August 13, 2008
Valin and ArcelorMittal Sign Electrical Steel JV Agreement
Hunan Valin Steel Group Co., Ltd. and ArcelorMittal signed a joint venture agreement for the production and sales of electrical (silicon) steel, one more milestone following the Auto Sheet JV agreement signed by both parties last June. These two JVs constitute part of the realization of the framework agreement signed by Valin and ArcelorMittal in November last year.
The new JV, named Valin ArcelorMittal Electrical Steel Co., Ltd., has a registered capital of 2.6 billion RMB, each party retaining 50% of the shares. This JV will build cold rolling and processing facilities for the production of non-grain oriented (NGO) and grain oriented (GO) electrical steels. The total investment is estimated at 6.5 billion RMB, aiming for an annual production of 400,000 tons non-grain oriented and 200,000 tons grain oriented steel. ArcelorMittal will transfer its latest NGO and GO technologies to the joint venture.
Meanwhile, Valin Lian'gang, a subsidiary of Valin Steel Tube & Wire, signed a supply agreement with the joint venture. In order to supply high-quality hot-rolled substrate to the Electrical Steel JV, Valin Liangang also signed a Technology License Agreement with ArcelorMittal for the transfer of NGO and GO upstream technologies. ArcelorMittal's R&D centers in Brazil and Europe are dedicated to continuing product improvement as well as development of new, higher performance grain oriented grades.
Mr. ZHENG Baiping, General Manager of Valin Liangang said: "Currently oriented steel and high-grade non-oriented steel production in China is limited to a few large leading steelmakers. Our Electrical Steel JV will be ready to start production in 2010 and will supply competitive high end products to a high requirement electrical steel market."
Mr. LI Xiaowei, Valin Group's Chairman commented: "Valin continues to target high-end flat rolled demand, supported by the technical platform set up with ArcelorMittal and adjusting its product mix, developing its own core technical and innovative capabilities. Electrical steel is the latest addition, following high end heavy plate and automotive steel products."
Mr. Gonzalo Urquijo, member of ArcelorMittal's Group Management Board stated: "This Electrical Steel JV will allow Valin and ArcelorMittal to produce the latest generation and very high performance electrical steel grades in China, thanks to the technology transfer and the continuing R&D efforts from ArcelorMittal. It is a significant step forward in ArcelorMittal's strategy for supplying the market worldwide with high quality electrical steels. ArcelorMittal has recently decided expansions in its European and Brazilian operations and considers this market as strategic considering the strong demand linked to the increasing need for electricity distribution and consumption in performing applications."
About Valin Group
Valin Group is a large-sized enterprise set up by three steelmakers in Hunan province in 1997 --- Xiangtan Iron & Steel, Lianyuan Iron & Steel, and Hengyang Steel Tube, currently with 57,000 employees including 12,000 technical staff. Valin Group now has over 10 subsidiaries under direct or indirect control, including Xiangtan Iron & Steel, Lianyuan Iron & Steel, Hengyang Steel Tube, Nanfang Building Materials, etc., with a stable operating and governance system based upon sound capitals and assets.
Over the past 7 years, Valin Group has achieved coordinated leap-frog development through innovation, capital operation and optimized restructuring, aiming to become larger and stronger. In 2007, Valin Group witnessed sales revenue RMB 50.3 billion, 38% higher y.o.y., which is the first enterprise which exceeded 50 billion revenue in Hunan province.
About Hunan Valin Steel
Hunan Valin Steel Co., Ltd is a public company listed in China's Shenzhen Stock Exchange in 1999. Until May 31st, 2008, the number of its shares totals to 2,737,650,025. Valin Steel mainly produces cold and hot rolled super-thin coils, heavy plates, seamless pipes with a wide range of diameters, fine wire rods, etc.
Equipped with state-of-the-art production lines in plate, tube and wire, Valin Steel's products enjoy world class technology and quality, and cater to a diferent market segments in more than ten countries and regions, such as US, Singapore, Korea, Australia, Middle East, south Europe, Malaysia. In 2007, Valin Steel produced 11.12 million tonnes of steel products. It is now China's 10th largest steel company.
ArcelorMittal is the world's leading steel company, with over 320,000 employees in more than 60 countries.
ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. With an industrial presence in over 20 countries spanning four continents, the Company covers all of the key steel markets, from emerging to mature.
Through its core values of sustainability, quality and leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and wellbeing of its employees, contractors and the communities in which it operates. It is also committed to the sustainable management of the environment and of finite resources. ArcelorMittal recognises that it has a significant responsibility to tackle the global climate change challenge: it takes a leading role in the industry's efforts to develop breakthrough steelmaking technologies and is actively researching and developing steel-based technologies and solutions that contribute to combat climate change.
In 2007 ArcelorMittal had revenues of USD 105.2 billion and crude steel production of 116 million tonnes, representing around 10 per cent of world steel output.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MTP), Brussels (MTBL), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal visit: www.arcelormittal.com