Hyundai\, Posco keen on joint venture with RINL

Andhra Prades

Hyundai, Posco keen on joint venture with RINL

Production in progress at Visakhapatnam Steel Plant. RINL, the corporate entity of VSP, is on an expansion mode after increasing its capacity to 7.3 million tonnes. It had spent ₹4,000 crore to undertake capital repairs on blast furnaces and other facilities.

Production in progress at Visakhapatnam Steel Plant. RINL, the corporate entity of VSP, is on an expansion mode after increasing its capacity to 7.3 million tonnes. It had spent ₹4,000 crore to undertake capital repairs on blast furnaces and other facilities.  

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Both South Korean steelmakers send delegations to Vizag

South Korean steel majors Posco and Hyundai have evinced interest in a joint venture with Rashtriya Ispat Nigam Limited to set up a special greenfield steel plant on the latter’s premises.

Drawn by the efforts of the Prime Minister’s Office to attract Foreign Direct Investment (FDI) in steel production under the Make In India programme, a team lead by the South Korean Ambassador had visited RINL in October last year. Both Hyundai and Posco sent teams in quick succession to RINL, the corporate entity of Visakhapatnam Steel Plant, vying to be chosen to set up the greenfield plant.

According to initial proposals, the selected firm will set up a plant with an estimated investment of ₹30,000 crore in an area of 3,000 acres owned by RINL. The plant will produce three to five million tonnes of special grade steel for the automobile sector. RINL land will be its equity.

The proposal to involve either Hyundai Steel Co. Ltd or Posco in the joint venture project was mooted keeping in view RINL’s land bank of 20,000 acres.

Earlier attempts to bring FDI to the country had run into rough weather due to land and raw material linkage issues. However, there is still no clarity on where raw material will be procured from even if the latest project materialises.

At present, RINL does not have captive iron ore mines, and largely meets its raw material requirements from the mines owned by National Mineral Development Corporation in Chhattisgarh’s Bastar district.

RINL Chairman-cum-Managing Director P.K. Rath told The Hindu that the proposal was still at a nascent stage. “RINL clocked a turnover of ₹20,844 crore in the 2018-19 fiscal and this year, it is gearing up to achieve an all-time high turnover of ₹25,000 crore,” Mr. Rath said. As per the National Steel Policy, the Government of India envisages increasing steel production to 300 million tonnes by 2030-31. RINL now has a production capacity of 7.3 million tonnes and has plans to expand further to 11.5 million tonnes in the next few years.

Workers apprehensive

Workers’ unions however are apprehensive over the proposal.

RINL-recognised union president J. Ayodhyaram said that instead of a joint venture with a foreign company, they were in favour of expanding capacity on their own by engaging a foreign collaborator. Mr. Ayodhyaram also reiterated the union’s demand for the merger of RINL and NMDC for ‘mutual benefit’.

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