ArcelorMittal has submitted an offer to buy Essar Steel in a bid to enter the fast-growing Indian steel market. The offer, made through subsidiary ArcelorMittal India Private Limited (AMIPL), details an industrial plan aimed at improving insolvent Essar Steel’s profitability and ensuring it can benefit from projected Indian demand growth.

ArcelorMittal says “…the extensive experience and track record of the group in the successful acquisition and integration of under-performing assets… would be of considerable value to Essar.”

In a note seen by Kallanish group chairman and chief executive Lakshmi Mittal observes: “Essar provides a compelling opportunity for ArcelorMittal to enter the high growth Indian steel market. The offer submitted today by AMIPL includes a detailed investment plan to address operational issues in Essar’s existing asset base. With our industry expertise and renowned operating prowess, we believe we are uniquely equipped to implement a successful turnaround which would be beneficial to Essar’s stakeholders.”

Chief financial officer Aditya Mittal adds: “India is expected to be the world’s fastest growing economy over the next decade and as the economy grows its steel intensity will also increase. We believe our technical experience and management know-how, gained from many successful acquisitions and integrations, will ensure success for the various steel and pelletizing operations at Essar.”

A number of indebted steelmakers, including Bhushan and Essar Steel, were directed into insolvency proceedings by the Reserve Bank of India last June. Essar Steel has a nameplate crude steel capacity of 9.6 million tonnes/year, but maximum achievable output is currently 6.1m t/y due to a bottleneck, according to ArcelorMittal.