POSCO Expanding Business 
Scopes to Overseas Markets

Korea's No 1 Steelmaker focusing on globalization
As part of well-deliberated strategy toward globalization, POSCO, South Korea's largest steelmaker, has been branching out to businesses other than steelmaking.
With the goal of efficiently coping with the change in business environment and sharpen its competitive edges, POSCO is seeking to increase its annual steel production to 35 million metric tons at home and 15 million tons abroad by the year 2010.
This means expansion of its productions lines to foreign nations. As of now, overseas production meant taking the home-made hot-rolled coil abroad to make steel products there. In the future, POSCO plans to manufacture hot-rolled coil in the large emerging economies of Brazil, Russia, India and China.
Besides making more steel, POSCO has sought process innovation since 1999 to prepare for privatization in 2000, such as globalization and digitization, according to Kwon Jong-won of the Innovation Strategy Planning Dept.
The steelmaker also established the world's first Web-based operational management system. The digital management system, which took six years to be completed, has equipped the company with the top-level operational process and system. Thus, POSCO now has a strong foundation to constantly push for managerial innovation.
Lastly, POSCO is making efforts to innovate the employees' way of thinking.
Chairman Lee Ku-taek has repeatedly pointed out in public that the personnel's way of thinking has not changed although the system they use has been improved through process innovation. "If the world cannot sympathize with the way we work, we cannot expect their cooperation. We should get rid of any unnecessary formality that is a nuisance in holding meetings, making reports and giving approvals, not to mention huge company-wise projects," Lee said at the new year's address in early January.
A human resources management consulting agency named Hewitt Associates recently diagnosed POSCO's structural culture. They found that contrary to the advanced operational process and system, the way the staff works and uses the systems was still far from being the best.
The personnel especially lacked what they call " The global mindset." The employees themselves say that typical negative practices of a state enterprise -throwing too much time and resources in preparing business reports, evaluating personnel according to personal closeness instead of their capabilities, authoritarian bosses' hindrance to creativity, inefficient meetings and discussions and lack of responsibility - still exist in the company.
POSCO's Innovation Strategy Planning Dept. believes that meeting global standards in terms of working style is necessary because the staff and its business partners will consist of more diverse nationalities, races, religions and genders in the near future.
Secondly, the innovation POSCO has sought through transforming the operational process and system would end up only halfway successful if the people who use them don't change.
POSCO also said it plans to list its depository receipts on the Japanese stock market.
" We are considering listing on the Tokyo Stock Exchange. We will decide whether or not to go on the Jasdaq by November this year," the company said in a statement.
" Once we list on the Tokyo stock market, we will be able to enhance our corporate value as POSCO will have wider access to the global capital market." If the listing goes ahead as planned, POSCO will be the first Korean company to be listed on the Japanese stock market.
POSCO is already listed on the New York Stock Exchange and the London Stock Exchange by issuing depository receipts.
A depository receipt is a negotiable certificate of ownership that represents a specific number of shares of a stock. POSCO originally sought the Jasdaq listing of depository receipts of $200 million in 1996, but annulled the plan due to unfavorable market conditions at that time.
As of last year, POSCO's shares amounted to $87.18 million, with around 100 million overseas depository receipts listed on foreign stock markets.
The announcement that the company is reviewing the Jasdaq listing, however, had little impact on stock prices. nw

POSCO's Pohang Works

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