ArcelorMittal and Hunan Valin continue to strengthen their strategic partnership on high technology oriented business of automotive steel. ArcelorMittal plans to enhance its commitment to VAMA through increasing its shareholding in VAMA from 49% to 50%.
GONVVAMA Loudi factory production lines
On October 18, Mr. Xu Dazhe, Deputy Party Secretary and Acting Governor of Hunan Province, paid an official visit to Valin ArcelorMittal Automotive Steel Co., Ltd. (hereinafter referred to as VAMA or Auto Steel Company), highly praising the first-class automotive steel production lines and on-site management of the company. Meanwhile, he pointed out that VAMA should digest and absorb ArcelorMittal’s advanced technology and management expertise as soon as possible, actively implement the innovation-driven development strategy, and further enhance its market share and business efficiency.
Mr. Du Jiahao, current Party Secretary of Hunan Province, also stated in the media interview that Hunan should focus on the development of high-strength lightweight automotive steel and high-strength corrosion-resistant shipbuilding plate, so as to promote high-quality steel industry in the pursuit of better product portfolio through years of efforts.
It can be seen obviously that Hunan has attached great importance to the development of automotive steel. Moreover, a set of data recently released by Hunan Province appears to have boosted the confidence of Hunan in the growth of automotive steel: since 2013, Hunan’s automotive manufacturing industry has recorded an industrial added-value significantly higher than the average level of scale-sized industries of the whole province. From January to September this year, the added value of Hunan’s automotive manufacturing industry presented a year-on-year increase of 39.7%, contributing 19.1% to the growth of scale-sized industries of the whole province. The rate of 39.7% is far higher than the average level of the growth of national automotive sector. In 2015, the automotive production in Hunan reached 636,000 units, and is expected to exceed 900,000 units in 2016. In 2016, enterprises in the province such as Shanghai Volkswagen, GAC Fiat Chrysler, BYD, Geely, Changfeng and BAIC Zhuzhou are expected to reach RMB10 billion.
ArcelorMittal enhancing its commitment
As Valin Steel is transforming itself from steel enterprise to enterprise in finance services and power generation, through major asset restructuring, ArcelorMittal decided to exit Valin Steel as future business of Valin Steel are not the core business of ArcelorMittal. On August 2, Valin Steel announced that the company’s second-largest shareholder ArcelorMittal had signed a share transfer agreement with Hunan State-owned Enterprise Innovation Private Equity Fund Co. Ltd., in which ArcelorMittal transferred all of its shares in Valin Steel, which were 303,939,125 shares, to Hunan State-owned Enterprise Innovation Private Equity Fund at the trading price of RMB3.63 per share.
ArcelorMittal and Hunan Valin continue to strengthen their strategic partnership on high technology oriented business of automotive steel. ArcelorMittal plans to enhance its commitment to VAMA through increasing its shareholding in VAMA from 49% to 50%, participation in management team, bringing new products to VAMA portfolio and providing the loan for working capital.
VAMA has introduced ArcelorMittal’s most advanced automotive steel technology in the world and transformed the excess capacity of hot rolling to process and produce high-end automotive steel that is in shortage in the market and has relied upon imports for a long term. VAMA’s total investment in the first phase amounts to RMB5.2 billion, and the construction scale is based on 2.3 million tons, of which the construction project in the first phase is 1.5 million tons and has been approved by the National Development and Reform Commission and become a key project of Hunan Province.
GONVVAMA Loudi factory site
Establish excellence and efficiency of entire supply chain
“ArcelorMittal continues to deepen and strengthen its cooperation with Hunan Valin Group in the auto steel project. To serve highly demanding automotive customers, the excellence and efficiency of entire supply chain is critical: Upstream plant of Lianyuan Steel to VAMA to Downstream facilities of Automotive Lightweight Technology Solution Center located at various automotive clusters. The weakest link in the entire supply chain decides the highest possible efficiency so it becomes critical to have highest level of performance across the entire supply chain. ArcelorMittal’s technical experts are working closely with upstream facilities of Lianyuan Steel which provides input Hot Rolled Coils substartes to VAMA and similarly a strong focus is on downstream facilities which produce the value added products for delivery to automotive manufacturers.” ArcelorMittal China and India CEO Sanjay told the reporter.
It is known by the reporter that VAMA’s not only has access to world class technology but also to modern management practices and operating know-how. ArcelorMittal has provided many senior managers and technical experts to facilitate the technology and know-how transfer to VAMA.
According to reports, ArcelorMittal’s lightweight auto steel solution can reduce 19% of the weight of the body in white and 14% of carbon emissions by optimizing the weight of 43 parts of the vehicle. VAMA’s core product, Usibor® 1500, is a hot-stamping steel used for automotive structure and safety components. The final part after hot stamping features very high mechanical strength and is 30-50% lighter than conventional cold-stamping parts. At present, VAMA has obtained ArcelorMittal’s exclusive patent in China and can steadily produce the unique Al-Si coated hot-forming steel Usibor®1500 and the Ductibor used with laser welding. The combination of both can be used to manufacture “B-pillar with soft zone”, and when the strength of B-pillar reaches 1,500 MPa, the need of energy absorption can be satisfied to protect the safety of passengers to the greatest extent.
GONVVAMA processing and distribution bases soon to be ready
In addition to the advantages of the product, VAMA is currently working with Gonvarri, a global leader in automotive sheet processing services, by means of a joint venture GONVVAMA and is building a processing and distribution base. GONVVAMA is headquartered in Changshu, and four major processing and distribution bases in Loudi, Changshu, Shenyang and Chongqing are well under construction and will be put into operation by the end of this year or early next year. VAMA and GONVVAMA will bring leading-edge solutions to the Chinese market, such as Tailor Welded Blank technology, integrated door ring forming, new coating solutions for automotive steel and lightweight body solutions. The introduction of above solutions will mainly help the automotive industry achieve lightweight body, reduce greenhouse gas emission, and enhance passenger safety.
GONVVAMA Loudi factory production equipments
VAMA has obtained technical support from ArcelorMittal’s global R&D centers, and ArcelorMittal has also set up an early vendor involvement (EVI) team for car models in China and sent experts from its R&D departments who have over 20 years of service experience in the automotive industry. EVI team provides support of the latest technology and solutions to OEMs in the early stage of model design, and serve VAMA’s automotive customers. “VAMA is in a business of enhancing passenger safety and making cars more environmental friendly. VAMA has strong technical advantage, managerial experience and brand strength, and we are confident to jointly with Hunan Valin, to build VAMA into a high-caliber leader among Chinese automotive steel suppliers.” Sanjay told the reporter.
It is reported that, from April to October, VAMA & GONVVAMA has made five technical roadshows around the country, and all the international and Chinese-branded OEMs and major first-tier suppliers in the Chinese market have sent representatives to participate in the events, and more than 560 relevant customer representatives have attended the roadshow activities.
GONVVAMA Loudi factory production equipments
So far, VAMA has successfully passed almost all the certifications for OEMs, and has completed the certifications of steel grades and trademarks such as ultra-high strength steel and Usibor®1500 for important customers including Dongfeng Shenlong, Ford, GAC Fiat Chrysler, Daimler, Toyota, Honda, FAW-Volkswagen, Nissan, BAIC and Geely.
“ArcelorMittal and Valin join hands in the automotive steel, but they are not limited to the automotive steel. As Lianyuan Steel provides automotive substrates to VAMA, ArcelorMittal has provided Lianyuan Steel with a full range of technical quality support in upgrading process technology, innovating grade R&D and improving the physical quality of products. ArcelorMittal’s technical team also insists on carrying out technical exchanges and seminars once a week with relevant personnel of Lianyuan Steel in order to achieve rigorous quality control over developed products, improve management of all aspects in an all-round way, and focus on the development of independent innovation capability of Lianyuan Steel.” Valin Group Chairman Mr. Cao Huiquan said.
