Hyundai Steel targets S.E. AsiaHyundai Steel, the nation’s No. 2 steelmaker, plans to shift its focus to Southeast Asia amid a stagnant domestic market.
The company said yesterday it has signed an MOU with major steel companies in Indonesia, including a plant there owned by India-based Essar Steel, to supply 340,000 tons of hot-rolled steel every year. Specific prices and terms have not yet been confirmed.
Having inked the agreement, Hyundai Steel Vice Chairman Park Seung-ha will visit a client company in Singapore today to discuss forms of cooperation, the company said. Park is currently on a regional swing.
The steelmaker intends to boost exports to help flagging domestic sales as the local industry has been suffering from the fallout of the recession in Korea’s construction market for two years.
However, moves by Chinese and Japanese steelmakers to increase their exports are making it even harder for Korean firms to tap revenue streams abroad.
The company also aims to narrow Korea’s deficit in the steel trade.
According to Korea Customs Service, the country exported 29 million tons of steel materials and imported 23 million tons last year, recording an $8.3 billion surplus. But its exports to China and Japan posted respective deficits of $4.3 billion and $4.8 billion.
Hyundai Steel set its sights on Southeast Asia due to its economic growth potential, it said, with Indonesia considered a prize target due to its annual GDP growth of 6 percent, which is unmatched in the region.
“We have strong expectations that exporting to fast-growing countries in Southeast Asia will help offset the recession in the domestic market and close the deficit in the steel trade,” said an official at the company.
The steel manufacturing unit of Hyundai Motor Group has ranked second in the domestic steel industry with annual production of 20 million tons. It is making efforts to develop new technologies to produce high-quality H-beams, it said.
Hyundai is widely recognized for its research and development efforts. It conducted research on hot-rolled plates for automobiles and ships for over five years before it started running an integrated steel mill.
As of last year, the company has developed 263 kinds of steel products including 163 types of hot-rolled plates and 100 kinds of thick plates. As a subsidiary of the largest automotive group in Korea, it has also developed various kinds of steel for automobiles.
By Song Su-hyun [email@example.com]