ArcelorMittal has completed its acquisition of Essar Steel (ESIL). It has simultaneously established a joint venture with Nippon Steel – called ArcelorMittal Nippon Steel India Limited (AM/NS India) – to own and operate ESIL.
ArcelorMittal president and chief financial officer Aditya Mittal has been appointed AM/NS India chairman, with Essar Steel managing director Dilip Oommen appointed chief executive.
“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,” ArcelorMittal chairman and ceo Lakshmi Mittal says in a note seen by Kallanish. “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,” he adds.
Nippon Steel president Eiji Hashimoto says: “Nippon Steel and ArcelorMittal will bring out AM/NS India’s potential by providing it with their respective business experience and world-leading advanced technologies… We will strive to establish a prominent presence in India, conforming with its policy to increase domestically-produced steel products.”
Essar currently produces 7.5m t/y of crude steel in western India and also has 14m t/y of iron ore pelletising capacity in eastern India.
AM/NS India plans to increase finished steel sales to 8.5m t/y over the medium term by completing ongoing capital expenditure projects and implementing best practice to deliver efficiency gains, ArcelorMittal observes. Additional assets will thereafter be commissioned. In the longer term the aim is to increase finished steel sales to 12m-15m t/y through the addition of new iron and steelmaking assets.
