Mumbai, Sep 20 (IANS): In an interview to an international publication posted on social media, a senior executive of Essar said that the company plans to build a 4mtpa steel complex in the Kingdom of Saudi Arabia.
India's Essar Group, which is carrying out the largest foreign direct investment in Saudi Arabian steel industry history, chose the country due to its investment-friendly environment, says Essar corporate planning general manager Amar Kapadia.
The new integrated flat steelworks is scheduled to break ground by year-end and be completed by end-2025.
"Management has asserted that critical to the progress has been the enlightened and collaborative approach of the Saudi government ministries: the Royal Commission of Jubail and Yanbu, Invest Saudi, the National Industrial Development Centre and related entities who have provided a highly supportive and informed technocratic basis for both facilitating and supporting the planned investment," Kapadia told Kallanish in an exclusive interview during the Saudi International Iron & Steel Conference in Riyadh last week.
Authorities' welcoming approach to foreign investment and pragmatic policymaking has helped Essar fast-track project development, he added.
"We have formally applied to the Saudi Industrial Development Fund (SIDF), and they are evaluating our project. Through multiple rounds of discussion, additional information required for SIDF to complete technical, market and credit evaluation has been shared. We hope to conclude the process in the next few months," Kapadia commented.
"We plan to award an LSTK contract with project drivers of schedule, cost, quality and safety with the balance of the need to meet local content requirements even during the project execution phase. Therefore, all procurement would be the contractor's responsibility to achieve these objectives," he continued.
Essar signed a memorandum of understanding with Saudi Arabia's National Industrial Development Centre (NIDC) in October 2021 and an agreement with the Royal Commission for Jubail and Yanbu (RCJY) for land allocation in December.
The company will invest SAR 15 billion ($4 billion) into 4 million tonnes/year of continuous casting and hot strip capacity, 1m t/y of cold rolled coil capacity, and a tin plate line in Ras Al Khair Industrial City on Saudi Arabia's east coast. The new facility will also have two direct reduced iron plants, each with a 2.5m t/y capacity.
Essar will cater to domestic and regional demand, supplying a wide range from ultra-thin to thick gauges for various downstream industries such as automotive, oil & gas, water pipe, packaging, electrical, and home appliances .
The Essar Group has international investments across four areas covering the energy, metals and mining, infrastructure and EPC verticals. The privately held group has an annual turnover of over $13 billion.
The new investment in Saudi Arabia represents Essar's second foray in steelmaking.
Essar will conclude its planned asset monetisation programme and complete the debt repayment plan of $25 billion (Rs 2,00,000 crore) with the Indian banking sector being almost fully repaid.
Essar's aggregate revenues will stand at $15 billion (Rs 1.2 lakh crore) and an AUM (Asset Under Management) of $8 billion (Rs 64,000 crore) comprising various assets spread across India and overseas.