1. #Winning – competitiveness and sustainability

POSCO was recently named the world’s most competitive steelmaker for the eighth consecutive year by World Steel Dynamics (WSD). POSCO again took home the gold with the highest scores in five categories including innovative technology, cost reduction, skill level of labor, restructuring and investment environment.

POSCO is the world’s most competitive steelmaker.

Not only did POSCO come out on top for competitiveness, the company was ranked 35th among the “Global 100 Most Sustainable Corporations in the World in 2017,” by Toronto-based magazine and research firm Corporate Knights. The list was announced in early 2017 at the World Economic Forum in Davos, Switzerland. This is the third consecutive year POSCO made the list with outstanding scores in safety, environment and the salary levels of employees.

2. Joining the trillion club

POSCO entered the trillion club twice in 2017 as it recorded USD 1.283 billion (KRW 1.365 trillion) of operating profits in the first quarter, and USD 1.0581 billion (KRW 1.1257 trillion) in the third quarter based on its consolidated operating profit. Even in the midst of global oversupply and governments opting for protectionist policies, POSCO’s profits were unscathed. Much of the credit is owed to the company’s steel and non-steel affiliates overseas with strong sales performances. The consolidated debt-to-equity ratio was the lowest since 2010 and the non-consolidated debt-to-equity ratio was at its lowest ever.

POSCO recorded an operating profit over KRW 1 trillion in the first and third quarter of 2017.

To add, international credit rating agency S&P upgraded POSCO’s BBB-plus credit rating outlook to “stable” last February, and Moody’s also upgraded POSCO’s long-term corporate credit rating outlook to “positive” on October 26.

3. Everything’s bigger in…POSCO

Last June, after 102 days of repair, Pohang Blast Furnace No.3 became the world’s fifth-largest blast furnace. Its internal volume expanded from 4350㎥ to 5600㎥, allowing the super-sized blast furnace to put out 15,000 tons of molten metal daily. POSCO currently operates five super-sized blast furnaces, or blast furnaces sized 5500㎥ or larger.

Pohang Blast Furnace No. 3 under construction.

POSCO further upgraded Pohang Blast Furnace No.3 by adding in AI capabilities. It is now equipped with smart technology that can control the internal state of the blast furnace automatically, and smart sensors can now predict accidents before they happen, extending the lifespan of the furnace. Furthermore, POSCO plans to collect big data from the blast furnace and use it to develop fully smart blast furnaces in the future.

4. The smarter the better

Since his taking up the CEO position in 2014, POSCO CEO Ohjoon Kwon has repeatedly expressed his vision for securing future competitiveness through smart solutions. The company even started a smartization training course for employees and held the Smart POSCO Forum 2017 last July to share its insights and progress with clients and affiliates.

POSCO is gaining a competitive edge through smart solutions. (Source: Global Trade Magazine)

Moreover, POSCO also supported a smart talent training project customized for SMEs. The program included job training for AI and big data application technologies. Going forward, POSCO plans to build a “Smart Industry” to increase steel competitiveness and create new business opportunities with new, smart technologies.

SEE ALSO: How Factories Produce Steel- the Smart Way

5. Getting in on electric vehicles

The market for electric vehicles (EVs) is an exciting one with so many companies investing in new technologies. POSCO also hopes to extend its customized material and technology solutions to EV manufacturers. Last October, the company held the Global EV Materials Forum to showcase four of its core business areas: lightweight bodies, batteries, motors and charging infrastructure. More than 380 clients took part in the forum to learn about emerging trends and POSCO’s products and services including POSCO GIGA STEEL and commercially produced lithium batteries for EVs.

POSCO is a solutions provider for EV manufacturers. (Source: Bloomberg)

6. POSCO’s new marketing approach

For the first time ever, POSCO created and aired a TV commercial highlighting a specific product, instead of its corporate brand. This marks POSCO’s first B2C marketing effort and features the company’s innovative auto steel, POSCO GIGA STEEL. The commercial compares POSCO GIGA STEEL to aluminum, another widely-used lightweight material in a visual demonstration so that everyday drivers can better understand the benefits of a stronger yet lighter material.

7. Going for 10 million tons of automotive steel

On April 26, POSCO completed 7CGL, a new steel production facility in Gwangyang, Korea, designed exclusively for the production of POSCO GIGA STEEL. 7CGL has an annual capacity of 500,000 tons and is the world’s first plant capable of producing both 1.5 giga-level galva-annealed (GA) and galvanized (GI) steel sheets.

POSCO Completed 7CGL on April 26, 2017. (Source: Business Korea)

In addition, POSCO managed to reduce investment funds and secure cost competitiveness by designing and constructing 7CGL’s core facilities based on accumulated facility technologies and operating know-how. The 7CGL is POSCO’s 12th plant exclusively for automotive steel sheets, and POSCO aims to sell 10 million tons of automotive steel in 2018 globally.  

8. Setting new records with high manganese

POSCO became the first company in the world to commercialize the technology for producing high manganese using fusible ferroalloys. The technology took KRW 5.5 billion of research and development costs and four years to complete.

POSCO is the first company in the world to commercialize its high manganese production technology. (Source: Eramet)

The core part of POSCO’s high manganese production process is PosLM (POSCO Liquid Manganese), a special holding furnace that stores manganese ferroalloys in a fusible state. POSCO’s technology reduces the production time for high manganese steel by more than 50 percent as well as increases slab production efficiency. PosLM was jointly researched and developed by the Institute of Technology and POSCO M-tech.

9. Bringing home the lithium

On February 7, POSCO opened its PosLX (POSCO Lithium Extraction) plant with an annual capacity of 2,500 tons. The plant is the first plant in Korea capable of commercial lithium production. The technology took 7 years to perfect, but it was well worth it. The production process for high purity lithium now takes just 3 months, compared to the previous 12 to 18 months.

POSCO is making lithium extraction more efficient and sustainable. (Source: Mining)

In the past, Korean manufacturers imported the entire quantity of lithium they needed. With POSCO’s PosLX plant, partners now have access to a local supply of lithium. Moreover, POSCO plans to use lithium phosphate extracted from wasted secondary batteries as raw materials, in keeping with the company’s sustainability standards.

POSCO will continue building on a successful 2017 in the new year, by tackling new challenges and continuing to provide its partners with customized and optimal solutions in all business areas.

Cover photo courtesy of Hitech Building Solutions.

This year, the Corporate Knights released their 13th annual Global 100 list, examining the sustainability efforts of about 4,000 companies with a market value of at least $2 billion. Their methodology looked at 14 key performance indicators (KPIs) covering environmental, social, and financial performance metrics.

The following list looks at the leaders of several industries and what they are doing to remain competitive in today’s challenging market.  

#1 in Metals & Mining – POSCO (#35 overall)

The metals & mining industry is typically associated with high emissions due to the high energy consumption required. POSCO is the only corporation listed in the mining & metals industry, ranking 35th among all corporations across all industries.

[clickToTweet tweet=”POSCO strives to be a leader in sustainable manufacturing and smart factory solutions.” quote=”POSCO strives to be a leader in sustainable manufacturing and smart factory solutions.” theme=”style6″]

POSCO has made significant efforts to be a leader in sustainable manufacturing. Through its smart factory technology, POSCO has refined its production processes, which reduces waste, improves quality, and ensures employee safety. POSCO’s World Premium Product PosMAC has proven to be an ideal solution for solar panels due to its lightweight and durable properties (even being used on floating solar panel farms). More recently, POSCO’s innovations in advanced high strength steels for automobiles have made it the material of choice for automakers looking for low emissions, sustainable solution.

Venturing out beyond the steel sector POSCO developed innovative solutions in the lithium rechargeable battery industry. Its new extraction method takes anywhere from 8 hours up to one month (a significant improvement over previous technologies that took anywhere from 12-18 months). This new technology is also able to extract lithium with a purity rate of 99.9% and increases the recovery rate to over 80% – which reduces the resources needed for extraction making the process more sustainable and eco-friendly.

POSCO CEO Kwon Ohjoon holds lithium carbonate that was extracted using POSCO’s newly advanced technology that reduces time and the resources needed for extraction.

Beyond steel production, POSCO subsidiaries all over the world work to improve the communities around them. Every year more than 80,000 POSCO employees participate in Global Volunteer Week all over the globe, providing support and assistance to those who need it most. POSCO also sponsors the Beyond program, giving university students the opportunity to give back by helping build homes for those in need.       

In addition to The Global 100, POSCO has been listed on the SAM-Dow Jones Sustainability Index for 12 straight years (2005-2016), and World Steel Dynamics (WSD) has named POSCO the most competitive steelmaker in the world for seven years running since 2010. POSCO also recently received awards for its CSR work in China and Southeast Asia.

#1 in Auto Industry – BMW (#16 overall)

For an industry in the midst of radical change and an effort to reposition itself to be more sustainable, BMW leads the group and ranks as the 16th most sustainable corporation.

Sustainability has been an integral piece of the BMW Group’s culture and corporate strategy for decades. In 1973, they became the first automaker to appoint an environmental officer. In 2001, they committed to the United Nations Environment Programme as well as the UN Global Compact and the Cleaner Production Declaration. Today, BMW has a Sustainability Board that defines the strategic alignment through binding targets.

Automated machines work on the assembly line, helping to reduce waste and improve product quality.

The Global 100 specifically noted BMW’s holistic approach in encouraging sustainable production throughout its entire value chain. This includes not just environmental protection, but also supply chain sustainability, employee orientation, and social commitment.

In South Carolina, BMW’s plant uses methane gas from a nearby landfill to generate the power and heat needed for production. In South Africa, they operate a biogas-fuelled heat and power station by processing waste from local cattle and chicken farms.

From planning to production to disposal & recycling, the BMW Group has been dedicated to making each step more sustainable. Apart from advancing electromobility technology in their vehicles, BMW has pushed to purchase raw materials from environmentally and socially friendly sources, reduce environmentally damaging waste water, and use transport vehicles with lower emissions.

BMW sees its future growth as dependent on its ability to become a more sustainable company. Their vision is to be “the most successful and sustainable premium provider of individual mobility” and the measures they have taken are proof of their commitment.

#1 in Industry – Siemens AG (#1 overall)

German industrial conglomerate, Siemens AG, is a major player in the healthcare, energy, industrial, and infrastructure sectors. Siemens defines sustainable development as “the means to achieve profitable and long-term growth…while striving to balance people, environment, and profit.” All of their efforts helped them to be ranked as the most sustainable corporation in the world by the Global 100.

Siemens efforts to cut its carbon footprint in half by 2020 and to be completely carbon neutral by 2030 were a significant factor of its #1 spot. Currently, 50% of energy consumption in Germany come from green energy sources, cutting its 2016 carbon emissions by more than 200,000 metric tons. In the United States, only 20% of its energy comes from renewable sources, but Siemens is on track to have all of its US sites use clean energy sources by 2020. Overall, Siemens plans to shrink its emissions by 750,000 metric tons of carbon dioxide by 2020.

In Thailand, three SGT-400 industrial gas turbines each drive a Siemens barrel-type compressor.

In addition to its commitment to cut its carbon emissions, the Corporate Knights noted Siemens’ efforts to improve the efficiency of energy and water usage, responsible approach to paying taxes, significant investments in innovation, low employee turnover and strong female board representation. More than 30% of the Siemens supervisory board are women and they remain committed to seeing higher representation at lower levels of management as well.

Earlier this year, POSCO CEO Kwon Ohjoon visited Siemens in Germany to learn more about Siemens’ advanced manufacturing technologies and smart factory solutions. Its plant in Amberg is a model smart factory thanks to its 1,000 sensors used to connect its IOT technology, that makes it possible to check for abnormalities at each stage of the production process. These sensors can also stop the production line if any defective products are found and replace them with new ones. Also, with the ability to analyze 50 million pieces of process information per day, Siemens is continuously optimizing its production processes to ensure the lowest possible rate of defects.

POSCO remains committed to working with partners like Siemens while continuing to optimize its plants and processing centers to be more sustainable for its customers, employees, and partners.

Using publicly available data, Corporate Knights examined about 4,000 companies with a market value of at least $2 billion. Their methodology looked at 14 key performance indicators (KPIs) covering environmental, social, and financial performance metrics. KPIs included energy efficiency, greenhouse gas emissions management, atmospheric environment management, water resources management, waste recycling, innovation capacity, tax rates, wage disparities, pension fund ratios, safety performances, turnover rates, diversity, and links between sustainability performance and compensation.

POSCO received high marks for its safety performance, water efficiency, waste recycling, and the levels of average employee wages compared to CEOs.

POSCO ranked first among other Korean companies with Shinhan Financial Group (40th) and LG Electronics (65th) also being listed on The Global 100. German conglomerate Siemens topped the list, followed by Storebrand ASA (Norway) and Cisco Systems Inc (USA). Johnson & Johnson placed 8th, Coca-Cola 48^th, and GE 99^th (see the full list).

These evaluations are significant in that they recognized POSCO’s efforts to secure a sustainable future despite increasingly difficult market conditions such as global over supply of steel, sluggish demand, and strengthening trade regulations.

In addition to The Global 100, POSCO has been listed on the SAM-Dow Jones Sustainability Index for 12 straight years (2005-2016), and World Steel Dynamics (WSD) has named POSCO the most competitive steelmaker in the world for seven years running since 2010.

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Since 2005, the WEF has released the Global 100 Most Sustainable Corporations in the World Index (Global 100 Index) through Corporate Knights, the Canada-based media and investment advisory company. In the belief that corporate competitiveness and sustainability involve not only a company’s financial performance but also its contribution to environmental and social sectors, corporations are evaluated across 12 “key performance indicators” and ranked accordingly.

Receiving favorable evaluations in R&D innovation, energy efficiency and governance index, among others, POSCO maintains its leading position in the domestic manufacturing industry. Among Korean corporations, Shinhan Bank (18th), LG Electronics (44th) and Samsung Electronics (94th) also made the list. Meanwhile, BMW, the German automobile company, came in first while other global conglomerates such as Coca Cola (13th), Intel (38th) and GE (70th) followed.

Being selected as one of the top 100 corporations in 2016 is significant, as there were many difficulties in the market last year, including global oversupply, slumps in major industries and strengthened import regulations in export destinations. Furthermore, structural regulation was conducted for financial structure improvement.

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Since 2005, the Davos Forum has been announcing the ‘Global 100 Most Sustainable Corporations’ (hereinafter referred to as Global 100) through the Canadian media-investment consulting company, Corporate Knights.

Corporate Knights examined companies with significant global market capitalization to select the Global 100. Companies were evaluated on 12 main indices, including energy productivity, innovative capacity, staff turnover, and staff versus CEO compensation. In order to achieve high rankings, companies must score well on social, environmental and financial scores, rather than solely on financial measures.

This year’s Global 100 lists four Korean corporations, including POSCO. After ranking 30^th, the best ranking ever for Korean corporations in 2012, but POSCO wasn’t included in the Global 100 for the two years following. However, POSCO re-entered at 36^th this year, as the first evaluation conducted since the inauguration of CEO Ohjoon Kwon. On the other hand, Samsung Electronics ranked 45^th, LG Electronics ranked 51^st, and Shinhan Financial Group ranked 70^th.

POSCO’s highest ranking of any Korean corporation on the list shows that it has been recognized for the efforts of its staff and executives to create a good workplace with reduced staff turnover through sustainable management. It also brought positive results in terms of transparency of information release, including the *ESG integrated report by POSCO affiliates implemented since last year. POSCO was highly praised for the way it has carried out added-value improvements, such as making steel by-products resources and reusing, and in enhancing innovative capacity through R&D investment.

Along with the selection in the Global 100, POSCO has been selected as an excellent corporation in the SAM-Dow Jones Sustainability Indexes for 10 years running, which is the first case for any company in the steel industry. In particular, POSCO has been awarded in three sectors; POSCO has won the ‘Industry Leader’ as well as the ‘Industry Mover’ who get the highest rated compared to last year, as well as ‘Gold Class’ for being in the 1% of industry leaders.

Meanwhile, POSCO was selected as the ‘No.1 steel competitiveness of the world’ last year by World Steel Dynamics (WSD), a global steel specialized analysis institute. It was the fifth time running to win the prestigious title. The WSD has conducted its evaluation based on 23 indices, including the size of production and profitability, technology innovation, price determination power, cost reduction, financial soundness and securing raw materials, among 36 steel corporations worldwide.

*ESG 
Since corporation results in the area of Environment, Social and Governance do not appear in the financial element, ESG is defined as the core evaluation element when deciding investment under the UN Principles for Responsible Investment.