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Essar eyes commisioning of 4mtpa steel complex in Saudi Arabia by end-2025
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IANS | 20 Sep, 2022
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.
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