AM/NS India to Set up 1.4 Lakh Cr. Steel Plant in Andhra
ArcelorMittal Nippon Steel India (AM/NS India) will be setting up an integrated Steel plant in Andhra Pradesh’s Nakkapalli with an investment of about Rs. 1.4 lakh crore.
AM/NS to Add 17.8 MMTPA Steel Production Capacity in 2 Phases
AM/NS’ greenfield Steel plant in Andhra will have a production capacity of 17.8 Million Metric Tonne Per Annum (MMTPA) and will come up in 2 phases, which will together sprawl over 4,600 acre.
The first phase will entail investment of about Rs. 80,000 crore, and it will add 7.3 MMTPA to AM/NS’ Steel production capacity. For setting up phase 1 of the plant, AM/NS is in the process of procuring 2,600 acre of land.
The second phase will have a production capacity of 10.5 MMTPA, and will be developed with an anticipated investment of Rs. 60,000 crore. Phase 2 of the plant will require an additional 2,000 acre of land.
Nakkapalli Strategic Location for AM/NS’ Steel Plant
Nakkapalli offers a strategic location for AM/NS’ Steel plant. While speaking to the Economic Times (as per an ET article dated 3rd November 2024) on this matter, Mr. Manoranjan Kumar, Chief of Ports and Development, AM/NS said, “The key issues in setting up a steel project are the availability of land and port facilities. Nakkapalli fulfills both the criteria”. Notably, Nakkapalli has road, rail and port connectivity to Visakhapatnam. A captive jetty will be constructed for AM/NS’ planned Steel plant to facilitate economical procurement of raw material. Mr. Kumar elaborated, “This is important in our strategy to expand. The site at Nakkapalli is very promising on this account”.
AM/NS India Targets 40 MMTPA Production Capacity by 2035, Expansions Planned
AM/NS India’s planned greenfield unit at Nakkapalli will serve its long-term target to have 40 MMTPA production capacity in India by 2035. Currently, the company has a Steel production capacity of 9.6 MMTPA.
In order to attain this target, the company will be investing about Rs. 60,000 crore in its Hazira plant by FY-26 to expand the plant’s capacity to 15 MMTPA. In its annual report for FY-24, the company also mentioned: “We are also exploring opportunities on the eastern side of India, with our long-term vision to increase our Indian steelmaking capacity to 40 Million tonnes”.
As per several media sources, AM/NS has is planning two greenfield plants in Odisha, which include a 7 MMTPA Steel plant in Paradip and a 12 MMTPA plant in Kendrapara, Odisha. Moreover, in March 2021, the company had signed a Memorandum of Understanding (MoU) with Odisha government for developing a Steel plant in the state. However the company’s annual report does not specify any particular site in Odisha where AM/NS is planning expansion operations. “Our initiatives to expand steel production capacities in Hazira and the new site in Odisha highlight the strategic value of this acquisition and are crucial to achieving our ambitious objectives”, says the report.
AM/NS India’s annual report added that this move is to cater to the rising Steel demand in India and to boost its revenue ‘substantially’.
Steel Demand Projected to Grow, Production Needs to be Doubled by 2035
A September 2024 report by McKinsey & Company mentions that India’s annual Steel demand is projected to increase to 240 MMT to 260 MMT by 2035, which portrays a strong need to increase India’s Steel production capacity. In FY-23, India’s crude Steel production stood at 125.32 MMTPA as per an October 2024 report by the India Brand Equity Foundation. Therefore, it can be deduced that India’s Steel production capacity needs to be almost doubled by 2035.
