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Last Updated : Jan 08, 2020 04:20 PM IST | Source: Moneycontrol.com

Essar Steel deal done, ArcelorMittal and Nippon Steel set targets for the renamed entity

A major focus area for the two partners would be research and development. ArcelorMittal invests $300 million a year into R&D, and its partner has put in about $2 billion in last three years in research and innovation.

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Within a month of taking over Essar Steel, the ArcelorMittal-Nippon Steel combine has set its vision for the Indian market.

The vision includes nearly doubling the quantity of steel shipped from its production facility in Gujarat's Hazira and setting up a R&D facility, akin to what each of the partner has in its units globally.

Helping achieve this vision will be a billion dollar investment, to start off.

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The two partners had completed the acquisition in December 2019, and formed the joint venture ArcelorMittal Nippon Steel India (AM/NS), to run the operations.

At present, the company produces about 7.5 million tons of steel a year, though its capacity overall is close to 10 million tons a year.

"Our intention is to increase finished steel shipments to 8.5 million tonnes over the medium-term. This will be achieved will be achieved initially through ongoing capital expenditure projects and efficiencies through our expertise and best practices; and then commissioning additional assets," says the website of the re-christened company.

Its long-term aspiration is to increase finished steel shipments to between 12 million tonnes and 15 million tonnes. The company plans to do this through "new iron and steelmaking assets," hinting at more acquisitions or investment in new facilities.

R&D focus

A major focus area for the two partners would be research and development. ArcelorMittal invests $300 million a year into R&D, and its partner has put in about $2 billion in last three years in research and innovation.

"ArcelorMittal alone has 1,400 full-time researchers in 11 research centres across the globe... Nippon Steel has 800 full-time researchers in three research centres in Japan," the company says.

"As part of our plans to invest in and advance India’s steel manufacturing industry, we have a long-term plan to establish an R&D centre in Hazira to develop new industrial processes and steel products and improve quality, operational and environmental efficiencies," it added.

The new owners have retained Dilip Oommen as the CEO of AM/NS. Oommen was also the chief executive at Essar Steel. Executives from the industry added that many of the Essar Steel employees have now moved to the payrolls of AM/NS.

The company at present is based in Mumbai's Worli, and plans to move to a new corporate office in Bandra Kurla Complex.

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First Published on Jan 8, 2020 04:19 pm
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