Emphasis
on Globalization

POSCO to expand overseas presence in search of new markets and raw materials

POSCO Chairman Lee Ku-taek said recently that the domestic steel market has reached a saturation point and therefore should look overseas for its markets and operations including India, China and Southeast Asian countries.
In the long-term, POSCO should be able to produce steel products overseas as much as those produced at home, the chairman said, unveiling for the first time strategies for overseas expansion.
During his recent special session with new employees at the POSCO Personnel Training Institute, he said domestic steel market has reached a point where it is no longer possible for POSCO to make money from its new investment due to an excess steel supply and should look for overseas markets in a particular region or country. He told a local daily that POSCO would not rule out strategies for mergers and acquisitions overseas.
He said the steelmaker has been considering possible moves, including its timing and the targeted firms.
He said the company is watching seriously the developments with regard to Daewoo Marine and Shipbuilding, which is on the sale block. Reports said the steel giant has been looking into expanding its tie-up with Nippon Steel in the areas of technology, expanding stakes in each other and joint exploration of iron ores overseas.He also said that Hyundai Steel would be a great threat to POSCO when it completes its blast furnace steel mill by 2010 since it is located at home. The chairman said POSCO would be centered on steel-making as its core business, but also expands its investment in steelmaking to areas such as magnesium and power industry to make POSCO a leading company in the world with diversified interests.
POSCO officials said what the chairman has in mind is to benchmark Toyota not GE, in making up future management strategies for POSCO. Mexico, Brazil, Turkey and Poland, among others, would be good countries to find markets because they have enormous demand for steel.
In the next 30 years, POSCO's overseas steel production is likely to match that domestically, he said, in the way of explaining the steelmakers overseas expansion plans. He said the company has to go overseas for a number of reasons including the need to secure iron ores and reduce costs, which have emerged as a key factor for its survival. Until recently, steelmakers in Korea and Japan have not had trouble securing inexpensive iron ores and no trouble making a profit, although their countries don't have many natural resources.
But things have changed recently. Australia's BHP Billiton and two other iron ores suppliers take up nearly 70 percent of the iron ores market in the world, making it harder to secure iron ores. Chairman Lee predicted that the job of making steel from iron ores will be near the iron ores mines while slabs are made at locations near the markets in the near future.
He told new POSCO employees that the new slogan for POSCO in the age of globalization should be "Lets'Create a New Myth,"in reflection of the new environment for the steel industry in the 21st century, adding that he hopes they would be able to say to the new employees 30 years later that they have created a new myth and its your turn to create new one.
In the meantime, all employees of POSCO participated in "Sharing Saturday,"event on September 16 designed to share love with neighbors with the nation's largest holiday Chuseok set for October 6 in the lunar calendar this year. About 4,430 POSCO officers and employees including 2,140 from Pohang, 1,790 from Gwangyang, and 500 from the Seoul office undertook the campaign by calling on elderly folks living alone, handicapped and the houses of love to share their love with them.
Chairman Lee, during his attendance at the "The government-Private Sector Strategy Session to Revitalize Investment"on September 19, pledged POSCO will invest in projects to produce high-valued steel products in the country to spur business boom in the country as a corporate citizen fulfilling its social and ethical responsibility.
In line with major world steelmakers expanding their investments for their sustainable growth, POSCO will also do its best to expand investments at home and abroad to sharpen its competitive edge as a global steel maker. The event, organized jointly by the Ministry of Commerce, Industry and Energy, the Chamber of Commerce and Industry and the Korea International Trade Association to spur corporate facility investment attracted some 150 heads and employees of the 10 largest companies in the country. nw

POSCO Chairman Lee Ku-taek, third from left in front row, attends the Government-Private Sector Strategy Meeting to spur corporate investment Sept. 19.

POSCO employees participate in "Sharing Love"event in Pohang, Gwangyang, and Seoul, by calling on elderly people, handicapped and houses of love to share love with them Sept. 16.