New Delhi: Dubai-based ETA Star Group plans to set up power and cement projects in India, investing Rs7,336 crore.
“We are planning to set up a 1,200MW imported coal-based power project at an investment of Rs6,000 crore for which we are currently scouting for locations in Andhra Pradesh and Tamil Nadu. Once the project is ready, given the circumstances, we may also double its capacity,” said Hameed Syed Salahuddin, director, ETA Star.
Scaling up: Cement bags being loaded off trucks in New Delhi. ETA Star plans to invest $340 million in two cement plants, one each in Tamil Nadu and Gujarat, with a total capacity of 3 million tonnes per annum
The company plans to become an integrated power generation company, and is in the process of acquiring coal blocks overseas to enter the coal import business in India.
The group has a presence in 21 countries, with a consolidated turnover of $4 billion (Rs15,960 crore) for the year ended 2006. All the projects will be undertaken by its subsidiaries.
The power generation project in India, also the group’s first, will be developed as a merchant power project and is expected to be completed by early 2008. The company also plans to build a ship terminal as a part of the project to receive the imported coal.
The project will require 5 million tonnes per annum (mtpa) of coal, which the company will source from international markets as it already has a presence in coal trading.
“We will leverage our contacts with the coal mining companies to commit supplies for our power project,” Salahuddin added.
It also plans to acquire coal blocks and is at present in talks to secure them in Indonesia, Mozambique and South Africa.
“We plan to finalize our coal block plans within three months and will enter the coal import business in India on the back of our coal blocks. Once our power project is in place, we will also apply for coal blocks to the Indian government,” Salahuddin said.
The size of the market for imported coal for power generation in India is around 20mtpa. ETA will have to compete, among others, with LLC Dubai, PTC India Ltd, Adanis, Minerals and Metals Trading Corp. and Swiss Singapore.
Coal imports are projected to more than double to 40mtpa by 2012 due to a increase in demand of coal requirement for power projects. The overall coal requirement in the country is expected to go up to 544mtpa by 2012. Of this, only 482mtpa is expected to be available domestically.
The company is confident about its coal import plans as it already has a presence in the shipping business with 45 dry bulk carrier vessels in its fleet.
“A fully integrated company will have an advantage here. The imported coal consumption is on the rise due to less ash content in it as it helps in saving costs,” said Hitul Gutka, an analyst at India Infoline.
The company also plans to set up two cement manufacturing units, in Tamil Nadu and Gujarat, with a total capacity of three million tonnes per annum at an investment of $340 million.
ETA already has a cement manufacturing capacity of 5mtpa.“We are presently doing an assessment of the lime stone reserves,” Salahuddin said.