AM/NS India bets on high-margin, value-added steel for solar, automotive sectors

Mumbai: ArcelorMittal Nippon Steel India, the largest privately held steelmaker in the country, is betting on growing demand for specialty grades of steel, bulk of which is imported, a top executive said.  

The value-added products not only bring higher margin, but also help the company differentiate itself in a highly competitive market, according to Ranjan Dhar, director and vice president, sales and marketing, AM/NS India. 

AM/NS India is a joint venture between two of the world's largest steel producers–Lakshmi Mittal-led ArcelorMittal and Japan’s Nippon Steel.  

The company launched a value-added line of steel, called Magnelis, on 16 September, with an estimated investment of nearly ₹1,000 crore. The production line at its flagship plant in Hazira, Gujarat has a capacity of 5 lakh tonnes per annum. The product is targeted at solar panel manufacturers.

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AM/NS is in talks with potential customers such as Adani Green Energy, Reliance Industries, Sterling & Wilson, NTPC, NexTracker, Kirby Building, M&B enterprises and BG Shirke Construction Technology Private Limited, according to people in the know.

In 2022, Aditya Mittal, chief executive of ArcelorMittal, had mentioned a plan to supply Magnelis to the Mumbai-Ahmedabad High Speed Rail project as well, according to news reports.

AM/NS is also working on setting up a new line of value-added steel for the automotive sector by the first quarter of 2025. Currently, several leading automakers import steel from countries like South Korea.  

Value-added steel comprises 60-65% of AM/NS's sales. AM/NS provides specialty grade products to automotive, new energy and construction sectors, among others.

“When AM/NS came to India, we not only wanted to take part in the value chain added portion of the steel used in India, we wanted to propagate and move the market in the direction of the value of steel,” Dhar said. 

AM/NS plans to nearly double its capacity in India from about 8.5 million tonnes (mt) a year to around 15.6mt by the end of next year, and subsequently to 24mt a year, he said. Earlier this year, the steelmaker had announced plans to build the world's largest single integrated steel plant in Hazira.

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The steelmaker also plans to expand operations in East India, Dhar said.

Besides Magnelis, the company earlier launched two new products: zero spangle galvanized skin pass steel, a material used in appliances; and a patented product called Optigal, a steel coating produced by hot dip galvanization of the steel in a bath of zinc-aluminium-magnesium alloy. 

All the value-added products launched by the steelmaker this year have been backed by India’s Production Linked Incentive (PLI) scheme for specialty steel. So far, the ministry of steel has executed 57 memorandums of associations for generating an investment of ₹29,500 crore to add 25mt capacity for producing specialty steel grades and generate employment of about 17,000 people by FY27-28, according to a February press release.

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