“The acquisition of Essar Steel is an important strategic step for ArcelorMittal. India has long been identified as an attractive market for our company, and we have been looking at suitable opportunities to build a meaningful production presence in the country for over a decade,” said ArcelorMittal chairman and chief executive Lakshmi Mittal. 

“Both India and Essar’s appeal are enduring,” he added. 

Essar is a flat-steel producer and makes sheet, plate and pipe at its integrated mill in western India. It has a nominal crude steelmaking capacity of 9.6 million metric tons annually.

The mill will be operated by a 60-40 joint venture named ArcelorMittal Nippon Steel India Ltd., with ArcelorMittal holding the majority stake. ArcelorMittal president and chief financial officer Aditya Mittal has been appointed chairman of AM/NS India, and Essar managing director Dilip Oommen has been named chief executive of AM/NS India. 

ArcelorMittal said Essar is currently producing crude steel at an annualized rate of around 7.5 million metric tons, but the partners plan to increase finished steel shipments to 8.5 million metric tons over the next year or so.  

“This will be achieved by initially completing ongoing capital expenditure projects and infusing expertise and best practices to deliver efficiency gains, and then through the commissioning of additional assets, while simultaneously improving product quality and grades to realize better margins,” the company said. 

Longer term, the goal is to increase finished steel shipments to somewhere between 12 million and 15 million metric tons by investing in new iron and steelmaking assets.

“Essar Steel has quality facilities which provide us with immediate and substantial production capacity, and we also gain an excellent platform for further growth, across both volume and product quality. This acquisition gives us the opportunity to contribute to India’s expansion in infrastructure and urbanization in the coming decades,” said Aditya Mittal.