POSCO
steel mill Gwangyang Steelworks (Courtesy of POSCO)
CHENNAI, INDIA – POSCO, the South Korean
steel giant under POSCO Holdings Inc., is considering opening an
integrated steel mill in India in a second attempt in 18 years to meet the
growing demand for its automotive steel products in the world’s fifth-largest
economy.
“Steel plate orders are pouring in as finished carmakers are ramping up their
car production (in India) under the country’s ‘Make in India’ initiative,” Han
Tae-soo, head of POSCO India Chennai Corp. (ICPC), said in mid-August when The
Korea Economic Daily visited the center. “We are extremely busy dealing with
order requests from multiple customers.”
Maruti Suzuki India Ltd., India’s No. 1 car seller, has recently joined other
global automakers to use POSCO’s steel to produce cars in India.
POSCO’s other customers include Hyundai Motor Co., Kia Corp.,
Tata Motors Ltd., Mahindra and Mahindra Ltd., Honda Motor Co., Škoda Auto a.s.,
Volkswagen Group and Nissan Motor Co.
With the rise in customers, POSCO’s Indian operation earnings have
significantly increased in recent years.
POSCO Maharashtra Steel, the Korean steel maker’s rolling plant in India,
reported $27 million in operating profit in the second quarter ended in June
and $12 million in the first quarter.
The total operating income for the first six months of
this year already surpassed last year’s total of $39 million, according to the
company.
INTEGRATED STEEL MILL FOR MAKE IN INDIA
Industry observers project more room to grow in POSCO’s Indian operation
earnings as more car makers such as Tesla Inc. are poised to make inroads into
India, while those already with local operations in the country such
as Hyundai Motor are actively ramping up car output under the
Make in India initiative.
Make in India is the Indian government’s push to make the country a
manufacturing hub for the world, and foreign companies that produce their
products in the South Asian country will enjoy incentives under the plan.
To meet the growing automotive steel demand, the Korean steel giant is said to
be exploring an option to build an integrated steel plant in India about 18
years after its earlier plan to build one in 2005 folded due to the strong
opposition from residents living near the candidate site for the mill, who were
unhappy about the company’s compensation plans.
Under the Make in India initiative, POSCO is expected to be given more support
from the Indian government for its integrated steel mill plan this time than
before, said a unnamed official from a Korean company with operations in India.
With an integrated steel plant in India, POSCO would be able to offer its steel
to local customers in the country at lower prices because it would stabilize
commodities’ prices.