ISLAMABAD, Aug 5: South Korean steel making company Posco will invest $200 million to expand the production capacity of Tuwairqi steel plant located near Port Qasim.

To this effect, a memorandum of understanding for initiating joint venture between Posco and Tuwairqi will be signed by next month involving the Sindh government.

This was announced by Saleem H. Mandviwalla, Chairman, Board of Investment, here on Friday following his meeting with a delegation of Posco, headed by Senior Vice President Mr Baek.

Posco is among the four steel makers of the world. The joint venture of the companies to produce steel products for automobiles and construction goods is set to be completed in 2015 with an annual production capacity of 2 million tons.

Both Posco and Al-Tuwairqi Holding of the Kingdom of Saudi Arabia (the parent company of TSML) are in the steel business.

Posco is in steel business for the last four decades whereas Al-Tuwairqi is in steel business since late 1980. Al Tuwairqi Holding is establishing a state-of-the-art steel complex with an operational capacity of 1.28 million tons per annum of DRI plant in first phase at Port Qasim, Karachi.

Posco in Pakistan will be a great success not only in monitory terms but its position as a technology leader in the steel sector from which Pakistan can benefit to a larger extent. The gap between demand and supply is met through imports and thedemand for steel products is around 8.00 million tons against the supply of around two million tons, Mr Mandviwalla said.

Mr Baek affirmed that the construction unit of Posco Engineering and Construction will build the plant with the objective of winning deals of such other plants in Pakistan.

Explaining the operation of Posco, he said that the current steel production of the company was around 37 million tons per annum whereas in 2010 its revenues stood at $ 45 billion.

It has been ranked at fourth position among all the steel producing companies of the world whereas it is the top position in Asia.

Posco has its presence in a number of countries, such as China, India, Myanmar, Japan, Malaysia, Mexico, US, Australia, Canada and Vietnam.