Hunan home to joint venture ArcelorMittal auto steel plant

Wang Jun, chairman of VAMA, said the joint venture "enjoys great support from all stakeholders including the government, suppliers and the local community".

"Everybody agrees that this is an essential project to further contribute to the high-quality development of the automotive industry in China.

Jiao Guohua, chief operating officer of the joint venture, said "hot coil from VAMA will be made of Lianyuan Steel, another subsidiary of Valin Steel at Loudi".

"Building the factory in Central China's Loudi brings VAMA close to suppliers of raw materials and provides a central location to supply our products to automakers throughout the country."

Hunan province has attracted a number of automotive enterprises such as GAC Fiat, GAC-Mitsubishi, BYD, and Geely, as well as other automotive suppliers including Bosch.

Jiao said VAMA plays an important role for the future by adding an important element to the local automotive value chain - automotive steel. Its sales are expected to reach 10 billion yuan by the end of 2016.

"Steel makes up less than 10 percent of a vehicle's total cost, so automakers are not that sensitive to the price of steel," said Sharma.

"Automakers are more concerned about quality of product, time of delivery and service levels, and the establishment of the steel plant here means that we can provide services to automakers more quickly, probably just on a short notice."

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