POSCO Shifts Focus From Odisha Project, Says 'No Progress'
New Delhi: Steel giant POSCO has shifted its focus from a proposed $12-billion steel plant in Odisha citing "no progress" in the project.
"Actually no progress," a POSCO India spokesperson told PTI when asked about whether the firm is temporarily suspending its project in Odisha where it plans to set up a 12 million tonne (MT) steel plant.
When pressed further, the spokesperson said, "Not pulling out from India. Shifting its focus from upstream to downstream manufacturing processes with processed materials."
Earlier this week, POSCO chairman and CEO Kwon Oh Joon had said the company is "tentatively suspending the Odisha (India) project due to lack of any progress".
At an investor event in Seoul on Wednesday, he had said, "Business conditions at home and abroad have changed due to drop in global steel demand, growing deficit of subsidiaries, which have led us to come to a conclusion that we must step up our reform efforts."
The development comes amidst POSCO reducing its office space in Odisha as its over $12-billion project - viewed as the largest FDI proposal in India so far - has been hanging fire for almost a decade.
On reducing the office space, the company spokesperson had said, "Due to no progress in the project area, much of office space was lying vacant in Odisha. It was decided to renovate the office space to a smaller area."
POSCO has been facing problems regarding its mega project in Odisha on account of delays in raw material security, land acquisition as well as other clearances.
The company is reducing its unused office space and other expenditure that can be stopped as part of a massive global cost restructuring programme, said a person in the know of developments.
POSCO has announced a restructuring programme that involves reducing "30 per cent of the overseas business within the Group".
This will involve "early turnaround of newly run overseas business" as well as "dispose/liquidate/merger non-core business within the group".
The steel maker's proposed $12-billion project at Jagatsinghpur district in Odisha for producing steel at 12 million tonne per annum (MTPA) is yet to take off even after a decade.
POSCO had entered into a pact with Odisha government on June 22, 2005 for the plant that included iron ore mine development.
Apart from the delays, in a fresh blow to the company this year, the Centre said POSCO will have to participate in auction to get iron ore mines to feed its facility instead of direct allotment as assured earlier.
