29 April 2010
Posco-SAIL to Build Rs 1,000 CR Steel Unit in Maharashtra

Steel major SAIL and South Korean Posco, who are in talks to jointly set up a steel plant in Jharkhand, are also exploring forming another JV to build a Rs 1,000-crore specialised steel mill in Maharashtra.

"Posco and SAIL are in talks to set up a 3 lakh tonne CRNO (Cold Roll Non-Grain Oriented) steel mill in Maharashtra. The proposed JV is likely to come up at an investment of Rs 600-1,000 crore," a government official told.

SAIL already produces CRNO steel -which is primarily consumed by the electrical sector- at its Rourkela steel plant and is planning the venture with the global firm to meet the growing demand of such products.

At present, the demand for such steel items in the country is pegged at 3 lakh tonne, which is estimated to double by 2016-17.

The plant is likely to come up at Maharashtra Industrial Development Corporation-run Vile Bhagad industrial estate in Raigad district of Maharashtra. Posco is already in process of setting up a Rs 1,100 crore steel galvanising facility in the state.

Besides, the two companies are likely to form a JV to set up a Rs 11,000 crore steel plant in Jharkhand on land owned by Bokaro Steel Plant, a subsidiary of SAIL.

Another arm of the Indian firm, Rourkela Steel Plant (RSP) is likely to sell its saleable steel product for further processing to the Posco-SAIL proposed mill in Maharashtra. RSP annually produces about 1.6 million tonnes of saleable steel.

A sub-committee of SAIL's board is learnt to have already cleared both the JV proposals, which may be taken up by the company's Board soon. A delegation from the steel ministry is also expected to leave for South Korea next month to finalise the JV deals.

Faced with inordinate delays in setting up its Rs 54,000 crore steel plant in Orissa for over four years now, Posco is looking at various opportunities in states of Jharkhand, Karnataka, Maharashtra, besides actively pursuing talks with SAIL for joint ventures.

For SAIL, which is undertaking Rs 70,000 crore expansion project to increase its annual production capacity to about 23 million tonnes from present 14 million tonnes by 2011-12, this venture would further help augment the availability of specialised steel products in the country.

(Source: SEAISI Website)

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