Essar Steel Acquires Steel Processor Servosteel

By Reghu Balakrishnan

  • 28 Jun 2010

Essar Steel International BV, a subsidiary of Essar Steel Holdings Limited today announced that it has acquired Servosteel (Oakside Solutions Ltd), the largest independent steel processor in the UK. Essar Steel, part of the $15-billion Essar Group, is a fully integrated flat carbon steel manufacturer—with presence in Canada, USA, India and Indonesia. Essar Steel has a global steel production capacity of 8.6 million tonnes per annum (MTPA). It operates seven Service Centres in India, Indonesia and Canada with aggregate capacity of over 3 million tonnes. Financial details of the deal are not known. 

Last month, JSW Steel, part of the $8-billion OP Jindal Group, has acquired coking coal mines in West Virginia, in the US for a total consideration of $100 million.

Servosteel has a steel processing capacity of 500,000 tons per annum. It is capable of processing the entire flat product range – hot rolled coils, cold rolled coils, hot rolled pickled, galvanized  and color coated products. Servosteel, a Dudley based steel service center in the West Midlands and offers a one stop service for SCS (Smooth Clean Surface technology), pickling, slitting and decoiling and various individual custom tailored services.


Essar Steel Middle East, through its subsidiary, had announced its plans to set up a 2,50,000-tonne processing and service centre in Dubai's Jebel Ali Free Zone in January this year, to serve Essar''s expanding regional client base in sectors such as automotive, white goods, ship building and engineering, a PTI report said.

According to an earlier Emirates Business 24/7 report, Essar Steel was in talks to acquire Egypt's Kandil Steel. The Indian steel giant is believed to have sent feelers to Kandil Steel and is likely to offer a formal proposal to its management in the near future, the Emirates Business 24/7 report said, without quoting sources.

Essar Steel, with a current capacity of 8.6 million tonnes per annum (MTPA), has expansion plans in India, as well as Asia and the Americas, to achieve a capacity of 14 MTPA by 2011-12. A number of major client companies include Caterpillar, Hyundai, Swaraj Mazda, the Konkan Railway, and Maruti Suzuki.


Essar Steel Algoma, an integrated steel producer based in Ontario, Canada, has a current production capacity of 4 MTPA. Its Indonesia facility- PT Essar Indonesia

has a domestic market share of 35 percent.

Essar Steel Minnesota LLC which has access to iron ore resources of over 1.4 billion tons plans to set up an integrated pelletization plant on the Mesabi iron range in northeast Minnesota. The estimated cost of the project is US$1.60 billion and the plant will have an annual capacity of 4.1 million tonnes per annum (MTPA) of pellets, when completed. Essar Steel also plans 12.0 MTPA integrated pelletization facility at Paradeep which is located in the iron ore-rich state of Orissa. The Paradeep project is being implemented in two phases.


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