Sail-ArcelorMittal to forge JV deal in July
new delhi — All hurdles in the formation of a joint venture between steel giants Sail and ArcelorMittal have been removed and the final agreement may be signed next month, said Union Steel Minister Chaudhury Birendra Singh.
“A feasibility report on the new JV has been prepared and all the pre-requisites formalities have been achieved. The final draft of the agreement is ready and it may be signed as early as next month,” Singh told IANS in an email interview.
More than two years ago, both the steel majors entered into a pact to explore the possibility to setup a ₹5,000 crore JV to produce automotive steel. However, financial negotiations delayed the formation of the proposed project.
According to Singh, the JV will not only support the booming automobile sector in India but also provide specialised technologies to state-run Sail.
On the sector’s debt burden, Singh highlighted that remedial measures like imposition of antidumping duty coupled with RBI’s schemes have helped restructure some of the industry’s stressed loans.
“Various trade remedial measures, like anti-dumping, safeguard measures, coupled with RBI schemes to restructure outstanding debts [have helped],” he said.
“These steps have helped improve the price realisations of the steel companies and are addressing the issue of NPAs of the steel sector gradually,” he added.
Consumption-wise, Singh observed that the government’s monetary and policy push to develop the infrastructure sector will raise the overall steel usage in the country.
Singh’s optimism stems from the fact that a massive ₹4 lakh crore has been allocated for infra creation for sectors such as railways, shipping and national highways in the Union Budget 2017-18.
In the last fiscal year, the total finished steel consumption in the country rose by three per cent to 83.93 million tonnes in the last fiscal from 81.52 million tonnes in 2015-16.
Singh pointed out that exports can effectively generate more demand. India shipped out 102.1 per cent more steel last fiscal year at 8.24 million tonnes, compared to 4.07 million tonnes in 2015-16.
“For developing export oriented units, MSMEs need to be encouraged to develop coastbased steel hubs within the coastal economic zones identified under Sagarmala Program,” the minister said.
Export promotion is also expected to give a boost to domestic production. Currently, India is the world’s third-largest steel producer after China and Japan.
The domestic production grew by 11 per cent in 2016-17 to 101.27 million tonnes. —