The proposed R5,000-crore investment plan of ArcelorMittal and SAIL for an automotive steel plant in India, agreed on by the firms more than a year ago, will be finalsied during steel minister Chaudhary Birender Singh’s four-day visit to London and Luxembourg later in the month.
Sources in the steel ministry said the minister, who would be taking his first foreign trip after taking charge last month, would also be accompanied by SAIL chairman P K Singh and a joint secretary among others.
Though the details of the tour were not known, sources said the two companies may sign the joint venture agreement for setting up the automotive steel manufacturing facility during the minister’s visit. SAIL chairman did not respond to the phone calls. London-headquartered ArcelorMittal has also plant in Luxembourg.
Meanwhile, talking to reporters, the minister on Thursday said though there were some issues relating to production, these would be sorted out in a month or so and the joint venture would be “operational” by the year-end.
The world’s largest steelmaker ArcelorMittal and India’s largest steel PSU SAIL had on May 22 last year signed a memorandum of understanding (MoU) for setting up the facility. The aim was to cater to the growing need of the automotive sector.
Although the companies have not announced the size of the plant or the location of the proposed JV entity so far, sources had earlier said it could be a 1.2-million-tonne unit, entailing an investment of around R5,000 crore.
SAIL was supposed to supply steel to the joint venture entity while ArcelorMittal, the required technology.
ArcelorMittal supplies around 17% of the global auto steel demand.
India is likely to manufacture 7 million units to become the world’s fourth largest automobile manufacturing nation by 2020.
Increasing the availability of indigenously produced automotive steel would reduce India’s dependence on imports and is likely to give the automotive industry a sustainable competitive advantage.