Plant to be constructed in three phases of 4 mtpa each
Phase –I to be completed by December 2010 with an approximate investment of USD 3.7 billion
Bhubaneswar, December 18, 2005: POSCO officially declared today that POSCO-India’s proposed 12 million tonnes per annum (mtpa) integrated steel plant in Orissa will be constructed in three phases of four million tonnes per annum each. This decision was taken at a meeting held in Seoul, Korea today where 15 members of the Board of Directors of POSCO gave their official nod to several agendas including the POSCO-India project. POSCO’s Board of Directors comprises six standing Directors and nine outside Directors. These outside Directors include experts in the field of economic, financial, and legal sectors.
The approval by POSCO’s Board of Directors today is yet another milestone in the history of the POSCO-India project. It reflects their faith in and commitment to India and takes us a step closer to realizing our vision for Orissa and the global steel industry.
The capacity of the POSCO-India plant in Phase -I will now be 4 mtpa as against 3 mtpa which was originally mentioned in the Memorandum of Understanding signed with the Government of Orissa on June 22, 2005. However, the total capacity of the fully integrated steel plant will still remain at 12 mtpa.
The first phase of construction is expected to be completed by December 2010, six months later than the original mentioned date of June 2010. This delay will be due to the increase in capacity and equipment changes. The final completion of Integrated Steel Works will be earlier than the original schedule. The investment for the first phase is approximately US$ 3.7 billion (Rs 16,650 crore). Finex process, an innovative and next generation ironmaking technology, indigenously developed by POSCO is given priority over Blast Furnace process, which will also be considered as an alternative for the India project.
Of the four million tonnes to be produced in the first phase, 1.5 million tons will be slab and the 2.5 million tonnes would be hot rolled steel, value added products, as against three million tonnes of slab that was originally mentioned in the Memorandum of Understanding. These slab and hot rolled steel would be used for export as well as for domestic use.
The site preparation for the steel plant and construction work for the proposed port at Jatadhari are scheduled to begin in April 2007. The construction of the plant will start in April 2008.
Since the signing of the MoU in June 2005 and the setting up of POSCO’s Indian subsidiary in August 2005, POSCO has made a capital investment of USD 51.3 million in the project. The application for prospecting license for three areas was filed by POSCO-India on September 27, 2005. Additionally, proclamation of the Government land amounting to 3,556 acres was announced on November 23, 2005 and 4(1) notification of the private land for the steel plant is expected to be published soon.
POSCO-India’s steel plant project is the largest foreign direct investment in India and is a significant part of the company’s strategy to enhance its global competitiveness. The investment proposed is to the tune of US$12 billion (Rs 51,000 crore). By setting up the 12 mtpa steel plant, POSCO-India is striving to become a global leader in steel production.
India will see significant benefits from the POSCO project like creation of approx. 48,000 jobs in the region and approx. 467,000 man years of employment during the construction phase. A total of US$ 278.6 billion is the projected economic effect of the project, considering taxes and royalty incomes for the central government, as well as the government of Orissa.
About POSCO
Founded in 1968 and headquartered in the southeastern port city of Pohang in Korea, POSCO operates two of the world’s premier steel works--the Pohang and Gwangyang works. The Pohang works produces crude steel of 13 million tons and specializes in small-lot production of a broad range of products, including hot-rolled coil and cold-rolled sheet, plate, wire rod, electrical steel, and stainless steel. The Gwangyang works focuses on mass-production of limited high-demand products such as hot and cold rolled sheet and produces crude steel of 17 million tons. POSCO’s products are shipped to over 60 countries around the globe, satisfying some of the world’s most quality-sensitive customers.
POSCO employs 19,377 people and approximately 70% of its share is owned by foreign investors. In 2004, POSCO produced 30.2 million tonne of crude steel and generated sales of 19,792 billion KRW (US$18.96 billion) and net earnings of 3,826 billion KRW (US$3.67 billion) in 2004.
