South Korea''s Posco and state-run Steel Authority of India have signed a memorandum of understanding for strategic cooperation over the next three years, Posco said Thursday. Under the partnership, Posco is seeking to expand its knowledge of the Indian steel market ahead of its entry into the country, while Steel Authority of India is hoping to improve its operations through exposure to Posco''s advanced technologies.
The two companies have also agreed to jointly purchase raw materials and for Posco to utilize the Steel Authority of India''s sales network, Posco said in a statement. There is no capital alliance such as a cross-shareholding between the two steelmakers, Posco spokeswoman Ko Min-jin said. Posco, the world''s fourth-largest steelmaker, is set to invest $12 billion to build a 12 million metric ton-a-year plant in India by 2016.
The government of the Indian state of Orissa has so far allocated 454 hectares (1,121 acres) of land, though Posco has requested 1,600 hectares (3,952 acres). The strategic partnership between Posco and the SAIL can be renewed in three years for another three-year contract, Ko said.
Steel Authority of India, 86 per cent-owned by the Indian government, has a steel production capacity of 15 million tons a year and will raise that to 25 million tons by 2010, according to the statement.
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