POSCO's Indian Venture

POSCO signs an MOU to build $12-bil steel mill in India by 2010

POSCO, Korea's largest steel maker, signed a memorandum of understanding (MOU) with an Indian state government to build a steel mill there by 2010.
POSCO said that it agreed to set up the first foreign mill in the eastern state of Orissa and won the right to mine iron ores in the state's iron ores mines for 30 years.
Chairman Lee Ku-taek of POSCO and Orissa state chief minister Naveen Patnaik attended the signing ceremony in the state capital of Bhubaneswar June 22.
The Pohang-based steel maker plans to build the steel plant with the annual production capacity of 3 million tons of slabs or thick pieces of steel between 2007 and 2010, and eventually increase the capacity to 12 million tons per year.
The Korean steel giant said it will invest $3 billion initially and increase it to $12 billion by 2010, which will be the biggest overseas investment by a Korean company.
The provincial government of Orissa said it will provide POSCO with the right to mine its 600-million-ton iron ore reserves which is enough for 30 years to keep the steel mill going and carry out its plans for building infrastructure such as railroads, roads, industrial water supply and electricity.
"We have set a milestone in the economic cooperation between Korea and India by announcing that we will build the first overseas mill in the history of steel makers worldwide," said POSCO Chairman Lee.
POSCO said it will launch a local corporation in August and sign a final memorandum of agreement on the investment by the end of this year if business is verified after due diligence and efficiency analysis.
The Orissa mill is scheduled to begin exporting steel products to Korea in June 2010 and sell them in India as well. The project is seen as a timely measure since domestic steel consumption per capita already nears the world's highest with 1,000 kilograms, while the growth of global steel demand is slowing down.

6 Sigma Program

The 6 sigma program designed to help globalize POSCO will be completely established in the giant steel mill's management policies in a bid to innovate its organization culture.
POSCO decided to strengthen the base of the managerial reform program by including various reform issues related to mindsets and organizational culture in the 6 sigma program, which has been solidified through six waves of implementation of the managerial program.
The steel giant kicked off the seventh wave of the program on July 5 with the participation of officers and MBBs led by Chairman Lee Ku-taek.
The chairman said at the start of the meeting that the ultimate purpose of the 6 sigma program is to change POSCO's corporate culture through manpower training and organizational reform.
He, however, said the program has been successful to the extent that the company's quantitative expansion including finances with the growth of discussions on the way to push the managerial program, but it has yet to change the corporate culture of the steel maker.

LNG Terminal

POSCO completed building its own LNG terminal for the first time as a private-sector company in the country to facilitate its imports of the fuel on July4.
The LNG terminal stores LNG directly unloaded from tankers and supplies them to users.
The dignitaries at the opening ceremony of the terminal included Vice Commerce, Industry and Energy Minister Cho Hwan-ik, Park June-young, governor of South Jeolla Province, Rep. Woo Yoon-kun and Anne Quinn, vice chairman of the BP Group, in addition to POSCO Chairman Lee.
The terminal, built on a 90,000 pyeong land, has two 100,000 kl storage tanks with the total capacity to store 1.7 million tons of LNG per year.
POSCO plans to import 1.15 million tons of LNG and supply 300,000 tons to its Pohang steel mill, 250,000 tons to its Gwangyang mill and 600,000 tons to the K-power station operated by SK Group. nw

POSCO Chairman Lee Ku-taek shakes hands with Orissa State Chief Minister Naveen Patnaik after signing an MOU for POSCO's steel plant project in Orissa State, India, June 22.