POSCO closes construction engineering division in India

POSCO plans to close its engineering and construction division in India after the company failed to win orders. The management of the block, located near New Delhi, engaged in the development of metallurgical plants, plans to switch to civil construction, where there are orders for the construction of houses, installation flexible shingles , facade finishing.

The company is also considering cutting jobs on the planned construction of a steel complex in Odisha, in the eastern part of the state, with an investment of $ 12 billion. Officials believe the project could drag on for decades, pending approval. POSCO's engineering division looked to orders for projects from the parent steel company as well as other customers.

POSCO's Odisha project is failing to advance due to opposition from local farmers and a lack of lease permission to mine iron ore. The steelmaker was able to overcome local opposition and was able to acquire about 2,700 acres (1,093 hectares) of land for the implementation of the first phase of the metallurgical plant. Securing supplies of iron ore, a key raw material for steel production, has proven more difficult to achieve than expected.

The federal government has decided to hold an auction for all mineral resources, including iron ore and limestone. This means that Posco will now be competing for the supply of ore blocks, which will drive up costs. In 2013, Posco also failed to implement a plan to build a metallurgical plant in the southern Indian state of Karnataka due to delays in land registration and mining. At the same time, ArcelorMittal withdrew from the Odisha steel project, citing delays in obtaining permits.

Globally, POSCO's sales will be "tight" this year as lower raw material prices push down product prices. Stalevar plans to cut capital expenditures in 2015 to 4.2 trillion. won ($ 3.8 billion) from $ 5.4 trillion. won in 2014,