South Korean steel giant Posco has put on hold its $12 billion steel project in Odisha due to delays in various regulatory approvals.
"We are tentatively suspending the Odisha (India) project due to lack of any progress," Posco chairman and CEO Kwon Oh Joon said.
"Business conditions at home and abroad have changed due to drop in global steel demand, growing deficit of subsidiaries, which have led us to come to a conclusion that we must step up our reform efforts," he said at an investor event in Seoul yesterday.
The steel major's India spokesperson said however that it is not quitting Odisha, even as its over $12 billion project has been hanging fire for almost a decade.
"That is not the fact. Due to no progress in the project area, much of office space was lying vacant in Odisha. It was decided to renovate the office space to a smaller area," a Posco spokesperson told PTI on being asked whether there are plans to exit the 12 million tonne (MT) Odisha project.
Posco has been facing problems regarding its mega project in Odisha on account of delays in raw material security, land acquisition as well as other clearances.
The company is reducing its unused office space and other expenditure that can be stopped as part of a massive global cost restructuring programme, said a person in the know of developments.
Posco has announced the restructuring programme, which involves reducing "30% of the overseas business within the Group".
This will involve "early turnaround of newly run overseas business" as well as "dispose/liquidate/merger non core business within the group".