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NCAER projects Unprecedented Benefits from POSCO-India venture

Chain reaction on the economy through Gross Output, Value Addition, Employment, and Tax Benefits
11.5% Contribution to the State GDP by 2016-17
870,000 Man-year of Employment to absorb backlog of unemployment
A total of Rs. 174,971 crore Tax Benefit to GoO & GoI

Bhubaneswar, November 24, 2006: POSCO-India, Indian subsidiary of POSCO, the the world 3rd steel producer would play a major role in powering the economy of Orissa state according to a recent study conducted by NCAER(National Council of Applied Economic Research).

According to the study, the investment by POSCO-India will set up a chain reaction on the economy of the Orissa state resulting in increase in its gross output, employment and value addition. An enormous tax contribution to both the state and Central Governments is also expected.

POSCO-India is to invest Rs. 52,810 crores to construct a Green-field steel plant, develop iron ore mines and also construct support-infrastructure in both the Domestic Tariff Area (DTA) and the Special Economic Zone (SEZ) in Orissa.

The project is expected to generate Rs. 29,760 crores of additional output for the state. In terms of value addition, it would contribute 11.5% to the State Gross Domestic Product (SGDP) by 2016-17.

The study projects employment of 8,70,000 person year across all sectors of Orissa economy over the next 30 years. This would consume almost all of the current unemployment backlog of 9.9 Lakhs in the beginning of 2005~2006. Apart from 18,000 direct employments by POSCO-India, numerous jobs are expected to be created in the Agro & Forest, Mining, Manufacturing, Trade, and other service sectors.

Under the SEZ status the company would contribute a total of Rs. 174,971 crore of tax revenue to the State and Central Governments for next 35 years at the nominal value. The company will pay to the State Govt. Rs. 77,872 crore and to the Central Government Rs. 97,099 crore. POSCO-India’s tax contribution to GoO would be about 17.6% of the State’s estimated tax revenue of 2016-17 in a typical year of full production.

Announcing the study report of NCAER, Mr. Soung-Sik Cho, Chairman-cum-Managing Director, POSCO-India said, “The Company’s India project is an endeavor to combine the advantages of Orissa and POSCO for a huge synergy effect. If such favourable conditions are utilized effectively, it will create a win-win situation for all parties. We believe that POSCO is in an ideal position to play this role.”

About POSCO-India

POSCO-India Private Limited is a subsidiary of POSCO, the world’s No. 3 steel producer and one of the most competitive steel companies. POSCO signed a Memorandum of Understanding (MoU) with the Government of Orissa in June 2005, to set up a 12-mtpa green field steel plant near Paradip, Jagatsinghpur District, Orissa, with an estimated investment of USD12 billion. The company will build a 4 million tonne capacity steel plant in Orissa, during the first phase of its project between 2007 and 2010 and expand the final production volume to 12 million tonnes. POSCO-India Pvt. Ltd. was incorporated in 25th August 2005 with the Registrar of Companies, Orissa, under the Companies Act 1956.