POSCO seeks its return to India through Joint Venture with RINL

After a decade long battle to set up a steel plant in India, South Korean steel giant had abandoned its plan in 2015 due to delays in various regulatory approvals.

However, according to market sources, the company is once again trying to enter the Indian steel circuit, but this time through joint venture with Indian steel major, RINL (Rashtriya Ispat Nigam Ltd) in Vishakhapatnam. The JV aims to manufacture value-added special grade of steel.

Since the start of 2019, the POSCO officials have visited RINL facilities thrice with its latest visit in last week. In July this year, senior POSCO officials also met Steel Secretary Binoy Kumar and submitted an investment proposal, sources in the steel ministry said.

The 7.3 million tonnes RINL plant in Visakhapatnam is a shore-based integrated steel plant. It has a land of over approximately 22,000 acre of its own and enjoys access to Gangavaram Port, where raw materials such as coking coal etc arrives. Setting up a JV plant with RINL will give POSCO access to the South East Asian markets besides catering to the domestic needs of special steel through rail and road as RINL is located in the eastern coast of India.

POSCO had proposed to set up a 12 MTPA plant at Jagatsinghpur in Odisha at an estimated cost of INR 52,000 crore. An MoU was also signed between POSCO and the Odisha government in this regard in 2005 but the plant could never be set up due to various reasons from delay in environmental clearances to protests by the locals.

Although the Indian steel sector is currently facing downturn due to poor demand from end user especially automobile sector, the company believes that it is a short-term phase which technology-driven Korean companies will survive.