Kolkata: ArcelorMittal, the biggest steel group, will buy equipments for its new plants across the world from China and India to reduce their costs, a senior official said on Thursday.
Pierre Jonette, chief executive of Design & Engineering Centre at ArcelorMittal, said the cost of equipments in the two Asian countries were about 40% cheaper than in Europe.
“So it has been decided internally to source equipments from these low-cost destinations for most of our greenfield projects,” he said.
The company is looking to buy boilers and steel structures from India, and blast furnace, coke oven and sinters from China, said Jonette, who is based in the eastern Indian city of Kolkata where the design centre is located.
“Equipments cost constitutes nearly 50% of the total cost,” he said. “By these steps our main objective is to bring down the cost of a overall project by 20-22%.”
ArcelorMittal’s new projects include plants in Saudi Arabia, Kazakhstan and Brazil, he said.
It also has plans to build two steel plants in the eastern Indian states of Orissa and Jharkhand to produce a combined 25 million tonnes.
The Indian projects were initially expected to cost $20 billion to $25 billion, but Chairman Lakshmi Mittal said last September the cost could rise by about a half due to delays in getting government approvals.