October 12, 2011 3:05 pm
Anshan eyes $2bn steel plant in India
By Peter Marsh in Paris
Anshan Iron and Steel, one of Chinas biggest steelmakers, is studying the feasibility of a $2bn steel plant in India in what would be the first move into the country by a large Chinese steel producer.
Zhang Xiaogang, president of Anshan, told the Financial Times that having an involvement in India probably as part of collaboration with other steel producers was part of his effort to make Anshan the most competitive steelmaker in the world over the next five to 10 years.
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He said that venturing into India to build a plant to make 2m-3m tonnes of steel a year was part of an international strategy which also involves looking at the possibility of a new plant in an African country such as Nigeria.
I feel that by collaborating with other companies we can both become more global and improve in terms of the efficiency of our operations, said Mr Zhang in an interview at a steel conference in Paris organised by the World Steel Association, of which he is poised to become the chairman.
Mr Zhang did not want to put a figure on how much the India facility might cost, nor say which other businesses he is talking to about potential collaborations. However a plant in India of the size Mr Zhang has in mind would cost about $2bn.
Mr Zhang said Anshan a government-owned corporation that is Chinas seventh biggest steelmaker was keen to play a part in what seemed likely to be rapid growth of Indian steel output and consumption by around 2020.
I feel that after China, India is going to be the next big country [for the steel industry].
Last year, China produced almost 630m tonnes of steel making the country the biggest steel producing and consuming nation with almost half of total world output. In contrast India with a similar population to China produced 67m tonnes of steel in 2010.
The lower output is related to Chinas much bigger manufacturing sector and the intense use of steel in infrastructure and housing.
Mr Zhang said steel output and consumption in India was likely to rise more slowly than in China over the past decade. But he saw the possibility of Indian annual steel output and demand moving up to 100-200m tonnes in the next 5-10 years.
Anshan is already involved in plans in the US to build a series of steel plants in collaboration with Steel Development, a start-up business. Mr Zhang said he wanted to play part in building at least four steel plants in the US in association with Steel Development, which is headed by John Correnti, a US Steel veteran.
The first of these is due to be a $150m mill in North Carolina where Anshan would have a stake of about 15 per cent but this project is the subject of delays due to Mr Correntis difficulties in arranging the rest of the finance.
The planned participation by Anshan in the US Steel plants has also encountered opposition by some US steelmakers, a result of allegations that Anshan benefits from large subsidies from the Chinese government.
Mr Zhang denied his company had unfair help from Beijing. What we do [in Anshan] we do by ourselves, without the support of the government. The critics [of Anshans involvement in the US] have nothing to worry about.
Tom Gibson, chief executive of the American Iron and Steel Institute, said that in spite of Mr Zhangs chairmanship of the WSA, he would continue to be critical of Anshans involvement in the US Steel projects.
The institute is a Washington-based body that acts as a lobbying group for nearly all the USs biggest steelmakers, which are mostly also in the WSA.
Our concerns [over Anshans planned move into the US] have not changed, Mr Gibson told the FT. As a state-owned body Anshan has access to capital on a more preferential basis than most shareholder-owned businesses, which gives it unfair advantages.
Copyright The Financial Times Limited 2011. You may share using
Anshan eyes $2bn steel plant in India
By Peter Marsh in Paris
Anshan Iron and Steel, one of Chinas biggest steelmakers, is studying the feasibility of a $2bn steel plant in India in what would be the first move into the country by a large Chinese steel producer.
Zhang Xiaogang, president of Anshan, told the Financial Times that having an involvement in India probably as part of collaboration with other steel producers was part of his effort to make Anshan the most competitive steelmaker in the world over the next five to 10 years.
More
On this story
JFE considers steel plant outside Japan
Chinese steel chief to lead global body
Steel companies braced for price falls
Steelmaker presses on despite cooling demand
ArcelorMittal faces challenge to regain crown
He said that venturing into India to build a plant to make 2m-3m tonnes of steel a year was part of an international strategy which also involves looking at the possibility of a new plant in an African country such as Nigeria.
I feel that by collaborating with other companies we can both become more global and improve in terms of the efficiency of our operations, said Mr Zhang in an interview at a steel conference in Paris organised by the World Steel Association, of which he is poised to become the chairman.
Mr Zhang did not want to put a figure on how much the India facility might cost, nor say which other businesses he is talking to about potential collaborations. However a plant in India of the size Mr Zhang has in mind would cost about $2bn.
Mr Zhang said Anshan a government-owned corporation that is Chinas seventh biggest steelmaker was keen to play a part in what seemed likely to be rapid growth of Indian steel output and consumption by around 2020.
I feel that after China, India is going to be the next big country [for the steel industry].
Last year, China produced almost 630m tonnes of steel making the country the biggest steel producing and consuming nation with almost half of total world output. In contrast India with a similar population to China produced 67m tonnes of steel in 2010.
The lower output is related to Chinas much bigger manufacturing sector and the intense use of steel in infrastructure and housing.
Mr Zhang said steel output and consumption in India was likely to rise more slowly than in China over the past decade. But he saw the possibility of Indian annual steel output and demand moving up to 100-200m tonnes in the next 5-10 years.
Anshan is already involved in plans in the US to build a series of steel plants in collaboration with Steel Development, a start-up business. Mr Zhang said he wanted to play part in building at least four steel plants in the US in association with Steel Development, which is headed by John Correnti, a US Steel veteran.
The first of these is due to be a $150m mill in North Carolina where Anshan would have a stake of about 15 per cent but this project is the subject of delays due to Mr Correntis difficulties in arranging the rest of the finance.
The planned participation by Anshan in the US Steel plants has also encountered opposition by some US steelmakers, a result of allegations that Anshan benefits from large subsidies from the Chinese government.
Mr Zhang denied his company had unfair help from Beijing. What we do [in Anshan] we do by ourselves, without the support of the government. The critics [of Anshans involvement in the US] have nothing to worry about.
Tom Gibson, chief executive of the American Iron and Steel Institute, said that in spite of Mr Zhangs chairmanship of the WSA, he would continue to be critical of Anshans involvement in the US Steel projects.
The institute is a Washington-based body that acts as a lobbying group for nearly all the USs biggest steelmakers, which are mostly also in the WSA.
Our concerns [over Anshans planned move into the US] have not changed, Mr Gibson told the FT. As a state-owned body Anshan has access to capital on a more preferential basis than most shareholder-owned businesses, which gives it unfair advantages.
Copyright The Financial Times Limited 2011. You may share using
