Arcelor in JV with Saw Pipes

May tie up with Tatas as well

Arcelor, the French steel producer, is setting up its first manufacturing venture in the country with the O P Jindal group. It is also planning a joint venture with the Tatas for setting up a galvanised steel plant.

"Arcelor is trying to get close to its historical customers mainly in South Asia. Several arms of Arcelor are in talks with various steel companies in India and we are looking at more such ventures," Francis Vassort, chairman and CEO of Imphy Ugine Precision (IUP), said.

IUP, the precision stainless steel arm of the $30 billion Arcelor, along with Saw Pipes will set up a unit for manufacturing high precision metals.

"The new unit will be a 70:30 joint venture with Saw Pipes being the major partner. Fixed assets of Swastik Foils will be transferred to the joint venture and Arcelor will bring in equipment from its US facility and provide the technical knowhow," Prithvi Raj Jindal, chairman of Saw Pipes, said.

"The project cost is expected to be $15 million with an initial equity of Rs 10 crore. It will be largely equity funded with a very small portion of debt for working capital requirement," he added.

The new facility will be called IUP Jindal Hexa Metal and will be a consolidated subsidiary of Saw Pipes and will have Indresh Batra as managing director.

IUP and Saw Pipes will build a plant in Bahadurgarh in Haryana and it is expected to be operational by June 30, 2005. The plant will have about 200 employees and is expected to have an annual production capacity of 13,000 tonne.

The plant would manufacture high precision stainless steel and nickel alloys for textile machinery, clocks, watches, and electrical equipment and would later look at steel foils for catalytic converters.

Saw Pipes is also looking at product expansion in its Nashik division and will now manufacture medium diametre pipes needed for water pipes used in infrastructural and civil projects.

It will also set up a Rs 300 crore fully integrated plant in Mudra for production of iron cast/iron spun pipes. Also, more strategic business units, such as its Houston plants, are in the pipeline. Saw Pipes is also entering the energy transportation sector.