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Korea, Japan compete in Indian Steel Market |
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DATE |
2010-02-02 11:20:29 |
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Korea, Japan compete in Indian Steel Market
Feb. 01. 2010
By Kim Hyun-cheol
Staff Reporter
One of the world's fastest-growing economies, India, is emerging as a battlefield for steelmakers from South Korea and Japan, which are attempting to cash in on the promising market with new plants.
While Korean giant POSCO looks to break ground for an integrated mill there as the first step to establish a key post in the country as a hub for its global management, Japanese makers are also teaming up with Indian steel companies in the lucrative market.
POSCO's Indian project picked up steam, as the years-long process has been completed to secure the site for a mill in Orissa, the ninth-largest state in India.
The Indian government gave POSCO, the world's fourth-largest steelmaker, the final nod last month to develop the forested part of the planned plant site into industrial land. The project had been in stagnation for three-and-a-half years, with 74 percent of the whole plant site labeled as undevelopable forest land.
Once established, the new mill will produce 4 million metric tons of steel annually in its initial stage of operation. Its annual production will expand to 12 million tons after the completion of the project.
POSCO plans to carry out several more projects in the country, including its second Indian steel plant. Teamed up with world's No.1 steelmaker ArcelorMittal, it seeks to build two new steel mills in southern India. It also intends to invest $7 billion on a mill in Karnataka state.
POSCO signed a memorandum of understanding with the Government of Orissa for the project in 2005, as well as development of iron ore mines in the state, looking to enhance productivity by securing a supply of steel-producing materials. Indian courts will decide on the issue of POSCO's mining rights next month, and the firm is confident on a ruling in favor of it.
In the lead up to the effectuation of the Korea-India Comprehensive Economic Partnership Agreement in the beginning of this year, followed by President Lee Myung-bak's visit to India last month, the company expects the project to gain a big boost.
Moves on the Japanese side are as focused as its neighbor across the Korean Strait. Last week, Nippon Steel, the world's second-largest maker, sealed a technical collaboration deal with Tata Steel to make quality steel for vehicles.
Investing 35 billion yen ($388 million), Nippon Steel plans to establish a continuous annealing processing plant and its processing line in Jamshedpur.
A couple of months earlier, JFE Steel Corporation signed a technology partnership agreement with JSW Steel, and Sumitomo Metals also has a deal tied-up with Bhushan Steel for its upcoming project in Orissa.
Currently, the biggest attraction for global steel firms is India's shooting up auto industry, the third-largest in Asia, with an estimation to annually grow by double digits for the next few years. Indian-produced vehicles are expected to reach 4.2 million in 2015, a nearly 250-percent growth from 1.8 million in 2008, POSCO forecasts.
Nearly half of the total 4.1 million metric tons of cold-rolled coils produced in India are consumed by local carmakers.
POSCO's Indian facilities in operation are also aimed at the market of unfathomable potential. It has processing centers in major cities, including New Delhi and Chennai, which supply steel products for Indian carmakers.
"But even without the boost from the auto market, advancement of Korean and Japanese steel companies will get bigger in the future in efforts to secure long-term supplies of iron ore," said Kim Joo-han, a researcher at the Korea Institute for Industrial Economics & Trade.
Resourced from www.koreatimes.co.kr |
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