POSCO Looks Ahead

Chairman Lee vows to step up overseas steel projects in India, China, Mexico and Vietnam

POSCO Chairman & CEO Lee Ku-taek said in his New Year's message he expects many changes to occur once the new government takes office in February and that the management environment will require a new attitude and resolve to cope with the changes.
He said the subprime loan problems in the United States as well as China's belt-tightening financial measures will create impacts that will change the world economy, closing the door on the low-price, high-growth era with the rising uncertainties. He said the Korean economy will have to grapple with high raw materials prices, unstable currency exchange rates and the ensuing financial instability, factors which will make the economy unpredictable.
The world steel industry will see the price of raw materials rise rapidly and competition heat up with an increase in trade conflicts. Steel mills in advanced countries, with their strong competitive edge in technology, and China and India, with cost-competitiveness due to their easy access to iron ore, will pressure Korea's steel industry, Lee said.
This year, POSCO celebrates its 40th year in operation, an age of maturity in human terms.
The CEO said POSCO has worked hard to execute the mission given by the state over the past 40 years. But now, he added, the company has to set its own challenges and create a new myth in the process of achieving them. He said this year will be the starting point for POSCO as a global entity.
He called for laying solid cornerstones with everyone in the company working together to make the corporate structure strong.
Lee said the entire company should exert its full efforts to complete the new steel works in India, Mexico's CGL and a cold-roll steel mill in Vietnam, securing early roots in the search for global prominence.
With the belief that the last survivor from the downturn will emerge the strongest winner as a base, the company should have a competitive edge in technology and costs and continuously make reforms to realize its advanced status and become a top-result organization. The company should be a workplace in which every unit provides work on a voluntary basis. The CEO stressed that POSCO and its affiliates should plant the seeds for the growth of future assets and make their organization and culture open so that they will become a global enterprise.
Lee said the Indian steel project should progress this year no matter what. He also called for an increased build up of the SCM network, a steel product-processing unit in 35 strategic locations around the world to push the global sale of POSCOs steel products.
The chairman also called for measures to make POSCO's corporate structure strong so that it can withstand downturns in the business cycle. It should have top competitive power to be able to survive even a zero-growth period.
"Technology and costs are like a spear and a shield and we ought to sharpen our competitive edge like we are aiming at a target with a spear,"he said.
"We will spur our efforts for the development of world-first and best technologies, taking the Finex steel production technology as a model to lead our future growth in the form of 'strategic production process technology,' "he said.
Lee reiterated that the company has a lot to look back on with pride in its outstanding achievements of last year, such as its Finex technology developed and put into use for the first time ever, raising its status as a global steel maker. The steel maker has also expanded its annual production to 3.50 billion tons. This opens a new age for steel production with the continued expansion of its facilities both at home and abroad.
He said the company has expanded its operations worldwide from China, India Vietnam, Mexico and Eastern Europe, building a foundation for its global operations.
The company continues to speed up its processes and turn out high-quality steel products, achieving a top competitive edge by reducing costs by 1 trillion won last year.
The chairman also recalled that the steel giant's affiliates did well last year, too, getting orders for power generation facilities and having its Wibro technology named as a world standard. The company also succeeded in securing future growth engines in fuel cell batteries and magnesium-steel plates.
Due to such successes, POSCO's market value shot up to 50 trillion won last year in confirmation of its status as a global enterprise. Lee said he truly appreciated the hard work put in by every one of the employees, making the company such a luminous model for success in the world. nw

POSCO Chairman Lee Ku-taek,3rd R, raises his arm along with other executives of the steel giant at the New Year's rally at the POSCO steel complex in Pohang Jan. 2.