Renault made the offer to Posco “in early 2017 as part of its strategy to diversify its sources of steel,” a source acquainted with the affair told the South Korean Yonhap news agency Thursday.
In response to Renault’s offer, Posco said the two companies will postpone “formal discussions” on the matter. Posco is not currently planning to enter Morocco, “citing market conditions,” the source said.
Morocco World News contacted Renault to verify whether it made the offer to the Korean steelmaker.
“We cannot give you any comment on this subject. We are always under discussion with many suppliers for further potential business,” a Renault spokesperson told MWN today.
Renault is the third biggest customer of Posco’s automotive steel, Yonhap’s source said.
Renault is also one of the biggest clients of ArcelorMittal, a leading steelmaker in the world, which supplies the French carmaker with automotive steel.
According to Yonhap, Maghreb Steel, the leading steel producer of flat steel in Morocco, asked POSCO in 2017 to “invest in Morocco’s maker of flat steel products and provide necessary technology.”
Morocco World News contacted Maghreb Steel, but the company has not yet provided any information about the offer.
Posco “could use Morocco as a gateway for exporting its steel products to Europe without tariffs as Morocco has a free trade agreement with the EU,” Yonhap’s source said.
The move could save the Korean steelmaker from a 25 percent tariff the EU said it would impose on 23 categories of steel products if imports surpass “the average of imports” for the last 3 years after the US imposed tariffs on steel and aluminum imports. The European Commission is expected to make a final decision on the tariffs in early 2019.
Renault is one of the largest international companies in Morocco with two car manufacturing plants, in Tangier and Casablanca.
With a total of 35,365 sold units during the first semester of 2017, Morocco was the top automotive African market in terms of sales for the French group.
The Moroccan Society of Automotive Construction (SOMACA) plant in Casablanca launched an extension project to the Renault plant in Casablanca in October. The extension project is set to double the plant’s production to 160,000 vehicles per year by 2022.
“In 2018, over 400 000 Renault and Dacia vehicles will come out of our two plants. Groupe Renault counts more than 11 000 employees in the country and over 40 suppliers and partners chose to follow us, creating 50 000 jobs locally,” according to Carlos Ghosn, Renault CEO and chairman.
Japan has since arrested Ghosn for financial misconduct, and Renaut appointed COO Thierry Bollore as temporary CEO.
The French car manufacturer achieved 65 percent of its goals to expand its ecosystem in Morocco in 2017, according to Minister of Industry Moulay Hafid Elalamy.