Another Promising
Overseas Venture

POSCO to build steel mill in Vietnam to produce 3 mln tons of steel by 2012

POSCO is in the process of following its decision to build a steel mill by investing $1 billion in Vietnam. The Vietnam Steel Association said POSCO has already submitted its papers to the Vietnamese government for approval of its plan to build the projected steel plant capable of turning out 3 million tons of both cold-rolled and hot-coil steel plates annually by 2012 in Vungtao, Vietnam.
POSCO Managing Director Lee Dong-hee met with high-ranking host government officials in Hanoi and traveled to Ho Chi Minh City to take a tour of the proposed site for the plant. He arrived in Vietnam on Aug. 6.
POSCO plans to build the steel plant in two stages. When the second stage of the project is concluded in 2012, the plant will have the capacity to turn out 3 million tons of cold-rolled steel and hot coil steel. The production capacity is expected to upgrade the southeast Asian country's steel production capacity to a phenomenal level from 200,000 tons to 3.2 million tons.
POSCO officials said the steel maker would like to undertake the project alone without other investors. The company plans to invest $350 million in the first stage of the project targeted to be finished in 2009 and able to produce 700,000 tons of cold-rolled steel. Another $650 million will be invested in the second stage of the project by 2012 to make the plant to produce 3 million tons of both cold-rolled and hot-coil steel.
Vietnamese officials said it is very fortunate for Vietnam that POSCO, which played a key role in building the Korean economy, is given a chance to do the same for Vietnam. They went to say that POSCO has an edge over Asian steel makers who want to build steel plants in Vietnam including those from Taiwan and India.
POSCO officials said the steelmaker plans to make Vietnam its bridgehead for trade with other southeast Asian countries and is preparing to invest a large sum of funds into its Vietnamese operation. The company already operates POSVINA, and VPS, both joint-venture with local partners in Vietnam.
POSCO Chairman Lee Ku-taek said that the steel giant made a great stride in business last year making advance into India to build a steel plant, a giant step to become a global POSCO and POSCO shares were listed for the first time on the Tokyo Stock Exchange last year.
China has become an unavoidable threat to our steel industry earlier than expected, owing to the fast expansion of its steel-producing facilities in the past several years and becoming an exporter of steel.
Investments in India and China are part of POSCO's long-term plan based on a dream to make the company a global concern. Particularly, the construction of a blast furnace steel mill in India is a project unprecedented in the history of steel making in the world. The gigantic project will be a success falling back on the challenging spirit and passion of the founding generations who created a myth in the Pohang and Gwangyang bays and revive them and move them to India's Bengal Bay. The chairman continued that the steel company needs an organizational set up to back up its ambitious undertakings. We need our own working methods that are superior to others and can be used any where in the world. He said the company needs a culture to create daily innovations and practice it every day so that language and thoughts stemming from the six-sigma program could take a deep root in society.
He said we have the tradition that when the going gets tough we get together and pool our energy, and get the self-confidence to get things done. We have to make this year the initial year for taking a big step to become a global concern to expand the POSCO's enviable history. "Let's try to achieve our objectives for this year one by one so that when we meet together next year, we could talk about next year's plans with hope and pleasure."I believe in you and our future; I will do my best so that I could be a model for all of you,"he said. nw

A scene of the storage of hot-coil steel at POSCO.

POSCO Chairman and CEO Lee Ku-taek.