POSCO will set up a joint venture with the Chinese steelmaker Tonghua Iron and Steel Group.

According to the Korean steelmaker, it has formed an agreement with the Chinese firm to establish an automotive plate processing joint venture with an annual processing capacity of 200,000 tons.

The plant will be located in a special economic development zone in Huinan Country in Jilin Province.

POSCO will hold 60 percent of the stake in the joint venture, and the remainder will be held by its Chinese partner.

The works on the plant are scheduled to begin in August and be completed next July.

The steel plates processed at the plant will be supplied to carmakers operating in northeastern China, the company said.

With the Chinese government implementing aggressive economic development plans for the region, the economies of Jilin, Changchun and Tumen provinces are projected to grow four-fold by 2020.

By Choi He-suk  (cheesuk@heraldcorp.com)