The foresight of Italian engineering major Sideridraulic Spa in setting up an Indian branch some four years ago, is all set to prove a boon for Indian private sector steel and aluminium companies today.
Following the entry of ArcelorMittal in the steel industry through their recent acquisition of Essar Steel, and the sharp rise in aluminium scrap imports in the first half of the current fiscal year, private sector steel and aluminium companies are now under pressure to cut costs. Sideridraulic can play a big role in helping them do so.
Hydraulic and lubrication plants and water treatment plants are key components of any integrated steel or aluminium manufacturing facility. Sideridraulic specializes in this area.
“Our decision to launch a Sideridraulic branch in Mumbai in 2014 has helped us to find truly excellent, reliable local suppliers over the last four years. This has helped us to reduce our costs on imported components to no more than 10% of our total costs. Today we can offer Indian companies technological excellence at an accessible price,” company CEO Mario Bodini said in a statement.
“Our international experience, established over the last 40 years, means that we can offer something that is attractive for the Indian market. Our technical solutions are regarded as among the best since our clients have always given us a T1 ranking when it comes to our technologies. However, earlier when we sent in a bid with European prices we found that we weren’t always competitive in the Indian market. That is when we decided to Indianise,” Bodini said.
On October 19, lenders to Essar Steel declared that the highest bid has come from the joint venture (JV) of Luxembourg-based ArcelorMittal, promoted by Lakshmi Mittal, and Japan’s Nippon Steel and Sumitomo Metal Corp. The announcement means ArcelorMittal is inching towards closing the Essar Steel deal.
Mittal is known to have built his career on buying out stressed steel mills across the world—in Mexico, Romania, South Africa, and the US—and turning them into profitable ventures, usually by ramping up volumes just in time for the upward steel cycle and controlling costs.
With Mittal entering the fray, both Tata Steel and JSW, the two major private sector steel makers in India, will be forced to increase efficiency and control costs, analysts said according to a recent news report.
Moreover, Mittal is coming in not only with Essar’s ready capacity but also at a time when India’s steel consumption is taking off. India currently has per-capita steel consumption of only 70 kg a year, less than half the average of other developing nations. The World Steel Association expects Indian steel demand to climb 5.5% in 2018 and 6% in 2019, making the country the fastest-growing market among the world’s top 10 steel consuming countries.
The story is similar in the case of aluminium. In the next five years, consumption in India will double to 7.2 million tonnes from 3.6 million tonnes now, Tapan Kumar Chand, CMD, National Aluminium Company (NALCO) said while addressing the National Aluminium Network Meet 2018, held in New Delhi on October 12, 2018.
Thus, massive opportunities exist for expansion of both steel and aluminium capacity in India. Companies such as Sideridraulic, which produces and erects critical components for both sectors, can play a big role in this scenario by helping steel and aluminium companies keep costs down while benefitting from high quality technology solutions.
“This year we launched an exchange platform, ‘Metal-Hub’, in which Sideridraulic is also involved, to enhance the technical, technological, engineering, and other collaborations between the industrial metal networks. We have noted that there is a directive to advance R&D for water-saving solutions in India and that there is a great deal of interest in ZLD (Zero Liquid Discharge) systems,” said Francesca Bruni of the Milan-based ArtValley.
Sideridraulic India Pvt. Ltd. Is a private limited company incorporated on February 12, 2014 with an authorized capital of Rs 4 crore and a paid-up capital of Rs 1.6 crore. It is a subsidiary of Sideridraulic System Spa with headquarters in Cellatica, Brescia, Italy. The company was initially set up under the aegis of Danieli Group, world leaders in steel plant construction, to handle everything regarding hydraulics and lubrication for Danieli and for third parties. In the 1980s, Sideridraulic bought back the majority share from Danieli and, though remaining a major supplier for Danieli, it began to internationalize, thanks in large part to Italimpianti, another global steel plant construction giant. Up until the end of the 1990s it continued working in the hydraulic sector, becoming the main partner of all of the major builders of steel plants. From the early 1990s, however, the company also launched its water division for construction of water treatment plants to produce industrial quality water. With that Sideridraulic’s clientele shifted from primarily construction companies building metallurgy facilities to the end users, the steel producers themselves. In 2014, the company opened its first overseas branch in Mumbai, India to take advantage of the world’s fastest growing market in the metallurgy sector.