Essar Steel to supply plates to Indian Navy warships

Indian defence sector is increasingly looking at domestic companies instead of foreign shores for its needs.

Barely three weeks after Tata Power bagged a Rs1,000 crore order from the Indian Air Force for modernising its 30 airfields, Essar Steel on Thursday won an order from Mazgaon Docks for supplying 13,000 tonnes of steel plates to the Indian Navy warships.

Essar is the first steel company in India to be recognised by the navy for indigenous development of steel for building ships, said a company spokesperson.

While the company declined to share details about the value of the order and the timeframe, analysts said the order will give Essar an exposure for manufacturing high quality steel required for specialised applications.

“This will also open up a whole new market for the company in the form of defence sector, which is so far largely untapped by the Indian corporates,” said an analyst working with a domestic brokerage.

An industry source said that the company, however, has some exposure to the defence sector through its Algoma Steel Plant located in Canada which supplies to US and Canadian defence sectors. “There is no link between the two orders and there will be no sharing of technology,” said the spokesperson.

He said considering an order for steel plates to be used in Navy, it has to be of top most quality. “Steel plates are an input for hot rolled coils. While it is tough to estimate the size of the order, but typically high quality steel would fetch over Rs50,000 per tonne, which would take the order size to Rs70-100 crore,” he said.
Essar Steel has a plate mill at Hazira in Gujarat, which has a capacity of 1.5 million tonnes.

A company statement said a mill audit of Essar Steel’s recently commissioned wide-plate mill was conducted by teams from the Directorate of Naval Architecture, Defence Metallurgical Research Laboratory and the Director General of Quality Assurance of the ministry of defence.