Hot-rolled input products for the proposed joint venture of Steel Authority of India Limited (SAIL) with steel giant ArcelorMittal will be supplied by the former’s Rourkela plant in Odisha.
A SAIL source said that negotiations with ArcelorMittal for the joint venture were going on in full swing and it is likely to be operational by the end of 2016. The proposed JV will construct world-class facilities for manufacturing automotive steel, which will offer technologically advanced steel products for the automotive sector.
The two companies, he said, have agreed that hot-rolled input products for the proposed facility will be supplied by SAIL’s new hot strip mill in Rourkela, thus making the entire value chain indigenous. However, no decision has been taken as to where the proposed JV would be set up.
The two companies had signed an MoU last year for setting up a state-of-the-art automotive steel manufacturing facility under a JV arrangement in India. The estimated cost of the project is $1 billion. ArcelorMittal supplies around 17% of the global auto steel demand.
The project’s Joint Working Group (JWG), which was formed after the signing of the MoU, has completed the major part of the project’s feasibility report.
This week, a team of SAIL officials headed by Union Steel Minister Chaudhary Birender Singh and consisting of SAIL chairman P.K. Singh, Joint Secretary in the Steel Ministry Sunil Barthwal, had a meeting with ArcelorMittal chairman and CEO L.N. Mittal and others, in London to discuss the contours of the JV. Brian Aranha, ArcelorMittal’s executive vice president and head of global automotives, was also present in the meeting.
India is poised to become the world’s third largest automobile manufacturing country by 2026. According to estimates, passenger vehicles are likely to grow from 3 million units to over 7 million units in the next 10 years. Automotive manufacturers have been establishing an increased presence in the wake of growing demand, supported by Prime Minister Narendra Modi’s “Make in India” programme, aimed at transforming India into a global manufacturing hub.