ArcelorMittal holds investor day in India
25 September 2024 - 11:30AM
UK Regulatory
ArcelorMittal holds investor day in India
Event highlights India’s position as
world’s fastest growing steel market and AM/NS India’s vision to
become the benchmark for quality, scale and sustainability in
Indian steelmaking
25 September 2024, 11:30 CET
ArcelorMittal today hosted an investor day at AM/NS India’s
flagship plant in Hazira, Gujarat. The event provided members of
the investment community with the opportunity to witness first-hand
the progress AM/NS India – a 60/40 joint venture between
ArcelorMittal and Nippon Steel – is making with the first phase of
its project to grow steelmaking capacity in Hazira and insight into
its long-term vision to reach 40 million tonnes of annual
capacity.
In addition to the site tour the event included presentations
and a question and answer session with Aditya Mittal, ArcelorMittal
CEO and AM/NS India Chairman, and members of the AM/NS India
management committee including Dilip Oommen, CEO of AM/NS India.
The focus of the presentations was on AM/NS India’s progress over
the past four years and its growth plans, including:
- AM/NS India’s strong performance
since the acquisition in 2019: capacity debottlenecking has led to
record levels of production in the first quarter of this year, and
AM/NS India’s Ebitda per tonne exceeded the average of Indian steel
peers in the first half of 2024.
- Cash generation of $5.8 billion
since acquisition, which has enabled $5.8 billion of growth
investment - including securing the company’s supply chain and
enhancing profitability through several strategic acquisitions
including slurry pipelines, iron ore mines, ports, power plants and
land. Despite these investments net debt has remained stable since
the acquisition given low cash needs, including very competitive
funding costs.
- Insight into the progress being
made on the first phase of AM/NS India’s transformational expansion
project at Hazira. The upstream capacity expansion ($5.1 billion)
targets growing annual steelmaking capacity from 9 million tonnes
to 15 million tonnes by 2026, while the downstream expansion ($1
billion) will significantly enhance AM/NS India’s ability to
produce technically sophisticated steel products for the most
demanding customer sectors, including automotive, and introduce
advanced products such as Magnelis®, which offers best-in-class
corrosion resistance, to its product portfolio.
- These projects – part of an overall
$7.7 billion investment programme - are progressing to plan, with
transformational impacts on profitability anticipated; following
phase 1, AM/NS India’s Ebitda and investable cash flow (operating
cash flow less maintenance capex) are expected to increase by a
factor of 2.5x.
- Plans are under development to
further expand production. Phase 2A is a capex-efficient expansion
project that would see steelmaking capacity grow to 18 million
tonnes by 2028 with phase 2B taking capacity at Hazira to 24
million tonnes by the end of the decade, making AM/NS Hazira the
world’s largest, single site, coastal steelmaking facility. Upon
completion, Ebitda and investable cash flow would grow to
approximately 4x current levels.
- Further greenfield development
options are under consideration to take steelmaking capacity to 40
million tonnes in the long-term, meaning AM/NS India is ideally
positioned to capture the anticipated growth in Indian domestic
demand in this decade and beyond.
- India is forecast to be the world’s
third largest economy by 2028 with GDP in excess of $5 trillion;
domestic steel demand is set to grow at a CAGR of over 6 per cent
over the next decade making India the world’s fastest growing steel
market.
- AM/NS India’s plans to ensure its
growth is delivered in a responsible and sustainable manner: target
to reduce the carbon intensity of the steel it produces by 20 per
cent by 2030 (from a 2021 baseline); ambitious plans to develop
captive renewable energy capacity ($0.7 billion, 1GW renewable
energy project – funded by ArcelorMittal – recently commissioned
with further projects under evaluation).
Copies of the presentations used during today’s meeting can be
found on the company’s website at
https://corporate.arcelormittal.com/investors/equity-investors/shareholders-events
AM/NS India expansion plans (progress to date and phase
1) in detail
- Following completion of the acquisition in 2019, AM/NS India
embarked on a $0.8 billion debottlenecking project to realise the
Hazira plant’s 9 million tonne nameplate capacity. This project is
nearing completion and AM/NS India has achieved a production
run-rate in excess of 8 million tonnes this year.
- Organic growth has been supplemented several strategic
acquisitions over the past four years, including: four power plants
with total capacity of 1345MW; a 250km slurry pipeline; several key
infrastructure port and power assets; two downstream coating
facility (Uttam Galva (1.2 million tonne capacity) and Indian Steel
(0.6 million tonne capacity)).
- Phase 1 expansion: the $5.1 billion phase 1 upstream expansion
project to increase annual production capacity to 15 million tonnes
is underway with project completion anticipated in 2026. The
project involves construction of two state-of-the-art 3.5 million
tonne capacity blast furnaces and associated assets (three basic
oxygen furnaces, hot strip mill, two sinter plants, pellet plant,
four coke oven batteries, plus ancillary equipment and raw material
handling systems)
- Phase 1 expansion: the $1 billion phase 1 downstream expansion
project is designed to improve AM/NS India’s ability to deliver
technically sophisticated, added-value products for sectors
including automotive. It involves construction of a cold rolling
mill complex, which includes: a pickling line and tandem cold mill;
a 1 million tonne capacity continuous galvanizing and annealing
line; and two 0.5 million tonne capacity continuous galvanizing
lines, the second of which was commissioned in December 2023 and is
a dedicated facility to produce Magnelis®.
ENDS
About
ArcelorMittal
ArcelorMittal is one of the world’s leading integrated steel
and mining companies with a presence in 60 countries and primary
steelmaking operations in 15 countries. It is the largest steel
producer in Europe, among the largest in the Americas, and has a
growing presence in Asia, including India, through its joint
venture AM/NS India.
ArcelorMittal sells its products to a diverse range of
customers including the automotive, engineering, construction and
machinery industries, and in 2023 generated revenues of $68.3
billion, produced 58.1 million metric tonnes of crude steel and
42.0 million tonnes of iron ore.
Our purpose is to produce smarter steels for people and
planet. Steels made using innovative processes which use less
energy, emit significantly less carbon and reduce costs. Steels
that are cleaner, stronger and reusable. Steels for the renewable
energy infrastructure that will support societies as they transform
through this century. With steel at our core, our inventive people
and an entrepreneurial culture at heart, we will support the world
in making that change.
ArcelorMittal is listed on the stock exchanges of New York
(MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the
Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia
(MTS). For more information about ArcelorMittal please visit:
http://corporate.arcelormittal.com.
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