Ask an Expert: POSCO TCS Finds Success in Growing Thai Auto Market

The automotive industry in Thailand is the largest in Southeast Asia and the 12th largest in the world. Producing nearly 2 million automobiles per year, its annual output is larger than those in Italy, the UK, and Russia – and Thailand is well-positioned for further growth.

In particular, through the recent zero-tariff measures taken among ASEAN Economic Community (AEC) member states and the Thai government’s push for more eco-friendly cars, the market is expected to see high growth potential with an expanded annual production capacity of 2.8 million by 2020.

POSCO TCS is positioned to take advantage of Thailand’s growing auto market.

Due to the growing auto market in Thailand, demand for automotive steel is also on the rise. Thai car makers all prefer to receive materials from local suppliers, so steel companies have begun building subsidiaries in the area.

POSCO TCS Opens in Thailand

In August of last year, POSCO TCS opened near Bangkok with a production capacity of 450,000 tons. With a local supply facility in Southeast Asia, POSCO can provide steel to automakers and parts manufacturers at more affordable rates and with higher quality control.

Chotika Arusawat (Procurement, left) explains the tax benefits for locally produced steel at POSCO TCS.

Chotika Arunsawat in the Procurement Department noted that “If automakers in the Southeast Asian region import POSCO steel from Korea they need to pay over 17% in taxes, but with POSCO TCS, they pay 0%. Also, the nearby Laem Chabang Port is one of the busiest container ports in the world making shipments to Malaysia, Vietnam, and Indonesia quick and simple.”

Having a local facility allows POSCO to build stronger strategic partnerships by smoothly supplying materials to global automakers and parts manufacturers in one of the largest car markets in the world. Narisara Im-Tua, who works in the Sales Department, told us that 85% of the steel products coming off the line were going to car makers and auto parts manufacturers, making POSCO TCS one of the largest steel suppliers in the region.

POSCO TCS is Defined by Superior Quality & Service

The plan to develop POSCO TCS began in 2011 with construction starting in 2014. When POSCO TCS went online in August 2016, other steel companies had already entered the market. However, POSCO is using its strategic advantages in production technologies, automotive steel expertise, and advanced production facilities to gain an upper hand.   

POSCO TCS President Lee Jin-soo says he is optimistic about the future of POSCO TCS in Thailand and the Southeast Asian.

In a recent interview, POSCO TCS President Lee Jin-soo noted that “POSCO is currently implementing systematic technology support with knowledge gleaned from other automotive steel facilities in Mexico, Indonesia, and China. Although other companies may have a head start, the future for POSCO TCS is looking bright due to our superior facilities and higher quality.”

To be a leader in the Southeast Asian region, POSCO TCS realizes it must manufacture superior products and offer better service than its competitors. Lee emphasized that POSCO TCS is “competing in the same industry to serve the same clients alongside some of the world’s best. Every employee at POSCO TCS must be devoted to securing a competitive advantage in all aspects of business.”

When asked how POSCO TCS can compete with other steel companies that have been in the region longer, Narisara Im-Tua stated matter-of-factly, “Because our quality is so high.” She added that POSCO TCS sends samples to Korea every 1-2 weeks for quality certificates and because of their consistently high-quality ratings, automotive customers are very happy.

Piyakun Boonmee (HR) explains POSCO’s commitment to quality for its customers.

Piyakun Boonmee in HR recounted the story of when a customer called Sales about a product that was not fitting in with their production process. The Sales Department reacted immediately, sending the Customer Service Department to the customer’s facility to check the product and production line. POSCO came back and worked to fine-tune the product so that it fit the customer’s specific production needs.

Boonmee stated that POSCO TCS customers “can contact our Customer Service Department at any time if there are any perceived quality issues. Our Quality Control Department will go directly to the customer’s factory to check the product and the production line. We work together with the customer to fine-tune the product until we are sure it meets the customer’s needs.”

A Culture of Trust & Leadership

We asked employees how POSCO TCS could maintain such high standards and quality for its products while also building strong relationships with its customers and employees. The most common response was about the healthy working environment.  

President Lee Jin-soo told us that “If you are respectful and considerate of everyone, employees are better able to work together and build a great product – regardless of cultural barriers or where they are from. For better performance, we empower them with training and the skills they need to succeed and we take care of any issues with respect.”  

Also, at POSCO TCS each employee is provided with 30-40 hours of training per year. These classes include everything from leadership and communications to learning Korean.

Everyone agreed that POSCO TCS was a great place to work, making it easier to work together for the customer.

When asked what it was like to work at POSCO TCS, Piyakun Boonmee said, “At POSCO TCS we are like a family and it is a happy place to work. Even though we work in separate teams, we are not separate, we work together for the customer – always striving to learn more and do better.”

Boonmee added, “In the future if we continue working like a family, we will be the #1 company in Thailand. After that, we’ll be number #1 in Southeast Asia. And we all share that goal.”

Throughout April & May, The Steel Wire will explore the uses and benefits of POSCO GIGA STEEL and what POSCO is doing to lead the industry with new automotive steel solutions.  Don’t miss any of the exciting stories from The Steel Wire – subscribe via email today.