Luxembourg-headquartered steel manufacturer ArcelorMittal today announced that it has completed the acquisition of Essar Steel India Limited (ESIL) and simultaneously established a joint venture with Nippon Steel Corporation (Nippon Steel), called ArcelorMittal Nippon Steel India Limited (AM/NS India), which will own and operate ESIL.
In this context, Aditya Mittal, President and CFO of ArcelorMittal, has been appointed Chairman of AM/NS India, and Dilip Oommen has been appointed AM/NS India’s CEO.
Lakshmi Mittal, Chairman and CEO of ArcelorMittal, commented: “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. [...] 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 added: “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”.
Similarly, 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. [...] 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, so as to promptly implement the resolution plan and realise its further business expansion".
Aditya Mittal added: “India is a large and strategic market and we are delighted to be here. Our aim is to create sustainable and long-term value by becoming a leading steel manufacturer in the country. Essar Steel has quality facilities which provide us with immediate and substantial production capacity, and we also gain an excellent platform for further growth, across both volume and product quality. This acquisition gives us the opportunity to contribute to India’s expansion in infrastructure and urbanisation in the coming decades".
ArcelorMittal holds 60 per cent of AM/NS India, with Nippon Steel holding the balance.
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 around 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: increasing finished steel shipments to 8.5 million tonnes over the medium-term; 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.