The company has signed joint venture agreement with Tuwairqi Steel Mill (TSML) for investing US$15 million in the DRI project of TSML by subscribing 15.3% newly issued common shares, a statement of the EDB issued here.
According to statement, 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 percent.
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.
The CEO EDB held a number of meetings with the Korean Ambassador in Pakistan to woo him for investment in Pakistan.
A meeting of the Korean Ambassador was also arranged with Prime Minister by EDB. Later a delegation led by Chief Minister Sindh visited Korea.
During the visit they also met POSCO officials who were mentally prepared for investment in Pakistan as a host of information was provided to them by EDB on the potential of various sectors particularly the steel, wind and solar energy.
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.
The steel industry is often considered to be an indicator of economic progress, because of the critical role played by steel in infrastructural and overall economic development.
The volume of steel consumed has been the barometerfor measuring development and economic progress.
Whether it is construction or industrial goods, steel is the basic raw material.
Steel is one of the most common materials in the world, with around 1300 million tons produced annually.
It is a major component in buildings, infrastructure, tools, ships, automobiles, machines, appliances and weapons, the statement said.
Copyright APP (Associated Press of Pakistan), 2011