JSL inks strategic pact with Posco;to cooperate in Odisha proj

New Delhi: Jindal Stainless Ltd (JSL) and Posco on Wednesday signed a strategic pact that includes cooperation in South Korean major's USD 12 billion steel mill project in Odisha and joint exploration for a nickel facility in Indonesia.

Besides, JSL will sell certain products to Posco.

"JSL, a part of the USD 15 billion OP Jindal group has signed a memorandum of understanding (MoU) with Posco on this 10th day of April 2013, to mutually cooperate with each other for long-term joint business opportunities," the largest domestic stainless steel maker said in a statement.

It said the pact would be for three years, with a provision to extend it further.

JSL will focus on "long term based supply of 200 series stainless steel products of the company to Posco or its subsidiaries". This series is used for domestic as well as industrial applications.

Both the companies will also review "joint establishment and exploration for a nickel smelter process in Indonesia", besides "joint cooperation in the company's Odisha project," the statement said.

Posco, the world's largest producer of stainless steel, has been struggling for the last eight years to set up a USD 12 billion steel mill in Odisha.

The first phase of the South Asian steel major Poscos USD 12-billion (about Rs 50,000 crore) Odisha project, said to be the country's single-largest foreign direct investment, could start production by 2018.

The MoU will also enable "overseas joint projects including but not limited to the establishment of service centres and cold rolling mills", the company said.

It added: "With Posco being one of the global giants in stainless steel and carbon steel and having already expanded their cold-rolled capacities in the growing markets of South East Asia and also Europe, there is a unique opportunity for both Posco and the company to leverage on each other's strengths."

JSL, which has taken lead in commercialisation of the Cr-Mn 200 series and has increased its global share from 5.5 per cent to 15 per cent, is set to further benefit from the alliance.

JSL scrip rose 9.03 per cent on the BSE to closed at Rs 51.30 a scrip.