POSCO to Set up an Estimated $3 Billion Steel Plant in Maharashtra

The 3 million tonne integrated steel plant at Satarda in Maharashtra would be set up by a joint venture (JV) where Posco will have 20 per cent stake while 80 per cent would be with Shree Uttam Steel and Power Ltd, an arm of Miglani family-run Uttam Galva Group.

Shree Uttam is fully owned by the Miglani family, which is the co-promoter of listed entity Uttam Galva Steels Ltd along with ArcelorMittal.

Posco has been facing issues regarding its mega project in Odisha on account of delays in raw material security, land acquisition as well as other clearances.

The work on a detailed project report (DPR) has started, and construction activity will commence from September 2016. Commenting on the development, Ankit Miglani director, Uttam Galva said: “We have been associated with POSCO across various aspects of the steel business over the years. We hope to with POSCO’s create an integrated steel plant that will be a centre of manufacturing excellence”.

Posco also signed a memorandum of agreement with Mesco Steel this year for relocating a 600,000-tonne steel plant from South Korea to Mesco’s plant site in Odisha. “Uttam Galva must have take consent from ArcelorMittal before going ahead with the JV with Posco”.

Uttam Galva Steels Limited is one of the largest manufacturer-exporter of value added steel products in India.

The first phase will include setting up a capacity of 1.5 MTPA, he added. Post completion, the Uttam Galva Group will have 5.2 mtpa of steelmaking capacity with investments of Rs 30,000 crore. The company procures hot-rolled coil, processes it into cold rolled coils and further into galvanised plain and colour-coated coils. The company now exports to 148 countries worldwide.

Shares of UTTAM GALVA STEELS LTD. was last trading in BSE at Rs.40.85 as compared to the previous close of Rs. Typically, a 1-million-tonne-per-year steel plant requires $1 billion in investment. The steelmaker “tentatively postponed” the project, touted as India’s biggest foreign investment, due to the lack of an iron ore mine to feed the plant.