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ArcelorMittal Expands Presence in China
10/16/2007 - ArcelorMittal has acquired a 90% stake in Rongcheng Chengshan Steelcord, a privately owned steelcord wire drawing company based in China’s Shandong Province.
ArcelorMittal has acquired a 90% stake in Rongcheng Chengshan Steelcord, China, for the sum of US $26.6 million.
The privately owned Rongcheng Chengshan Steelcord, a steelcord wire drawing company, is based in Shandong province. The company specializes in the production of steelcord wire and bead wire, which is used for tire reinforcement. The company forecasts a turnover of RMB 536m (US $71 million) for 2007. ArcelorMittal’s consolidated sales in wire solutions represented US $2.6 billion worldwide in 2006.
‘This acquisition is an important step for us in expanding in a major market,” said Lakshmi Mittal, ArcelorMittal’s President and Chief Executive. “We have already shown through our joint ventures in China the value and skills we can bring the Chinese steel industry and we look forward to bringing our expertise to Rongcheng Chengshan Steelcord. As well as showing our commitment to the broader Chinese steel market, this acquisition also underlines our commitment to the wire business specifically and recognizes China’s leading position in this sector.’
In China, the largest steelcord wire market in the world, steelcord producers are situated in very close proximity to the tire manufacturers. China is also the leading tire manufacturing base.
ArcelorMittal is the world's largest steel company, with 320,000 employees in more than 60 countries. The company leads a number of major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African and American countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
ArcelorMittal’s key pro forma financials for 2006 show combined revenues of USD 88.6 billion, with a crude steel production of 118 million tonnes, representing around 10 per cent of world steel output.
