andterminalling services for crude oil and petroleum products to refineries andtraders·           
    • Hazira, Gujarat, India: A30-million tonne all-weather deep draft bulk terminal for import of iron ore,pellets, coal, limestone and export of finished steel products·                    
    • Paradip, Orissa, India:16-million tonne Mechanized Central Quay-3 berth at Paradip Port Trust tohandle export cargo of iron ore pellets and other dry bulk cargo

Under Execution

  • Ports &Terminals:       
    • Salaya, Gujarat, India: A 20-milliontonne integrated terminal facility for handling coal and pet coke used in powerplants·        
    • Paradip, Orissa, India : A 14-million tonne deep draft coal terminal at Paradip Port Trust under BOT basis to handle imported coal       
    • Hazira, Gujarat, India: Bulk terminal capacity to be increased to 50 million tonnes, with capacity addition of 20million tonnes     
    • Vizag, Andhra Pradesh, India: A 23-million tonne iron ore berth

Projects[edit]

Essar Projects is the second largest engineering, procurement and construction (EPC) company in India. It operates under sectors of steel, oil, gas, power, ports and terminals.[14]

It owns over 5,000 nos. construction equipment worth over USD 275 mn. Over 15,000 TPA (Tonnes per annum) of equipment and 40,000 TPA of fabricated structure with waterfront load-out facility for any size of equipment. It has dedicated engineering centers specializing in process, engineering and design for steel, ports, power & hydrocarbons with over 1,200 engineers. Global procurement support in India, Middle East, Europe and China.[14]

Other businesses[edit]

Essar has plans to expand into other key sectors. Its other businesses include

Information Technology – Essar deploys a host of IT systems which will enable their companies to compete as per global standards

Publishing – Paprika Media has tied up with the UK-based publishing company, TimeOut, to publish the Indian edition of the magazine.

Agribusiness – Essar Agrotech deals in growing of flowers, herbs and vegetables primarily for international markets.


See Also[edit]

References[edit]

  1. ^ a b c "Essar | Board of Directors". Essar.com. 2012-01-19. Retrieved 2012-08-16. 
  2. ^ Essar's Official Post
  3. ^ Forbes topic page on Shashi & Ravi Ruia Forbes.com. Accessed April 2010.
  4. ^ "Essar Group | Businesses | Steel | Profile". Essar.com. 2012-07-18. Retrieved 2012-08-16. 
  5. ^ a b c d e f g h i j k l m n o About us | Profile. Essar Steel. Retrieved on 2013-12-06.
  6. ^ "Essar Steel commissions heat recovery power plant at Hazira". 11 June 2012. 
  7. ^ Leahy, Joe (March 7, 2010). "Essar Group eyes $3bn London listing - FT.com". Financial Times. Retrieved 2 September 2012. 
  8. ^ Narayanan, Pratish; Munroe, Tony (22 April 2010). "Essar launches $2.5 bln London energy IPO: sources". Reuters. Retrieved 20 June 2010. 
  9. ^ Oil is an integrated oil company. Essar (2008-05-01). Retrieved on 2013-12-06.
  10. ^ a b Power - among the largest private sector power companies in India. Essar. Retrieved on 2013-12-06.
  11. ^ a b Shipping provides end-to-end logistics, shipping and oilfield services. Essar (2011-11-25). Retrieved on 2013-12-06.
  12. ^ Aegis is Essar's BPO arm. Essar (2011-12-16). Retrieved on 2013-12-06.
  13. ^ Ports is one of India's largest port operator. Essar (2012-10-01). Retrieved on 2013-12-06.
  14. ^ a b Projects is a global engineering, procurement and construction (EPC) company. Essar (2012-06-04). Retrieved on 2013-12-06.

External links[edit]