PRAGUE, Oct 8 (Reuters) - The Czech unit of the world’s top steelmaker, ArcelorMittal, will invest 1 billion crowns ($53.2 million) in continuous-casting equipment, a move expected to open new markets for it outside highly-competitive Europe, its chief was quoted as saying on Tuesday.
The economic downturn across Europe has hit the heavy-industry sector as companies and governments curb investment in equipment and infrastructure in a bid to cut debt and costs.
In an interview with the daily Hospodarske Noviny, Tapas Rajderkar said the investment would make it possible to supply a new type of product to oil and gas markets in the Middle East as well as other markets that are less competitive than Europe and where the company will be able to protect its margins.
“With our (current) type of products, demand is 50 percent below capacity in the (eastern European) region in which we operate,” the daily quoted Rajderkar as saying.
“This investment will enable us to get out of this region with a product where there is not such competition.”
He said the company was in talks with a steel mill in Saudi Arabia which has a capacity of 600,000 tonnes a year and to which it plans to supply its new product as part of a joint venture ArcelorMittal Jubail Tubular Products.
It hopes to deliver 3 million tonnes of material over the next 7-10 years, Rajderkar added.
$1 = 18.7930 Czech crowns Reporting by Jana Mlcochova; Editing by Mark Potter