[Sponsored Report] POSCO faces market with growth strategies

Kwon Oh-joon, President of Posco Group, left, shakes hands with Thanasak Patimaprakorn, Thailand’s deputy prime minister, right, at the completion ceremony for Posco’s CGL factory in Thailand. [POSCO]

Posco has plans to overcome the difficulties the heavy industry market is facing from oversupply, industry recession and the reinforcement of import and export regulations.

In the second half of this year, the company will continue to carry out structural adjustments on its subsidiaries and non-core assets, cut down operational costs and expand its sales of its high-profit World Premium (WP) products.

WP products maintain a business profit rate of 15 to 20 percent, and are the number one contributor in improving the profit ability of Posco. WP products include the ultra high-strength steel sheet, which recently became popular in the automobile industry due to its enhanced durability and lightness.

Posco utilized its domestic and overseas production and sales network to provide automotive steel sheets to car companies in China and the United States. The company sold approximately 8.7 million tons of automotive steel sheets last year, about 10 percent of the world’s demand.
Posco’s sales volume of automotive steel sheets equals 25 percent of the company’s total sales volume, which makes it the highest figure achieved among other major steel companies that manufacture the product. Luxemburg’s ArcelorMittal, which sells the most steel products in the world, and Japan’s Nippon Steel & Sumitomo Metal Corporation only take up 10 to 15 percent each of the total sales of automotive steel sheets.
After the construction of Gwangyang Steel Works in 1992, Posco has been focusing on developing its automotive steel sheet technology and started producing and selling the product. Now the company is providing automotive steel sheets to the world’s top 15 car companies.
The company aims to expand the supply of automotive steel sheets with the highest quality in the global market through constructing more overseas production bases and pioneering further developments in technology.

On Aug. 31, Posco completed Southeast Asia’s first automotive steel manufacturing factory in Thailand, the world’s 12th largest automotive producing country.

A total of $300 million was invested to construct the new Continuous Galvanizing Line (CGL) factory in Thailand. Posco is seeking to target Thailand’s automotive steel market by supplying products manufactured in the factory and processed in POSCO-TBPC, a steel processing center also located in Thailand, to car and auto parts companies such as Toyota, Nissan and Ford.

As a result of the construction of the CGL factory, Posco’s production capability of automotive steel sheets for overseas vehicles increased to 2.25 million tons a year.

The company is aiming to produce and sell over 9 million tons of automotive steel sheets this year, and 10 million tons after 2018 to hold its place as the world’s No.1 automotive steel sheets producer.

BY YANG SE-YOUNG [yang.seyoung@joongang.co.kr]