Last Updated: Thursday, 19 April 2007
Indian steelmaker seals US deal
http://news.bbc.co.uk/2/hi/business/6570975.stm
[Essar sees a North American presence as vital to its growth]
Essar Group, the Indian conglomerate whose interests span energy, telecoms and shipping, is expanding in the US by buying a leading steelmaker.
It is to buy Minnesota Steel for an undisclosed sum, only days after it also agreed to acquire Canadian firm Algoma Steel for $1.58bn (£788m).
Minnesota plans to build a major steel mill in the north of the state, costing $1.6bn and creating 700 jobs.
Essar said the deal would help fulfil its aim of becoming a global operator.
Global expansion
[Our investment in Minnesota Steel is exciting as it gives us a cornerstone in the North American market
Shashi Ruia, Essar Global chairman]
Essar's Indian steel business produces more than four million tonnes a year while the firm is also expanding in low cost markets such as Vietnam and Trinidad & Tobago.
The Minnesota and Algoma deals will give Essar a significant presence in North America.
"Our investment in Minnesota Steel is exciting as it gives us a cornerstone in the North American market," said Shashi Ruia, chairman of Essar Global.
"From this we will further expand our global steel business."
The steel industry is consolidating rapidly, driven by the need to reduce costs and meet the substantial demand for its products from fast-expanding economies such as India and China.
Indian firms are at the forefront of this trend, Tata Group having bought Anglo-Dutch business Corus earlier this year for £5.7bn.
Essar Global, Essar's international division, already employs more than 3,000 people in the US, as part of its 20,000 global workforce.
Essar is also a shareholder in Hutchison Essar, one of India's largest mobile phone firms.