Steel giant ArcelorMittal plans to source equipment required for its greenfield and brownfield projects around the globe from India and China. The company has asked its Design & Engineering Centre to find out best possible ways of sourcing equipment to bring down costs. The strategy aims to counter the economic slowdown. Sourcing from two countries could bring down the equipment cost for the factories by 35-40%.With equipment costs pegged around 50% of the entire cost of a greenfield project, total reduction could go up to 20-22% of the project cost, said Pierre Jonette, CEO, Design & Engineering Centre, a strategic business unit of the company.
Talking to reporters on the sidelines of ICT-East, 2009, organised by CII, Jonette said: ?We are reviewing our strategy in terms of sourcing and trying to lower the cost.? Pointing out that India has a huge opportunity to become a sourcing hub for the company, he said, ?We are trying to source more equipment from India and then China.
?The company sources boilers and steel structures from India, and blast furnace, coke oven and sinter plants from China. The company reported a second quarter net loss of $823 million in July. ArcelorMittal with production capacity of around 100 million steel per year, has the largest greenfield project in India. Apart from that, the company has comparatively smaller projects in Saudi Arabia and Kazakhstan. The company is working on modalities to set up two 12-million tonne per annum steel mills, one each in Jharkhand and Orissa. ?The projects in two states are likely to begin byend of 2013,? Jonette said.