Essar signs agreement for $100 M with INI Steel
By agencies   |   Thursday, 08 September 2005, 19:30 IST
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MUMBAI: Essar Global, an international investment arm of the Essar group, has signed an agreement with South Korea's INI Steel to buy two steel-making units for about $100 million (approximately Rs 437 crore). Industry sources said Essar Steel might use the units, which were now being dismantled for shipment to India, in any of Essar Steel's upcoming plants. An Essar group spokesperson confirmed the acquisition, which was "subject to certain conditions". He said the Essar group was yet to decide on the location where the units would be set up. Essar Steel, the country's second largest private steel maker, is conducting a feasibility study in three states—Chhattisgarh, Jharkhand and Orissa -- for setting up new steel plants. It is also eyeing Qatar for a new project. The South Korean units have a combined production capacity of 2.5 million tonne a year. Essar Steel, the flagship company of the diversified Essar group, has a production capacity of 3 million tonne of steel per year at its plant in Hazira in Gujarat. Essar Steel's shares rose 8.7 percent to Rs 62.10 on the Bombay Stock Exchange (BSE) on Monday. INI Steel had acquired the steel units last year when they bought South Korean steel-maker Hanbo Steel. The two steel-making units use the corex technology, an environment-friendly alternative to the conventional blast furnace route for producing hot metal. India produces 38 million tonne of steel a year. Riding on high prices and a strong demand, the production capacity is estimated to go up to 70 million tonne by 2015.

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