Ambarish Mukherjee

New Delhi, March 30

LUXEMBOURG-BASED Arcelor, the world's second-largest steel maker, has informed the Ministry of Steel that it wants to participate in the expansion of the Indian steel sector.

India has set a target of increasing its steel production capacity from 36 million tonnes a year to 100 million tonnes by 2020.

Arcelor's plan has been communicated to the Steel Minister, Mr Ram Vilas Paswan, here by a delegation from Luxembourg, headed by the Minister of Economy and Foreign Trade of the Grand Duchy of Luxembourg. Ministry officials told Business Line that "we have asked them to provide details of their plans and would be in a position to examine options only afterwards."

According to industry observers, Arcelor's interest in India's expansion of steel capacities coincides with its plan to cut down production at its European facilities and marks the beginning of the shifting of steel capacities from developed nations to developing ones. The move also follows Posco's plan to set up a 10-million-tonne capacity plant in India.

Last Friday, Arcelor announced that it had cut production by 1 million tonnes during the second quarter of the current year across four plants in Germany, Belgium and Spain, because demand for flat-rolled steel had fallen by 14 per cent in the European Union amid high inventory levels and weaker sales to customers, particularly white good manufacturers ranging from washing machines to auto body panels.

According to an official release, during the meeting between the Steel Minister and the Luxemburg delegation, it was noted that "Arcelor, headquartered in Luxembourg, could play a role in the setting up of additional steel capacities in India."

In order to facilitate the investments, Ministry officials provided details of the policy framework relating to the steel sector, which allows 100-per cent foreign direct investment.

Panel to monitor Posco project

THE Government has set up a inter-ministerial committee, headed by the Steel Secretary with representatives from the Ministries of Coal, Mines, Shipping and Transport, Commerce and Forest and Environment, to monitor Posco's proposed project.

Speaking to reporters after meeting the delegation, Mr Paswan said the committee's task is to see that Posco's project doesn't face bureaucratic delays or other roadblocks.

Official sources said the Government's stand to ensure speedy implementation of Posco's project is also acting as an eye-opener to other global metal companies about India's seriousness in pursuing its declared policies to liberalise the metallurgical sector.

The delegation also urged the Ministry to detach technology selection from the normal tendering process. Paul Wurth, a leading iron and steel technology providing company based in Luxembourg, informed the Ministry its eagerness to provide technology to new steel capacities coming up in India. It had earlier provided technologies to leading Indian producers such as Steel Authority of India Ltd and Tata Steel.

(This article was published in the Business Line print edition dated March 31, 2005)
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