Indian group to build Egypt plant plus three more in Middle East.
India's Essar Global is considering building a steel plant in Egypt that entails an investment of $590 million, an Egyptian government official said on Monday.
"The group told an Egyptian delegation that visited India earlier this month that it was seriously interested in establishing a steel plant in Egypt with an estimated investment of $590 million," the source who declined to be named told Reuters.
"We expect the group to sign an agreement with the Egyptian government soon," the source said, but he did not give the capacity of the proposed plant.
Essar, with interests from telecomms to construction, last year made an unsuccessful bid for Egypt's Suez Steel.
The group also plans to set up three steel plants elsewhere in the Middle East, including a joint venture to build a 1.5 million tonnes a year plant in Iran.
It said last month it planned to buy the privately owned Minnesota Steel LLC, a U.S.-based company, and invest $1.65 billion to build an integrated steel plant.
Indian steel companies have been looking overseas to acquire steel plants and raw materials as demand there and in China in particular has grown.
India's largest private steel maker, Tata Steel Ltd, is examining the possibility of building a steel plant in Egypt at an estimated cost of up to $900 million.
"The company has already started discussions with the Egyptian government," the source added.
If Tata's plant is established, it would be the company's second major venture in Africa after a ferrochrome unit in Richards Bay in South Africa, still under construction.
Egypt, the Arab world's most populous country, went from importing 2 million tonnes of steel a year less than 10 years ago to become an exporter of 900,000 tonnes in 2006, the ministry of trade and industry said.
The country produced about 4.3 million tonnes of steel in the same year, according to government data.
The International Iron & Steel Institute (IISI) said Egypt's crude steel output stood at 6 million tonnes in 2006.
The IISI has said steel demand in the Middle East is forecast to grow by 9.1 % this year and a further 8.4 % in 2008, bringing the region's overall demand in 2008 to 43.6 million tonnes.