22 May 2015 - ArcelorMittal, the
world's leading steel and mining company, and the Steel Authority
of India Limited ('SAIL'), India's leading steel company, today,
signed a Memorandum of Understanding ('MoU') to set up an
automotive steel manufacturing facility under a Joint Venture
('JV') arrangement in India.
The MoU was signed in London today
by Mr. Lakshmi Mittal, Chairman and CEO of ArcelorMittal, and Mr.
C.S. Verma, Chairman of SAIL. Mr. Rakesh Singh, Secretary to the
Government of India, Ministry of Steel and Mr. Aditya Mittal,
ArcelorMittal CFO and CEO ArcelorMittal Europe, were also
present.
The MoU is the first step of a
process to establish a JV between the two companies. 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. 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
units1. In response
to the level of demand, and supported by the Indian Government's
'Make In India' programme, which has been designed to transform
India into a global manufacturing hub, automotive manufacturers
have been establishing an increased presence in the country.
Commenting on the announcement,
Mr. Rakesh Singh, Steel Secretary to the Government of India, said:
"Increasing the availability of indigenously produced automotive
steel would reduce India's reliance on imports and provide the
Indian steel industry and the automotive industry with a
sustainable competitive advantage. India is expected to grow as a
hub for automobile export manufacturing facilities to cater to the
international market. This proposed collaboration between
ArcelorMittal and SAIL is a positive and welcome step towards
fulfilling the objectives of the 'Make in India' campaign launched
by Hon'ble Prime Minister, Narendra Modi."
Mr. Mittal, Chairman and CEO,
ArcelorMittal, said: "We have been in discussions with SAIL for
some time and today's signing signals our intention to further
advance our collaboration. Bringing together our leading automotive
technological capabilities with SAIL's production scale in India,
in a similar manner to ArcelorMittal's partnership with Hunan Valin
on our VAMA joint venture in China, is an exciting and powerful
combination. The automotive sector is a highly strategic and
important market for ArcelorMittal; establishing an automotive
focussed production presence in India, one of the world's fastest
growing automotive markets, is a natural progression in executing
our global automotive strategy."
Mr. C.S. Verma, Chairman, SAIL,
added: "SAIL is on the verge of completing a comprehensive
modernisation and expansion program to increase its hot metal
capacity from 14 million tons 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 fulfil the
high-quality steel requirements of the rapidly growing
infrastructure and manufacturing sectors in India."
The combination of significant
demand growth and limitations in India's existing domestic
automotive steel production capabilities provides a compelling
opportunity for both ArcelorMittal and SAIL. In the coming months,
a working group with representatives from both companies will work
on evaluating a structure for the proposed JV and carry out
feasibility studies as part of a comprehensive due diligence
process.
ArcelorMittal is the world's
leading steel supplier to the global automotive sector, with a
market share of approximately 17 per cent. In 2014, the company
shipped over 13 million tonnes of steel to automotive customers
globally, resulting in revenues in excess of $12 billion. The
company has a proven track record of delivering innovative
solutions to global automotive manufacturers, with six of its 12
research and development laboratories across the globe dedicated to
developing new steels for auto manufacturers, focusing on:
optimising the weight and cost of vehicles; helping auto
manufacturers to meet stretching carbon emission targets; and
ensuring high standards of safety. Recent innovations include the
group's S-in-motion® range of steel solutions, applying advanced
high-strength steels that can collectively reduce a vehicle's
weight by up to 23 per cent and reduce carbon emissions by 14 per
cent during a vehicle's use phase. ArcelorMittal's global footprint
for automotive steels was recently expanded through the acquisition
of AM/NS Calvert in 2014, a state-of-the-art finishing facility
located in Southern USA that is servicing the growing NAFTA
automotive market, and the opening of VAMA, a joint venture with
Hunan Valin that established an inaugural production presence in
China. VAMA produces high-strength automotive steel in China, the
world's largest and fastest growing automotive market.
1 Source: LMC
Automotive Limited
Notes to editors
About ArcelorMittal
ArcelorMittal is
the world's leading steel and mining company, with a presence in 60
countries and an industrial footprint in 19 countries. Guided by a
philosophy to produce safe, sustainable steel, we are the leading
supplier of quality steel in the major global steel markets
including automotive, construction, household appliances and
packaging, with world-class research and development and
outstanding distribution networks.
Through our core
values of sustainability, quality and leadership, we operate
responsibly with respect to the health, safety and wellbeing of our
employees, contractors and the communities in which we
operate.
For us, steel is
the fabric of life, as it is at the heart of the modern world from
railways to cars and washing machines. We are actively researching
and producing steel-based technologies and solutions that make many
of the products and components people use in
their everyday lives more energy
efficient.
We are one of the
world's five largest producers of iron ore and metallurgical coal
and our mining business is an essential part of our growth
strategy. With a geographically diversified portfolio of iron ore
and coal assets, we are strategically positioned to serve our
network of steel plants and the external global market. While our
steel operations are important customers, our supply to the
external market is increasing as we grow.
In 2014,
ArcelorMittal had revenues of US$79.3 billion and crude steel
production of 93.1 million tonnes, while own iron ore production
reached 63.9 million tonnes.
ArcelorMittal is
listed on the stock exchanges of New York (MT), Amsterdam (MT),
Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of
Barcelona, Bilbao, Madrid and Valencia (MTS).
For more
information about ArcelorMittal please visit:
http://corporate.arcelormittal.com/
About SAIL
Steel Authority
of India Ltd is India's largest steel maker and among the top
Government owned companies conferred with the prestigious
'Maharatna' status. Government of India currently owns 75% of
SAIL's shares, the rest being held by FIs and individuals. With a
turnover of about US $ 9 billion employing around 94,000 people
across India; SAIL owns and operates 5 integrated steel plants at
Bhilai, Durgapur, Bokaro, Rourkela and Burnpur, 3 special steel
plants and ferro-alloy & refractory manufacturing units. SAIL
is also the second largest producer of iron ore in India and meets
100% requirement from captive mines.
SAIL offers the
maximum array of steel products amongst all Indian manufacturers in
the country. SAIL offers a wide range of products in mild, special
and alloy steel categories in around 1000 qualities and 5000
dimensions.
Currently SAIL is
on the verge of completing its modernization & expansion
programme at an expenditure of around USD $12 Billion which will
enhance the company's hot metal capacity to around 23.5 million
tonnes per annum. Recently Prime Minister of India - Mr Narendra
Modi dedicated SAIL's modernized and expanded units in IISCO Steel
Plant (ISP) & Rourkela Steel Plant (RSP) to the nation.
Post expansion
SAIL will also add a number of new products to its basket which
will cater to the needs of India's growing infrastructure and
manufacturing sector. SAIL has also drawn up a strategic plan -
'Vision 2025' to increase its hot metal capacity to 50 million tons
per annum which will put SAIL amongst the top steel companies
globally.
Our business
philosophy encompasses a triple bottom line approach covering the
economic, environmental and social dimensions reflecting SAIL's
commitment to build natural, human and societal capital and
contribute its might in adding strength to India's development and
progress. The tagline of the company 'There's a little bit of SAIL
in everybody's life' symbolizes the fact that in last five decades
it has grown from strength to strength and the SAIL brand is well
entrenched in peoples' minds.
For more information about SAIL please visit:
http://www.sail.co.in/
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Source: ArcelorMittal S.A. via Globenewswire
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