POSCO, Uttam Galva group to set up steel plants in Maharashtra

“Shree Uttam Steel and Power Ltd, a part of Uttam Galva Group, and Posco Korea today signed a memorandum of agreement (MoA) to set up an integrated steel manufacturing facility under a joint venture arrangement in India“, said a press release issued by Posco.

The memorandum of agreement (MoA) will be followed by establishing a JV between the two companies for the proposed three million tonnes per annum integrated steel plants at Satarda in Sindhudurg district of Konkan in south Maharashtra in two phases. ArcelorMittal, the world’s largest steelmaker, held a 29.05 per cent in Uttam Galva Steel as of end-June and has a tie-up with it for downstream facilities like cold-rolling and galvanising, among others.

Uttam Galva shares surged as much as 16 percent in morning trade on news of the joint venture. “The Korean firm would have an option to increase its equity as the project progresses”, Uttam Galva group deputy managing director Ankit Miglani told The Indian Express over telephone.

Allaying fears on sourcing iron ore, he said the upcoming plant would be the first in India to be designed for the use of iron ore from Goa, which has less iron content, but is available in plenty. This JV will help us develop a world-class integrated steel manufacturing facility in line with the government’s “make-in-India” initiative.

The work on a detailed project report (DPR) has started and construction activity will commence from September next year, Miglani said.

The Maharashtra plant will produce 3mt hot-rolled coil, which is the raw material for Uttam Galva Steels, one of the largest manufacturer and exporter of value-added steel products in the country. Miglani said Maharashtra emerged as the natural choice as both Uttam Galva and Posco have operating plants in the state. Shree Uttam Steel and Power has so far invested about Rs 1,000 crore in the project, they added.

Stuck in a decade-long regulatory quagmire in Odisha for a mega $12 billion steel plant, the company has now turned its sights to Maharashtra.