NRI billionaire Laxmi Mittal-led ArcelorMittal today opened its first steel making facility in China through a joint venture, VAMA, aimed at catering to the local automotive market with USD 832 million investment.
Valin ArcelorMittal Automotive Steel Co (VAMA), in which Chinese firm Hunan Iron and Steel Co also has stake, has an annual capacity of producing 1.5 million tonnes high-strength automotive steels. China imports such steel to meet domestic need, the world's largest steel maker said in a statement.
"VAMA will produce state-of-the-art grade steels for safe and cost-efficient light-weight design, superior surface quality and coating technology, helping to meet rapid growth in demand for advanced automotive steels in China," it said.
"The annual production capacity will be 1.5 million tonnes, including 800,000 tonnes of cold rolled coils, 200,000 tonnes of aluminium-coated coils and 500,000 tonnes of hot-dip galvanised coils," it added.
International car makers such as Volkswagen, GM, Ford, Daimler-Benz, BMW, Honda Toyota, Honda, Renault, Fiat and Nissan have presence in China. Domestic manufacturers such as Geely, Chery, Dongfeng, Guangzhou Auto, Shanghai Auto and Changan are also to be targeted.
"China has the world's fastest-growing automotive market, recording a 16 per cent increase in car sales to 18 million units last year, and is expected to account for 35 per cent of worldwide automotive growth between now and 2020," the company said.
Mittal, who was present at the inaugural ceremony, said completion of the major project with six million safe work hours, on schedule and within budget, was a "remarkable achievement which sets a new standard in our industry".
VAMA is located in the economic zone of Loudi, Hunan province. ArcelorMittal has contributed the most advanced automotive steel production technology available and assisted with the completion of the quality control and R&D systems.
ArcelorMittal had revenues of USD 79.4 billion in 2013 and crude steel production of 91.2 million tonnes.