POSCO to Establish Its First Overseas Eco-Friendly Integrated Steel Plant in India in 12 Years

Joint Venture with India's Adani Group for Eco-Friendly Steel Plant
Securing High-Grade Steel Demand in India and Strengthening Response to Environmental Regulations such as Carbon Reduction
Group-Level Cooperation in Renewable Energy, Hydrogen, Logistics, and Chemicals Beyond Steel Also Underway

[Asia Economy Reporter Hwang Yoon-joo] POSCO is building an eco-friendly integrated steel mill in the Mundra region of India. This is the second overseas integrated steel mill following Indonesia, interpreted as a determination to secure the Indian and Southeast Asian markets, where steel demand is expected to surge.

On the 13th, POSCO announced that it signed a comprehensive cooperation memorandum of understanding (MOU) with India's Adani Group to promote joint projects including an eco-friendly integrated steel mill. The signing ceremony, held online, was attended by POSCO Group Chairman Choi Jeong-woo and Adani Chairman Gautam Adani, among others.

The steel mill is planned to be built in the Mundra area of Gujarat state in northwest India. Details such as investment scale and production capacity have not yet been finalized. India has strong local autonomy, so securing support from the state government is important when foreign companies enter. To successfully promote the integrated steel mill, POSCO also signed a tripartite agreement with the Gujarat state government and the central government.

POSCO's decision to build a second integrated steel mill in India is based on the judgment that steel demand in India-centered Southeast Asia will grow significantly. According to POSCO, India's steel demand is expected to nearly double from 100 million tons in 2019 to 180 million tons by 2030. Currently, POSCO operates a cold-rolled galvanizing plant with an annual capacity of 1.8 million tons in Maharashtra, western India, and four processing centers in Pune, Delhi, Chennai, and Ahmedabad.

In particular, the high-grade steel market in India is expanding. POSCO is recognized as the most competitive steel company in the Indian high-grade automotive steel sheet market. Through its World Premium (WP) products, POSCO leads the high-grade steel market with products that have about 10% higher profit margins than general steel products. With the joint integrated steel mill project with Adani Group, POSCO expects to further solidify its position in the steel market by securing demand for high-grade steel in India.

Additionally, POSCO will promote eco-friendly energy-related businesses such as renewable energy, hydrogen, logistics, and chemicals in India in cooperation with Adani Group to respond to carbon reduction policies. Adani Group is India's largest energy and logistics company, recording sales of $15 billion in 2020.

Chairman Choi said, "With this business agreement, combining POSCO's steelmaking technology and Adani Group's expertise in energy and infrastructure will create various synergies in future eco-friendly businesses including steel," adding, "We hope to focus the capabilities of both companies to establish a model of exemplary cooperation between Korea and India."