POSCO's Production Expansion

Goal is to be No.1 supplier of auto steel plates at 6.5 million tons

POSCO dedicated the expansion project of its 6continuous galvanizing line (6CGL) at POSCO's Gwangyang steel complex by adding 400,000 tons to reach total production capacity of 6.5 million tons on June 30 with the attendance of leaders of its key customer firms and POSCO executives led by Chairman & CEO Lee Ku-taek.
"The completion of the expansion project has made POSCO a world-class producer of top-quality steel plates required by auto makers,"said Chairman Lee at the dedication ceremony held at POSCO Gwangyang steel complex.
The expanded CGL will produce 400,000 tons of zinc alloy steel plates a year, which are made with cold-rolled steel with zinc alloy. The zinc alloy steel plates will have strong resistance against oxidization and easily handled by auto makers in producing high-quality cars. The increased capacity to produce such high-quality steel plates has put POSCO in an advantageous position in the market for steel plates used by auto makers around the world.
The expansion has made POSCO to rank behind only Arcelor Steel in the production of steel plates for auto makers in the world. POSCO has been working since the 1990s to improve the quality of its steel to cope with mergers of steel producers and the pursuit by Chinese steel makers to catch up with leading steel makers in the world.
POSCO has picked its Gwangyang steel complex for expansion to become the top steel plate plant for the automobile industry in the world. In 1997, POSCO completed the construction of 2.2 million tons of steel plates, its 4cold-rolled steel production facility. The steel giant went on to build 4CGL in 2000, 5 CGL in 2005, before completing the 6CGL in June.
POSCO also plans to invest 1.6 trillion won to upgrade steel plate production facilities to produce more high-quality steel plates for autos and back up the domestic auto companies strategies to make higher profits.
The steel giant plans to have auto makers to participate from the early stages of the development of new steel plates to help with their globalization plans and market them.
POSCO also plans to provide support to auto parts makers in their efforts to advance into overseas markets by supplying technologies and raw materials on a stable basis. The steel maker also plans to strengthen its technology cooperation with top-class foreign car makers in Japan and Europe to make its position solid as a global car steel plate supplier.
POSCO plans to expand its overseas auto steel plate supply points to improve global services.
The Gwangyang steel complex, following the dedication ceremony for its revamped CGL facility, held the declaration ceremony on June 4 to show that it will realize its vision to become the No.1 auto steel plate producer in the world.
"We need to sharpen our competitive strength enough to survive any tough competition,"said an order issued recently by POSCO Chairman & CEO Lee Ku-taek. The statement would not have surprised anyone if it had been made by heads of average companies. But it deserves a lot of attention because it came from the POSCO chairman himself,
one of the leading steel makers in the world. People were curious why he had to make such a statement when his company is doing so well. The Korean steel giant is the fourth largest steel maker in the world in terms of steel output and tops in competitiveness. The World Steel Dynamics Inc. named POSCO the top firm in the world in terms of competitiveness for three years in a row from 2002. The Japanese steel industry yielded the top position in the world steel community to POSCO in the latter half of the 1990s and has been trying to catch up with POSCO ever since in search of its past glory.
The POSCO CEO has been issuing dire warnings to his company to make reform in light of the fast changing environment in the world steel industry. Until recently, the steel maker's main job was to supply good quality steel products to domestic market at reasonable prices as its motto, "To serve the country with steel production."But things began to change coming into the new century. A number of earth-shaking M&As took place in the world steel industry, making steelmakers just another commodity, no longer a strategic national industry. The establishment of many steel foundries in China is already threatening the domestic steel market in the country. nw

POSCO Chairman & CEO Lee Ku-taek

POSCO executives led by Chairman Lee Ku-taek at the dedication ceremony for expanded production facility for auto steel plates at the Gwangyang steel complex, South Jeolla Province; An inventory of cold-rolled steel plates at POSCO Pohang steel complex in North Gyeongsang Province; Chairman & CEO Lee Ku-taek.

POSCO's Pohang steelworks