Steel Products

ArcelorMittal, Nippon Team Up to Rescue Essar Steel India

Written by Tim Triplett

ArcelorMittal (AM) and Nippon Steel & Sumitomo Metal Corp. (NSMMC) have teamed up to acquire and operate financially troubled Essar Steel India Ltd. (ESIL). The joint venture is still subject to regulatory approval.

ESIL operates one of India’s largest integrated mills with annual capacity of 10 million tons. It manufactures hot rolled, cold rolled and galvanized steel products in flat roll, plates and pipes, which are sold through its domestic sales channels. It also owns an iron ore mine in eastern India. The company is in bankruptcy proceedings.

ArcelorMittal and NSSMC have experience with other alliances in the United States, including the joint management of I/N Tek (cold-rolled steel products) and I/N Kote (coated steel products) in Indiana, as well as AM/NS Calvert (hot-rolled, cold-rolled, and coated steel products) in Alabama. Based on the success of their past joint ventures, ArcelorMittal’s track record of rebuilding companies and its substantial market knowledge of India, the partners believe they will be able to turn around ESIL and transform it into a competitive steel business.

The joint venture views India as one of the most promising steel markets in the world. NSSMC had been seeking opportunities to engage in integrated steel production in India to capitalize on the nation’s medium and long-term growth potential, and to reinforce its global supply network.

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