Global steel giant Arcelor Mittal said on Wednesday that it aimed to pursue rapid growth by focusing on emerging markets such as China and India rather than mega mergers. “Arcelor Mittal has been the catalyst of the consolidation in the steel industry and will continue to pursue growth opportunities,” CEO Lakshmi Mittal told journalists in Brussels.
With an annual production of 115 million tonnes, the company currently dwarfs its next biggest rival Nippon Steel, but it is nevertheless aiming to lift its output to 150-200 million tonnes by 2015.
After swallowing up Arcelor, the company is pushing ahead with its expansion through takeovers of Mexican group Sicartsa and US group Noble while planning new plants and mines around the world.
However, Mittal was dismissive about launching new big takeovers on Wednesday, saying the company had no designs on French steel tubes maker Vallourec “at this time” or an interest in South Korean steel maker POSCO, the world’s third largest.
Instead of seeking big new tie-up partners, the steel giant would focus on fast growing emerging markets where steel demand is strong.
“We are focusing on growth in China... and on India,” chief financial officer Aditya Mittal said. “We expect steel consumption in India to triple in the next five to six years.”
The company plans to build a 12 million tonne capacity steel mill in India, with Orissa and Jharkhand in the running, and aims to buy iron exporter Sesa Goa.
Globally, “greenfield projects must be in low cost countries,” said Lakshmi Mittal.
In China, which accounts for a third of global steel production and consumption, Arcelor Mittal is “optimistic” about the future possibility of a foreign company taking control of a local producer, Mittal said.
Arcelor Mittal already owns about 32% in Chinese steel maker Hunan Valin and has been waiting since 2005 for Chinese authorities to approve its plan to take a stake of 38.41% in Laiwu Steel Corp.
The decision is expected “in a couple of months,” Mittal said.