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ArcelorMittal establishes auto-use steel JV in China

(Xinhua)
Updated: 2008-06-29 10:38

ArcelorMittal, the world's leading metal and mining company, is investing in China to establish a new automotive-oriented steel joint venture in the central Hunan Province.

The new company was expected to produce 1.2 million tons of automobile steel sheet annually, ArcelorMittal's China office said on Saturday.

ArcelorMittal, the Hunan-based Valin Group and Valin Steel Tube and Wire Co Ltd signed a cooperation contract on Friday for investing 5 billion yuan ($725 million) to set up the Valin ArcelorMittal Automotive Steel.

ArcelorMittal, Valin Group and Valin Steel Tube and Wire hold a stake of 33 percent, 33 percent and 34 percent, respectively, of the joint venture scheduled to turn out products by the end of 2010.

Lakshmi Mittal, chairman and CEO of the Luxembourg-based steel titan, said the move was part of its global and China strategy, aiming to better serve both global as well as domestic automotive clients through offering high value-added products with the support of ArcelorMittal technology.

Li Xiaowei, chairman of Valin Steel Tube and Wire, one of China's top 10 steel makers, said the company's development was boosted by the technological platform jointly set up with ArcelorMittal. He added it was improving the product mix and targeting high-end products.

The China Association of Automobile Manufacturers (CAAM) predicted the steel automotive application would reach 12.55 million tons this year nationwide and possibly climb to 21.76 million tons by 2015.

CAAM said although the country's top steel manufacturers, including Baosteel and Angang Steel, had started producing auto-use steel products, China still needed to import a large quantity of high-tier steel products, boosted by its surging domestic auto demands.

Dirk Matthys, CEO and country manager of ArcelorMittal, forecasts that the total number of vehicles in China will rise from the current 10 million to 18 million in 2017.

ArcelorMittal also has a stake in the Hong Kong-listed China Oriental Group Co Ltd, a domestic iron and steel maker.