In a bid to reduce cost, ArcelorMittal, the world's largest steel producer, is to source more equipment from India and China for its greenfield projects worldwide. Disclosing this to mediapersons here on Thursday on the sidelines of the ICT East 2009, organised by the Confederation of Indian Industry, Mr Pierre Jonette, CEO, ArcelorMittal Design and Engineering Centre, said that for the two proposed projects in Jharkhand and Orissa, the plan is to procure about 80 per cent of the equipment locally. “Equipment not available locally would be sourced from Europe,” he said. In other countries (for example, Brazil), the share of local sourcing would be 60-70 per cent, he observed. The Design and Engineering Centre here is primarily responsible for making plan layout and designs for all ArcelorMittal projects. “We plan to use India and China as hubs for procuring equipment for projects worldwide without compromising on the quality,” Mr Jonette said, adding, “the idea being to bring down the project cost by 20-22 percent.” The company proposes to source boilers, infrastructure and steel structures from India and blast furnaces, coke oven and sinters from China. The company is in talks in this regard with different vendors in the two countries. “The equipment cost constitutes about 50 per cent of the total cost of a greenfield project and the proposed sourcing from India and China is expected to bring down equipment cost by 35-40 per cent,” he said. The company's largest greenfield projects — two steel plants, each of 12-million-tonne capacity at an estimated investment of $20-25 billion — are to come up by 2014 in Orissa and Jharkhand, while smaller projects are planned in Saudi Arabia and Kazakhsthan.
