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Corus, the European steel major, is expected to finalise a medium-term investment plan for India shortly and would prefer to launch operations through a joint venture with a local partner.
The $12 billion steel maker is considering investments in the flat segment and is now considering potential investments.
At the sidelines of Metals 2004, organised by the Bengal Chambers of Commerce and Industries on Friday, director commercial co-ordination of Corus, Duncan Pell, said, "The company is re actively considering India as an investment option and would formalise its plans in 12 to 18 months."
The 19-million-tonne steel maker has just come out of the red and is now considering investment for future growth.
Pell said Indian steel demand growth rates were expected to grow by an average of 6.3 per cent over eight years. The corresponding growth rate in China was expected to be 5-6 per cent. "In this context Corus should develop a strategy on India," he said.
The steel giant was also considering destinations such as China and the new 10 European countries. "Corus will be doing a comparative study of countries and would come up with a final decision soon," he added.
Investment in India would be in the flat segment and the company would be catering to the consumer boom the country expected over the next few years.
Pell said the current global boom on steel would be more sustainable than the last cycle.
"Corus believes the boom will continue for at least seven years. However, given the raw material crisis, the cost of production will increase and the profitability would be decided on efficient use of raw material."
Pell said demand for flat products was expected to increase manifold in India and unless production capacities increased, import of specialised steel items over the next five years looked inevitable.
"Demand for long products also look sustainable owing to the construction boom. Overall, there is a tight balance between demand and supply," he explained.
Incorporated in 1999 through merger of Hoogovens and British Steel, and having both steel and aluminium production capacities, Corus remained in the red for four years and turned around in the first half of 2004. The company has already decided to sell its aluminium business.
It has 48,500 employees, including those at four integrated steel plants in Europe.
Corus markets its products in the US. Apart from production, it also trades 4 million tonne of steel. Strip products contribute 41 per cent of turnover at Corus, followed by distribution at 26 per cent, long steel products at 21 and aluminium at 12 per cent of turnover.