$15 million equity investment: POSCO, Al-Tuwairqi Holding sign agreement

Saudi Arabia's largest private sector steel manufacturer Al-Tuwairqi Holding and the world's third-largest steel maker by market value POSCO have signed a joint venture agreement for the project of Tuwairqi Steel Mills Limited (TSML). Through the agreement POSCO will invest $15 million equity in TSML.
The agreement was signed by Dr Hilal Hussain Al-Tuwairqi, Chairman Al-Tuwairqi Holding and Joon-Yang Chung - Chairman and CEO POSCO here at the Sindh Chief Minister House on Saturday night. On the occasion Minister of State, Saleem H. Mandviwalla, Tariq Barlas Vice Chairman and CEO Al-Tuwairqi Holding, Baek, Sung-Kwan - Executive Vice President Overseas Investment POSCO, Zubair Motiwalla Chairman Sindh Board of Investment and Younus Dagha, Secretary Investment, Government of Sindh were also present. The agreement is the result of Chief Minister's visit to Korea earlier this year where he visited headquarters of major Korean business houses, which included POSCO, KOSPO, Lotte and others. It is a testimony of initiatives taken by Sindh Board of Investment, which are bearing fruits in such a short period of time.
Addressing the gathering Minister of State, Saleem H. Mandviwalla said that collaboration of two foreign investors will definitely puts synergy into the project and will greatly help in augmenting the efforts towards the forward and backward integration of the project.
"POSCO in Pakistan will be a great success not only in monetary terms but its position as a technology leader in the steel sector from which Pakistan can benefit to a larger extent. The gap between demand and supply is met through imports and it is expected that the demand for steel products will be around 18 million tonnes against the supply of around 10 million tonnes in the year 2015."
Zubair Motiwala, Chairman SBI informed that serious interest has been shown by leading Korean companies to invest in Thar Coal, Wind energy, Tourism and other infrastructure projects being offered by the Government on guaranteed Return on Investment basis.
Secretary Investment Mohammad Younus Dagha informed that the Steel sector of the country offers a host of opportunities for the investors both local and foreign, as the current indigenous production capacity caters to only 40 percent of domestic market needs.
Subsequent to commercial operation of the DRI project, POSCO and TSML shall focus on upstream and downstream production processes, involving Long/Flat Products Project and Iron Ore and/or Beneficiation & Pellettization Plant Project. The DRI plant technology has been sourced from the world renowned American Company named Midrex Technologies Inc (a subsidiary of KOBE steel of Japan). Presently the plant, having a capacity of 1.28 million tons per year, is at a stage of 96 percent completion and is targeted for commercial production in December this year.
Speaking on the occasion, Dr Hilal Hussain Al-Tuwairqi said, "This agreement will not only further strengthen the bond among the three companies but also among the countries. We are hopeful that this is the beginning of a long lasting relationship between ATH and POSCO and it will also help build trust of more foreign investors in the country.
"We have ambitious plans for Pakistan as part of our long term vision for the country", said Joon-Yang Chung Chairman CEO POSCO. He also took into account the current scenario of the Pakistan steel sector, which indicates a huge growth potential in this industry. "The country's geographical location offers immense opportunities to the investors and we are keen to capitalise on that," he added.
Chief Minister Sindh Syed Qaim Ali Shah, who was unable to attend the event due to relief activities of flood, conveyed his message that this agreement will not only create new job opportunities in Pakistan but also enable transfer of technology in the industrial sector. He expressed his satisfaction on the ongoing progress of Al-Tuwairqi's project in Pakistan and termed this joint venture, as the catalyst for industrial development in the country.