Posted on 26 Nov 2020
While POSCO is in denial, India’s trade union leaders say that the Indian government entered into an agreement with POSCO on Aug. 23 to set up a joint venture steel plant between the Korean steelmaker and Visakhapatnam Steel Plant (VSP) in Visakhapatnam, a port city and industrial center in the Indian state of Andhra Pradesh (AP).
The union leaders, including Ch Narasinga Rao, head of the AP state committee of Centre of Indian Trade Unions (CITU), are against the Indian government’s alleged joint venture plan on the grounds that it will push the VSP into the red.
The union leaders are particularly opposed to the Indian government’s move to hand over VSP’s land to POSCO as an incentive to set up the new steel plant. They view that this concession will further increase VSP’s losses.
According to media reports from India, the joint venture company is scheduled to commence production of steel sheets for vehicles with a capacity of 5 million tons. The project requires an investment of 300 billion rupees (about 4.5 trillion won), of which at least 100 billion rupees (about 1.5 trillion won) would have to be paid by the VSP, despite the fact that it is already running a loss of 30 billion rupees (about 450 billion won).
The union leaders argue that the Indian government intends to hand over VSP to POSCO.
On Nov. 23, Rao released a book titled “POSCO-Boon or Bane” to explain the attempts of successive Indian governments to privatize VSP, and how the workers had struggled and defeated these attempts.
The book was released ahead of the proposed one-day nationwide strike on Nov. 26 called by trade unions against the labor and farm laws introduced by the Indian government.
Rao said on Nov. 24 that the strike was not just to demand bonus and enhancement of wages, but against the Indian government’s move to privatize public or state-run companies. “We strongly oppose the move to privatize Visakhapatnam Steel Plant, by entering into a joint venture with South Korean steel major POSCO,” he said.
Yet POSCO denied the media reports, saying it has not reached any agreement on setting up a joint venture with VSP. “We are simply reviewing a plan to set up a joint venture steel plant in India, but nothing has been decided yet,” a company spokesman said.
POSCO is one of the two Korean steelmakers that were requested by the Indian government last year to set up a joint venture integrated steel mill in India. The Indian government wants to produce high-quality steel products such as automotive steel sheets locally. India still lacks advanced steelmaking technology and relies on imports for high-tech products, including automotive steel.
The Indian government plans to increase the country’s steel production capacity from the current 142 million tons to 300 million tons by 2030 through the establishment of joint venture steel mills.
Source:Business Korea
