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POSCO-India project well on track: POSCO Chairman

Chairman Ku-Taek Lee meets Orissa Chief Minister Naveen Patnaik, Deputy Chairman of Planning Commission Montek Singh, Minister of Mines Sis Ram Ola and Minister of Commerce and Industry Kamal Nath
Discussions focus on displacement, rail & power infrastructure and CSR activities

Bhubaneswar, November 16, 2005: The Chairman of POSCO, Mr Ku-Taek Lee, visited Orissa recently and held top level meetings with the Chief Minister of Orissa, Mr Naveen Patnaik, and other senior officials on various aspects pertaining to the progress of the POSCO-India project. The key topics of discussion included displacement; infrastructure support and facilities like railways, power plant, water supply; and POSCO-India’s corporate social responsibility (CSR) activities. The construction of the proposed POSCO-India green field steel plant project was also discussed in detail.

Mr Lee also met the Deputy Chairman of Planning Commission, Dr Montek Singh Ahluwalia; the Minister of Mines, Mr Sis Ram Ola; and the Minister of Commerce & Industry, Mr Kamal Nath, in Delhi, the last stop in his week-long India tour to review the POSCO-India project, and discussed the importance of mine and railway development and possible areas of cooperation to develop the steel industry in India. During these meetings, views were also exchanged on critical infrastructure support; the growing importance of India as a major steel producing hub and the burgeoning demand for steel in the country. Mr Lee stressed that the success of the POSCO-India project would also be instrumental in the development of Indian industry and offer strong support in its road to rapid development.

This was the POSCO chairman’s first visit to India after the signing of the memorandum of understanding (MoU) with the Government of Orissa in June this year, which allowed POSCO to set up a 12 million tonne per annum (mtpa) green field steel project in the Jagatsinghpur district in Orissa.

According to Mr Lee, the feasibility report for the project would be submitted by mid December 2005. After submission of this report, various agreements including land lease, prospective license and water supply etc., will be signed with the respective departments of the Government of Orissa as well as the various public sector undertakings (PSUs).

Satisfied with development of the project, Mr Lee expressed his happiness with the state government’s support to the mega project. “The work progress has been on schedule and I am satisfied with the pace of work that is being undertaken for the project. Our endeavour is to provide full support to this project and I will visit Orissa as often as possible because the importance of this project can never be overstated,” said Mr Lee. “We have ambitious plans for India as part of our long term vision for the country,” he added.

The POSCO India project is progressing as per schedule. As part of its operations in the country, POSCO-India has set up various Supporting Group (SG) departments that will assist the company both systematically and strategically in its overall operations to make POSCO-India a competitive top-tier steel maker in India. A total of 33 sections have been formed within the main five sectors of Facility, Operation, Technology, Planning and Management, comprising a total of 88 employees. The Facility, Operations and Technology Supporting Groups began operations after a kick-off meeting on August 9, 2005, with the Planning and Management Supporting Groups began operations on October 10, 2005.

POSCO-India’s steel plant project is the largest foreign direct investment project in India and is a significant part of the company’s strategy to enhance its global competitiveness. The investment proposed is to the tune of US$12 billion (Rs 51,000 crore), including an investment of US$3 billion during the first phase. By setting up the 12 mtpa steel plant, POSCO-India is striving to become a global leader in steel production.

About POSCO

Founded in 1968 and headquartered in the southeastern port city of Pohang in Korea, POSCO operates two of the world’s premier steel works--the Pohang and Gwangyang works. The Pohang works produces crude steel of 13 million tonne and specializes in small-lot production of a broad range of products, including hot-rolled coil and cold-rolled sheet, plate, wire rod, electrical steel, and stainless steel. The Gwangyang works focuses on mass-production of limited high-demand products such as hot and cold rolled sheet and produces crude steel of 17 million tonne. POSCO’s products are shipped to over 60 countries around the globe, satisfying some of the world’s most quality-sensitive customers.

POSCO employs 19,377 people and approximately 70% of its share is owned by foreign investors. IN 2004, POSCO produced 30.2 million tonne of crude steel and generated sales of 19,792 billion KRW US$18.96 billion and net earnings of 3,826 billion KRW (US$3.67 billion) in 2004.

India will derive significant benefits from the POSCO project once it is functional, including the creation of 48,000 jobs in the region and 467,000 man-years of employment during the construction phase. Foreign exchange inflows of US$23 billion are projected, with taxes and royalty incomes of US$19.8 billion for the central government and US$4.1 billion for the Orissa government.