On February 29, POSCO signed a memorandum of agreement (MOA) with Iranian steelmaker PKP to construct an integrated steel mill. (Front row, from left) POSCO Executive Vice President Lee Hoo Geun, PKP Chairman Abdolreza Zoroufchian, and POSCO E&C Executive Vice President Kim Dong Chul. (Back row, from left) Minister of Trade, Industry and Energy Joo Hyunghwan, (fourth) Iranian Minister of Energy Hamid Chitchian.

Under the agreement, POSCO will shoulder 8 percent of the total construction cost of the steel mill—approximately $1.6 billion—and transfer its POSCO innovative steelmaking technology (POIST) to its Iranian partner. PKP will pay for the remaining 92 percent.

POIST is a combination of its own innovative FINEX and compact endless cast and rolling mill (CEM) technologies. FINEX is an environmentally-friendly technology for producing molten metal using powdered iron ore and bituminous coal directly as fuel without needing to undergo pre-treatment. CEM is a technology that reduces energy consumption by integrating the molten metal casting and steel rolling processes into one.

At the MOA signing ceremony, with over 100 participants, including the Minister of Trade, Industry and Energy Joo Hyunghwan, Iranian Minister of Energy Hamid Chitchian and POSCO Group officials, POSCO and PKP agreed to carry out the project in two phases. The first will involve the construction of the integrated steel mill; the second will consist of the establishment of an additional cold rolling and plating line with an annual capacity of 600,000 tons, to help accelerate production of high-value products.

Meanwhile, POSCO Energy and POSCO E&C also signed a memorandum of understanding (MOU) with the Korea Electric Power Corporation (KEPCO) and PKP to build an off-gas power plant and undertake a desalination project. POSCO Energy and KEPCO will be responsible for the operations and maintenance of the power plant and desalination facility, while POSCO E&C will oversee construction of the plant and facility. The power plant and desalination facility will later provide a stable supply of power and water for steel mills and the Chabahar Free TradeㅡIndustrial Zone (CFZ).

The construction site for the integrated steel mill is located in CFZ near the coast of Oman, south of Iran. CFZ is conveniently located due its abundance of raw materials and tax privileges. Before breaking ground in March 2017, POSCO will finalize the specifications for the facilities, and perform technical reviews and due diligence.
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1. Announcing ‘Innovation POSCO 2.0’: Accelerating Business Restructuring
In July, POSCO announced “Innovation POSCO 2.0,” which included five major management reform plans and focused on restoring public trust and securing core competitiveness for the next 50 years. After the announcement, POSCO resolved to overcome crises by holding a briefing on management reform plans and a resolution meeting. POSCO also implemented large-scale company restructuring in August to improved organizational efficiency. Meanwhile, CEO Ohjoon Kwon and executives took the lead in overcoming the management crisis by giving up part of their salaries and repurchasing treasury stocks.

2. POSCO Sold 38 Percent Stake in POSCO E&C to PIF in Saudi Arabia
POSCO sold a 38 percent stake in POSCO E&C to Saudi Arabia’s Public Investment Fund (PIF) in exchange for the sales amount of 1.24 trillion won on September 30. The PIF investment is expected to bring positive improvement to POSCO in its financial structure, and the PIF can rapidly respond to the post-oil era in Saudi Arabia. POSCO E&C and PIF opened a joint operation, POSCO E&C Saudi Arabia (PECSA) in Saudi Arabia on December 21.
Related Article: POSCO Strengthens Business Alliance

3. Extension of Retirement Age to 60 and Introduction of Salary Peak System
POSCO extended the retirement age from 58 to 60, and introduced a 4–year salary peak system. Starting next year, the retirement age will be extended to 60, and according to the salary peak system, employees aged 56 will receive 90 percent of the amount they are paid at the age of 55. The salary will be reduced by 10 percent over the next two years. They will receive 80 percent at the age of 57, and 70 percent from the age of 58 through to 60. POSCO initiated salary peak system in 2011 and reached an agreement with labor on major labor innovation issues, such as the expansion of the salary peak system and a salary system restructuring based on performance.

4. POSCO Named World’s Most Competitive Steelmaker for Six Consecutive Years
POSCO was named the world’s most competitive steelmaker for the sixth consecutive year. The WSD (World Steel Dynamics) ranked 36 steelmakers from around the world by analyzing 23 categories, including production capacity, profitability and technology innovation. POSCO ranked at the top of the world-class steelmaker list, receiving the highest score in four categories, and an average of 7.91 points out of 10. POSCO received positive responses in its sales expansion of World Premium products and solutions marketing, proving POSCO is the world’s best steelmaker.
Related Article: POSCO Named World’s Most Competitive Steelmaker for 6th Consecutive Year

5. POSCO Exports Its Own CEM Technology Abroad for the First Time                                                                                                                                        POSCO signed an agreement on POSCO’s own compact endless casting and rolling mill (CEM) technology licensing and co-marketing with German engineering group, SMS on July 3. CEM is an innovative technology which produces hot rolled coils by integrating continuous casting and rolling process into one. According to the licensing agreement, POSCO will be paid a technology transfer fee from the SMS group, and engage in co-marketing efforts with SMS group for the sale of CEM technology.

6. Visible Progress in Solutions Marketing, Including EOLAB Project
The EOLAB Project, which succeeded in creating new demands by offering technologies for steel materials for car body and chassis, was selected as the best case of POSCO’s solutions marketing. The EOLAB Project is the result of POSCO’s constant effort to improve customer value by providing total solutions, from the development of new steel materials to the manufacturing of components. POSCO has been focusing on expanding its sales channel of World Premium products and improving customer value through human.
Related Article: Renault’s EOLAB Shines at 2015 Seoul Motor Show

7. Introducing ‘POSCO Masters,’ the Highest Honor Awarded to On-Site Engineers
POSCO selected its first POSCO Masters, who are equipped with professional knowledge, and have been leading on-site creative improvement activities and technical competitiveness. Beginning this year, the honorary recipients of the first POSCO Masters are Master Son Byoung-rak, EIC Technology Department at Pohang Works, Master Jo Gil-dong, Steelmaking Department at Gwangyang Works, Master Kwon Yung-kug, Hot Rolling Department at Pohang Works and Master Cho Young-ki, Ironmaking Department at Gwangyang Works. The four POSCO Masters will receive special benefits including treasury stocks, prize money, overseas couple trips and special promotions.

8. Making POSCO an Accident-Free Workplace through Self-Directed Safety Spread
POSCO set 2015 as the starting year for the settlement of its self-directed safety culture and has been striving for the realization of POSCO the Great through the expansion of safety Self-Directed Safety Spread (SSS) activities. POSCO held its “POSCO Family Safety SSS Festival” in January, and awarded prizes to excellent groups and individuals in August. POSCO takes the lead in making POSCO an accident-free workplace through constant safety SSS activities.

9. The 1st and 2nd Special Reward for Innovation POSCO Project
POSCO selected Construction Steel Materials Solution Project Team as the first recipient of Innovation POSCO (IP) Project’s special reward on July 23, awarding 150 million won of incentives for their achievement of excess profit. The IP Project special reward is given to the IP project team in proportion to the outcome, when achieving over 1 billion won of extra profit and the second special reward was awarded to PJT for the construction of a high profit PO-expanded production system in December.
Related Article: Innovation POSCO Grand Project Kick-Off

10. Cessation of POSCO Weekly, Smartization of Communication
POSCO Weekly, a weekly newspaper which delivered POSCO’s latest news and its development and innovation internally and externally for the past 21 years, ceased its publication on July 30. POSCO Today is serving the role of POSCO Weekly, creating POSCO’s unique communication culture, and delivering real-time news of POSCO to its employees. In line with the increased use of internet and mobile devices, POSCO Today is solidifying its position as a group-integrated communication channel, accommodating various needs of POSCO group employees.

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POSCO has many modifiers that follow us, one of it being given by WSD. On February 1st, POSCO has been named “The World’s Most Competitive Steelmaker” by the World Steel Dynamics(WSD), which is a strategic information service providing critical and new perspectives on possible and probable steel industry developments, for 4 years in a row.

Thirty-four steel industries, including POSCO, were judged on basis of their production scale, profitability, innovative technology, reduction of production cost, financial soundness, ability to secure raw materials and 23 additional measures.

POSCO impressed the world with our high level of workmanship, production capacity. Products like Finex, POIST, CEM proved the cutting-edge, leading innovative technology we’ve created and pursued, which also helped increase the competitiveness of raw materials. On sections like profitability, reduction of production costs and expansion into new markets, POSCO scored 7.76 points out of 10, as to be one of the top ranked companies.

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FINEX: POSCO’s own eco-friendly iron making technology that allows the direct use of cheap iron ore fines and non-coking coal as feedback. Having significantly lower operating costs and emissions, Finex dramatically reduces overall construction costs.

POIST: POSCO’s Innovation Steel Technology is POSCO’s own leading-edge refining technology of molten metal for protection of profitability and environment simultaneously.

CEM: Compact Endless Casting and Rolling Mill that have compacted steelmaking, steel performance, and rolling process.

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What’s interesting about this year’s results is that the entire steel industry experienced a down-turn over the years, yet POSCO managed to receive an even better score of 7.48 points that we did the previous years. The gap between POSCO and companies who scored below 7.3 became huge as well.

Following POSCO as 1st place are, Russia’s NLMK placed 2nd, Severstal 3rd and India’s JSW Steel as the 4th place. Companies who were named “The World’s Most Competitive Steelmaker” all possessed self-functioning/ owned steel mines, enabling the competitive supply of base materials. In addition, with the technologies such as solar synergy and enzer, Nippon Steel and Sumitomo Metal became 5th place. Arcelormittal, though it was 1st place in steel production level, scored as 22nd place.

As evident as it is by now, POSCO is currently the 1st place in “The World’s Most Competitive Steelmaker,” for 4 years in a row today. But actually, we have achieved this title during 2002 to 2004 also. We rented the place to other large corporations briefly, namely to Severstal and Tata Steel. Nonetheless, POSCO was able to take the title back since 2010 due to our continuous efforts in reducing production costs, improving profitability, increasing technological researches, and pioneering for new markets. We hope to continue this happy trail and work harder to further develop our skills for the betterment of not just POSCO but the world that we coexist.

< WSD’s World-Class  Steelmaker Rankings as of January 2013>