ArcelorMittal inaugurated an $832 million steel plant -- Valin AreclorMittal Automotive (VAMA) Steel -- to produce high strength automotive steels that are currently imported into the local market.
The greenfield project has been set up in joint venture with Hunan Iron & Steel Co is located at Loudi, in Hunan province. VAMABSE -3.63 % will cover a large range of automotive steel products, including those for visible structural parts, chassis and wheels.
It will have an annual production capacity of 1.5 million tonnes, including 8 lakh tonnes of cold rolled coils, 2 lakh tonnes of aluminium-coated coils and 5 lakh tonnes of hot-dip galvanised coils. The total investment for the project was 5.2 billion yuan ($832 million), an ArcelorMittal statement said.
As one of the fastest-growing automotive markets, China recorded a 16% increase in car sales to 18 million units last year. The country is expected to account for 35% of worldwide automotive growth between by 2020.
ArcelorMittal contributed the most advanced automotive steel production technology available, including Advanced and Ultra High Strength Steel (AHSS and UHSS) grades to the project.
VAMA aims to supply international carmakers and Tier-1 suppliers which include, ArcelorMittal's major customers in China, such as Volkswagen, GM, Ford, PSA, Daimler-Benz, BMW, Toyota, Honda, Renault, Fiat and Nissan, and domestic manufacturers such as Geely, Chery, Dongfeng, Guangzhou Auto, Shanghai Auto and Changan.
The inauguration ceremony was attended by Mr Lakshmi Mittal, chairman and CEO of ArcelorMittal, Cao Huiquan, chairman and CEO of Hunan Valin Steel among other officials.
Speaking in Loudi on Monday, Lakshmi Mittal, chairman and CEO of ArcelorMittal, said: "The most advanced technology has been extended to VAMA, which is therefore ideally positioned to give auto manufacturers greater flexibility to produce lighter, safer and more environmentally friendly cars for customers in China".
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