Arcelor reveals its plans for integration in steel sector

Arcelor reveals its plans for integration in steel sector

Arcelor has recently announced its plans to enhance worldwide competitiveness in steel sector. Accordingly, a consolidation was established two years ago. In line with the consolidation, Arcelor plans to reduce costs by €300 million at the end of 2003 and by €700 million at the end of 2006. At the end of second quarter, Arcelor posted cost reduction of €280 million through mill closure, improvement in purchases, technology transfers and it expects the targeted value of €300 million to increase to €500 million by the end of 2003. According to Arcelor, a worldwide integration will not be realized before a decade, however, it is stated that, Arcelor is to solve some problems such as excessive debts and asset fluid, before taking over any other big companies. Arcelor has an annual crude steel production capacity of 1'580'000 tons, however the company plans to reduce capacity of inland mills by 7.5 million tons and 7 million tons in Western Europe by 2010 and increase the capacity of coastal region mills by 2 million tons. For instance, a mini mill in Spain will increase its capacity by 1 million tons, with the installation of a new blast furnace. Current projects conducted by Arcelor is; establishment of a new mill with cold rolled and hot-dip galvanized lines in Brazil, a joint venture company with Erdemir (Turkey) and a joint mill with hot-dip galvanized mill in Russia, all of which will produce steel sheet and serve for automobile industry. Located in Brazil, CST has recently announced that it will set up No.3 blast furnace and will provide slabs to Arcelor. Arcelor possesses small amount of CST stocks, however the officials from Arcelor state that expansion of CST is not related with Arcelor's reduction of capacity plans in Europe and they add that taking over the stocks of CST is among their plans for future. Establishment of an integrated ironwork with Baosteel and CVRD in Brazil is also present among the plans of Arcelor, however the company plans to use it to test cost and return.