Posco records profits despite struggling market

Posco invests in developing ultra-lightweight cars using their renowned steelmaking capabilities. Provided by the company

Posco, the nation’s leading steelmaker, recorded increased profit in spite of last year’s adverse market conditions.

Amid economic challenges, the company prioritized the development of high added-value products and invested in so-called solution marketing to heighten corporate competitiveness.

As a result, the company was able to collect a total profit of 29 trillion won, with operating profits topping 2 trillion won. The conglomerate as a whole was able to reach 65 trillion won in total profit and 3 trillion won in operating profit on a consolidated basis.

Last year, Kwon Oh-joon became the new CEO for the conglomerate, with the ambition to “make the fastest-selling products” and therefore increase the profitability of steelmaking. Kwon emphasized that achieving this goal entails much more than just physically building a product and putting it out on the market.

Rather, he emphasized that Posco should share its expertise with client companies and provide differentiated services in comparison to other corporations.

Through this process, companies will be able to apply technologies provided by Posco more conveniently and accurately.

Posco’s main strategy is to provide comprehensive services that resolve a multitude of problems clients may face. Kwon referred to the example of automobile steel plates to elaborate on the necessity and effectiveness of solution marketing.

“Steel plates for cars need to be both lightweight and durable,” he said. “However, automakers frequently run into problems because the hefty plates they purchase are not the best when it comes to formability.

“Therefore, our company should step in to advise engineers about the adequate technology and welding techniques needed for car manufacturing.”

Ssangyong Motor, a major client of Posco, has especially benefited from the company’s so-called Early Vender Involvement strategy. In January, the automaker released TIVOLI, a sport utility vehicle built with steel plates supplied by Posco.

During the planning and building processes of TIVOLI, Posco played the role of supplier and advisor to the automaker.

The EVI strategy was fully utilized; Posco recommended which type of steel should be used and gave advice about how to reshape the plates to fit automobiles.

The steelmaker works in partnership with many other companies as well, ranging from Renault and Toyota to GM.

Posco and Renault have been cooperating to develop lightweight cars since 2012. Toyota and GM have awarded Posco with the Excellent Value Improvement Awards and Supplier of the Year Award, respectively.

As a conglomerate expanding beyond national boundaries, Posco has established 23 technical service centers across the world, including in Asia and the Americas, along with 29 manufacturing facilities spread across 14 countries in order to secure a broader network for global production and sales.

Since the company is operating in many different locations, these service centers provide timely assistance to local clients who need extra support while doing business.

In supplying high quality goods and services all over the world, Posco recognizes that it should go beyond being a good steelmaker. Without the comprehensive after-sales services, they would only be doing half of their job.