Pravat Kumar Pattanaik
Bhubaneswar: World's steel market came down to 2003 level. Every country including China also worried about the low price of steel products. Despite this gloomy picture of steel industry in whole world, South Korea's largest steel producer Posco shows so much interest for India is an exception.
In this article I try to convince my reader about the possible thought of Posco management for India specific project.
Here I like to mention first that, Today in Mumbai, Posco signed a Memorandum of Agreement (MoA) with Uttam Steel and Power Limited. These to company decided to form a joint venture to put up a greenfield integrated steel plant in Maharastra. The capacity of the plant would be 3 MTPA. It will constructed in two phases as mention in the official statement of Uttam Steel.
Ten years ago Posco signed a Memorandum of Understanding (MoU) with Odisha government to set up a 12 MTPA integrated steel plant in Jagatsinghpur district. For various reasons like problem in land acquisition, local land losers strong protest for the project, minimg lease, etc, Posco project did not seen the light here. Though hope for the project steel alive as told by the company official sitting in New Delhi.
Problem in Odisha
Initially Posco plans to put a bigger plant in Odisha as the state government agree to provide Khandadhara mines to the company. But, after new mining policy enacted by central government every mine to be allotted through auction route. Posco got the strong shock for mine. Though its several failed attempt to convince the State and Central government, why Khandadhara mine so much important for this project.
Land acquisition has been biggest problem for Odisha project. Local people divided over this ambitious projcet. But majority of them did not want to give their land for Posco project.
Green approval also another area of concern. Water linkage also a issue.
Why interested for India?
- As everybody aware that steel consumption in India is in very low level, That means, for business there is lots of scope for any company.
- The Narendra Modi government announced Make in India plan to enhance manufacturing of product in India. Government organised many roadshows overseas to attract investment under Make in India. It can be treated as a great opportunity for any foreign company to set up its base in India as government itself decided to help all those company want to come to India.
- Twenty first century is Asia's century. In Asia, China and Japan achieve highest steel production capacity. They export steel to every county of the world. In this two country there is minimum chance for any company to grow rapidly.
- India is the only developing country in Asia where demand is high, large scope for business growth and now a favorable and stable government in centre.
- Indigenous steel producer Tata Steel, Jindal Steel and Power Limited, JSW, Jindal stainless limited (JSL), VISA Steel, Mesco steel have total installed capacity near about 75 MTPA. China installed capacity much higher than India.
- Bilateral ties between India and South Korea so good. Posco can take advantage of it.
- Posco has good understanding of India's business environment as their executives were here from last 10 years.
Why Maharastra?
- Posco chooses Maharashtra for it's greenfield project because it has already a 1.8 MTPA cold roll mill.
- Maharashtra one of the favorable state for investor to do business easily.
- This state has Mumbai like financial city which will helpful for trading product.
- Strategically located.
- Good road, rail and Air connectivity.
- There are many mines going to be auctioned in Maharashtra from which Posco can bid for one.
