Irrespective of the location of the new facility, the hot-rolled input products for it will be supplied by SAIL’s hot strip mill in Rourkela.


Global steel giant ArcelorMittal and India’s largest steel producing company, Steel Authority of India Limited (SAIL), are eyeing Odisha as the potential location for the automotive grade steel plant, proposed jointly by them. It could be Rourkela, said sources.

The two companies had signed an MoU in May 2015 for setting up an state-of-the-art automotive steel manufacturing facility under a joint venture (JV) arrangement in India with an estimated cost $ 1 billion.

A senior SAIL official informed that the company recently wrote to Odisha Industries Secretary Sanjeev Chopra, expressing interest to set up the auto grade steel facility in the state. In response, the state government has said it would be happy to invite SAIL-ArcelorMittal JV to set up the plant as there is ample land available in the state.

The proposed JV will construct a cold rolling mill and other downstream finishing facilities in India, said to be one of the fastest-growing automotive markets in the world with the production likely to double from 3.6 million units in 2014 to 7.3 million units in 2020.

The source said if the two sides agree, Rourkela could be an ideal location. SAIL has a steel plant in Rourkela with 4.5 MTPA of hot metal and 4.2 MTPA crude steel capacity. That apart, Odisha has two more steel plants – Tata Steel’s facility at Kalinganagar in Jajpur district and Jindal Steel and Power Limited’s plant at Angul.

It has been agreed that the hot-rolled input products for the JV will be supplied by SAIL’s hot strip mill in Rourkela irrespective of the location of the new facility, thus making the entire value chain indigenous, on the lines of Prime Minister Narendra Modi’s vision of ‘Make in India’.

Following the interest shown by Odisha, the SAIL-ArcelorMittal officials would decide on the site selection based on the advice of experts and after conducting due diligence, taking into account the location, availability of manufacturing inputs, infrastructure and facilities as well as incentives and benefits made available by the state government.

Sources also said that several rounds of discussions were held on where the plant should be set up. Besides Odisha, there are three more options – Andhra Pradesh, Maharashtra and Gujarat. Besides, commercial terms and conditions are also being worked out.

Sources said a feasibility report on the new joint venture has been prepared by the Joint Working Group (JWG) and all the pre-requisite formalities have been achieved. The final draft of the agreement is ready. It is believed that the JV will not only support the booming automobile sector in the country but also provide specialised technologies to SAIL.

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