AM/NS India, a joint venture between Arcelor Mittal and Nippon Steel plans to expand its steel-making capacity in India and has sought policy support from the government for the ambitious plan. Proposing to make large investment, the company is mulling the prospects of a green-field facility in eastern India combined with further expansion through inorganic route.
The firm had acquired Essar Steel’s 9.6 million tonne Hazira plant for `42,785 crore in December. It was the country’s largest stressed-asset deal and marked ArcelorMittal’s entry into India’s potentially fast-growing steel industry. Senior representatives of AM/NS India have recently made a presentation to Union steel minister Dharmendra Pradhan on the firm’s likely investment proposals in the country.
They also explained to the minister the support that the company would be requiring, from the Centre and the concerned state governments for the plans to materialize.
“It was a fruitful meeting in which we explained our ambitions to expand our steel making footprint in India in the future. We also discussed with the minister the appropriate backdrop which would provide us with the confidence to make significant investment to fulfill the ambitious plans,” Dilip Oommen, CEO, AM/NS India told Financial Express. Despite the Covid-19 pandemic, AM/NS India did well compared to peers in India in first three full quarters of 2020 since the Hazira unit acquisition – it clocked $423 million as earnings before interest taxes depreciation and amortisation (Ebitda) in the January-September period.
For the expansion of its India footprint via a green-field facility in the eastern part of the country, the company seeks support of the government’s ‘Purvodaya’ initiative that encourages the setting up of new steel plants. In sync with its strategy, in February, AM/NS India bagged an iron ore mine with estimated reserves of 180 million tonne in Odisha through competitive bidding.
Arcelor Mittal is expected to undertake all steel capacity expansion in India through the joint venture entity, at least for the time being. India’s current installed capacity is around 140 mtpa. The country aspires to have 300 mt installed capacity by 2030-31. India’s per capital steel consumption is still around a third of the global average.