POSCO Expands Overseas Operations

Giant steelmaker completed steel plants in a number of countries including the U.S., Vietnam and Japan

The Year 2009 has been a very significant one for POSCO, as the steelmaker successfully beat the economic woes and sustained normal profit levels and continued to make progress in the expansion of its overseas operations.
The fifth largest steelmaker in the world has been extremely successful in cutting costs to expand its profits under Chairman Chung Joon-yang’s avowed management objectives to continue to maintain the policy of cost-savings throughout 2011 to ease the impact from the economic slump, which reduced the demand for steel.
The steelmaker has also been right on the mark on its policies to expand its overseas operational reaches.
POSCO said it and Indonesian steelmaker Krakatau Steel signed a memorandum of agreement on co-constructing steelworks in Indonesia.
The MOA was signed by POSCO CEO Chung Joon-yang and Fazwar Bujang, the head of the state-run Indonesian steelmaker.
Established in 1970, Krakatau Steel has an annual production capacity of 2.4 million metric tons and holds about 60 percent of the Indonesian market for steel plates.
POSCO officials said that the deal with Krakatau Steel will help POSCO expand its market presence in the Southeast Asian market, which imports about 30 million tons of steel products each year.
According to the agreement, the two steelmakers will build an integrated steelworks with a production capacity of 6 million metric tons in Cilegon, located on the north coast of Java.
The first stage of the project, the construction of facilities capable of producing 3 million tons of crude steel, will begin during the second half of 2011. This stage of the project is scheduled for completion at the end of 2013.
The new steelworks will be located within Krakatau Steel’s existing facilities in the region, allowing the company to cut initial investments and bring the facilities to full operations quickly, POSCO officials said.
The completion of the construction of steel plants in Vietnam, Japan and the United States, stand out among its accomplishments overseas, in addition to paving the way for the construction of an integrated steel mill in India. Chairman Chung made a whirlwind tour of those countries to make sure that the steel projects are being pushed as scheduled. He visited jobsites in India, Vietnam, the U.S. and Japan to inspect POSCO’s operations in those countries.
Among the highlights of his tours were the signing of an MOU with Ust-Kamenogorak, a producer of titanium in Kazakhstan, to set up a joint venture to produce titanium slabs in the central Asian country. He also traveled to Nagoya, Japan, in September to dedicate the steel plate plant, POSCO’s third such steel plant in Japan. The Korean steelmaker now operates steel plate plants in 41 cities in 12 countries.
POSCO also put online its joint-venture spiral pipe plant in Pittsburgh, the United States, in the early part of November through the United Spiral Pipe Co., set up jointly with U.S. Steel and SeAH Steel. POSCO and U.S. Steel have the rights to supply hot-rolled steel to the new spiral pipe plant with the annual capacity to produce 270,000 tons of spiral pipes, some as large as 26 inches thick, being supplied to North America, the largest market for spiral pipes in the world.
POSCO also built and operates a cold-rolled steel plant in Vietnam with the annual capacity to produce 1.2 million tons of cold-rolled steel, which is being marketed in Southeast Asian countries including Thailand, Malaysia, Indonesia and the Philippines, Chairman Chung Joon-yang said at the dedication ceremony of the new steel plant in Vung Tau, near Ho Chi Minh City.
Chung also travelled to India in September to call on Indian Prime Minister Manmohan Singh at his office in New Delhi to ask for the Indian government’s help with POSCO’s project to build an integrated steel mill in India, the Korean steelmaker’s largest project overseas. Chung also called on key officials of Orissa State, where the projected steel plant is to be located, including Gov. Naveen Paitnaik, to ask for their support to speed up the construction of the steel plant by removing all the problems in the way such as the purchase of the necessary land and the rights to the mines to secure the iron ore needed for the projected steel mill.
POSCO opened the age of the mega-blast furnace by installing a blast furnace capable of turning out 5 million tons of crude steel annually, the biggest in the world, in July at its Gwangyang Works in Gwangyang, South Jeolla Province. The new blast furnace is 5,500 cubic meters wide, 900 cubic meters bigger than the third blast furnace at the Pohang Works.
Chairman Chung Joon-yang, at the ceremony to ignite the new blast furnace on July 21, said POSCO opened the age of the super large blast furnace, although its steel industry goes back only four decades. “This superb record is owed to our excellent capabilities in all phases of steel making including design, construction, operation and maintenance technologies, which are tops in the world,” the POSCO chairman said.
The new blast furnace will not only increase steel output, but also help enhance POSCO’s steel product quality because only four other steelmakers in the world have such a large blast furnace including Russia, with the capacity of 5,580 cubic meters, and Mitsubishi Steel of Japan, with the capacity of 5,555 cubic meters, POSCO said.
Gwangyang Works’ fourth blast furnace is the largest in the world in terms of daily steel output capacity of 14,000 tons, they said. nw

POSCO Chairman Chung Joon-yang meets with Prime Minister Manmohan Singh of India on Sept. 17 at his office in New Delhi to ask for the Indian government’s help on POSCO’s steel mill construction project in Orissa State in India.

POSCO Chairman Chung, left, shakes hands with President Fazwar Bajang of Krakatau Steel Co. of Indonesia after signing an MOA on a joint venture project to build a steel plant in Cilegon, Indonesia, with the annual capacity to produce 6 million tons of steel to be completed in 2013.