ArcelorMittal on Monday announced the acquisition of a 90% stake in Rongcheng Chengshan Steelcord, the Chinese privately owned steelcord wire drawing company based in Shandong province. The acquisition is being made for the sum of US$26.6mn.
Speaking today, Lakshmi Mittal, President and Chief Executive of ArcelorMittal said: ‘This acquisition is an important step for us in expanding in a major market. We have already shown through our joint ventures in China the value and skills we can bring the Chinese steel industry and we look forward to bringing our expertise to Rongcheng Chengshan Steelcord. As well as showing our commitment to the broader Chinese steel market, this acquisition also underlines our commitment to the wire business specifically and recognises China’s leading position in this sector.’
Rongcheng Chengshan Steelcord specialises in steelcord wire and bead wire (used for tire reinforcement). The company forecasts a turnover of RMB 536m (US$71mn) for 2007. China is the largest steelcord wire market in the world with very close proximity of the steelcord producers to the tire manufacturers. China is also the leading tire manufacturing base in the world. ArcelorMittal’s consolidated sales in wire solutions represented $2,6bn worldwide in 2006.
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