Posco to set up plant in West India

Galvanised-steel plate factory to have a capacity of 450,000 tonnes.

Posco, South Korea’s largest steel maker, will buy 90 per cent stake in Vietnam’s Asia Stainless Corporation and build a plant in India after this week forecasting a demand recovery in the second half.

The board of directors approved buying Asia Stainless, known as ASC, today, the Pohang-based company said in an e-mailed statement without providing financial details on the purchase or the cost of the Indian plant.

Posco plans to build a galvanised-steel plate factory in western India with an annual capacity of 450,000 tonnes, and will begin production in 2012, according to today’s statement. Consumption of steel plates in India will increase as automobile production is expected to more than double by 2015, the Korean steel maker said.

Posco raised its 2009 output target on July 13, signaling the worst of the global slump in demand may be over. Demand for cold-rolled stainless steel in Vietnam was 110,000 metric tonnes last year while supply was 28,000 tonnes, Posco said today.

ASC, Vietnam’s only cold-rolled stainless steel maker, has an annual capacity of 30,000 tonnes and plans to expand output to 85,000 tons by 2010, Posco said. The Korean company said in May it will take control of a stainless steel unit of Taihan Electric Wire Co.

The purchases of ASC and TaihanST Corp. will help Posco expand, the company said. Posco’s crude stainless steel capacity was 3 million tonnes a year, while its cold-rolled stainless steel capacity is 950,000 tonnes, it said.