World's largest steel maker ArcelorMittal today said it has signed a joint venture agreement with China's Hunan Valin Steel Group for the production and sale of electrical steel.
In a statement, ArcelorMittal said the JV would build cold rolling and processing facilities for the production of non-grain oriented (NGO) and grain oriented (GO) electrical steels.
"The total investment is estimated at RMB 6.5 billion (about 947 million dollars), aiming for an annual production of 400,000 tons non-grain oriented and 200,000 tons grain oriented steel," the statement said.
The new joint venture 'Valin ArcelorMittal Electrical Steel Co., Ltd' has a registered capital of RMB 2.6 billion (about 378 million dollars) and both parties would have 50 per cent stake.
Further, Valin Liangang, a subsidiary of Valin Steel Tube & Wire, has signed a supply agreement with the JV.
"Valin continues to target high-end flat rolled demand, supported by the technical platform set up with ArcelorMittal and adjusting its product mix, developing its own core technical and innovative capabilities.
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"Electrical steel is the latest addition, following high end heavy plate and automotive steel products," Valin Groups Chairman LI Xiaowei said.
Commenting on the JV, Valin Liangang General Manager ZHENG Baiping said: "Our Electrical steel JV will be ready to start production in 2010 and will supply competitive high end products to a high requirement electrical steel market."