Essar Steel awarded Rs 5,000 cr order from POSCO
08 July 2019
Essar Steel, which is facing insolvency proceedings, has been awarded an Rs 5,000-crore order from the Indian subsidiary of Korean major Posco. Posco Maharashtra has signed an MoU with Essar Steel for procuring 1 million tonnes (mt) of hot rolled products, making it the fourth contract signed between the two.
GH Bang, MD, Posco Maharashtra, said the company has found Essar Steel to be a very dependable partner, meeting its quality standards and delivering on time. Irrespective of its insolvency proceedings, Essar Steel has continuously improved its operational and financial performance, he added. Posco’s partnership with Essar Steel began with a trial order of 1,000 tonnes in FY15.
A bulk order of 10,000 tonnes was placed, followed by one of 62,000 tonnes. An agreement for the supply of 650,000 tonnes was signed in FY16. The quantity later reached 1mt per annum.
Essar Steel had developed 16 new grades of steel for auto and other special applications for Posco Maharashtra, which has a 2-mt unit at Mangaon. It is currently operating at a capacity utilization of about 85%. Last year, it produced 6.9 mt of crude steel and expects to cross 7 mt this fiscal, said the firm. For the first two months of this fiscal, crude steel production at Essar Steel has grown 11% to 1.25 mt, compared to 1.1 mt in the corresponding period last year.