ArcelorMittal hosted an investor and analyst day at AM/NS India’s flagship plant in Hazira, Gujarat on the 25th Sept. 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 40Mt of annual capacity.
In addition to the site tour the event included presentations and a Q&S 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 main 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 1Q'24, and AM/NS India’s Ebitda per tonne exceeded the average of Indian steel peers in 1H'24.
- Cash generation of $5.8 billion since acquisition, which has enabled $5.8bn 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 ($5.1bn) targets growing annual steelmaking capacity from 9Mt to 15Mt by 2026, while the downstream expansion ($1bn) 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 $7.7bn 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 18Mt by 2028 with phase 2B taking capacity at Hazira to 24Mt by the end of the decade, making AMNS 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 40Mt 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 $5trn; domestic steel demand is set to grow at a CAGR of over 6% 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% by 2030 (from a 2021 baseline); ambitious plans to develop captive renewable energy capacity ($0.7bn, 1GW renewable energy project – funded by ArcelorMittal – recently commissioned with further projects under evaluation).
To access the presentation shown at the event, click here.
AM/NS India expansion plans (progress to date and phase 1) in detail
To view the Expansion video shown at the event, click here.
- Following completion of the acquisition in 2019, AM/NS India embarked on a $0.8bn debottlenecking project to realise the Hazira plant’s 9Mt nameplate capacity. This project is nearing completion and AM/NS India has achieved a production run-rate in excess of 8Mt this year.
- Organic growth has supplemented several strategic acquisitions over the past 4 years, including: 4 power plants with total capacity of 1345MW; a 250km slurry pipeline; several key infrastructure port and power assets; 2 downstream coating facility (Uttam Galva (1.2Mt capacity) and Indian Steel (0.6Mt capacity)).
- Phase 1 expansion: the $5.1bn phase 1 upstream expansion project to increase annual production capacity to 15Mt is underway with project completion anticipated in 2026. The project involves construction of 2 state-of-the-art 3.5Mt capacity blast furnaces and associated assets (3 basic oxygen furnaces, hot strip mill, 2 sinter plants, pellet plant, 4 coke oven batteries, plus ancillary equipment and raw material handling systems).
- Phase 1 expansion: the $1bn 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 1Mt capacity continuous galvanizing and annealing line; and 2 0.5Mt capacity continuous galvanizing lines, the second of which was commissioned in Dec'23 and is a dedicated facility for the production of Magnelis®.