ArcelorMittal Opens Steel Facility In China Through JV - Analyst Blog

Steel giant ArcelorMittal MT has opened a new, state-of-the-art steel making facility in China through a joint venture, Valin ArcelorMittal Automotive Steel Co (VAMA), aimed at catering to the local automotive market. The aggregate investment in this project is roughly $832 million.

Construction of the plant was completed on schedule and within budget and the entire project was constructed in 730 days versus an industry average of 3.5 years, thus setting a new standard in the industry. The plant will provide employment to about 600 professionals and the number is expected to rise once production increases.

VAMA – the joint venture between ArcelorMittal and Hunan Iron & Steel Co., – will manufacture state-of-the-art grade steels for safe and cost-efficient light-weight design, superior surface quality and coating technology, satisfying the increasing demand for advanced automotive steels in China. The annual production capacity will be 1.5 million tons which includes 800,000 tons of cold rolled coils, 200,000 tons of aluminium-coated coils and 500,000 tons of hot-dip galvanised coils.

VAMA, located in the economic zone of Loudi, Hunan province, focuses on supplying the international carmakers and Tier 1 suppliers in China, such as Volkswagen, General Motors Company GM, Ford Motor Co. F, PSA, Daimler-Benz, BMW, Toyota Motor Corporation TM, Honda, Renault, Fiat and Nissan, as well as leading domestic manufacturers such as Geely, Chery, Dongfeng, Guangzhou Auto, Shanghai Auto and Changan.

ArcelorMittal is the world's leading steel company and has contributed the most advanced automotive steel production technology available. The opening of a new facility in China marks the beginning a new era of automotive manufacturing in the country.

China recorded a 16% increase in car sales in 2013 and is projected to account for 35% of global automotive growth from now till 2020.

ArcelorMittal currently holds a Zacks rank #3 (Hold).

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