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With increasing consolidation in the steel industry, Essar Steel too is catching up on the global game with a reported plan to invest about Rs 6,900 crore or Rs 69 billion ($1.5 billion) to set up three steel plants in West Asia.
According to a Gulf media report, Anshuman Ruia, one of the directors at the conglomerate, gave details of three plants being set up in Iran, Sharjah (UAE) and Qatar.
According to company sources in India, the company is in advanced stages of finishing the paperwork for different plants. In Qatar, it has reportedly signed a 50:50 joint venture agreement with state-owned Qatar Steel Company for a 1.5 million-tonne-a-year plant.
Essar is reported to have taken possession of the land in Qatar and raised capital for the project and is close to signing gas contracts with the government.
The plant is estimated to cost $325 million in the first phase. It will subsequently be supplemented by a 1.5 million tonne steel rolling mill for long products such as steel rods in the second phase, which is expected to cost another $300-400 million.
In Iran too, it is setting up another similar 1.5 million tonne plant. Essar will hold 60 per cent and other institutional investors, 40 per cent.
In the UAE, the company will set up a one million tonne steel rolling mill at the Hamriyah Free Zone on the outskirts of Sharjah.
The plant will use imported steel billets from the Indian facilities. The required investment in the Sharjah plant has been estimated at $200 million.Essar Steel has a capacity of 4.6 million tonne in India and is the second biggest private sector steel maker.
The company is reportedly aiming at the supply of cheap natural gas in the Gulf to cut costs in one of the fastest growing construction markets.
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