Hazira-based Arcelor Mittal-Nippon Steel (AM-NS) has approached Indian government, seeking specific policy support to an ambitious plan to expand its steel-making capacity in India with “significant investments”. The L.N. Mittal-owned company is evaluating an option of setting up a large green-field facility in eastern India, but may also opt for further expansion through the inorganic route.
AM-NS India, a 60:40 joint venture between world’s largest steelmaker ArcelorMittal and Japan’s Nippon Steel Corporation, had acquired Essar Steel’s 9.6 million tonnes Hazira plant for Rs 42,785 crore in December last year. This was the country’s largest stressed-asset deal and marked Arcelor-Mittal’s entry into India’s potentially fast-growing steel industry.
According to a Financial Express report, 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. “It was a fruitful meeting in which we explained our ambitions to expand our steelmaking 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 fulfil 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. The Hazira unit produced 4.7 million tonnes of crude steel during the nine month period, of which the highest output was in the September quarter, at 1.8 million tonnes.
AM-NS India has already announced a plan to enhance the finished steelmaking capacity at Hazira to 12-15 million tonnes per annum (mtpa) from 6.5 mtpa now. However, the larger plan is to expand its India footprint via a green-field facility in the eastern part of the country.
The idea is also to bank on the government’s ‘Purvodaya’ initiative that encourages the setting up of new steel plants. In sync with its strategy, in February 2020 AM-NS India bagged an iron ore mine with estimated reserves of 180 million tonnes in Odisha through competitive bidding.