New steel plant in Saudi Arabia to receive $4 billion investment from Essar Group

21 Sep 2022 , 08:01 AM

According to news reports, the Essar Group plans to invest $4 billion in the construction of an integrated flat steelworks plant in Saudi Arabia over the next three years. According to Amar Kapadia, general manager for corporate planning at Essar, who talked to ET, the facility, which would cost Saudi Riyal 15 billion (USD 4 billion), is expected to start construction by the end of this year and be finished by the end of 2025.

In Ras Al-Khair Industrial City on the east coast of Saudi Arabia, a new integrated flat steelworks plant with a capacity of 4 million tons per year will have continuous casting and hot strip capacity, 1 million tons of cold rolled coil capacity, and a tin plate line.

Two direct reduction iron facilities, each with a capacity of 2.5 million tons annually, will also be part of the new site.

In October 2021, Essar and the Saudi Arabian National Industrial Development Centre (NIDC) signed a memorandum of understanding, and in December, the Royal Commission for Jubail and Yanbu (RCJY) and Essar inked a land allocation agreement.

Kapadia stated in an interview with a global publication: “We intend to award an LSTK (Lump Sum Turnkey) contract with local content criteria being balanced against the need to achieve project drivers of schedule, cost, quality, and safety. In order to accomplish these goals, the contractor would be responsible for all procurement.”

The Essar Group has foreign investments in four sectors, including infrastructure, EPC, metals & mining, and energy. The privately held company generates more than $13 billion in revenue annually.

Essar is also close to finishing its intended asset monetization program and completing the $25 billion (about Rs2 lakh crore) debt payback plan, with the Indian banking sector being almost fully repaid.

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