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By Alex MacDonald
LONDON--ArcelorMittal (MT) said Friday it has signed a
preliminary agreement with state-owned Steel Authority of India Ltd
to create a automotive-steel joint venture in India that would take
advantage of burgeoning demand for cars and trucks.
ArcelorMittal, the world's largest steelmaker by shipments,
signed a memorandum of understanding with SAIL to build a cold
rolling mill and other finishing facilities that would use the
steel titan's advanced technology to sell steel products to India's
rapidly growing automotive sector.
India is forecast to become the world's fourth-largest
automobile-manufacturing nation by 2020, with output growing from
approximately 3.5 million units to more than 7 million units by the
end of the decade. But a bloated bureaucracy and significant
hurdles over purchasing land and regulation have deterred some
foreign companies from investment.
In 2013, ArcelorMittal pulled out of constructing an integrated
steel plant in the eastern state of Odisha have experienced
significant delays after signing an accord with the state
government in 2006.
ArcelorMittal is proceeding with plans to build two other steel
plants in the states of Jharkhand and Karnataka.
ArcelorMittal is the world's largest automotive steel producer,
accounting for 17% of global supply and generating more than $12
billion last year from the sale of more than 13 million tons of
steel to automotive customers globally.
SAIL is expanding its hot steel production capacity to 25
million tons a year from 14 million tons annually with a view to
then doubling production capacity to 50 million tons a year by
2025.
Write to Alex MacDonald at alex.macdonald@wsj.com
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