The Essar Group is looking to invest $4 billion in setting up an integrated flat steelworks plant in Saudi Arabia in the next three years, a senior company official said.
The plant, which will cost Saudi Riyal 15 billion ($4 billion), is scheduled to break ground by this year-end and be completed by the end of 2025, said Amar Kapadia, general manager for corporate planning at Essar.
The new 4-million tonne per annum integrated flat steelworks plant will have continuous casting and hot strip capacity, 1-million tonnes 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 2.5-million tonnes a year capacity.
Essar signed a memorandum of understanding with the 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.
"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 evaluations has been shared. We hope to conclude the process in the next few months," Mr. Kapadia said.
In an interview to an international publication, Mr. Kapadia said, "We plan to award an LSTK (Lump Sum Turnkey) 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."
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.
Essar is also in the process of concluding its planned asset monetisation programme and complete the debt repayment plan of $25 billion (about ₹2 lakh crore) with the Indian banking sector being almost fully repaid.