Korean company to invest $15mn in Pakistan
ISLAMABAD: The Engineering Development Board (EDB) has persuaded a South Korean manufacturer of Iron and Steel products, Pohang Iron and Steel Company POSCO to invest in Pakistan.
The company has signed joint venture agreement with Tuwairqi Steel Mill (TSML) for investing $15 million in the DRI project of TSML by subscribing 15.3 percent newly issued common shares, said a statement issued here on Monday.
Subsequent to commercial operation of the DRI project, POSCO is keen on the forward and backward integration of the project by investing in the steel melting and mining sectors by increasing its shareholding in TSML upto the threshold level of 50 per cent.
The move will eventually result in huge foreign equity inflow to build a state-of-the art integrated in the country along with creation of tremendous employment opportunities.
It may be recalled that four member delegation of the POSCO visited Pakistan in March 2011 to explore the possibility of initiating the steel manufacturing business in Pakistan.
The delegation was given detailed presentations about the current status of local steel industry and future growth prospects by Engineering Development Board (EDB).
They showed their satisfaction at the growth potential of steel manufacturing industry in Pakistan. Later a visit of the delegation to Tuwairqi Steel Mill was also arranged by EDB.
A two-member team of TSML accompanied the Chief Minister of Sindh during his visit to South Korea as a follow up of the discussions between the two steel manufacturers.
After conducting due diligence, POSCO has finally agreed to conclude a formal joint venture agreement with TSML.
A spokesman of Engineering Development Board explained that per capita steel consumption in Pakistan is very low as compared to other countries and is around about 38 kg per capita.
In 2009, the per capita steel consumption in Pakistan was 35 kg as compared to 384 kg in China, 225 kg in Saudi Arabia, 123 kg in Egypt, 228 kg in Iran, 432 kg in Kuwait and 985 kg in Qatar, he added.
Copyright APP (Associated Press of Pakistan), 2011
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