The USD 1 billion joint venture (JV) between SAIL and ArcelorMittal for producing auto-grade steel may come up at Sanand in Gujarat, though the two parties are yet to finalise the location.
A senior steel ministry official said that “Almost all the contentious issues involving the joint venture has been resolved and an agreement for the setting up of the joint venture is likely to be signed in Aug’17”.
The two parties have been negotiating on the deal since the signing of a Memorandum of Understanding (MoU) in May 2015 for setting up the JV mainly to cater to the fast-growing automotive sector of India, which is poised to become the world’s fourth largest automobile manufacturing nation by 2020.
“The JV will come up in one of the three automotive hubs in the country. We have given them a timeframe to compelete the formation of JV and operationalise it. We have directed them to do the foundation stone-laying ceremony before December this year,” said a source.
Asked whether Gujarat’s Sanand has a fair chance of hosting the joint venture, the official said, “I can’t confirm that now.”
Raw material for the proposed plant in the form of HR Coil would be supplied from SAIL’s Rourkela plant while ArcelorMittal, which commands over 15% of the autograde steel market globally, will supply the technology for the venture. It might take two years to operationalise the plant from the zero date of construction starts.
Once operationalised, the JV will give JSW and Tata Steel a run for their money. In association with JFE, JSW produces auto-grade steel while Tata Steel has partnership with Nippon Steel for manufacturing such products.
India mostly relies on imports to meet the requirement of the auto-grade steel.
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