World’s leading steel maker ArcelorMittal and Steel Authority of India (SAIL) on Friday signed a Memorandum of Understanding (MoU) to set up an automotive steel manufacturing facility under a joint venture (JV) arrangement in India.
“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,” a joint press release said.
The MoU was signed in London on Friday by Lakshmi Mittal, Chairman and CEO, ArcelorMittal and CS Verma, SAIL chairman, in the presence of Rakesh Singh, Secretary, Ministry of Steel and Aditya Mittal, son of Lakshmi Mittal and chief financial officer and CEO ArcelorMittal Europe.
The proposed joint venture would construct a cold rolling mill and other downstream finishing facilities in India that would offer technologically advanced steel products to India’s rapidly growing automotive sector.
“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,” commented Lakshmi Mittal while signing the MoU. ArcelorMittal is the world’s leading steel supplier to the global automotive sector, with a market share of approximately 17 per cent.
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.
While reducing India’s reliance on imports, steel secretary Rakesh Singh also hoped that increasing the availability of indigenously produced automotive steel will provide a sustainable competitive advantage to Indian steel industry and automotive industry. The Government of India currently owns 75% of SAIL’s shares, the rest being held by financial institutions and individuals.
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