Amaravati: Hyundai Steel to partner with AP government

Amaravati: The state government is contemplating to sign a Memorandum of Understanding (MoU) with the Korean company Hyundai Steel Co Limited for setting up the steel plant in Kadapa district.

The plant will be established under Public-Private Partnership (PPP), in which AP High Grade Steel Corporation, AP Mineral Development Corporation and Hyundai Steel will be partners. Chief Minister Y S Jagan Mohan Reddy laid the foundation stone for the plant on December 23, 2029.

Though the talks have concluded and even a date for signing MoU was decided, but it got delayed due to the Covid-19 scare, according to the sources at the Chief Minister's office. It was learnt that the Hyundai Steel company expressed willingness to establish the plant at an estimated investment of more than Rs 15,000 crore.

The location of the plant has many advantages, including proximity to the Krishnapatnam sea port, 10,000 acre land is available at a throw away price, and most importantly, water from the Gandikota reservoir and electricity from the Rayalaseema Thermal Power Plant (RTPP). Taking into consideration all these factors, Hyundai Steel has favoured to be partner with AP in the greenfield steel plant.

It is proposed to import high quality iron ore from Australia, Indonesia and other countries and produce fine quality steel. In fact, one of the most valuable byproducts of the industry is hot-rolled steel. Hot-rolled products are widely used in different industries, including automotive, structures and steel pipes for construction. Currently, most of the hot-rolled steel products are being imported from various countries. Now the steel plant at the Kadapa district will have the advantage to catch the market in the entire southern region of the country and could also supply to the automobile industries located in Tamil Nadu, Karnataka, Kerala and Telangana apart from Andhra Pradesh, according to sources familiar with the deal.

Initially, the company will establish the unit with a production capacity of 3 million metric tonne (MMT) per year, which will be increased to 10 MMT a annum in a phased manner. In the first phase itself the steel plant will be able to provide direct employment to more than 20,000 people.

As the state government has already brought a legislation mandating the companies to employ at least 75 per cent of workforce from local people in the newly-establishing companies, it is expected that at least 14,000 people in the state will get employment with this industry.