ArcelorMittal, the world's leading steel company, and Steel Authority of India Limited (SAIL) inked a pact on Friday to set up an automotive steel manufacturing facility with an estimated Rs 5,000-crore investment under a joint venture (JV) arrangement in India.
According to a SAIL press release, a memorandum of understanding (MoU) was signed in London on Friday by ArcelorMittal chairman and chief executive officer Lakshmi N. Mittal SAIL chairman C.S. Verma. The proposed JV will construct a state-of-the-art cold rolling mill and other downstream finishing facilities in India that will offer technologically advanced steel products to India's rapidly growing automotive sector.
India is forecast to become the world's fourth-largest automobile manufacturing nation by 2020 growing from approximately 3.5 million units today to over 7 million units.
In response to the level of demand and supported by 'Make In India' campaign, which has been designed to transform India into a global manufacturing hub, automotive manufacturers have been establishing an increased presence in the country.
Commenting on the announcement, joint secretary Rakesh Singh, who was present during the signing of the MoU, said, "Increasing the availability of indigenously produced automotive steel would reduce India's reliance on imports and provide the Indian steel industry and the automotive industry with a sustainable competitive advantage ."
Mittal said that the company was in discussions with SAIL for some time and the pact indicates its intention to further advance the collaboration. "Bringing together our leading automotive technological capabilities with SAIL's production scale in India, in a similar manner to ArcelorMittals partnership with Hunan Valin on our VAMA joint venture in China, is an exciting and powerful combination," he said.
"The automotive sector is a highly strategic and important market for ArcelorMittal; establishing an automotive focussed production presence in India, one of the world's fastest growing automotive markets, is a natural progression in executing our global automotive strategy." Mittal added.