A persistent slump in demand for steel that has left plants idled worldwide for nearly a year is pushing top global producers to expand in India, which along with China is a rare bastion of growth.
Strong local demand driven by infrastructure projects and rebounding car sales has led big foreign steel makers to seek out investments in a fragmented local industry after efforts to develop independent projects met with delays.
Midlevel firms including Usha Martin, Electrosteel Casting, Bhushan Steel and Monnet Ispat are seen as attractive targets for joint ventures or acquisitions by foreign companies keen to enter a market beset by regulatory hurdles and land acquisition issues, analysts said.
Smaller, less-competitive domestic players, however, could see their market positions under threat as global players increase their presence in the country. ArcelorMittal, the global leader, said this month it would acquire a one-third stake in the Indian company Uttam Galva, and more such deals are expected given the difficulty of going it alone in India.
Global steel demand slumped by more than a tenth in the past year, but India’s 55 million-ton steel market has seen nearly 10 percent growth as its $1 trillion economy focuses on building physical infrastructure and as auto sales revive.
Source:http://www.nytimes.com/2009/09/29/business/global/29iht-steel.html(edited)
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