India’s Essar Group has decided to set up a 2 million tonne gas-fired steel plant in Bangladesh, through a consortium of four Bangladeshi partners named S Alam, PHP, KDS and Abul Khair.

Under the terms of the joint venture, Essar will hold a majority 60% stake with the balance 40% being held by the consortium.

The JV, Essar Bangladesh Ltd, would invest about 550 million dollars in setting up the steel plant in southeastern port city of Chittagong with an annual capacity of 2 million tonne. The plant is likely to start production in 2010.

However, the JV is awaiting a clearance from Bangladesh's Board of Investment.

Earlier, the consortium imported billets for their re-rolling steel mills in Bangladesh from Essar's plant in the Indian coastal state of Orissa.