The Hindu Business Line : Arcelor sets sights on India

ARCELOR, the French steel major that was created in February 2002 by integrating three steel-making companies, Aceralia, Arbed and Usinor, has decided to enter India.

According to Mr Alain Davezac, Senior Vice-President, International Business Division, a decision on the nitty-gritty of the entry is likely to be taken shortly. However, he confirmed that India was on the growth agenda of the company.

Though Mr Davezac was not forthcoming in giving a deadline, he said that a final decision would be taken within the next few months. He was speaking to newspersons on the sidelines of Steel Metallics India 2005.

On whether a final decision would be taken by the middle of 2006, he said: "It can be even earlier than that date."

Mr Davezac also said that Brazil was the first country on the global agenda of Arcelor, with Ukraine second in line. Some 20 per cent of Arcelor's total production is located in Ukraine.

On whether it is a toss-up between China and India, Mr Davezac said that Arcelor, whose turnover in 2004 was 30 billion euros, was eager to have operations in both the countries.

According to him, China, India, and other emerging Asian countries are the future global "growth basins" of steel. However, the raw material would be available mostly in South America and CIS countries.

India is on top of the company's agenda because it is a high-growth market. "Moreover, it is a potentially competitive cost production area and a major zone of iron reserves."

Mr Davezac said that low coking reserves, high electricity prices, infrastructure bottlenecks, environmental restrictions, the bureaucracy, and monsoon dependence are the negative features that hinder any investment proposal in India.

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