Steel Industry Backbone 
of National Economy
Accounts for 2.2 percent of gross domestic product
South Korea's steel industry has been playing the role as backbone of the national economy over the past three decades.
According to recent statistics, the industry accounted for 2.2 percent of the nation? gross domestic production (GDP) and 5.2 percent of total exports last year.
The Korea Iron & Steel Industry (KOSA) said Korea maintains its status as the world? fifth largest steel producer, providing 47.52 million tons of steel, or 5 percent of the world? total steel production.
Last year, net income of 25 steel makers increased to 5.69 trillion won, a 96.2 percent increase from the previous year.
The KOSA released the figures on the occasion of the Sixth Steel Day, which fell on June 9.
"The Korean steel makers produce quality steel at an affordable price, contributing to raising the competitiveness of the nation's backbone industries, including automobiles, shipbuilding and electronics,?KOSA spokesperson Oh Kum-seok said.
"The nation's leading steel companies are developing mid- and long-term growth strategies to stay ahead in the fierce competition with foreign rivals,"he said.
POSCO, the world's fifth largest steel maker, has currently announced it will invest 1.6 trillion won in growth engines and the development of advanced technology by 2009.
INI Steel, an affiliate of Hyundai Motor Company, aims to expand production capacity up to 7 million tons by constructing a blast furnace by 2010.
Dongkuk Steel sets a goal of achieving 8 trillion won in sales by 2008, launching a campaign under a catchphrase of "change and growth."In a related development, people in the steel industry including Yoon Seok, senior executive vice president in charge of POSCO's communication affairs, received awards for contributions to industry development.
He received the Silver Tower Industrial Medal from the Ministry of Commerce, Industry and Energy (MOCIE) for his commitment to innovating distributions in the steel industry.
He also made a contribution to protecting the environment, serving as chairman of the Korea Metal Can Recycling Association since 1994.
The rate of metal can recycling soared to 74 percent in 2004 from 21 percent in the 1990s.
Steel industry has been essential for the nation's major exports items like automobiles and vessels and so on.
South Korea has emerged as the No. 1 shipbuilding nation and such a fame would not become possible if without the support from the steel industry.
Against this backdrop, domestic shipbuilders and steelmakers agreed to cooperation as major consumers and suppliers of steel products.
The nation's two most competitive industries invited Commerce, Industry and Energy Minister Lee Hee-beom to their gathering to seek synergy amid a deteriorating situation where high costs may give way to their Chinese counterparts.
"The keyword for industrial development this year is coexistence between small and big companies, and between different trades. The cooperation between two staple industries that are the pillars of Korea's exports will open a road to coexistence,"said Lee.
The chief executives of steel companies and shipbuilders agreed on four major points, including efforts to ensure stable supply and demand of steel products.
Steelmakers pledged to strengthen their ability to respond appropriately to increasing demand of premium steel products while their operation is supported by shipbuilders' cooperation.
The two industries will increase joint development and usage of new products through expanding ties in research and discuss occasionally on supply and demand situation and other current agendas.
The domestic shipbuilders have received $66.8 in orders until late April this year, which amounts to 38 percent of global orders.
Having built 14.76 million tons of ships or 37 percent of production worldwide last year, Korean shipbuilders are now beefing up construction of high-value-added vessels such as the liquefied natural gas carriers priced over $200 million, 10,000 TEU (20-foot equivalent unit) container ships and floating production storage and offloading vessels that involve high-end technologies.
Stable supply of premium steel products, including thick plates, heat-treatment materials and steel used in low temperatures, is a necessity as they are required for building such costly vessels.
The steel industry's competitive price has helped Korean shipbuilders to become the world? No. 1 not only in volume but also in technologies. Japan has led the world's shipbuilding for 40 years in the past.
We need constant support of the steelmakers as we aim to maintain our current global top status for a hundred years,"said Chairman Kim Jing-wan of the industry association.
"Cooperation between supply chains is very important for elevating our competence. Such moves wouldn't involve sacrifice as coexistence means long-term benefit for both sides,"said Chairman Lee Ku-taek of the nation's biggest steelmaker.
Details on supply volume and price of steel products for shipbuilding were not disclosed as they may trigger trade issues, according to the assistant vice-minister of the Commerce Ministry.

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