Realization of Dreams

Dongbu Steel Chairman Kim and guests break ground for electric-furnace hot-coil steel plant

Dongbu Steel Co. broke ground for its electric furnace hot-coil steel plant in Asan, South Chungcheong Province on Nov. 16 with the attendance of Dongbu Group Chairman Kim Joon-ki and other company executives and local dignitaries including Gov. Lee Wan-koo of South Chungcheong Province and former POSCO chairman Hwang Kyung-ro.
The steel plant, with two 1.6-ton electric furnaces and a high-class VD-OB installation and slab production facility, is expected to turn out 2.5 million tons of hot-coil steel plates annually. Some 620 billion won will be invested in the new steel production facility and is slated for completion in July 2009.
The company will make an additional investment of 100 billion won to expand the production capacity to 3.5 million tons per year in 2010. Hot-coil steel is the raw material used to make cold-rolled steel, which is needed to make automobile body frames and home appliances.
Chairman Kim, in his speech at the ceremony, said electric furnace steel production technology has been developed to the extent that the steel plates from the electric steel plant can be used to make the bodies of automobiles in the United States and Japan. He said the electric furnace has become competitive enough in technology and the quality of its steel to produce high-quality steel like that from a blast furnace.
"Dreams I've had since my 20s have come true,"the chairman said.
Dongbu Steel will now look for supply sources for iron ore and is ready to make investments in iron ore mining companies in order to secure a stable supply of raw materials for its electric furnaces.
President Han Kwang-hi, in charge of the hot-coil steel department at the company, said they are in talks with an Australian iron ore mining company. Dongbu Steel has been seeking suppliers for iron ore in Australia, Myanmar and Vietnam.
Dongbu Steel launched its electric-furnace steelmaking venture as there is still a lot of room in the cold-rolled steel market in the country due to a shortage of hot-coil steel. Dongbu's supply of hot-coil steel comes from POSCO and overseas steel producers, but it has yet been able to secure adequate quantities. The production of hot-coil steel has been decreasing every year since 2003 when production peaked at 8.5 million tons. It reached 6.7 million tons last year and this year it is projected to be down to some 6 million tons.
The gradual reduction in supply of the product has been traced to POSCO's expansion of its cold-rolled steel production, which requires hot-coil steel to produce, limiting the hot-coil steel supply that POSCO can sell to others.
Domestic customers of the steel product imported it from overseas, but Dongbu Steel has decided to make its own furnace steel plant to produce the steel product for its own use.
Chairman Kim said when the electric-furnace steel plant is completed, the import substitution effect would amount to $1.5 billion, helping to ease the supply problems of hot-coil steel in the country.
The company, established in 1967, has since grown to record annual sales of 2 trillion won, producing 2.5 million tons of steel products.
"The company's track record shows that its success is the result of using only state-of-the-art equipment, possessing a wealth of industry know-how, and maintaining a high level of technical expertise,"President Lee Soo-il of the company said.
He said Dongbu Steel's priorities are simple as the company is wholly customer-oriented. "It is devoted to continuously developing new technology that exceeds the clients'expectations. Because the company's customers come first, we understand the importance of listening and responding. We regularly conduct customer satisfaction surveys and quality assessments."The company's basic business policy is three-fold: The application of performance based management, accelerating the management of innovation and providing the best customer service.
For performance-based management, the company implements risk management policies, reduces expenses through improved ERP and increases the sales of high-profit products by providing more value to customers.
To step up management innovation, the company will uphold fair and clear human resources policies, maintain a work environment that encourages all employees to manage their work independently and cultivate a progressive corporate culture that promotes individual initiative and responsibility.
To provide the best customer service, the company will maintain a superior customer service system and ensure the highest quality for every product and service it provides. nw

Dignitaries break ground in a ceremony for launch of construction of Dong Steel Co." new electric-furnace hot-coil steel plant in Asan, South Chungcheong Province.
Chairman Kim Joon-ki of Dongbu Group.