- Apr 27, 2018 -
On April 2nd, Nippon Steel & Sumitomojin announced that it will jointly acquire ArcelorMittal Steel, an Indian subsidiary of ArcelorMittal, and AMIPL, the Indian subsidiary of ArcelorMittal. The company (Essar St eel) will jointly acquire Essar Steel in a cooperative manner. After the acquisition, Essar Steel will be jointly operated as a joint venture between the two companies. Essar Steel is an Indian steel company with its main production base in Gujarat. The annual production capacity of crude steel is 9.6 million tons. However, due to restrictions on steelmaking and continuous casting, the current annual steel production is only 6.1 million tons.
Nippon Steel & Sumitomo Gold is Japan's leading steel company (50 million tons of crude steel production capacity per year) and has nearly 20 years of cooperation with ArcelorMittal. In addition to I/N Tek Corporation and I/N Kote Corporation, which are joint ventures for the production of cold-rolled steel sheets and galvanized steel sheets for automotive use in Indiana, the United States also acquired the original ThyssenKrupp Group in the United States in 2014. The Calvert steel plant in Parma, which produces hot rolled steel, cold rolled steel and surface treated steel, was renamed AM/NS Calvert.
Kosei Shindo, president of Nippon Steel Sumitomo Corporation, stated that India is one of the steel markets with the most growth potential in the world, and Nippon Steel Sumitomo has been seeking to expand opportunities in the Indian market. For a long time, Japanese steel companies and Indian steel companies have a good relationship of cooperation. If the new Nippon Steel Sumitomo Gold Corporation successfully acquires Essar Steel, it will help the two countries' iron and steel companies to strengthen cooperation. The Japanese government also supports this acquisition and intends to promote this acquisition. Although Essa Steel is a private steel company, it has high-quality steel assets. Once Nippon Steel & Sumitomo Metal and ArcelorMittal succeeded in acquiring Essar Steel, it will bring advanced production technology to the latter to further explore the potential of ESA Steel's equipment and increase its product output and quality for manufacturing in India. The industry provides more quality steel. This is in line with the Indian government’s policy of actively increasing its domestic steel production capacity (with a target of 300 million tons), and it also contributes to the implementation of the “Made in India” policy proposed by the Indian government. Shinto Higashi believes that with the help of Nippon Steel Sumitomo and ArcelorMittal, Essar Steel will be able to restore profitability and improve bank credit ratings as soon as possible through business restructuring.
Mr. Lakshmi Mittal, chairman of ArcelorMittal, stated that ArcelorMittal has been hoping to have a greater market share and influence in the Indian steel market. He had planned to build a steel plant in India but due to long-term Delays and changes in the market environment were forced to stop. The acquisition of Essar Steel will be a new way for ArcelorMittal to expand its influence in the Indian market. Essar Steel currently needs a new owner with strong financial and technical strength to help it increase production efficiency and output in order to restore profitability and bring return to shareholders. Nippon Steel & Sumitomo Metal and ArcelorMittal have extensive experience in the management and operation of steel companies, as well as advanced steel production technology and strong R&D capabilities. After Nippon Steel & Sumitomo Metal and ArcelorMittal complete the acquisition of Essar Steel, it will help ESA Steel's blast furnace steel plant in Hazira, Gujarat, India to break through the technical bottleneck of production through investment and technical output. , And further expand the product outline to produce high-quality automotive plates and electrical steel plates that are urgently needed in the Indian market. India's urbanization, industrialization, and manufacturing development will bring huge demand for steel products (especially high value-added high-quality steel). Therefore, the acquisition of ESA Steel will help ArcelorMittal expand rapidly and cost-effectively in India. The steel production capacity, in order to seize the opportunity of growth in Indian steel demand.