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ArcelorMittal, Hunan Valin Launch New Automotive Steel Joint Venture
06/30/2008 - ArcelorMittal, Hunan Valin Group and Hunan Valin Steel launch Valin ArcelorMittal Automotive Steel, an industrial and commercial automotive joint venture that will have an annual production capacity of 1.2 million tonnes of flat carbon steel, mainly for automotive applications.
ArcelorMittal, Hunan Valin Group and Hunan Valin Steel Co. have announced their cooperative launch of Valin ArcelorMittal Automotive Steel, an industrial and commercial automotive joint venture.
The new venture will have an annual production capacity of 1.2 million tonnes of flat carbon steel, mainly for automotive applications. Products will include cold rolled steel, galvannealed steel and pure zinc galvanized steel. Hunan Valin Steel Co., Ltd will own 34% in the new joint venture, and ArcelorMittal and Hunan Valin Group will each have a 33% equity share.
“We have been working closely together with Hunan Valin Steel Co. for three years now and the cooperation is going very well,” said Lakshmi Mittal, Chairman and CEO of ArcelorMittal. “We are making a lot of progress and the signing of these joint venture contracts is only further proof of this. This automotive joint venture is part of our global and China strategy, aiming to better serve both our global as well as domestic automotive clients by offering high value added products with the support of ArcelorMittal technology.”
The new activity will be located in Hunan Province next to Hunan Valin Steel Co.’s subsidiary, Lianyuan Steel, which will supply hot rolled coil to the new joint venture.
Mr. Li Xiaowei, Chairman of Hunan Valin Group, said: “Hunan Valin’s long term development and future really depends on the technological platform jointly set up with ArcelorMittal. Valin is structurally transforming its product portfolio and targeting high added-value products, allowing us to differentiate ourselves from our competitors and to accelerate the transformation of Hunan province.”
Setup of this new joint venture is still subject to regulatory approval.
Valin Group is a large-sized enterprise set up by three steelmakers in Hunan province in 1997: Xiangtan Iron & Steel, Lianyuan Iron & Steel, and Hengyang Steel Tube, currently with 57,000 employees including 12,000 technical staff. Valin Group now has over 10 subsidiaries under direct or indirect control, including Xiangtan Iron & Steel, Lianyuan Iron & Steel, Hengyang Steel Tube, Nanfang Building Materials, etc., with a stable operating and governance system based upon sound capitals and assets.
Over the past 7 years, Valin Group has achieved coordinated leap-frog development through innovation, capital operation and optimized restructuring, aiming to become larger and stronger. In 2007, Valin Group witnessed sales revenue RMB 50.3 billion, 38% higher year-on-year., which is the first enterprise in Hunan province whose revenues exceeded 50 billion.
Hunan Valin Steel Co., Ltd mainly produces cold and hot rolled super-thin coils, heavy plates, seamless pipes with a wide range of diameters, fine wire rods, etc. Equipped with state-of-the-art production lines in plate, tube and wire, Valin Steel’s products enjoy world class technology and quality, and cater to a different market segments in more than ten countries and regions, such as U.S., Singapore, Korea, Australia, Middle East, South Europe, Malaysia.
In 2007, Valin Steel produced 11.12 million tonnes of steel products, with total assets, turnover and profit amounting to RMB 48.4 billion, RMB 43.8 billion and RMB 234,000 respectively. It is now China’s 10th largest steel company.
ArcelorMittal is the world's largest integrated metals and mining company, with over 310,000 employees in more than 60 countries. The company leads a number of major global markets, with leading R&D and technology, as well as sizeable captive supplies of raw materials and strong distribution networks. An industrial presence in over 20 countries across 4 continents exposes the company to key steel markets, from emerging to mature.
ArcelorMittal’s key financials for 2007 show revenues of USD 105.2 billion, with a crude steel production of 116 million tonnes, representing around 10% of world steel output.
