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03. March 2008

Posco marking presence through marketing tie-ups

Mumbai (India) - Korean steel major Posco might have run into trouble for acquiring land in Orissa to set up a $12-billion steel plant there, but it seems that the company is marking its presence in the country through marketing tie-ups.

Posco, which has a warehousing facility in Delhi, Pune and Chennai, is expanding its trading activity through marketing tie-ups with steel manufacturers here.

Declining to give further details, a Posco official, on condition of anonymity said, “The Chennai warehouse is not completely owned by Posco, we just have a minor share in that.”

Uttam Galva Ltd, which earlier had a servicing tie-up with Posco, is now in talks with the company for joint marketing arrangement and using their warehousing facility in Delhi.

Asked about the marketing arrangement with Indian steel manufacturers, the Posco official replied, “We are always talking with people.”

Posco, in August last year, signed a memorandum of understanding with SAIL to cooperate on a wide range of business and commercial interest areas.

SAIL and Posco, besides exchanging engineers, technicians and other professionals, will also share information in the development of mines. They will also use each other’s existing marketing and warehousing network and will coordinate the procurement of coking coal, nickel and ferro-alloys.

According to Tarang Bhanushali, an analyst with India Infoline, “Posco still has a long way to go in India. It is stuck with the land acquisition and will require at least three-four years to start production. These marketing tie-ups could be to increase its brand image in India. It looks more like a market survey for the know-how of demand and supply chain management, which could benefit them once their production begins in India.”

It was recently reported that Posco may face further delays starting construction in India The land disputes in the country have hampered the company's drive to proceed with potentially the nation's biggest overseas investment.

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