India’s ArcelorMittal and China’s Valin Steel Company has opened a new steel joint venture plant in China’s Hunan province, targeting the country’s fast-growing automotive and white goods industries.
ArcellorMittal has a 49% stake in the joint venture, called Hunan Valin Steel, while Shenzen-quoted Valin Steel controls the remaining 51% stake. ArcelorMittal also holds a 20% stake in Valin Steel, however, which it plans to reduce to focus on its new automotive steel joint venture.
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ArcelorMittal is extremely bullish on the outlook for steel demand in China, saying that vehicle output has the potential to rise to as much as 35m units within eight years.
The new Hunan steel plant, with an initial production capacity of 1.5m tons of steel per year, takes on Chinese steel giant Baoshan Iron & Steel, which is said to supply around 50% of the country’s automotive steel at present.
