The Hindu Business Line : Essar eyes auto component sector with new-grade steel

ESSAR Steel Ltd (ESL) seems to be keen to get on the right track with the automotive manufacturers of the country with a new grade steel that fits their bill for enhanced fuel efficiency.

And what could be a better way than to get the US automobile giant, General Motors, to become its first customer for the newly developed hot-rolled dual-phase steel coil that was recently developed at ESL's Hazira plant.

Hot-rolled dual-phase steel is a high-grade steel designed by reorganising the microstructure of the material, rendering it stronger and lighter.

This makes it the ideal material in auto engineering, helping to reduce kerb weights significantly and to improving vehicle mileages.

The durability of the material also finds takers in applications that use lightweight and high tensile materials.

Having designed and developed India's first hot rolled `dual phase' steel coil, the Hazira-based steel major has already entered into a supply agreement with Delphi Automotive Systems Ltd, which would in turn supply the new grade steel-based auto components to General Motors in the US. However, Essar is now keen to turn its eyes closer to home, given that the Indian automotive market, which is importing this product, has a size of 50,000 tpa.

"Essar Steel has now become the only Indian company to commercially supply hot rolled dual phase steel to our customers across the worldCurrently, the local auto component industry imports its dual phase steel requirements from international producers. Also, precision tube manufacturers undertaking trials on the material have found it ideally suited for use and this is definitely a huge opportunity to explore," said Mr Vikram Amin, Executive Director of ESL.

The product was developed a few weeks ago at Hazira and ESL is now in the process of tying up with various automotive manufacturers in the country. The twin arguments being made by ESL in its bid to persuade the Indian automotive industry to make a switchover to the new product is its property of being lighter in weight, leading to better fuel efficiency and saving on valuable foreign exchange.

The $1-billion domestic auto component industry, one of the fastest growing sectors which is expected to touch the $5-billion mark by 2008, is seen as one of the largest consumers for this material.

Domestic auto component manufacturers servicing international automobile giants currently figure as one of the largest importers of dual phase steel in the country.

More Stories on : Outlook | Automobile Components | Steel

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