Firm sees opposition to land acquisition as major hurdle for growth.
ArcelorMittal, the world’s biggest steel manufacturer, saw its revenue from India fall 18% from $838 million in 2011 to $686 million in 2012.
This comes after the company has removed India from its list of top priority for setting up greenfield steel projects in the country as its plans in Jharkhand are still stuck in land acquisition problems.
While ArcelorMittal has not specified the reason for the fall, analysts said this could very well be the situation with any other company exporting to India in the last one year.
“2012 was the worst year for steel in India from all aspects – shrinking demand from infrastructure, low prices and weak sentiment,” said an analyst with an international brokerage.
He said except Japan and Korea, which had seen their exports to the country rising, the European imports to India have fallen due to price differential.
In fact, where Europe has lost, Russia and China gained in the Indian steel market place, keeping the net imports at almost the constant.
“Another reason for a fall in revenues of the company could be the fall in revenues from its partner in India – Uttam Galva,” he said.
ArcelorMittal owns 33.80% stake in Uttam Galva, while the promoters of the company – the Miglani family – own 37%.
Uttam Galva, which is primarily a value added steel player, has also seen its revenues in India shrink due to lacklustre demand.
Its revenues in India dropped from Rs 2,057.72 crore in the June quarter to Rs 1,460.54 crore in the December quarter. In the September quarter, its revenues remained more or less flat and the company is yet to announce its fourth quarter results.
ArcelorMittal, owned by Lakshmi Mittal (pictured), in its 2012 annual report, published on Tuesday, did not sound too upbeat about its prospects in India.
Among the risk factors to its growth plans across the world, the company pointed out land acquisition as a major problem in India.
“...local opposition to land acquisition or project development (as experienced, for example, in connection with the company’s projects in India)…,” is a possible risk to future growth, ArcelorMittal said in its annual report on Tuesday.
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