Calcutta, May 14: The Ruias and the Tatas plan to invest $5 billion or Rs 20,000 crore in steel and oil sectors in Egypt.
The Essar group wants to set up a $3.4-billion oil refinery and a $590-million steel plant in the most populated Arab country, while Tata Steel is planning to invest $900 million in a greenfield venture, an Egyptian government official said in Cairo today.
An Essar spokesperson said: ďAs a group, we keep looking at growth opportunities. This is one such proposal being considered. It is too premature to comment on the projects.Ē
However, Reuters quoted Ashraf Diwidar, adviser to the Industrial Development Authority (IDA), saying that the Egyptian government could soon approve Essarís projects, indicating that talks were in an advanced stage.
A Tata Steel official said the company was in discussion with various entities across the world but no project had been finalised as yet.
Though the exact size of Essarís oil refinery is not known, it is expected to produce 300,000 barrels per day. The plant could come on steam by 2010.
Given the importance of oil in overall economic growth, the Egyptian government may even take a stake in the project.
Essar is not the first Indian company to explore oil-rich Egypt. The Indian Oil Corporation has been pursuing a pipeline project there. GAIL is already present in that country and runs two city gas distribution projects.
The Egyptian steel sector, however, has no Indian company.
Abundance of natural gas, which can be used as the fuel to fire a steel plant instead of coal, rich iron ore reserves and a strategic location with proximity to key markets in the EU, Africa and West Asia, seem to be drawing both Essar and Tata Steel to the land of the Nile.
Essar and Tata Steel have both been aggressively pursuing overseas expansion of their steel empires.
Tata Steel bought Anglo-Dutch Corus Group plc in January in the biggest overseas acquisition by any Indian company.
It is also bidding for a steel unit in Vietnam. The company took the lead in the Indian steel industryís global march by acquiring Singapore-based Natsteel in 2004 and Millennium Steel of Thailand in 2005.
Last month, Essar bid for Algoma Steel of Canada and bought Minnesota Steel in the US through its overseas investment arm Essar Global.
The Ruia-controlled company, having interests in telecommunication, steel and oil, last year made an unsuccessful attempt to buy government-controlled Suez Steel in Egypt.
Apart from acquisitions, both the companies are open to greenfield ventures as the proposals for plants in Egypt indicate. Tata Steel and Essar are pursuing steel projects in Iran and Bangladesh also.
Egyptís steel production now stands at 4.3 million tonnes. India is the twelfth largest foreign investor in Egypt. However, if these projects are cleared, India could move up a few notches in the investment pecking order.