POSCO has announced its financial reports at Investor Relation (IR) conference call on April 24th that its first quarter consolidated sales were up to 14.7 billion dollars and its consolidated operating profit was 1.4 billion dollars. The consolidated net profit was approximately 1 billion dollars.

POSCO’s consolidated profits indicates positive sign for both domestic and overseas

Reach to 14.7 billion dollars consolidated sales, 1.4 billion dollars in consolidated operating profit

Sales, operating profit and net profit has elevated by 5.2%, 9% and 10.9% compared to the previous year. This impressive achievement is done by the improvement of both domestic and overseas steel production and non-steel affiliates.

Non-consolidated sales of 7.7 billion dollars and 946 million dollars of operating profit.

PT. KRAKATAU POSCO, which is an integrated steel mill in Indonesia also turn into profit from the third quarter. Despite of decrease of steel bar and shaped steel plant from POSCO SS VINA in Vietnam, operating profit has increased gradually. This great performance of oversea steel subsidiaries gives positive indication of growth in sales.

Its non-consolidated sales rate has increased by 9.8% year-on-year to 7.7 billion dollars. Also, the proportion of the sales of World Premium products went up by 1.4% year-on-year to 54.9%.

Increased sales of high-value-added products, cost reduction, continued improvement of profitability, and the increased price of steel were the driving force of increasing operating profit margin from 1.8%p year-on-year to 13.1%.

Future is even brighter

POSCO expects that demand of steel will continuously increase on the back of steady restructuring of the Chinese steel industry and recovery of emerging economies. POSCO still also continue to secure financial soundness, reducing costs, and expanding high value-added sales.
All those efforts of POSCO brought impressive result of increasing consolidated and non-consolidated sales to 58.4 billion dollars and 27.9 billion dollars.

As major automakers around the globe are investing in and developing electric vehicles (EV), there was much anticipation and attention focused on the EV category and its top winners the Tuning X team of Soeyeong University. A major factor in the team’s achievement was the application of POSCO’s magnesium plates for the car body instead of aluminum, something the team had never done before.

The Tuning X Team take home the Excellence Award for the electric vehicle category

The Steel Wire talked to Professor Yoon Jae-Gon, who led 10 members of the Tuning X to victory, to get an in-depth look into the winning electric vehicle.

The Secret to Tuning X’s Success

Like all other major automakers in the world, the biggest obstacle for the Tuning X team was lightweighting their electric vehicle, without compromising the performance of its battery.

Yoon said, “Electric cars are the future of the auto industry, but batteries have a short driving distance, so manufacturers are making batteries bigger and heavier (about 200 ~ 500kg). Despite these efforts, current electric vehicles weigh hundreds of kilograms and cannot go over several hundred kilometers on one charge.”

The motor engine is central to any electric vehicle. For the Tuning X team, they used an AC electric motor which requires a controller, adding more weight to the car. Thus, weight reduction from other sources was absolutely necessary.

How did the team make up for the extra weight?

“We applied magnesium plates for weight reduction to the floor, side, and rear panel of the EV cabin. POSCO’s technical seminars and the production skill training played a vital role. Through this preliminary training, we were able to reduce the number of trials and errors, produce the car in time and end up with the best results possible,” explained Yoon.

POSCO’s magnesium plate applied to the internal, driver side of the vehicle

The team had previously used aluminum, another popular lightweight material, but with the new magnesium plates, they achieved a 5 kilogram weight reduction, from 177 kilograms to 172 kilograms. Yoon added, “Magnesium also showed the same processability as aluminum, and did not require professional processing methods.”

Even as the champions, the team will work on improvements for next year, as defending champions. Their plans include increasing the use of magnesium. Yoon remarked, “If we have a chance, I would like to increase the use of magnesium by using the plates as a base and applying it to the mainframe, knuckle and road wheel in the future.”

The Significance of Magnesium Applications In the Auto Industry

According to Professor Yoon, lightweighting is a trend that is here to stay, especially with the rise of electric vehicles as the next-generation cars. The automotive industry accounts for nearly 25 percent of all greenhouse gas (GHG) emissions in the transportation sector and will face increasing emission reduction policies as countries try to battle climate change.

Lightweighting has numerous benefits in this regard, including increased fuel efficiency, reduced CO2 emissions, improved braking performance, increased acceleration, road protection, increased comfort, increased mileage and environmental sustainability.

Companies started off working to improve internal combustion engines, and the goal was to improve fuel efficiency through downsizing and the use of high-strength steels. Now, they are going further and pairing lightweight materials with electric batteries-the next-generation power source.

An electric vehicle charges at a newly-opened charging station in downtown Michigan (Source: Michigan Live)

“The weight of the vehicle has the most direct effect on fuel consumption. The way to reduce the weight of the vehicle is to reduce the thickness of each part and to modularize the parts, but the most effective way is to lighten the parts through innovative materials. Aluminum, magnesium, and composites are important lightweight materials, and double magnesium alloys and composite materials can be positioned as future lightweight technology materials by improving the reliability of collapse characteristics, achieving economic manufacturing and assembly costs.”

“In addition, the magnesium alloy has been widely used in various fields such as transportation, aerospace, medical care and leisure with its wide marketability. With its light weight, it is possible to install additional safety devices that protect the safety of the driver and will be able to reduce social costs at the same time.” Added Yoon.

“I think that the most important advantage among the various advantages is the environmental contribution. This is because it is possible to reduce gas emissions during the manufacturing process of magnesium alloys and through improved fuel efficiency by lightweighting vehicles.”

Professor Yoon and the Tuning X Team have high expectations for magnesium as a lightweight material of the future. The team will incorporate more magnesium into their upcoming model, and Yoon believes magnesium has the potential to provide effective lightweighting solutions to more and more automakers in the near future.

POSCO will continue to support future automakers as well. Since 2016, POSCO has been supplying magnesium plates and extruded materials free of charge to the winners of the Formula and EV categories. Besides materials, POSCO provides training to make it easier for students to work with and magnesium materials to their cars. POSCO will continue to support student teams to build industry-academia collaborations and provide even more opportunities for students who are the car makers of tomorrow.

Cover photo courtesy of FS Total.

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“Nowadays, all of the electrical instrumentation control facilities use a digital control system with Programmable Logic Controllers (PLC) or Distributed Control Systems (DCS). At that time, the Cold Rolling Maintenance manager gave me the task of drawing up each of the 25 A3 pages of the equipment control block diagram by memory, in a month. It seemed impossible, but I did it faster than anyone.”

The training paid off. In his third year, he quickly detected a disconnection in the winding part of a motor during a daily inspection of the cold rolling mill, preventing what could have been a catastrophic equipment accident.

“As a result, I found the same defect in 5 other motors and repaired them in advance. It was the first time I was commended for my work and since then, I immersed myself in my work because of the rewarding experience.”

Milestones in Suh’s Career

There was plenty more to be commended for after that as Suh became a crucial member of the cold rolling mill.

In 1995, Suh was in control of the rolling equipment brought in from Japan at the Pohang Cold Rolling Mill 1. “I had special orders to figure out how to work with the brand-new equipment without any difficulties as soon as possible. For that to happen, I knew I had to be able to communicate freely with the Japanese supervisor. I spent all my free time outside of working hours learning Japanese. Soon, I was able to converse with the supervisor without any trouble. Of course, I was able to operate the equipment faster and better than anyone else.”

His passion for achievement continued. Starting from 1997, he became a member of a new development Task Force Team (TFT) for the the Cold Rolling Mill 1. Together the team achieved a processing speed of 2,150 mpm which was the fastest among all the steel mills in the world at the time.

Sheets of cold rolled steel

His next task was at Zhangjiagang Pohang Stainless Steel Co., Ltd., in China. It was the source of many problems for POSCO, starting with the vibrations coming from the payoff reel (POR) of the annealing and pickling lines. He tried stabilizing the base and frame, but the vibrations wouldn’t stop. He finally found the root of the problem: it was the oxygen that seeped into the hydraulic oil that caused the vibrations. Right away he installed an air vent and the vibrations stopped.

In 2001, Suh joined the Double Reversing Mill’s new line TFT and successfully completed the planning, design and installation construction of all the equipment. All that was left was the trial when they ran into issues. The Japanese supervisors couldn’t properly laminate the thinnest sheet of steel that was 0.05 millimeters as they insisted on using a roll gap to roll out the steel. Suh thought of a better way. He persuaded his team and supervisors to try combining the roll gap method with the stretch rolling method for better results. His idea was applied right away, to achieve the desired thickness.

Expertise in Cold Rolling

Suh’s numerous achievements coupled with his endless efforts to learn made him an expert in his field of cold rolling.

In 2006, Suh developed a technology called the Roll Force Mode to take care of plate breakage problems. From 2008 to 2009, Suh took successful steps to improve the welding machine for the annealing and pickling process. He achieved an error margin of less than 0.001 millimeters on all the welding equipment.

His latest achievement was in February of this year when his team completed the trial run of the cold rolling process 3 without any external support. The process of rolling Hyper NO had never been done before, so they had to try numerous times to find the most desirable settings for the equipment and the inputs. At the end of the demanding process, they were successful.

Working Philosophy/ Results

In 2011, Suh received the CEO’s Exemplary Award, and was named the Maintenance Man of the Year in 2013. When asked for his secret to success, he answered, “steady learning, deeply caring for the facilities and communicating with my colleagues. If I did not practice these three things, I would not be where I am today.”

Suh Gwang-Il on site at POSCO’s steel mill with his colleagues

Among his colleagues, Suh is known for his ability to identify different equipment and machinery by the sound it makes. It is this kind of practice, unending curiosity and genuine interest in his work that makes Suh Gwang-Il a true master.

POSCO was ranked No. 4 in the same evaluation last year, but this year, it placed first, beating out all domestic Chinese metal companies (including steel). It was followed by the Aluminum Corporation of China, Zaokuang Group, TISCO, Xinxing Jihua Group, the Baosteel Group, the Maanshan Iron & Steel Company, and Angang Steel.

According to the Blue Book of Corporate Social Responsibility 2016, POSCO scored 80.6 points, which is 3.1 points higher than last year, ranking it at No. 32 (the same rank it placed last year) among 300 companies. POSCO has become the only steel company among the 100 CSR foreign-funded enterprises.

The CSR evaluation of the Chinese Academy of Social Sciences has been carried out since 2009. The process consists of selecting a group of 300 companies considering their sales, brand and influence, and then ranking them according to four evaluation criteria: responsible management, market, society and environment. The evaluation is known to uphold strict standards, and is acknowledged as the most authoritative CSR index in China.

POSCO’s achievement in securing the top place for CSR in the steel and metal sector is a result of the enthusiastic social contribution activities carried out by multiple branches in China, listening attentively to the voices of each community. It is expected to be a driving force that will substantialize and reinforce CSR activities based on the great interest and efforts of the entire POSCO Group.

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The recognition ceremony was hosted by the Korean Academic Society of Business Administration and Maeil Business News on October 18 at the Shilla Hotel in Seoul. It took place as a tribute to the distinguished services rendered by various enterprises and entrepreneurs that served as the driving force behind Korea, helping the country become one of the top 10 economic powers of the world.

In the enterprise category, the elected companies included: Samsung Electronics, CJ Cheil Jedang, Amore Pacific, SK Telecom, LG Chem, Hyundai Motor Company as well as POSCO. People who were inducted into the entrepreneur category included: Taejoon Park (the honorary chairman of POSCO), Inhoe Koo, Kunhee Lee, Byungchul Lee, Mongkoo Chung, Juyung Chung and Jonghyun Choi. Among the inductees, Taejoon Park is the only member who is not an enterprise owner-manager, making his achievement a unique and remarkable one.

At a time when POSCO lacked experience and technological means, Park, armed only with the conviction that “Steel is the rice of industry, and that we must make the country rich by making cheap quality steel,” erected the integrated steel mill at Yeongil bay of Pohang, which was a wasteland at the time. Living up to his motto of “I shall dedicate my short life to the eternal fatherland,” he transformed POSCO into a steel mill in 1992 that produced 21 million tons a year. Just 25 years later, he created a stable steel supply system.

Thanks to POSCO, steel-consuming industries such as the automobile, shipbuilding and construction industries, secured superior quality and cost competitiveness to become the leading enterprises of today. One story often told in Korea in industry circles involves the Chinese Community leader Deng Xiaoping. He visited the Nippon Steel Corporation in Japan in 1978 and asked the company’s chairman Yoshihiro Inayama to build a steel plant in China similar to POSCO’s. In response, the Nippon Steel chairman told Deng that “it won’t do you any good unless China has a manager as good as Taejoon Park to run it.”

This anecdote gives us an idea of Taejoon Park’s success story and his reputation as an indomitable driving force. Through his vision and dedication, the honorary chairman spearheaded POSCO’s transformation into the world’s most competitive steelmaker, and laid the foundation for Korea to become a powerhouse in the heavy and chemical industries.

POSCO and its honorary chairman Taejoon Park were elected into the ‘Korean Business Hall of Fame in the entrepreneur and enterprise categories at a ceremony held on October18 at the Shilla Hotel in Seoul. From the left, Changjo You (chairman of the Korean Academic Society of Business Administration), Daehwan Jang (chairman of Maekyung Media Group), Taehee Woo (vice minister of Trade, Commerce & Energy) and Eunyeong Hwang (the CEO of POSCO) can be seen posing for a picture at the ceremony.

“It was the entrepreneurship and can-do spirit of the founders, including the honorary chairman Taejoon Park, that made POSCO the most competitive steelmaker in the world,” said Professor Jinbae Kim of Korea University, who presented POSCO at the ceremony that day. “I sincerely hope that POSCO employees will do their best to enable the company to maintain its status as the best steelmaker in the world by taking in this spirit of entrepreneurship and engraving it in their DNA.”

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