POSCO in Expansion Mode

Vice Chairman Lee D.H. named to run Daewoo Int’l, particularly to secure iron ore overseas

Vice Chairman Lee Dong-hee forecast the creation of a great synergy between POSCO’s top steelmaking technology and Daewoo International’s expansive global operations network.
The new top executive at Daewoo International said at his inauguration that the joining of POSCO and Daewoo International raised the expectations of many people and that the company would do its best to prepare and realize a new vision for the future to respond to the high expectations.
‘In order to meet the high hopes that many people have over the combining of the two companies in their own fields of operations, we have to change the organization to upgrade corporate value and development,” Lee said. ‘We have to be faithful to the internal solidness and growth in scale by strengthening our management to make the company that people look up to as the firm where many top talents are assembled and work.”
The vice chairman, a veteran steel man, took over the helm of Daewoo International on Oct. 1 with the finalization of POSCO’s takeover of the trading company and now has the heavy burden to make the merger a success. Dignitaries present at the new CEO’s inauguration included POSCO Chairman Chung Joon-yang and heads of POSCO affiliates.
Chairman Chung said at the ceremony that POSCO will have access to the top talents and business experiences of Daewoo International, while the new affiliate will have a strong partner and supporter in POSCO. He called on the new affiliate to lead the POSCO Family Vision 2020 and POSCO Family 3.0, the two major strategies for the POSCO Group.
Industry sources said POSCO’s move was a big deal and it could be a huge gamble on the steelmaker’s part. First, they note that the price of 3.37 trillion won for the takeover is a large sum of money even for the 5th largest steelmaker in the world and could be burdensome as POSCO plans more M&As if appropriate targets appear.
The vice chairman took charge of the deal from its initiation and has led the project for the post merger integration (PMI) for the new affiliate of the POSCO Group, POSCO sources said.
The big job left for him now is to prove that the deal was a successful one and will be of great help to POSCO in the area of resources exploration, iron ore in particular, with Daewoo International having a vast overseas network for natural resource exploration projects.
What the new top manager has going his way is the talented pool of executives at Daewoo International, as every one of them is very capable in his area of responsibility. Vice Chairman Lee likens the new members of the POSCO family to “new winds” for the group.
Lee said, “What we have to do is to organize them together so they can create a new force for the company to move as a team so that at the end they can contribute to the creation of synergy with other POSCO affiliates.”
The first thing Lee did after arriving at the new company was to set up four business-cooperative teams made up of the people who worked for the PMI team and a selected staff from Daewoo International in what could be termed as the initial effort toward the creation of synergy.
Lee intends to style the new affiliate after POSCO, but only some key components from POSCO’s professional organizational patterns, leaving intact the professional style of the new family member.
Such key matters as financial, personnel and information system will be integrated with POSCO’s early next year in order to give the new affiliate more time to adjust. But the new company will borrow from POSCO’s marketing setup and operation as early as possible.
The new CEO intends to keep Daewoo International’s 24 percent stake in Kyobo Life for some time to wait until its value jumps higher before it is sold.
Lee feels internal communication among officers and staff is key to the company’s success, which is why he has already been touring the offices and meeting with staff and having lunch with managers on a number of occasions.
Daewoo International emerged as a company dedicated to international trading and investment when the international trading and construction sectors of Daewoo Corporation were spun off into three companies: Daewoo International Corporation, Daewoo Engineering & Construction Company Limited and Daewoo Corporation. Since the completion of workout on Dec. 27, 2003, Daewoo International Corporation has been growing and finally became one of the POSCO Family Members in October 2010. Through this move, Daewoo International Corporation will fulfill the vision of becoming a “Global Top 10 Trader.” nw

Vice Chairman Lee Dong-hee makes a speech at his inaugural ceremony as the CEO of Daewoo International Corp.