JSW Group ties up with South Korea’s POSCO for steel plant, EV batteries

Mumbai: JSW Group and POSCO on Tuesday signed an agreement to collaborate on steelmaking, electric vehicle (EV) batteries and renewable energy projects, marking the South Korean steelmaker’s fourth attempt at entering the lucrative Indian market in the last 15 years.

The two will first set up a 5 million tonnes per annum (MTPA) integrated steel unit with provisions for capacity expansion, JSW Group said in a statement on Tuesday. The companies have yet to disclose the nature of the partnership.

While the location of the steel plant has not been disclosed yet, it is expected to be at Jagatsinghpur in Odisha. JSW Utkal Steel, a subsidiary of the steelmaker, has regulatory approvals to set up a 13.2 MTPA integrated steel unit at the site, which the company has earlier touted to be the largest single-location steel plant in India.

POSCO has previously made three failed attempts at getting a direct foothold in India. The company had inked a similar pact to set up a joint venture with public sector Steel Authority of India at Bokaro in Jharkhand in 2010. However, the partnership fell apart, reportedly over disagreements on shareholding in the joint venture.

In 2013, POSCO had to scrap its plans of setting up a greenfield steel unit in Karnataka after delays in securing land and mining rights. A similar proposal to set up a unit in Odisha was abandoned in 2017 following protests by locals and delays in securing regulatory approvals.

Incidentally, the Jagatsinghpur site on which the proposed 5 MTPA steel unit is likely to be set up was the same site that POSCO had evacuated in 2017. The site was soon awarded to JSW Steel.

Queries sent to JSW Steel seeking further details on the partnership remained unanswered till press time.

"As one of the world’s fastest-growing economies, India presents tremendous opportunities for sustainable growth, and our partnership with POSCO strengthens JSW’s commitment to drive that transformation,” Sajjan Jindal, the chairman of the JSW Group, said in the statement.

The Korean steelmaker’s top management was in Mumbai to sign the pact. “This collaboration will contribute significantly to the economic development of Korea and India and drive our joint efforts towards a more eco-friendly and sustainable future,” said Chang In‐hwa, chairman of POSCO.

Also read: Steel imports trip on India’s bureaucratic red tape

Jindal added, "This JV also entails collaboration for renewable energy for a state-of-the-art integrated steel plant and for setting up an EV ecosystem in India. Together, we aim to set a benchmark in technology and sustainability that can shape the future of manufacturing in India and beyond.”

The JSW Group has a presence in EV manufacturing through its investment in MG Motor India, the domestic arm of China's leading automaker SAIC Motor. It also has a presence in renewable energy production through the listed firm JSW Energy. JSW Steel has a joint venture with Japan's JFE Steel to manufacture grain-oriented electrical steel in India.

Also read: India plans ‘safeguard duty’ to protect steel companies from cheap imports

JSW Group is a $24-billion Indian conglomerate with a diverse business portfolio comprising steel, energy, infrastructure, cement, paints, realty, e-platforms, mobility, defence, sports and venture capital.

JSW Steel stock fell about 1% to settle at ₹959.35 on the NSE on Tuesday.

JSW Steel expects second-half turnaround

On 27, October Mint reported that JSW Steel expects its margins to improve in the second half of FY25 as steel prices recover after touching multi-year lows in September, according to a top executive, who said the company’s cost-cutting measures continue to deliver results.

Additional capacity from the company’s upcoming expansion projects will also help increase sales and spread fixed costs on a wider base, further aiding margins, Jayant Acharya, joint managing director at the steelmaker, said in an interview.

Also read: Govt panel may approve ₹4,000 cr new PLI scheme for specialty steel next month

The steelmaker also expects its coking coal costs to fall by $20-25 per tonne in the second half on expectations of lower prices and by using a more cost-effective blend that it has been experimenting with.

“We remain bullish for H2,” Acharya said. “The second half will have stronger seasonal demand, and our additional capacities are also playing out at the right time. This will give us a good volume increase, and also absolute improvement in Ebitda.”