Essar Steel is close to achieving financial closure for its Rs 6,500 crore second steel plant at Hazira, Gujarat. With the new plant to have capacity of 3.9 million tonne a year, Essar's total steel manufacturing capacity will go up to 8.5 million tonne. And, this will make it the largest steel maker in a single location in the country.

Vikram Amin, director-sales & marketing, Essar Steel, said the second plant would be commissioned during the year 2008-09. He said the plant, which is located in South Korea, is being brought in, in pieces, to Hazira.

The plant is being set up under the aegis of Essar Steel (Hazira) Ltd - a part of the Essar group.

For the project the company has acquired some initial equipment from INI Steel, Korea. It expects to implement the project within 36 months.

The plant will produce long as well as flat products. The feasibility of the project has been done by Mecon.

Amin said, "We are constantly evaluating growth opportunities in the steel sector. However, it is too premature to offer specific comments on this project." The Hazira location, where the project is coming up has the advantage of easy access to the already well-developed infrastructure at the existing steel plant and availability of key resources such as a captive port, power, natural gas and water. The layout of the plant has been planned keeping in mind the need for smooth and uninterrupted movement of raw materials and dispatch of finished products.

Over the last two decades, the Essar group has acquired substantial expertise in setting up and operating a large integrated steel plant.