Eyeing for Boosting Sales

SeAH Special Steel focuses on overseas sales China in particular to increase sales to 1 tln won

Chairman Lee Woon-hyung of SeAH Holdings Co., which includes SeAH Special Steel Co. among its affiliates.

President Yoo Eul-bong of SeAH Special Steel said the special steel maker has overtaken Japan's O and K, a special steel maker, which has been its benchmark company for the past 10 years, in production by about double to become the largest special steel maker in the world.
Yoo said the steel maker would have no trouble achieving its sales target of 1 trillion won by 2014 and its initial public offering scheduled for June would boost the market image and help find new growth engines during a recent media interview.
The steel maker has obtained a clearance from the Korea Exchange to conduct an IPO at the end of last year and plans to make the offer shortly possibly from this month to list its shares on the stock exchange from June, Yoo said.
The CEO feels that the company will be able to secure 40.4 billion won from the IPO and invest 20.4 billion won in facilities and pay off its debts with the remaining 20 billion won to cut its debt ratio to below 90 percent from the current 150 percent.
The steel maker's history goes back to Changwon Steel Co. set up in 1986 and SeAH took over the company in 1988 and has been producing CHQ Wire, CD bar, stainless steel bar needed to make nuts and bolts used in autos, electronic products, shipbuilding and machinery, among others.
The steel maker dominates 40 percent of the steel products markets for its products with its major clients being Mando Machinery, Taeyang Metals, Pungang and Youngshin Metals, among others. Its sales in 2010 totaled 527.2 billion won, up five times from 2001.
Yoo said until the foreign exchange crisis, the steel maker remained among the late starters in the industry with the steel market hard to crack for any new starters in the industry. But SeAh took over Kukdong Metal and invested in new facilities including automation technologies and facilities and succeeded in upgrading the qualities of its products to be a top leader in the sector of its steel making.
The CEO said SeAh has successfully localized the production of a key auto part in cooperation with POSCO and Mando Machinery, which used to be imported and in addition, the steel maker has been able to expand its market share of its products thanks to timely supply of key raw materials from POSCO and foreign companies.
In the near future, the company plans to cut the production ratio of steel products for autos from 70 percent to 60 percent of its total steel production so that 15 percent would go to industrial equipment, 20 percent to electronics products and 5 percent to others to diversify its clients to minimize the risks from changing market trends.
We can pass on to consumers the increased prices of raw materials, so steel wire rods business is depend on how effectively get raw materials supplied is a key to its competitive edge, the CEO said.
SeAH Steel has been all out to explore its overseas market in recent years with a large focus in China. The steel maker has been using its joint venture firm in China, the POS-SeAH Steel Wire-Namtong Ltd. as a window to boost its market share in China.
He said the Chinese industry has been growing rapidly, but it has limits in producing such special steel products as nuts, bolts and other diverse products. Korean steel makers have an advantage because they have updated technologies and advantages in price and quality.
The joint venture firm saw its sales in China increase from 21 billion won in 2009 to 43.8 billion won in 2010 with operating profit rising to 2.3 billion won and 1.7 billion won, running in black since the company was launched in a year and half.
In the meantime, SeAH Special Steel will conduct its initial public offering on June 1 to sell 2,582,820 shares including 1,721,880 new shares at per share price of ranging from 24,000 won to 28,000 won at a total price of 62 billion won at the lowest price share range. The company's total annual sales amounted to 527.2 billion won, operating profit 47.6 billion won and net profit 30.9 billion won.
The steel maker produces CHQ wire, Cold Drawn Bar, Stainless Steel Bar as the largest maker of steel wire products in Korea The company's steel wire products go into auto parts, electronic equipment, machinery and construction in a wide range of industry. nw

Photo on Courtesy of SeAH