AM/NS India expanding capacity for downstream products by more than 51% by this year-end: Dilip Oommen

Economic Times

7 days ago

Synopsis
AM/NS India is significantly boosting its downstream product capacity by over 51% to five million tonnes by year-end, aiming to meet rising demand from the auto and appliance sectors. This expansion, part of an ₹8,500 crore investment, includes commissioning a galvanizing line capable of producing high-strength steel, reducing imports.
ETMarkets.com MUMBAI—AM/NS India is expanding capacity for downstream products by more than 51% to five million tonnes by this year-end, said Dilip Oommen, chief executive, underscoring efforts to meet demand from automobiles and other industries such as appliances.AM/NS India—a joint venture between steel giant ArcelorMittal and Japan's Nippon Steel—can currently produce up to 3.3 million tonnes downstream products annually.
The company currently ranks among India's top flat steel producers, with a capacity of 9 million tonnes at its plant in Hazira, Gujarat. JSW Steel, the largest producer of steel in the country, has a downstream capacity of more than 13 million tonnes, while Tata Steel has more than 4 million tonnes of downstream capacity.On Wednesday, the company commissioned a continuous galvanising line in Hazira, becoming the only Indian company with the capability to produce steel with strength of up to 1180 megapascals. This high-strength steel, which finds application in the auto industry, is currently imported, and AM/NS is looking to substitute these imports.India currently consumes about 8 million tonnes of flat steel per year for automobiles, of which around 10-15% is imported.
AM/NS will commission additional galvanising lines by the end of the year, further increasing its downstream offerings. 'This is a part of the Rs 8,500 crore capital expenditure planned for downstream expansion,' Oommen said.AM/NS India has already spent 85-90% of the planned capex. The remainder will be spent through the course of the year, he said.The company currently garners about 60% of its sales from downstream products.Apart from the auto sector, these downstream products will be used for manufacturing appliances, green steel, and in the solar energy space, said senior company executives.Automobiles, though, will remain a critical part of the company's downstream portfolio, given the premiumisation happening in the space, they added.As per its latest available financial results, in fiscal 2024, AM/NS posted a net profit of Rs 6,997.23 crore on a revenue of Rs 57,433.02 crore. It had earnings before interest, tax, depreciation and amortisation of Rs 14,925 crore for the year.