POSCO's Strategy Session

Chairman Lee holds meeting with heads
of POSCO-invested firms to map out strategy

POSCO affiliates are not only partners to strengthen competitive power, but also are new growth engines, said POSCO Chairman & CEO Lee Ku-taek as he presided over a meeting of heads of the steel giant's five affiliates on January 24. Participants in the new year strategy meeting included POSCO Construction President Han Soo-yang, POS Data President Yoo Byung-chang, and Changwon Special Steel President Kim Jeong-won, among others, along with members of the POSCO Management Committee.
The meeting agreed that POSCO will pursue heightened operation of its steel mills through securing cost-competitiveness and stable operation of its affiliates and make its core capabilities stronger to be a top company in the industry, which will maximize the POSCO Group's business value. The two-hour meeting also agreed that CEOs should try to establish transparent and ethical management to take root as early as possible even it they have to wager the fortunes of their companies to achieve that goal and held profound discussions on roles and growth strategies of each affiliate this year.
POSCO Construction will enhance its steel engineering technology and make contributions to boosting cost-competitiveness of POSCO steel production facilities and successfully pursue the large-scale complex projects to secure its own separate position in the industry this year. POS Data lead the effort to raise the quality of information systems of POSCO affiliates and provide support in this regard.
The company will also search for next generation industry to secure stable sources of income this year as the IT technology as a base.
Changwon Special Steel will grow to be the top special steel producer in the world by turning out special steel products that POSCO doesn't produce. POSCO Power will make efforts to supply stable energy to POSCO and search for new areas for business taking advantage of its experience for running a LNG terminal.
The POSCO chairman said short-term strategies are important, but also important are long-term plans, calling on affiliate heads to focus on strategies, as well as the management of their firms.
POSCO has been working hard on setting up steel processing centers in foreign countries to expand its reach in global steel market, especially steel plates for automobile and electric steel plates. The steel giant has completed the construction of steel processing plant for steel plates needed by automobile named POS-TPC in Rayon Amatha City industrial complex in Thailand.
The company started the construction of the plant in April last year, capable of producing 120,000 tons of steel plates needed by the automobile industry. POSCO set up POSCO-Thai in 1998 to supply various steel products to the nearby industrial complex and the company expanded the plant to cope with increased demand for steel plates from Japanese auto makers including Toyota, Honda and Ford, the U.S. auto maker, which operates an auto assembly plant in Thailand.
POSCO plans to install more facilities in the plant to produce tailor welded banks, including laser welders and presses to produce steel plates for automobile, to bring the plant's annual production capacity to 200,000 tons. POSCO also held a ground-breaking ceremony for POS-IPC, an electric steel plate production plant, near Mumbai, India on January 23, which is targeted to be completed in October, with an annual capacity of 130,000 tons of electric steel plates. The company plans to install a core-cutting machine to produce core parts of transformers in order to be able to supply high-quality products and services by the time that the new plant is completed in October.
The steel giant has been building steel processing centers overseas from the mid-1990s to support its overseas marketing operations and they will total 14 when POS-IPC in India and POS-MPC in Mexico are completed in the second half of this year.
POSCO Chairman Lee kicked off the 8th wave of the Six Sigma Activity with a lecture on the program. He said the 7th wave of the activity has been completed in 3 and half years, 4 years if the preparation period is included. He stressed that every activity or program should be followed steadily as he emphasized on many occasions. He believes that it will take another 10 years for the Six Sigma Activity to take a firm root in the company, although 4 years have passed since it was first kicked off. It will help making POSCO's corporate culture stronger. The CEO said he heard two stories on reform from Sohn Wook, an outside director of POSCO, who is a former president of Samsung Integrated Technology Institute. He told him about the companies that carry out the Six Sigma Activity go through. Handing him a book entitled, "Stand in the Center of Change,"he said those companies had common problem of company workers having difficulty in the process of pushing the program. The problem was that they thought the Six Sigma Program was a separate from their daily work routines. Another thing concerned the fund management department. It has been able to cut the account payable process substantially through the program, in addition to solving a number of problems. He said he was able to learn where POSCO's six sigma program had problems after hearing from director Sohn, although there were many improvements, too. He concluded that the most important elements for the success of the program were office heads and team leaders because what we needed was the selection of the right areas where the program should be targeted at and not develop the program to just show it to others or just to register the list of tasks.
The chairman said he was deeply impressed with the film on the results of the QSS activity at the second steelwork of POSCO. The program was able to sweep off that dirt in the steel plant with the help of workers. It was a moving experience to see the scenes before the program was launched and the results. He said the program will be a success if every one concerned worked hard at it by combining the project with the daily work. nw

POSCO Chairman & CEO Lee Ku-taek presides over a meeting of heads of POSCO-invested firms to map out strategies.

A scene of POSCO blast furnace in Gwangyang.

POSCO Chairman & CEO Lee Ku-taek