The Essar Group has put the expansion of its Vadinar oil refinery in Gujarat on hold as the “market condition is not good,” Essar Group Chairman Shashi Ruia said today.
While the first phase of the expansion, at a cost of Rs 30,000 crore, is over, the second phase aimed at augmenting the capacity from 16 million tonnes to 34 million tonnes has been put on hold for six to eight months.
However, Essar Steel is going ahead with its plan to invest Rs 225 crore to set up three service centres at Chennai, Pune and the National Capital Region (NCR). The Chennai centre was inaugurated today.The centres would cater to clients in the auto and the white goods sectors.
Vikram Amin, executive director, sales and marketing, Essar Steel, said the capacity of each centre would be 250,000 tonnes. Ravi Singh, vice-president, service centre and business development, said the investment in each centre would be around Rs 75 crore. The centres would provided value-added service on basic hot-rolled and cold-rolled steel products to customers. He added that clients would save around 5 per cent on logistics. Inventory costs will also come down.
The service centres would have 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, he added.
Singh added the Chennai centre would cater to customers like Temple Steel and other auto majors like Hyundai, Ashok Leyland, TVS and Wheels India. The plant has a 10,000-tonne order worth Rs 30 crore.
