True to its tagline – “We move the world in silence” — and notwithstanding the delay in the proposed steel project in Orissa, South Korea’s Posco is silently but diligently making inroads into the Indian market by increasing the number and capacity of steel processing centres.

In a joint venture with its domestic consumer electronics peer LG Electronics, Posco had in 2006 set up a subsidiary called Posco-India Pune Processing Centre (Posco-IPPC) at Talegaon in Pune for processing the alloy.

Posco-IPPC, in which Posco owns the majority stake, mainly brings raw materials from different Posco works and processes them as per the customers’ requirements.

The Talegaon facility, built with an investment of $20 million, has an annual steel processing capacity of 170,000 tonne. Posco-IPPC is now setting up one more processing centre at Talegaon, adjoining the existing facility, with an investment of another $20 million.

The plant will have an annual capacity of 120,000 tonnes and be operational by the year-end. Putting up a third plant is also on its agenda. This plant may come up in Chennai.

“We are thinking of putting up the third plant. It has not yet been decided. It may come next year. We are trying to find out the land,” Posco-IPPC Managing Director Gil Ho Bang told PTI.

Posco-IPPC also does processing jobs for domestic steel makers. However, the company imports some sophisticated variants of the alloy such as Silicon steel to sell in the Indian market.

Posco-IPPC caters to a wide array of customers, mainly automotive players, including Tata Motors and electric equipment manufacturers such as ABB and Gammon among others. Revenue-wise, Posco-IPPC is also doing well

In 2007, only in its first year of operation, the company recorded a turnover of $60 million, which, according to Bang, should go up to $100 million in the current year.

It is reported that POSCO is considered lifting its stainless steel price as imported nickel costs kept surging, due to higher operating cost caused by Korean currency decline.

POSCO said that it had no immediate plans to lower steel prices after its Chinese peer Baoshan Iron & Steel cut its fourth quarter sales prices for cold rolled steel products on August 25th 2008.
 
 A POSCO spokeswoman said that “We have no plans for a price cut. Prices of stainless steel are subject to changes, but there are no such plans for other lines of products.”
 
 Mr Kim Hyun tae an analyst at Goodmorning Shinhan Securities said that “POSCO’s steel prices are still competitive compared to its international peers, so pricing worry is the last concern. However a weakening won currency will surely dent its operating and pre tax income, and this is weighing on the shares today.”

South Korea’s POSCO, the world’s No.4 steelmaker, is considering investing in iron ore, steel mill and shipyard assets in Ukraine, a source close to the situation said on Friday.

The plan is a strategic option that POSCO is considering to improve synergies from its potential takeover of Daewoo Shipbuilding, the source said.

“POSCO signed a letter of intent to invest in Ukraine assets…as they could improve synergies from the Daewoo deal,” the source said, adding that the company was looking at other regions for a similar investment.

POSCO, which had been asked by the Korea stock exchange to clarify on the reported deal by 6 p.m. (0900 GMT), declined to comment.

Daewoo Shipbuilding, the world’s No.3 shipbuilder, is up for sale by its top shareholders and bidders are asked to submit their letter of intent by next Wednesday. [ID:nSEO297443]

South Korea is offering a 50.4 percent stake in Daewoo, which was taken over by creditors in 2000 after its parent Daewoo Group collapsed under a mountain of debt, and analysts expect the deal to fetch up to $8 billion, more than double its current market value.

POSCO, which wants to generate 30 percent of consolidated group revenued from non-steel business by 2018, sees the Daewoo deal helping to secure future demand, protecting against possible ship plate oversupply and aiding diversification.

But some analysts and investors have cast doubt on synergies from the Daewoo deal and urged POSCO to focus more on increasing mining assets to raise its mineral self-sufficiency rates, which are less than 20 percent, well below its bigger rival ArcelorMittal’s 50 percent level. 

Cash-rich POSCO seeks to form a consortium with the National Pension Service and banks in a bid to squeeze rival Daewoo Shipbuilding bidders who may be financially stretched and have problems in securing funds amid tight credit market conditions and raise competitiveness of its potential offer.

Shares in POSCO were down 0.4 percent to 467,000 won, by 0147 GMT beating a 1.8 percent fall in the broader market .