AM/NS India, a joint venture between ArcelorMittal and Nippon Steel, projects its operating profit and cash flows to increase 2.5 times by 2026 following the completion of its first expansion phase. Currently generating around $2.5 billion in operating profit and $1.7 billion in cash flows, the company expects a significant boost from its ongoing growth initiatives. AM/NS India shared these projections at an investor meeting, outlining further potential to quadruple profits after completing the second phase of expansion.
Since acquiring Essar Steel in 2019, AM/NS India has generated $5.8 billion in cash, used for strategic acquisitions and securing supply chains. The company has managed to close the gap in operating profit per tonne compared to its Indian peers, achieving higher profitability in the first half of 2024. A comprehensive turnaround strategy focusing on operations, finance, sales, procurement efficiencies, and capacity optimization helped achieve this milestone.
AM/NS India’s Hazira plant in Gujarat, one of India’s largest steel producers, currently has an annual output of 9 million tonnes. The first phase of expansion, which started in 2022, aims to add 6 million tonnes of steelmaking capacity with an investment of Rs 60,000 crore, bringing the total capacity to 15 million tonnes.
This phase is seen as “transformational” for the company, enabling access to higher-margin products. In addition to steel production, AM/NS India bolstered its infrastructure by acquiring two port assets in Hazira and Paradeep, along with a 270 MW power plant from the Essar Group for Rs 16,500 crore in 2022.
The second expansion phase will be divided into two parts. By 2028, the company plans to add a 3 million tonne rolling mill and expand capacity for $1.4 billion (around Rs 117 crore), pushing total production to 18 million tonnes. By 2030, another 6 million tonnes may be added, contingent on land acquisition, power and water supply, and port infrastructure development.
AM/NS India currently meets 60% of its iron ore needs through captive mines and is exploring additional resources. The company aims to reach a production capacity of 40 million tonnes, aligning with India’s goal of producing 300 million tonnes of steel by 2030.
