HYDERABAD: Aditya Mittal, Chief Financial Officer of the world’s largest steel company, Arcelor-Mittal, has indicated that his company is diversifying into the oil and gas space.
The Arcelor-Mittal group is working closely with the Central Government for forming a joint venture to participate in the competitive bidding as part of the New Exploration and Licensing Policy (NELP).
Responding to queries at an interactive session organised by the Andhra Pradesh chapter of the Confederation of Indian Industry (CII) here on Monday, Mr. Mittal said India was an energy-deficient country. Asked if his company was on the look out for acquiring any global oil and gas player, he said: “It is too early to comment on this.”
Arcelor-Mittal would be acquiring Chinese Oriental, for which the agreement had already been signed and the Government clearance was awaited. About the company’s China strategy, he said: “We are ahead of competition, but not enough ahead, due to the Government’s regulations.”
Asia accounted for 50 per cent of the world’s steel consumption. While China alone consumed 500 million tonnes a year, India’s consumption was around 40-50 million tonnes. China’s consumption was growing by 10 per cent annually, thus making the country the industry’s powerhouse. In fact, the per capita annual consumption of steel in China was 400-600 kg, while it was a niggardly 40-50 kg in India. However, there was scope for growth of consumption in India too.
The company was establishing two steel plants with a capacity of 12 million tonnes each, for which coal mines had already been allocated. Ground-breaking ceremony would be performed soon.
The steel industry was not consolidated and his company held only 10 per cent of the world’s market share, while the second largest company had only three per cent. Top five companies would add up to just 20 per cent, said Mr. Mittal. The company completed 35 deals of mergers and acquisitions so far after acquiring Arcelor.