Wikipedia

Essar Group

Essar Group[2]is an Indianmultinationalconglomeratecompany, founded byShashi Ruia and Ravi Ruiain 1969. The company, known as Essar Global Fund Limited (EGFL), owns a variety of assets in the core sectors of energy (oil refining, oil and gas exploration and production, power), infrastructure & logistics (ports, projects), metals & mining, technology, and retail (oilfield services, information technology, and food retail). EGFL holds a nearly 100% stake in all its investments.[3]

Essar Group
Company typePrivate
IndustryConglomerate
Founded1969;55 years ago(1969)
Founder
Headquarters
Mumbai,Maharashtra
,
India
Area served
Worldwide
Key people
Products
RevenueIncrease₹120,000 crore(US$14 billion) (2022)[1]
Total assetsIncrease ₹64,000 crore(US$7.7 billion) (2022)[1]
Number of employees
7,000+[1]
Subsidiaries
Websitewww.essar

Significant Essar Group companies include Essar Oil UK, Essar Ports, Essar Oil & Gas Exploration & Production,Essar Shipping,Essar Power, and Essar Projects.

History

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In 1969, Shashi Ruia won a major contract worth Rs. 2.3 crore for the construction of an outer breakwater for Chennai Port, thus laying the foundation of Essar Group.[4]

In 1991, Essar became India's first Independent Power Producer (IPP) and started a 515 MW cycle power plant at Hazira.[5]It later built and operated national power plants in Madhya Pradesh, Gujarat, Odisha, and internationally in Ontario, Canada.[6]

In 1992, Essar acquired the South India Shipping Corporation and strengthened its shipping venture.[7]

In 1995, Essar Group entered the telecom sector with a Swiss PTT joint venture partnership branded as the Essar Cellphone.[8]In the same year, Essar Group started GSM operations from Delhi.[9]Essar, independently and in partnership with Hutchison (Hutchison Essar), subsequently acquired more telecom circles in India. By 2006, all the circles were under Hutchison Essar Limited.[10]Vodafone bought the Hutchison stake, and Hutchison exited India in 2006. Essar Group continued to have a 33% stake in the Vodafone Essar partnership. In 2011, Essar sold its stake and exited the telecom business.[11]

In 2006, Essar Oil imported its first consignment of 2.2 billion crude oil at Vadinar in Gujarat.[12]

In 2007, Essar owned The MobileStore, an Indian chain of telecom and mobile phone retail stores.[13][14]

In 2017, Essar Steel India Ltd. (ESIL) was on the defaulter's list disclosed by theReserve Bank of India.[15]Essar Oil was acquired by a consortium led byRosneft,Trafigura,andUCP Investment Groupfor $12.9 billion, and Essar Oil was rebranded asNayara Energy.[16]

In 2018, Essar signed an offtake agreement with GAIL for Raniganj East CBM block production.[17]Essar Oil & Gas Exploration & Production Ltd. (EOGEPL) owns India's highest producing coal bed methane block in Raniganj, West Bengal.[18]

In 2019, EOGEPL received environment clearance for exploring shale gas reserves in Raniganj block, West Bengal.[19]

In November 2019,ArcelorMittalwon approval from theSupreme Courtto take over Essar Steel and pay the creditors with equal rights.[20]ArcelorMittal’s bid of Rs 42,000 crore was considered over Essar’s bid of Rs 54,000 crore.[21]

In March 2020, Essar Group was successful in cutting down the residual debt by 70% to about Rs. 12,000 crore.[22]

Essar has established Vertex Hydrogen under the UK's HyNet project with Progressive Energy in December 2021 to help drive energy transition in the UK.[23]

In September 2022, Essar Oil UK completed an offtake agreement with Vertex Hydrogen to facilitate hydrogen supply of 280 MW to decarbonize its plants.[24]

In November 2022, the Essar Group has become a debt-free company (cleared $25 billion in liabilities) by selling its power plant and captive ports to ArcelorMittalNippon Steelat a deal value of $2.05 billion.[25]

In 2023, EOGEPL announced that they would invest Rs. 2,000 crore in the next two years in Raniganj to increase their CBM production capacity.[26]

Business transformation

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Effectively debt-free, Essar is investing in decarbonization, decentralization, and digitalization, wherein it is getting intosustainable businesseslike blue &green hydrogen,LNG, biofuels, green ammonia, and green steel.[27]

Under Essar Energy Transition (EET), the company plans to invest $2.4 billion in Stanlow (UK), betweenLiverpoolandManchester,and $1.2 billion in India to develop a range of low-carbon energy transition projects.[28]

Essar is also foraying into steel manufacturing with plans to set up a 4Mtpa green flat steel complex inSaudi Arabiaand an iron ore pellet plant inOdisha.

Essar invests in infrastructure and logistics to decentralize heavy trucking through LNG trucks. Its company, GreenLine, owns a fleet of LNG trucks that have collaborated withTata Steel,JK Lakshmi Cement,Nestlé,and others.[29]

Business verticals

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The Essar Group comprises a range of companies in core economy sectors.

Energy

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  • Essar Energy Transition
  • Essar Oil UK
  • Essar Oil & Gas Exploration & Production Ltd
  • Essar Power Ltd

Infrastructure & logistics

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  • Essar Ports
  • Stanlow Terminals
  • Essar Projects
  • Ultra Gas & Energy

Metals & mining

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  • Essar Minmet
  • Mesabi Metallics
  • Manoor Bulatn Lestari
  • KSA Saudi

Technology & retail

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  • Black Box (Previously known as AGC Networks Ltd)
  • Essar Shipping
  • Pluckk

Acquisitions

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In 2003, Essar Group acquired Aegis Communication and spread across 13 countries.[30]In 2014, Essar did a part sale of Aegis USA Inc. with annual revenues of $400 million to Teleperformance,[31]and in 2017, Essar left the outsourcing business by selling Aegis’ operations to Capital Square Partners (CSP).[32]

Essar Steel acquired HGPL and SCGL from Stemcor in 2005 and became an integrated steel producer.[33]

In 2007, Essar Global acquired a US-based steel company named Minnesota Steel LLC.[34]

In 2010, Essar Global acquired Aries coal mines in Indonesia.[35]

In 2011, Essar Energy purchasedStanlow Refineryin North West England for $1.3 billion.[36]Under Essar's leadership, the first phase of the turnaround of Stanlow refinery has been started during the financial year 2015–16 with $187 million net profit.[37]Essar plans a £250 million expansion of Stanlow refinery, with over 16% production of transport fuels in the UK.[38]

AGC Networks, a wholly-owned subsidiary of Essar Group, acquired Black Box Corporation in 2019.[39]

Initiatives

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During theCOVID-19 pandemic,Essar Foundation opened Covid Care Centre at Devbhumi Dwarka, Gujarat,[40]organized vaccination drives,[41]and provided meals to needy people.[42]

In 1997, the company started Essar Foundation for philanthropic initiatives in the areas of education, health, environment, women's empowerment, infrastructure, livelihoods & entrepreneurship.[43][44]

See also

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References

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  1. ^abc"How Essar Group is reorganizing itself".2 June 2023.
  2. ^"Essar - Businesses Across Energy, Construction, Mining & IT Industry".Essar.Retrieved24 March2023.
  3. ^"Essar Group - Company Profile and News".bloomberg.Retrieved26 September2020.
  4. ^"Quest to Save Essar: As debt hits Rs 1.38 lakh crore, Ruias look to recast group".businesstoday.in.15 June 2017.Retrieved3 August2022.
  5. ^"The Indian Electricity Market: Country Study and Investment Context"(PDF).
  6. ^"Essar Power commissions first flue gas scrubber to cut sulphur emissions by 25%".7 September 2021.Retrieved11 May2023.
  7. ^"South India Shipping Corporation Ltd".Retrieved29 May2023.
  8. ^"Quest to Save Essar: As debt hits Rs 1.38 lakh crore, Ruias look to recast group - BusinessToday".15 June 2017.Retrieved5 August2022.
  9. ^"Why the Essar Group made it in telecom but the Tatas couldn't - Mint".September 2014.Retrieved5 August2022.
  10. ^Pratap, Rashmi (6 July 2007)."Hutch to ditch pink for Vodafone's red - The Economic Times".The Economic Times.
  11. ^Pratap, Rashmi (6 July 2007)."Hutch to ditch pink for Vodafone's red".The Economic Times.Retrieved22 May2023.
  12. ^"Essar Oil begins trial runs at Vadinar Refinery".Retrieved28 May2023.
  13. ^"Essar plans to set up 2,500 MobileStore outlets in 3 years - Economic Times".economictimes.indiatimes. 7 December 2007.Retrieved20 July2022.
  14. ^"The MobileStore has won the Retailer of the Year award".oneindia.Retrieved20 July2022.
  15. ^"RBI tells banks to file cases against 12 big loan defaulters in a month".16 June 2017.Retrieved5 August2022.
  16. ^"Essar Oil completes $13 billion sale to Rosneft-led consortium in largest FDI deal".The Economic Times.22 August 2017.Retrieved29 November2022.
  17. ^"Essar signs GSPA with GAIL for offtake of production from Raniganj East CBM block".10 August 2018.Retrieved30 May2023.
  18. ^"Essar Oil despatches first ever C-CBM for city gas distribution".30 January 2021.Retrieved30 May2023.
  19. ^"Essar Oil & Gas gets environment clearance to begin shale gas exploration".3 March 2019.Retrieved12 May2023.
  20. ^"Supreme Court paves way for ArcelorMittal's takeover of Essar Steel in ₹42,000 crore deal".15 November 2019.Retrieved5 August2022.
  21. ^"Ruias make stunning Rs 54,000 crore bid to retain Essar Steel".The Times of India.26 October 2018.Retrieved18 May2023.
  22. ^"Essar to further cut down debt by 70% in last leg of deleveraging exercise".11 March 2020.Retrieved22 November2022.
  23. ^"Essar sets up Vertex Hydrogen to help drive energy transition in UK".energy.economictimes.indiatimes.
  24. ^"Essar Oil UK inks offtake agreement with Vertex Hydrogen".Retrieved11 May2023.
  25. ^"India's Essar Group is debt-free after repaying $25 bln".Reuters.21 November 2022.Retrieved21 May2023.
  26. ^"Essar to invest Rs 2,000 crore in Bengal's brownfield CBM project".The Economic Times.Retrieved20 December2023.
  27. ^"How Ruias are reinventing the Essar Group".6 June 2023.Retrieved30 December2023.
  28. ^"Essar 2.0 – Driven by a new energy".23 April 2023.Retrieved30 December2023.
  29. ^"Essar 2.0: Ruias script zero debt, asset-light business model".2 June 2023.Retrieved2 January2024.
  30. ^S, Rajalakshmi (27 November 2017)."Essar Group sells Aegis to Capital Square Partners for $300 million".thehindubusinessline.Retrieved1 August2022.
  31. ^"Aegis completes sale of US arm to Teleperformance".The Economic Times.8 August 2014.Retrieved1 August2022.
  32. ^Dhanjal, Swaraj Singh (3 April 2017)."Essar sells Aegis BPO to Capital Square Partners".Livemint.Retrieved1 August2022.
  33. ^"Essar Steel acquires two Stemcor companies".Retrieved24 November2022.
  34. ^"Essar to acquire US steel firm".The Economic Times.18 April 2007.Retrieved21 November2022.
  35. ^"Essar buys Aries coal mines in Indonesia".25 March 2010.Retrieved18 May2023.
  36. ^"India's Essar buys Shell's Stanlow refinery - Reuters".Reuters.29 March 2011.Retrieved4 August2022.
  37. ^Das, Debabrata (3 April 2016)."Essar Oil UK turns around Stanlow Refinery - The Hindu BusinessLine".thehindubusinessline.Retrieved4 August2022.
  38. ^"Essar Oil UK to invest $250 million Stanlow refinery".7 September 2017.Retrieved23 November2022.
  39. ^"AGC Networks completes Black Box Corporation acquisition".enterpriseitworld.Retrieved19 November2022.
  40. ^"Essar Group sets up 100-bed covid care centre at Dwarka, Gujarat".livemint.May 2021.Retrieved21 November2022.
  41. ^"CSR: Essar vaccinates over 2,000 employees across locations so far".indiacsr.in.Retrieved20 November2022.
  42. ^"Coronavirus: Essar Foundation to provide 12.5 lakh meals, 1 lakh medical supplies to people in need".The Economic Times.8 April 2020.Retrieved21 November2022.
  43. ^"Essar Foundation and AGC Networks jointly supports multiple noble initiatives in the country".Retrieved10 May2023.
  44. ^"CSR: Essar provides shelter for Jay Janardan Aashram in Nashik".Retrieved10 May2023.
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