Posco, GE team up on power plants

Posco and General Electric agreed yesterday to cooperate in developing steel products and building power plants in emerging markets.

The two industrial giants said they will also join hands to develop information and communications technology and build infrastructure in new markets, while also benchmarking each other’s successful business models.

According to the MOU on strategic cooperation signed by Posco CEO Chung Joon-yang and General Electric CEO Jeffrey Immelt, they will make joint bids for power plant construction projects. Posco will build and manage the plants while GE will supply it with turbines and boilers.

As companies around the world accelerate their pursuit of oil and gas deposits in deep seas and polar regions, demand for corrosion-resistant and super resilient steel continues to rise. The development of non-conventional fuel, such as shale gas, requires stronger and more durable steel pipes.

Posco has also been developing and producing such products through its subsidiaries including Posco Specialty Steel and Sungjin Geotec.

The products are also used to make storage and processing facilities and in transportation. They are usually certified by the American Petroluem Institute.

Posco has years of experience in engineering and construction, while GE has widespread global networks, infrastructure-related technologies and considerable expertise in financial and capital businesses.

Recently GE has been expanding its energy business, which accounted for 31 percent of total revenue last year, while Posco has focused more on developing its overseas plant business to overcome recent declines in its profits from steel.

Immelt also visited President Lee Myung-bak yesterday and heaped praised on Korea for having overcome the global financial crisis so quickly.

By Limb Jae-un [jbiz91@joongang.co.kr]