India’s JSW Steel and South Korea’s Posco have announced plans to invest Rs 65,000 crore ($7.73 billion) in a steel plant in Odisha, a region known for its rich iron ore reserves. The move is part of a broader strategy to tap into India’s growing demand for steel, which has surged amid the country’s rapid economic expansion and increased infrastructure spending.
Last week, the two companies signed an agreement to establish an integrated steel plant with an initial production capacity of 5 million metric tons per year. According to sources familiar with the development, the initial investment in the plant will be Rs 20,000 crore, with the facility expected to be operational by next year. Over the next three years, the total investment will rise to $7.73 billion as the plant’s production capacity expands to 18 million metric tons annually.
The partnership between JSW Steel and Posco comes at a time when India’s steel demand has surged, driven by rapid infrastructure development and the growing manufacturing sector. In the first five months of the current fiscal year, India’s steel demand reached a seven-year high, with both domestic and international companies seeking to capitalize on the country’s booming construction and manufacturing industries.
The Indian government is also playing a crucial role in driving steel demand, planning to invest $12 billion in expanding and building new airports across the country, further boosting the need for steel.
The proposed steel plant in Odisha will manufacture hot-rolled, cold-rolled, and galvanized steel, catering to various industries, including automotive and construction. The collaboration marks a significant shift in India’s steel production landscape, as both companies seek to meet the growing demand in the region.
This project is particularly noteworthy for Posco, which had previously abandoned a $12 billion steel plant in India due to land acquisition issues. The South Korean company operates a cold-rolled, galvanized steel mill in Maharashtra, which supplies steel for the automotive sector. The new Odisha plant, however, is set to be its largest investment in the country.
The joint venture between JSW Steel and Posco reflects a broader trend of increasing foreign investment in India’s manufacturing sector as companies look to diversify their supply chains and capitalize on the country’s expanding infrastructure and industrial growth.
