Posco to set up $14 million unit in Pune

The steel maker tied up with LG in a 65:35 joint venture for the Pune centre.

South Korean steel major Posco will process and sell 1.3 lakh tonne of electrical steel from its upcoming Posco-India Processing Centre (POS-IPC) in Pune. Earlier this year, the steel maker had tied up with consumer electronics major LG in a 65:35 joint venture for the centre.

A senior official at Posco's Indian office stated that the $14 million centre will come up by November this year. "Almost 25 per cent of the output will be sourced to LG and the rest will be sold in the local and international markets," the official said.

"We foresee a surge in demand for electrical steel in the country owing to huge investments in the power sector and the expanding white goods sector. And there are hardly any players processing this steel in India," he added.

Electrical steel is used in the manufacturing of electrical home appliances and for transformers. One of its variants, CRGO steel, is used in making transformers and at present, the country imports the entire requirement of the value-added metal.

The centre will include four cutting and shearing machines, including a grain-oriented magnetic steel sheet and strip facility, and will be capable of producing up to 130,000 tonne of electrical steel sheets.

It will be located in Pune's Talegaon Industrial Complex, which is surrounded by large-scale transformer manufacturers, including Siemens.

Many electronic appliances manufacturers, including LG and Whirlpool, also have manufacturing facilities in the complex and are expected to demand large volumes of electrical steel sheets.

After production begins in November, Posco will introduce a core cutting machine that can manufacture cores for transformers and motors, enabling the new coil centre to be considered a specialised centre for electrical steel sheets.

The company has constantly invested in overseas processing centres since the mid-1990s with the intention of making these centres play active roles in supporting Posco's overseas marketing of steel products.

The steel manufacturer, at present, operates 12 processing centres, including the POS-NPC, which opened in early February in Nagoya, Japan. With the addition of the POS-IPC in India and POS-MPC in Mexico later this year, Posco will have 14 processing centers across the globe.