Calls to Hang Tough

KISA Chairman Lee urges cost cuts, upgrading of steel quality to beat stiffening competition

Chairman Lee Ku-taek of the Korea Iron and Steel Association said, in his speech at the association's New Year reception held Jan. 8 at Renaissance Hotel in Seoul, that the steel industry is likely to have a tough year due to slowdown in the world economy and flooding of cheap steel products into Korea, mainly from China. This year, the cooperation between the government and the industry needed more than ever to overcome the situation, said the chairman, who also is chairman and CEO of POSCO, the nation's largest blast-furnace steelmaker.
The chairman pointed at the move by the Arcelor-Mittal Steel Group's to integrate the world steel industry, the Chinese government's plan to streamline China's steel makers through mergers and acquisitions and Japanese steel firms daring restructuring to make Japanese steel products more competitive and expand their global market through the Japan's strong global trading network as factors that will have a serious impact on the domestic steelmakers this year.
He also warned that Korean steel firms should find means to grapple with the situation created by the moves by the U.S. and the EU to restrict imports of Chinese steel products and China would have to find market for some 10 million tons of its steel products else where.
He said the Jiangsu Provincial government asked him to make POSCO's Zhanjiagang Pohang stainless steel plant completed in November, last year, a model environment-friendly factory, a green cat, a Chinese euphemism for environment-friendly enterprise, calling on the KISA member firms to prepare for the possible impact from China's steel industry restructuring.
To take care of problems for the steel industry basically, he argued that productivity have to be reformed and strengthen price competitiveness and boost the quality of steel, along with the government help to improve the level of domestic steel consuming industries and upgrade R&D efforts to develop innovative new material.
"Its about time that domestic steel makers get together to pull their wisdom and courage to cope with changes in game rules in the world steel industry,"the KISA chairman urged.
The chairman went on to say that productivity should be raised with a stable labor-management culture as a base and change the working system to an advanced level to change the corporate structure.
At the reception, heads of member KISA firms and dignitaries resolved to spur their plants operations and meet the management targets for this year.
Vice Commerce, Industry and Energy Minister Kim Jong-kap said, in his speech, that the government will do all it can to support the steel industry to take care of its woes and forge ahead in their operations.
The government will provide support to the steel industry's R&D activity to develop new material needed by industries and also find new markets abroad. He said the steelmakers have to bring down their costs and find new sources for raw material, in particular, iron ores. He said Korea's steel production capacity will be increased by 7 million tons when the Hyundai Steel's blast-furnace steel plant goes into operation in 2012. They should be ready for heated competition ahead with cheap steel from China flooding into the steel market and Hyundai Steel coming into market as a new comer.
Former KISA chairman Hwang Kyung-ro said he hopes that all of us will meet again at the same time next year with happy minds after achieving all of the management targets this year. Chairman Lee Hee-beom of the Korea International Trade Association, said he hopes that the steel industry would be a key player in boosting the country's exports to the $500 billion level annually.
He said the exports last year surged over the $300 billion mark for the first time in history and are on the way to achieve $500 billion annually until 2010 with exports this year expected to amount to $360 billion, up around 10 percent from last year.
Attending the event included Chang Sei-joo, chairman of the Dongkuk Steel Mill Co., President Park Seung-ha of Hyundai Steel, President Lee Soo-il of Dongbu Steel, former MOCIE Minister Ahn Byung-hwa and former KISA chairmen, Chung Myung-shik, and Yoo Sang-boo, among others totaling some 200. nw

Dignitaries at the New Year reception held by the Korea Iron and Steel Association including Chairman Lee Ku-taek, 5th R, clap hands to welcome 2007. Also in the photo are Vice MOCIE Minister Kim Jong-kap, 5th L, Hyundai Steel President Park Seung-ha, SeAh Steel Chairman Lee Yoon-hyung, and POSTECH Chancellor Park Chan-mo.