"By the end of FY 2016-17, Essar Steel India expects to record a marked increase in its capacity utilisation and produce 80 percent of its rated capacity," the company said in a statement.
Ruias-promoted Essar Steel today said its flat steel production rose by 48 percent to 1.22 million tonnes (MT) during the April-June quarter this fiscal from 0.82 MT during the year-ago period.
Iron ore pellet production too grew by 58 percent to 2.02 MT against 1.28 MT during the quarter under review, Essar Steel said in a statement.
"By the end of FY 2016-17, Essar Steel India expects to record a marked increase in its capacity utilisation and produce 80 percent of its rated capacity," it added.
The firm's efforts to de-commoditise its steel production and focus on developing value-added grades are bearing fruit.
In the last one year, it has developed 17 new grades, which have given it a first-mover advantage in many industrial segments.
In the quarter ended 30 June 2016, it developed three new grades one each in the Automobiles, Yellow Goods and Defence segments.
The new grades enable Essar Steel customers to substitute imported products with indigenous Made in India steel and make substantial savings. The adoption of multi-modal transport to move its products has helped the company achieve better price realisation and improved logistics, it said.
Commenting on the performance, Essar Steel MD and CEO Dilip Oommen said: "Over the last few months, we have taken several steps to strengthen our operations. We have also been able to maintain higher operating margins." In addition, the markets have been stable and customer response has been encouraging. This gives the firm confidence to aim for full production going forward, he added.
With the natural gas price plummeting to USD 6 per mmbtu (from a high of USD 20 per mmbtu), Essar Steel has been able to contain cost, improve margins and ramp up production. The company is looking at restarting all its gas-based DRI units in the current fiscal, it said.
Essar Steel's downstream facility in Pune clocked its highest ever quarterly production. PPGI production of 78,000 tonnes in June quarter this fiscal is higher by 55 per cent than production in the same period last year. The facility is operating at 100 per cent capacity utilisation.
Essar Hypermart has recorded a 40 per cent growth in sales volume. The SBU sold 2.89 lakh tonnes of finished steel products, as against 2.07 lakh tonnes in the same period last year.
The Hypermart expects to earn USD 1 billion in revenues by the end of the current fiscal and contribute close to 30 per cent of Essar Steel India's consolidated sales, it said.