As demand for steel goes up in the infrastructure and automobile sectors, ArcelorMittal Nippon Steel India (AM/NS India) is increasing capacity through debottlenecking, greenfield investments and acquisitions. The joint venture is enhancing the output from the Hazira plant through debottlenecking. It is also planning investments to increase capacity of the plant to 15 million tonne (MT) from 9MT.
The steelmaker is now in talks to raise a $1 billion loan to fund its growth.
AM/NS India targets to expand its capacity to 40MT by 2035. ArcelorMittal chairman Lakshmi Mittal, in January, announced that the JV will be building the world’s largest single-location integrated steel plant at Gujarat’s Hazira. The plant will have a capacity of producing 24 MT of crude steel by 2029.
In December last year, the steel manufacturer signed a ₹1.14 lakh crore worth agreement with the Gujarat government for a green hydrogen project, an integrated steel plant and expansion of its existing steel manufacturing capacity. It also signed a Memorandum of Understanding (MoU) worth ₹16,000 crore with the state government for construction of a ship-building and repair facility at Surat.
It also acquired two companies recently. In April, AM/NS India received approval from NCLT to buy Indian Steel Corporation, which specialises in cold-rolled, galvanised and non-ferrous steel products for the automotive, construction, home appliance and general engineering sectors. The company’s production capacity is 6 lakh tonne a year. In 2022, AM/NS India had acquired the Uttam Galva plant with a capacity of 1.2 MT that specialises in the processing of cold-rolled, non-ferrous and galvanised steel.
AM/NS India’s primary focus is value-added products and import substitution. It aims to manufacture the specialty steel varieties that are offered globally by both companies. The JV took over Essar Steel in a ₹42,000 crore deal in 2019 and began its operation in India.
AM/NS India, the JV in which ArcelorMittal holds 60% stake, recorded 2 MT of crude steel production in January- March 2024, achieving an annual run-rate close to the 8.6 MT capacity. Steel shipments in the quarter reached a record 2MT, representing an increase of 7.9% compared to the previous quarter, including higher exports.
The EBITDA during January- March 2024 declined by 37.5% to $312 million compared to $499 million in the previous quarter. This decline was driven by a negative price-cost effect because of natural gas hedges, which partially offset by higher shipments, the company said.
