South Korean Steel Majors Inspect RINL’s Vizag Unit taking a Step Ahead in Setting up Steel Plant in India

In September last month, the Indian steel ministry had initiated talks with Japanese and Korean steel companies for setting up a 5-mtpa steel plant through a joint venture with state-run Rashtriya Ispat Nigam (RINL) in Vizag (Visakhapatnam).

The companies involved in the discussion are POSCO and Hyundai Steel and the proposed venture is entailed to have an investment of INR 30,000 crore and would produce high-end steel meant for automotive and other sectors aimed at imports substitution.

Now market reports suggest that taking a step forward, senior executives from Korean steelmakers Posco and Hyundai Steel visited the Vizag unit of the state-run Rashtriya Ispat Nigam (RINL) on 22 Oct to explore the proposal.

The purpose of the visit, was to get a first-hand experience of the existing facility, where RINL operates a 6.3-mtpa unit now and explore the means and ways to execute the proposed steel unit.

This initiative by the Indian government to set up a steel plant in joint venture with foreign companies is aimed at giving boost to the Prime Minister’s ‘Make in India’ programme. Also the proposed venture is hoped to add to India’s capacity augmentation effort, under which the government has targeted to jack up the domestic installed steel-making capacity to 300 million tonne per annum by 2030-31 from around 134 MnT at present.

Apart from their rich experience in the manufacturing of value-added steel, the particular reference to the Japanese and Korean firms in the PMO directive might have stemmed from the fact that India is a regular exporter of iron ore to the Japanese steel mills (since 1963) and Posco, South Korea (since 1973).

South Korean major Posco had signed an initial pact with state-run Steel Authority of India (SAIL) in 2007 to form a steelmaking joint venture here but could not taste success. Russian firm Severstal’s plan for a joint venture with another state-run firm, NMDC, also failed to bear fruit. In both these cases, the overseas partners wanted to retain the majority stake in the venture, which SAIL and NMDC opposed, leading to their death even before they saw the light of the day.

source: SteelMint