POSCO Chairman Elected as
Vice Chairman of IISI
Focuses on value-added products and overseas presence
POSCO Chairman Lee Ku-taek was elected vice president of the International Iron & Steel Institute (IISI) during its annual board of directors meeting held on October 3 at the Grand InterContinental Hotel in Seoul. POSCO Lee became the second Korean to be elected to the IISI leadership following former POSCO Chairman Kim Man-je, who also served as vice chairman of the IISI between 1994 and 1997.
POSCO Chairman Lee is likely to take up the position of chairman of the IISI in 2007 or 2008 as each member of the IISI leadership rotates every year to serve as the chairman of the international steel organization, POSCO officials said. Lee's inclusion in the IISI leadership is expected to boost the international profile of both POSCO and the local steelmaking industry, they said.
IISI's board of directors elected Guy Dolle, chief executive officer of Arcelor, as new chairman for 2006, replacing Nippon Steel Corp. President Akio Mimura, and United States Steel Corp. President John Surma and Mimura were also elected as vice chairmen along with POSCO Chairman Lee.
POSCO Chairman Lee said, "I will work for the sustainable development of the global steelmaking industry through close cooperation among member companies, stable supply and demand of steel products, environmental protection, and smooth supply of raw materials."About 400 officials from member companies of the IISI got together in Seoul on October 3- 5 and discussed ways to sustain competitiveness amidst challenges such as the emergence of super-size steelmakers and rising competition to procure raw materials. It is the second time that Korea hosted the annual IISI conference since 1988.
The board of directors approved four companies' joining the IISI as regular members - Evraz Group, magnitogorsk Iro and Steel, Novolipetsk Steel and TMK. The four newcomers brought to 192 the membership of the IISI, comprising of steelmakers, steel-related associations and other organizations. Raw steel producers of at least 2 million short tons per annum are given regular membership. In Korea, POSCO, INI Steel Co., Dongkuk Steel Mill Co. and the Korea Iron & Steel Association are IISI members.
Meanwhile, global steel demand is projected to increase from 972 million tons last year to somewhere between 1,040 million tons to 1,053 million tons next year, IISI Secretary General Iran Christmas said in his opening session. "The strongest growth continues to come from China, the world's largest steel consumer, which should see a 10 percent increase in steel demand in 2005 and a further 7 to 10 percent growth next year,"he said.
Christmas said in a later meeting with reporters that China has emerged as an important factor in terms of global steel demand and supply, and the IISI recognizes China's standing as a global leader. He added that China should take responsibility in terms of global steel consumption and supply now that the country became a member of the IISI last year, and IISI? office opened in Beijing would hold close consultations with Chinese companies. China sent to the annual IISI conference a delegation, drawing keen attention. Executives of Baoshan Iron & Steel Co., Shoudu Iron & Steel Co., Anshan Iron & Steel Group Corp. and Wuhan Iron & Steel Co. were present at the meeting.
POSCO Chairman said in a meeting with reporters prior to the annual IISI conference POSCO, the world? fifth largest steelmaker, will focus on an expanded overseas presence and production of technology-based and valued-added steel products in a bid to cope with rising global competition.
Commenting on the Chinese steel industry, Lee said, the average quality of POSCO products are quite excellent, compared to that of Chinese ones, and China is chasing Korea at a fast pace to the extent that less than 10 percent of China's top quality steel products lag behind Korea's in one or two years.
Lee reconfirmed POSCO's plan to push an investment project in India. The Korean giant steelmaker inked a deal with the Orissa state of India to invest $12 billion to set up a steel plant last June.
The POSCO chairman said POSCO went to India to meet the rising steel demand in India, not to concentrate on acquiring raw materials produced in Orissa. Concerning its rival company Mittal Steel's investment plan in Jharkhand, a state adjacent to Orissa, Lee said, POSCO would keep an eye on the rival company's move and determine whether to make any changes in the investment project in Orissa.
Lee said, "Recently an understanding is building up that the steel industry is a global basic industrial sector rather than the protected industry of each country, and there is a tendency of making steelmakers bigger through overseas investments or M&As and POSCO will have to head in that direction to survive competition."
The POSCO chairman showed a keen concern over the deal in Orissa to complete a steel plant by 2010, saying that a steel mill should be located near a place where raw materials are available to maintain a competitive edge.
POSCO President Kang Chang-oh said during his presentation of a session that POSCO is forecast to post $22.75 billion in sales, up 18 percent this year over last year and achieve $4,496 million in net income, a 20.6 percent increase. nw

The 39th International Iron & Steel conference is under way at the InterContinental Hotel in Samseong-dong, southeastern Seoul Oct. 2-5.