India's Essar Group to Invest $445 Million on Ferroalloy and Cement Plants in Madhya Pradesh

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Researched by Industrial Info Resources (Sugar Land, Texas)--Leading Indian conglomerate Essar Group (Mumbai) will construct a ferroalloy plant and cement manufacturing facility in Madhya Pradesh, requiring an estimated investment of $445 million. Essar Group signed a memorandum of understanding to build these projects during the recent two-day investor's summit, which was organized by the Madhya Pradesh government at Khajuraho.

The 100,000-ton-per-year ferroalloy production facility will be built in two phases. The cement plant also will be constructed in two phases, with a 2 million-ton-per-year capacity planned for the first stage of development. The $445 million investment will be in addition to Essar Group's $1.7 billion investment in the power, telecommunications and steel sectors in the state.

Essar Power Limited (Mumbai), a subsidiary of the Essar Group, plans to construct a 1,200-megawatt (MW) thermal power project at Mahan in Madhya Pradesh. The $1.2 billion project is expected to begin operations in 2012. In the steel sector, the group has announced plans to add 50 express markets and 10 hypermarkets to sell its steel products in the state. Presently, Essar Group's steel production capability is about 8.6 million tons per year. Augmentation projects are in progress to increase steel manufacturing capacity to 14 million tons per year by 2012.

Confirming the group's investment plans in Madhya Pradesh, Essar Group Chairman Shashi Ruia said that Madhya Pradesh was an ideal choice for new projects, as the state has abundant natural resources and offered excellent infrastructure facilities, power, water and skilled manpower. The company is also exploring the opportunity of establishing a technical academy to train and create a skilled talent pool. The academy will be on the lines of the group's training center at Hazira in Gujarat, which imparts engineering and technical knowledge to 250 people.

Essar Group, which is a $15 billion enterprise, employs 60,000 people across more than 20 countries. The company operates a full-fledged training and educational academy that aims to provide different courses to upgrade the technical skills, management capabilities and business capabilities of its employees. The diploma engineer trainee program enables fresh graduates to hone their engineering knowledge through on-the-job training sessions. The academy also offers 18-month comprehensive business management and career enhancement programs for executives. Additionally, the academy provides 400 training programs in business, technology, engineering and management, which is accessible to all employees. In 2009, Essar Group received the "Innovative Training Organization" award from the Indian Society for Training and Development (New Delhi).

Madhya Pradesh, which is among the least industrialized states in India, is following in the footsteps of Gujarat and Karnataka to attract domestic and international investments. In the recently concluded global meet, which was attended by delegates from 17 countries, 106 memoranda of understanding that were valued at a total of $53.16 billion were signed. These included 22 deals worth more than $28 billion on the first day of the summit, and 84 deals worth more than $24 billion on the second day. The power sector attracted the largest share of investment, valued at $30 billion. Several other Indian companies, including Videocon Industries Limited (BSE:511389) (Aurangabad, Maharastra), NTPC Limited (BSE:532555) (New Delhi) and GAIL (India) Limited (BSE:532155) (New Delhi), participated in the event.

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