• Tuesday, May 17, 2022

Business

ArcelorMittal acquires debt-ridden Indian firm Essar Steel

FILE PHOTO: ArcelorMittal chairman and CEO Lakshmi Mittal (Photo: PHILIPPE LOPEZ/AFP via Getty Images).

By: Radhakrishna N S

GLOBAL steel giant ArcelorMittal has completed the acquisition of debt-ridden Indian steel firm Essar Steel India Limited (ESIL), the company said on Monday (16).

The LN Mittal-owned business conglomerate has also established a joint venture with Nippon Steel Corporation (Nippon Steel), which is named ArcelorMittal Nippon Steel India Limited (AM/NS India).

The new joint venture will own and operate ESIL.

ArcelorMittal holds 60 per cent of AM/NS India, with Nippon Steel holding the balance.

Aditya Mittal, president and chief financial officer of ArcelorMittal, has been appointed chairman of AM/NS India, whereas Dilip Oommen has been appointed AM/NS India’s chief executive officer (CEO).

LN Mittal, Chairman and CEO of ArcelorMittal, said: “The acquisition of Essar Steel is an important strategic step for ArcelorMittal. India has long been identified as an attractive market for our company, and we have been looking at suitable opportunities to build a meaningful production presence in the country for over a decade. Both India and Essar’s appeal are enduring.

“Essar has sizeable, profitable, well-located operations, and the long-term growth potential for the Indian economy and therefore Indian steel demand are well known. The transaction also demonstrates how India benefits from the Insolvency and Bankruptcy Code, a genuinely progressive reform, whose positive impact will be felt widely across the Indian economy.

“We are also delighted to be embarking on this together with Nippon Steel, with whom we have a trusted, long-term relationship. Our combined strengths and technology will bring many new opportunities, which will allow us to make a positive contribution to India’s target to grow steelmaking capacity to 300 million tonnes per annum by 2030, and for its manufacturing sector more broadly.”

Eiji Hashimoto, Representative Director and President of Nippon Steel, said: “AM/NS India manufactures flat steel, steel plates and steel pipes mainly at its integrated steel mill with nominal crude steel production capacity of 9.6 million tonnes per year in India, one of the most promising steel markets in the world. The company also has a wide-ranging domestic sales network and manufacturing plants in east India producing pellets, a raw material of steel.

“For years, Nippon Steel has been making direct investments in many countries, including Brazil, the US, China and ASEAN countries, in areas where we can take advantage of our advanced technology, contributing steadily to the industrial development and the enhancement of self-sufficiency in each host country. We will strive to establish a prominent presence in India, conforming with its policy to increase domestically-produced steel products.”

AM/NS India is an integrated flat steel producer and the largest steel company in western India. Its current level of annualised crude steel production is circa 7.5 million tonnes.

It also has iron ore pellet facilities in the east of India, with current annual capacity of 14 million tonnes per annum.

AM/NS India’s plans include an intention to increase finished steel shipments to 8.5 million tonnes over the medium-term, the company said.

A long-term aspiration to increase finished steel shipments to between 12 and 15 million tonnes through the addition of new iron and steelmaking assets, in order that AM/NS India can play an active role and fully benefit from the anticipated growth in the Indian steel industry.

Eastern Eye

Related Stories

Eastern Eye

Videos

Mrunal Thakur on Dhamaka, experience of working with Kartik Aaryan,…
Nushrratt Bharuccha on Chhorii, pressure of comparison with Lapachhapi, upcoming…
Abhimanyu Dassani on Meenakshi Sundareshwar, how his mom Bhagyashree reacted…