ArcelorMittal, SAIL in automotive steel JV pact
23 May 2015
ArcelorMittal, the world's leading steel and mining company, is partnering India's state-run steel maker Steel Authority of India Ltd (SAIL) to set up a state-of-the-art cold rolling mill for the manufacture of automotive grade steel, with other downstream finishing facilities, in India.
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| (L to R) Aditya Mittal, SAIL chairman C S Verma, LN Mittal and Rakesh Singh, secretary ministry of steel |
ArcelorMittal and SAIL, India's leading steel company, today signed a memorandum of understanding (MoU) for setting up a joint venture facility for automotive steel manufacturing in the country.
Lakshmi Mittal, chairman and CEO of ArcelorMittal, and C S Verma, chairman of SAIL, signed the memorandum of understanding (MoU), taking the first step of a process to establish a JV between the two companies, in London today.
''The MoU is the first step in the process to establish a joint venture between the two companies.
''The proposed joint venture will construct a cold rolling mill and other downstream finishing facilities in India that will offer technologically advanced steel products to the automotive sector,'' the two companies said in a statement.
The MoU was signed by Lakshmi Mittal, chairman and chief executive officer, ArcelorMittal, and CS Verma, chairman of SAIL.
The proposed JV, involving an estimated investment of Rs5,000 crore ($850 million), will offer technologically advanced steel products to India's rapidly growing automotive sector.
While details of the investment and plant size were not disclosed, sources close to the development said the plant size could be around 1.5 million tonnes and the investment could be in the range of $850 million.
"The proposed JV will construct a state-of-the-art cold rolling mill and other downstream finishing facilities in India that will offer technologically advanced steel products to India's rapidly growing automotive sector," ArcelorMittal and SAIL said in a joint statement.
India is forecast to become the world's fourth largest automobile manufacturing nation by 2020, growing from approximately 3.5 million units today to over 7 million units by that time.
The joint venture will also support the Indian government's 'Make In India' programme, which has been designed to transform India into a global manufacturing hub.
''We have been in discussions with SAIL for some time and the signing signals our intention to further advance our collaboration.
''The automotive sector is a highly strategic and important market for ArcelorMittal.
''Establishing an automotive focused production presence in India is a natural progression in executing our global automotive strategy,'' said Mittal.
India is forecast to become the world's fourth largest automobile manufacturing nation by 2020, growing from approximately 3.5 million units today to over 7 million units, the two companies said in a statement.
Verma said product enrichment is an integral part of SAIL's modernisation and expansion plan.
''The MoU with ArcelorMittal will aid a broader effort by SAIL to help fulfill the high-quality steel requirements of the rapidly growing infrastructure and manufacturing sectors in India,'' he said.
''SAIL is on the verge of completing a comprehensive modernisation and expansion program to increase its hot metal capacity from 14 million tonnes per annum (MTPA) to 23.5 MTPA, with a quantum jump in production of value added steels.
"Furthermore, we have drawn up a Vision 2025 plan to further increase capacity to 50 MTPA. Product enrichment is an integral part of this plan and the MoU with ArcelorMittal will pave the way for a new chapter in the indigenous production of high-quality automotive steel in India. It will also aid a broader effort by SAIL to help fulfill the high-quality steel requirements of the rapidly growing infrastructure and manufacturing sectors in India,'' Verma added.
