Daniel Fairclough
Thanks. So we'll move to the next question, please, from Tom at Barclays.
Tom Zhang
Hi, guys. Thanks very much for taking the question. And congrats, I guess, thus far on what has been record earnings and a very good year. Firstly, just on the current CapEx envelope that you have on strategic growth. I mean, it seems like every quarter, there are some interesting new sort of growth projects that are coming online, most recently sort of Ukraine environment. So just wondering if that's something we should expect for the next couple of quarters or are you quite happy with the existing portfolio of projects?
Aditya Mittal
Yes. So first of all, thank you. It's been a long time since we have delivered such good results, so everyone in ArcelorMittal is very pleased. In terms of the specific strategic projects, look, we'll update you as things develop. Clearly, as we move forward in terms of decarbonization and also our product suite, where we want to have capability to supply to the new demands that are being created in terms of the new energy infrastructure, we could have more updates and develop more projects, which could create both EBITDA and value for us as we move forward. So I would not say that this is the end of it. I would say that the area to focus on is how interesting these projects are.
Because if you look at the relative CapEx or the relative EBITDA generation, these are all very strong projects, primarily focused on the emerging markets, adding value in terms of our product range, adding value in terms of iron ore. And the reason why I say they are very strong projects, apart from the strategic reasons, is also because the EBITDA forecast that we have provided in terms of iron ore are based on long-term iron ore pricing, which we have not changed for many years. And in terms of steel, it's really based on historical spreads between 2015 and 2020.
And so to the extent that there is a structural shift in the steel industry, then obviously, the EBITDA performance of all of these facilities will improve, for all of these projects will improve. So I think these are quite exciting. It's not – they are already commenced. So we should see the EBITDA benefit soon, especially Mexico, for example, where the first coil was already shipped out in December of this year.
Tom Zhang
Okay. Thank you. Very clear. And just another question, please. I apologize, the line cut out a little bit during Alain’s second question. But I heard that Europe seems to be past the worst, and you can see sort of, I guess, the CIS prices starting to pick up. Would you rule out that Q1 EBITDA might be higher than Q4?
Aditya Mittal
Genuino?
Genuino Christino
Yes. Hi, Tom. Yes. Look, I mean, as you know, we don’t really provide that type of guidance. No, I was just trying to discuss the moving parts, right? So we are, of course, very confident on Q1. We believe that we’re going to have a good quarter there. And I spoke already about the moving parts, so I think that should give you an indication of what kind of EBITDA to expect in Q1.
Tom Zhang
Okay. Fair enough. Thanks. I’ll turn it back.
Daniel Fairclough
Great. Thanks, Tom. So we’ll move to the next question from Patrick at Bank of America.
Patrick Mann
Hi, good day. Well done on the record results. I just wanted to ask two questions. One, the $1.5 billion value plan, which is in the results. Can you just maybe give us a little bit more color around what actions you’re taking? I think I saw there at some intended to offset some of the inflationary pressures you’re feeling. So it would be interesting to hear what actions you can take.
And then the second one is, could you just maybe give us an operational update on India and the strategy there going forward? It’s obviously doing very, very well. And just to get a sense of the trajectory that the business is on. Thank you very much.
Aditya Mittal
Great. Thank you, Patrick. In terms of the value plan, as you correctly point out, it’s $1.5 billion over the next three years. The focus area is really variable costs and improved operational reliability. And variable cost is really improving consumption factors. And the way we can do it – or efficiency factors. And the way we can do it is through transferring knowledge. We have facilities, which obviously do very well, and there are areas in which we can improve across the Board.
And so this is a bottoms-up plan. It’s very clear which facilities have this improvement potential. And it’s a cumulative of all of those plans, which we have presented. Operational reliability is just improving mill availability, so ensuring that the mills are available much more. It’s really focusing on preventive maintenance practices versus reactive maintenance practices. And the combination of the two is a prime generation of this value plan.
It’s different than what we did in 2020, in 2021, where we had a fixed cost plan, which, if you remember, included the footprint optimization. So this is a [indiscernible] Saldanha as well as Kraków in Poland, and we improved employee productivity by 8% reduced SG&A. So this is much more focused on variable costs, operational reliability and because this variable cost should offset some of the inflationary impacts.
In terms of operational update in India, you’re absolutely right. India is off to a very, very strong start. It has done very well since our acquisitions. We’re very proud of the team there and what we have achieved. It hit record results, both production and shipments in 2021, and it has excellent growth characteristics. Inherently, the facility is low cost, has a very good strategic base because the iron ore is coming from the East via slurry pipelines to the East Coast, where we own pelletizing facilities, transported to the West Coast, where we have a coastal facility where the market is and then obviously converted into steel.
In the short-term, our growth plans are two-fold, primarily it’s automotive downstream. So we have a project to set up a new coil rolling facility, galvanizing lines to address the market in terms of automotive demand. And the second is to expand the facility on the West Coast, which Hazira site.
We have a plan underway or a project underway, which hopefully we should be announcing soon this year in which we can take that facility from 8 million to 14 million tonnes. And clearly, as it’s an expansion, it’s a brownfield facility, I think that will bring down its cost. So from a cost competitiveness perspective, I think it would be world-class and clearly located to the growing market in India. Moving forward, there are other growth plans, but I think this is the main takeaway for today.
Patrick Mann
Thank you.