China blocking ArcelorMittal expansion: Lakshmi Mittal

09 September 2008

Mumbai: ArcelorMittal is facing roadblocks in its bid to expand business in China even as demand from emerging markets continues to drive growth of steel companies around the world, Lakshmi Mittal, chairman and chief executive of the world's top steelmaker, said.

Mittal highlighted the problems of doing business in China, saying that his company had to pull back its acquisition of China Oriental last year to a 47 per cent stake amidst Chinese government restriction of ownership in steel assets.

''I wish China would let us do more. We tried to expand by acquiring more in China, but so far have not been lucky enough,'' Mittal said on the sidelines of the Forbes conference of CEOs in Singapore.

He said other steel companies also had to face similar problems in China. Russia's Evraz Group, which bought into Delong Holdings, a Singapore-listed Chinese steelmaker, could not clinch the $1.5 billion acquisition because of the Chinese restrictions, he added.

"The Chinese government is not encouraging foreign investors to come in a big way. Now their priority is consolidating their own fragmented steel industry," said Mittal, adding that he expects more consolidation among Chinese steelmakers.

Mittal said he expects the steel industry to grow at an annual rate of 3 to 5 per cent, thanks to demand from markets such as Brazil, India, Eastern Europe, and China.