Korean steel major Posco opened its first steel mill in India earlier this week, at a special function attended by chairman and managing director Yong-Won Yoon yesterday and senior state government officials.

The $240 mn, 0.45 mtpa capacity plant, is still awaiting one minor final clearance from the government and is expected to be fully operational soon. It will be the first unit in India that is controlled fully by the company.

The location of the plant, which will produce hot galvanized steel plates for use in the automobile and consumer durables industries, and zinc galvanised-alloy steel products for local and overseas markets is significant.

On the one hand it is in close proximity to the Pune industrial areas where a number of global and Indian auto companies including GM, Volkswagen, Tata Motors, Mahindra, Audi, Mercedes Benz, Skoda, Premier Auto and Bajaj Auto have their units.

On the other it is also just 97 km from Dighi port on the west coast where Posco has constructed a warehouse with a capacity to handle 360,000 tonnes a year. The area surrounding the port has also been designated as a hub under the multi-billion dollar Delhi Mumbai Industrial Corridor (DMIC) project.

Company officials said that Posco also plans to invest $1.5 billion to expand capacity at its facilities in Maharashtra. This will include reprocessing of Austenitic and Cold Rolled stainless steel at the facility at Vile-Bhagad and Palasgaon industrial area in Raigad district.

Posco plans to open the 300,000-ton electric steel plate facility by October 2013 and a 1.8 million-ton cold-rolled mill in June 2014.