POSCO Group produces the core steel materials required to drive the global shift toward decarbonization. Through high-performance steel products and tailored solutions, the Group enhances safety, efficiency, and durability across industries including oil and gas, power generation, and renewable energy, contributing to the sustainable growth of the global energy sector. Here, we take a closer look at POSCO Group’s key steel products that are shaping the future of energy infrastructure.

Powering the Energy Transition with POSCO Group’s High-Performance Steel

The global energy landscape is undergoing a profound transformation. While technologies such as renewable energy, hydrogen, LNG, and CCUS continue to advance in pursuit of carbon reduction, it is advanced materials that ultimately enable these innovations to become reality. POSCO Group is supporting the advancement of next-generation energy infrastructure by providing steel engineered to perform under extreme environments and demanding conditions. From PosMAC, a high-corrosion-resistant alloy-coated steel used in renewable energy infrastructure, to steel forming the foundation of hydrogen pipeline systems, high-manganese steel recognized as a key material for liquefied hydrogen storage tanks, and LT-FH36, a core steel for LCO₂ carriers, POSCO’s high-performance steel products are applied across a wide range of energy transition industries, each tailored to specific application requirements.

Strengthening ESS Safety with PosMAC: A High-Corrosion-Resistant Alloy-Coated Steel

▲ PosMAC is used as a material for ESS battery cases developed by LG Energy Solution.

As renewable energy expands and power efficiency becomes increasingly important, demand for energy storage systems (ESS) continues to rise. Because ESS must store electricity safely and reliably over long periods, corrosion-resistant materials are essential. POSCO’s high-corrosion-resistant alloy-coated steel, PosMAC, is widely used in ESS battery enclosures, ensuring long-term stability and durability.

PosMAC offers more than five times the corrosion resistance of conventional galvanized steel, maintaining reliable performance even in coastal, high-humidity, and high-salinity environments. This durability helps reduce carbon emissions and overall lifecycle costs. As a result, PosMAC is extensively applied across renewable energy infrastructure, including wind turbine tower components, offshore wind structures, and solar module mounting systems. By extending equipment lifespans and reducing maintenance requirements, PosMAC plays a key role in driving the growth of sustainable energy.

Beyond ESS battery enclosures, PosMAC is expanding into a wider range of components, including racks and Battery Protection Unit (BPU) cases. Through close collaboration with customers, POSCO continues to enhance the product’s reliability and application range, reinforcing PosMAC’s position as a core material in the renewable energy industry.

Steel for Hydrogen Pipelines: The Foundation of Hydrogen Infrastructure

▲ Model of hydrogen pipeline steel exhibited at the POSCO Group booth at the 2025 International Climate Industry Expo.

Hydrogen is a cornerstone of future clean energy systems, requiring uncompromising safety throughout its entire value chain—from production and storage to transportation. In particular, pipelines transporting high-pressure gaseous hydrogen must resist hydrogen embrittlement* while maintaining reliable performance under extreme conditions.

*Hydrogen embrittlement: A phenomenon in which hydrogen penetrates a material, significantly reducing the ductility and toughness of the metal.

POSCO’s steel for hydrogen pipelines was designed to meet these stringent requirements. By replacing imported seamless pipes previously used for hydrogen transport, POSCO has enabled domestic production while offering strong cost competitiveness, supplying the product at approximately 70% of the cost of imported alternatives. The steel provides sufficient strength and toughness to withstand impact at temperatures as low as –45°C, not only in the pipe body (base material) but also at welded joints. After rigorous testing by international certification bodies, it has been confirmed to meet hydrogen pipeline performance standards, earning official recognition for its safety and reliability.

By 2025, POSCO plans to introduce high-strength materials compliant with API X70 standards for use in high-pressure environments of up to 100 bar. Demonstration and verification testing will be conducted in collaboration with Korea Gas Corporation (KOGAS), Korea Gas Safety Corporation (KGS), Korea Research Institute of Standards and Science (KRISS), and domestic steel pipe manufacturers.

*API (American Petroleum Institute): An organization that establishes international standards for pipelines and steel products used in the oil and gas industry.

Challenging –253°C: High-Manganese Steel for Liquefied Hydrogen Storage Tanks

▲ Model of high-manganese steel liquefied hydrogen storage tank exhibited at the POSCO Group booth at the 2025 International Climate Industry Expo.

Liquefied hydrogen (LH₂) is drawing global attention as a core technology for hydrogen transportation and storage in the hydrogen economy. Stored and transported at an ultra-cryogenic temperature of –253°C, liquefied hydrogen places significantly higher demands on storage tank materials than liquefied natural gas (LNG), which is handled at approximately –163°C. Against this backdrop, POSCO’s high-manganese steel is recognized as a key material capable of maintaining stability under such extreme conditions.

Independently developed by POSCO as the first of its kind in the world, high-manganese steel contains more than 22% manganese (Mn). It offers outstanding performance at cryogenic temperatures while offering a unique combination of high strength, excellent wear resistance, and non-magnetic properties that minimize electromagnetic effects. Its yield strength exceeds 335 MPa—approximately twice that of conventional stainless steel—while high elongation ensures excellent formability. In addition, relatively low manufacturing costs* contribute to its economic competitiveness. As a result, high-manganese steel is widely used in LNG infrastructure, including storage tanks, carriers, pipelines, and terminals.

*Manganese used in high-manganese steel is abundant worldwide and relatively inexpensive.

▲ Inside view of Tank No. 7 at Gwangyang LNG Terminal 2. High-manganese steel has been applied to the inner tanks of Units 5 and 6, and it is planned to be applied to Units 7 and 8 to be constructed in the future.

Over the past decade, POSCO’s high-manganese steel has proven its reliability through certifications from leading global classification and certification bodies. In 2022, the International Maritime Organization (IMO) formally adopted international technical standards governing its application, allowing the material to be used in cryogenic cargo and fuel tanks without separate flag-state approval. In 2024, it was further registered under standards applicable to both LNG and ammonia cargo and fuel tanks.

Building on its extensive experience in LNG infrastructure, POSCO is working to improve the performance of high-manganese steel so that it can reliably withstand impact even at –253°C. Going forward, the company plans to conduct demonstration projects and feasibility assessments through the fabrication of liquefied hydrogen storage tanks in collaboration with customers, aiming to secure both safety and economic viability for future hydrogen infrastructure.

Applied to the World’s Largest 22,000㎥ Vessels: Steel for LCO₂ Carriers

▲ AI virtual image of a liquefied carbon dioxide (LCO2) carrier.

Liquefied carbon dioxide (LCO₂) carriers are specialized vessels designed to safely store and transport carbon dioxide captured through CCUS processes after it has been cooled and compressed into liquid form. As the carbon capture and storage (CCS) industry continues to expand, the need for materials that support safer and more efficient vessel operations is becoming increasingly critical.

Unlike LNG and ammonia, which can be transported in liquid form under low-temperature conditions alone, carbon dioxide must be transported under both low temperature and controlled pressure. Scaling up liquefied carbon dioxide storage tanks therefore requires advanced steelmaking technologies.

POSCO’s LT-FH36 steel for LCO₂ carriers is engineered to maintain stable performance at temperatures as low as –60°C, reflecting the design conditions of low-pressure LCO₂ tanks. It can be applied in thicknesses of up to 50 mm and provides a yield strength exceeding 355 MPa. Even after post-weld heat treatment (PWHT), the steel maintains stable mechanical properties, ensuring long-term reliability in environments with elevated risks of corrosion and structural failure.

LT-FH36 is the world’s first steel to receive certification for use in large-scale liquefied carbon dioxide transport tanks. In 2023, at the international maritime exhibition Nor-Shipping, Lloyd’s Register (LR), a globally recognized British classification society, awarded POSCO official certification for steel used in large-scale LCO₂ carriers.

▲ The world’s largest 22,000㎥ liquefied carbon dioxide (LCO₂) carrier currently under construction at HD Hyundai Mipo. It uses POSCO’s LT-FH36 steel.(Photo source: HD Hyundai Heavy Industries)

LT-FH36 is currently applied to the world’s largest 22,000m³-class liquefied carbon dioxide carriers. In anticipation of the industry’s shift toward ultra-large storage tanks to improve transport efficiency, POSCO has also become the first in the world to complete the development and certification of LT-FH51, a higher-yield-strength steel grade. Over the longer term, the company plans to introduce even stronger grades, such as LT-FH70, further strengthening the safety and efficiency of next-generation LCO₂ carriers.

From PosMAC and steel for hydrogen pipelines to high-manganese steel and LT-FH36, POSCO Group’s independently developed high-performance steel products are delivering greater safety, efficiency, and sustainability across the energy industry. POSCO Group will continue to strengthen its materials technologies to help shape the infrastructure of the future global energy landscape.

POSCO Group, which holds core capabilities across the entire value chain—from energy business development to materials supply and Engineering, Procurement & Construction (EPC)—is accelerating its energy transition strategy by consolidating business capabilities and synergies in preparation for the upcoming decarbonization era. In particular, the Infrastructure Division, which includes diverse business units such as energy, construction, infrastructure, DX, and logistics, is expanding its energy transition initiatives centered on POSCO International. These efforts include advancing hydrogen co-firing power generation, which is emerging as a realistic power generation option during the decarbonization process, securing renewable energy sources such as onshore/offshore wind power and solar power, and accelerating the development of high-quality energy steel. Let’s take a closer look at POSCO Group’s energy transition strategy toward decarbonization.

POSCO International, which operates the 3.4 GW Incheon LNG complex power plant, is advancing a hydrogen co-firing initiative that replaces 20% of the LNG fuel used in its power plant with clean hydrogen. Hydrogen co-firing power generation refers to a method of generating electricity by combusting a mixture of natural gas (LNG) and hydrogen in a gas turbine*. Increasing the hydrogen ratio reduces CO₂ emissions generated during the power generation process. As it enables the use of existing power generation facilities while reducing carbon emissions, hydrogen co-firing power generation is emerging as a practical power generation method and a transitional bridge toward decarbonization.

*Gas turbine: A core component of combined cycle power plants that generates electricity by combusting fuel and converting high-temperature, high-pressure gas into rotational force. It can operate not only on natural gas but also on fuels such as hydrogen, offering flexibility for diverse energy mixes.

▲ Scale model of a gas turbine for hydrogen co-firing power generation under development by POSCO International.

POSCO International plans to replace Units 3 and 4 of the seven combined cycle power units at the Incheon LNG complex power plant with high-efficiency power generation facilities capable of using clean hydrogen fuel. Through hydrogen co-firing, the company expects to reduce CO₂ emissions by up to approximately 35%. Starting with Units 3 and 4, POSCO International will gradually transition additional facilities and increase the hydrogen co-firing ratio, ultimately aiming to operate the plant as a 100% hydrogen-based power generation facility by 2050.

Furthermore, to ensure a stable supply of clean hydrogen—which is essential for operating hydrogen co-firing power generation—POSCO International is actively participating in global clean hydrogen production projects in North America, the Middle East, and Australia. It is also developing transport and storage infrastructure using ammonia. In January 2024, POSCO International, together with POSCO Holdings, signed the “Strategic Cooperation Agreement (SCA) for a Joint Investigation of Clean Hydrogen Production Business” with ADNOC, an oil corporation run by Abu Dhabi, UAE. Through such partnerships, the company is proactively building the clean hydrogen supply infrastructure required for hydrogen co-firing power generation.

Photo source: POSCO International

Incheon LNG Combined Cycle Power Plant Operated by POSCO International POSCO International operates a total of seven combined cycle power generation units, with a facility capacity of 3,412 MW, accounting for about 10% of the metropolitan area’s power generation facilities. With very short start-up/shutdown times, the plant can respond quickly to fluctuations in national power demand, contributing to the country’s energy security. POSCO International applies IoT and big data to its power plant operation technology, running it as a smart power plant.

To address the global climate crisis, governments and corporations around the world are accelerating the transition to renewable energy sources such as offshore wind power and solar power. POSCO Group is also expanding its renewable energy business by integrating its differentiated capabilities across project operation, EPC, and materials supply, creating strong synergies.

POSCO International Operates Onshore and Offshore Wind Power Farms and Solar Power Plants

▲ View of the Sinan Green Energy onshore wind farm operated by POSCO International.

POSCO International is leading the future energy transition by leveraging the abundant onshore and offshore resources of Sinan, Jeollanam-do. Shinan Green Energy, a subsidiary of POSCO International, has installed 20 wind turbines in Jaeun-myeon, an area with excellent wind conditions, operating an onshore wind farm with a total capacity of 62.7 MW since 2016. The electricity generated is sufficient to supply approximately 31,000 households in the Sinan and Mokpo regions, reducing CO₂ emissions by roughly 49,000 tons annually.

As Shinan Green Energy expands its renewable energy initiatives centered around Sinan, Jeollanam-do, it is also actively engaging in community contribution activities. Since commercial operations began in 2017, the company has pledged 1.5% of annual revenue to Sinan’s development fund for 10 years, and has donated KRW 800 million to support the construction of a multifunctional community center—demonstrating its commitment to coexistence with the local community alongside renewable energy production.

Their wind power market expansion continues offshore as well. In 2017, POSCO International obtained approval to develop a 300 MW offshore wind farm west of Jaeundo Island in Sinan and has since continued its development efforts. The company is further expanding its offshore wind power business through increased collaboration with global industry leaders.

▲ Model of POSCO International’s renewable energy complexes displayed at the 2025 International Climate Industry Expo, showcasing onshore and offshore wind farms and solar power facilities in Sinan, Jeollanam-do

POSCO International also operates a large-scale 14.5 MW solar power complex in three phases across a former salt field in Palgeum-myeon, Sinan. By utilizing unused salt field land, the solar complex minimizes environmental impact while taking advantage of the high solar radiation characteristic of salt pans to generate efficient renewable energy. It produces approximately 18,000 MWh of electricity annually, enough to power around 5,300 households, which translates to a reduction of about 7,600 tons of CO₂ emissions and an environmental benefit equivalent to planting 2.2 million pine trees each year.

▲ Introduction video of POSCO International’s onshore and offshore wind farms and solar power complexes in Sinan, Jeollanam-do (Video source : POSCO International YouTube)

POSCO E&C Constructs the Ulsan Firefly Floating Offshore Wind Power Complex

▲ Rendering of the Ulsan Bandibbul floating offshore wind farm under development by POSCO E&C and Equinor.

POSCO E&C, drawing on extensive experience in offshore construction and power plant development, is advancing into the offshore wind power sector through collaboration with global offshore wind power specialists and domestic academic institutions. In 2023, it signed an MOU with Norway’s DNV to secure optimized design technology for fixed and floating offshore wind power substructures. In September 2024, it strengthened its competitiveness further by partnering with Equinor, Norway’s state-owned energy company and the only global developer with proven experience in floating offshore wind power.*

*Floating offshore wind power: Unlike conventional fixed offshore wind power, which installs foundation structures on the seabed, floating offshore wind power uses buoyant structures that support wind turbines on the ocean surface. This allows installation in deeper waters where stronger and more stable winds can be harnessed, minimizes seabed construction, reduces environmental impact, and enables more flexible installation and relocation.

POSCO E&C, in collaboration with Equinor, is constructing a 750 MW floating offshore wind power complex through the Ulsan “Firefly” offshore wind power project. The large-scale project involves installing fifty 15 MW wind turbines approximately 70 km east of Ulsan Port. POSCO E&C is strengthening its construction capabilities through activities such as Front-End Engineering Design (FEED) and conceptual design for onshore transmission lines.

Additionally, POSCO E&C is enhancing collaboration with POSCO to strengthen technological competitiveness and cost efficiency in offshore wind power. The company is particularly focused on independently developing floater technology using POSCO’s high-performance thick steel plates. Internalizing the technology for key components and structures is expected to serve as a crucial foundation for achieving leadership not only in the domestic market but also in the global offshore wind power market.

Furthermore, POSCO Group is accelerating the energy transition by collaborating with global renewable energy companies to lead and strengthen competitiveness in the offshore wind power industry.

POSCO Future M Produces Renewable Energy through Rooftop Solar Panel Structures

▲ Solar power facilities at POSCO Future M’s Gwangyang cathode plant, installed in February 2024 in collaboration with POSCO International. Since 2021, POSCO Future M has also operated rooftop and parking lot solar installations at its Sejong anode plant, producing 209 MWh of renewable energy annually.

POSCO Group is proactively expanding renewable energy production and usage across its subsidiaries. In February 2024, POSCO Future M, in collaboration with POSCO International, installed 2.2 MW of rooftop solar panels at its Gwangyang cathode material plant. POSCO International produces 2.6 GWh of renewable energy annually from these panels and secures Renewable Energy Certificates (RECs), which POSCO Future M purchases to support its RE100 commitments—creating a sustainable circular system.

Recently, POSCO Future M signed an agreement with SK Innovation E&S to jointly promote a solar power generation project. SK Innovation E&S will install 2.5 MW of solar panels on the factory rooftops and parking lots, generating 2.8 GWh of renewable electricity annually. POSCO Future M plans to purchase this electricity for plant operations, expecting to reduce carbon emissions by approximately 1,300 tons per year.

Going forward, POSCO Future M plans to review additional installations of solar power generation facilities at sites such as its dedicated Gwangyang NCA cathode material plant, and to diversify its renewable energy procurement methods through Power Purchase Agreements (PPAs) and REC purchases.

Materials also play a critical role in POSCO Group’s diverse energy businesses. Renewable energy, Energy Storage System (ESS), LNG, hydrogen, and Carbon Capture, Utilization and Storage (CCUS) projects require specialized steel products tailored to their unique operational environments. Because temperature, pressure, and corrosion conditions vary greatly by application, general structural steel cannot ensure adequate performance or safety. POSCO produces and supplies high-quality, proprietary energy steel designed specifically for various domestic and international energy applications.

▲ POSCO’s energy steel products at the 2025 International Climate Industry Expo — PosMAC for ESS, steel for hydrogen pipelines, and high-manganese steel.

A representative example is PosMAC (POSCO Magnesium Alloy Coating Product), an ultra-corrosion resistant alloyed steel plate that applies an alloy coating layer containing magnesium (Mg) and aluminum (Al). It offers superior strength and durability compared to conventional galvanized steel sheets. Its excellent corrosion resistance extends product lifespan by reducing replacement cycles, thereby reducing raw material usage and lowering carbon emissions during manufacturing and transportation. POSCO plans to expand the use of PosMAC in key ESS components, such as battery cases, racks, and BPU cases, through collaboration with customer companies.

▲ LNG storage tank model built with POSCO high-manganese steel.

POSCO’s high-manganese steel—developed as a world first—has higher strength than stainless steel and remains intact even at -196°C, making it suitable for safely storing and transporting LNG and liquefied hydrogen. POSCO is also strengthening market competitiveness through the development of additional energy-related materials, including steel for hydrogen pipelines that resist high pressure and hydrogen embrittlement, and LT-FH36 steel for liquefied CO₂ carriers. POSCO Group plans to build a global energy transition ecosystem by expanding the development and production of high-quality special steel made with its proprietary technologies.

POSCO Group’s energy transition strategy goes beyond short-term carbon reductions and focuses on building a sustainable industrial ecosystem. We look forward to your continued interest and support as POSCO Group advances toward the decarbonization era and drives its energy transition initiatives forward!

POSCO introduced its advanced solution marketing campaign ranging from energy steel products to end products at OTC held in Houston, Texas, on April 30th.

POSCO decorated various technologies and solutions in the Main hall

The main purpose for the convention was maximizing promotion activity by POSCO’s unique solution program. Therefore, from the last year, POSCO set up the booth in the main hall (NRG Center) with the global major companies including Exxon, Siemens and GE. POSCO is the first domestic company that set the booth at NRG center.

Technologies from the fundamental materials to final products

POSCO has got huge attentions from by participants by presenting various unique solutions ranging from materials and end products, including 9% Ni steel LNG storage tanks and LNG fueled ship equipped with storage tanks made of high-manganese steel, large diameter thick wall welded steel pipe that POSCO’s high-strength panels applied and the Fitting, the joint between the pipe, the world’s leading wire rope that is made of ultra-high-strength for offshore construction, membrane for fuel storage of LNG carrier and tubes for energy mining.

Strengthen the relationship with global partners

In addition, POSCO and marine equipment manufacturers held a technical meeting with EPC (Engineering, Procurement and Construction) companies to discuss and encourage new projects. POSCO also engaged in consultations with a range of companies, including potential clients located near Houston in order to penetrate a new market for World Premium steel products.

POSCO has been participated the OTC every year since 2008 and established strong network with major oil companies and global ETC companies and promote POSCO’s finest high manganese steel.

Yet, the quality standards for advanced steel used for drilling, producing, transporting, conserving and handling energy resources for oil and gas are becoming stricter so that steel can better endure the harsh drilling environments of the deep sea and polar areas, two domains on the radars of oil exploration geologists.

At this year’s Offshore Technology Conference (OTC), the world’s largest marine technology exhibition, which was held from May 4 to 7 in Houston, Texas, POSCO showcased its efforts on such developments. Included were its lineup of high-grade steel products, as well as the firm’s cross-department collaboration system between steel plants, laboratories and marketing departments, among others, to improve the development of functional, advanced steel.

Considered the leading forum for gathering and sharing offshore oil and gas information (as well as unveiling some impressive machinery), the goal of the conference, according to its website, is to “advance scientific and technical knowledge for the safe, environmentally friendly and sustainable development of offshore oil and gas resources.”

Despite recent low oil prices, the 2015 OTC attracted over 94,000 attendees, making it the sixth largest in its 47-year history. Additionally, approximately 2,700 major oil and global EPC (Engineering, Procurement and Construction) companies from 37 countries participated.

Among these, POSCO represented South Korea, aiming to continue its solution marketing activities for advanced steel for energy, production and technology, as well as steel utilization techniques.

Introducing a variety of the company’s products and technologies, POSCO’s exhibition consisted of four zones: energy plants, energy pipes, shipbuilding, and manganese steel sectors. At the booth, a video on steel-making technology was presented to help attendees better understand steel products.

POSCO displayed its strength as a “total solution provider,” which has helped the firm to simultaneously strengthen its position in the steel market and discover new business opportunities.

Since it first participated in the OTC in 2008, POSCO has operated a booth annually as part of its demand development activities, which have led to the company’s increasing development of energy steel in a short period of time. Moreover, POSCO’s progressive product promotion and supplier certification activities have resulted in a successful long-term contract for the blanket supply of energy steel, and have solidified technical cooperation with clients.

As new advancements are made in offshore drilling technology, the utilization of steel in the industry will also evolve. POSCO will continue to adapt to such changes, and will work hard to manufacture sustainable, quality products to meet the demands of its clients.

POSCO-America TSC (Technical Service Center) is strengthening its technical services and solution-based marketing support for its US and Mexican clients. The company opened last year with two offices in Mexico City, the capital and largest city in Mexico; and Birmingham, Alabama. Past January, it opened one more place of business in Houston, Texas. Based in these three cities, POSCO-America TSC is engaging in technical services and EVI (Early Vendor Involvement) activities for its clients in North and Central America, in which automotive and energy steel products are in high demand. Mexico is a global automotive industry hub. World’s top-notch automakers such as Nissan, GM and Volkswagen have active business operations in the country.

POSCO-America TSC Mexico City is currently focusing on automotive industry, providing technical services while working hard to develop new clients. It is also pursuing a certificate in automotive steel products. In an effort to increase the sales of steel products produced by POSCO and its local sales unit, POSCO-Mexico, the company is exchanging information with local processing centers and distribution corporations. POSCO-America TSC is scheduled to open a new business operation in Detroit, Michigan, within this year. Many global automobile manufacturers have headquarters and R&D centers in the city. Once it is opened, the Detroit office will dedicate itself to providing technical services for car companies in North America, as POSCO-America TSC Birmingham does.

Houston along with Scotland’s Aberdeen are two of the global energy industry hubs.  Located in Houston are companies from various sectors of the energy industry, such as Exxon Mobil, Shell, EPC (Engineering, Procurement & Construction) corporations and equipment fabricators. For this reason, POSCO-America TSC Houston is striving to get information about new business opportunities, by engaging closely with its key clients. As a result of all these efforts, POSCO-America TSC successfully signed a contract to supply GI (galvanized steel) products to a major US truck maker. Upon hearing that the GI materials the truck maker had been supplied were often flawed, POSCO-America TSC proposed a solution, in an effort to win trust from the company (and it worked perfectly!). The employees of POSCO-America TSC Mexico City demonstrate a high level of satisfaction with their everyday lives, due much to mild climate and friendly locals.

In addition, they take a great pride in representing POSCO’s automotive and energy steel business in the country with great growth potential. Living up to the motto, ‘POSCO the Great’, all the employees of POSCO-America TSC will enhance its efforts to provide its clients with upgraded technical services and solution-based marketing support. In addition to pursuing a certificate in automotive steel products, POSCO-America TSC will seek to strengthen partnership with key clients through more frequent contact with them. The company also plans to form a consultative group with local manufacturers, to improve the quality of its products.

1. CEO Ohjoon Kwon 

POSCO’s 8th CEO Ohjoon Kwon was officially inaugurated in March. CEO Kwon has shown a strong will to actualize POSCO’s vision, ‘POSCO the Great’ by enhancing steel competitiveness based on distinctive technological skills, wise decisions and concentration.

In pursuit of the group’s vision, CEO Kwon has been actively engaging in various activities. Visiting numerous global sites, he encouraged and applauded the accomplishments of all employees. Furthermore, as a member of the World Steel Association’s board of directors and an official member of the execution committee, CEO Kwon exchanged perspectives on the steel industry with leaders of fellow global steel companies. Through diverse opportunities of meetings, he has shown engaged and flexible communication with employees as well. Moreover, CEO Kwon visited client companies such as Hyundai Heavy Industries to inspect current status of solution marketing and announced POSCO’s new business strategy at an investor relations meeting for stakeholders and investors. Ever since his inauguration, CEO Kwon has been passionately leading toward ‘POSCO the Great’ by directly managing major topics of clients and investors.

More details are available here at Inauguration of Ohjoon Kwon and Vision for ‘POSCO the Great’ and POSCO the Great! CEO Ohjoon Kwon Speaks about POSCO’s Vision & Direction

2. Creative Economy
POSCO’s mutual growth activities for 2014 Creative Economy evolved in many different forms. Fostering venture business through ‘Idea Market Place’, POSCO took the lead of the creative economy in Korea. Especially, POSCO Partner’s Day event provided a platform for companies to share cases of mutual developments. Also at the event, POSCO announced the mutual growth vision, ‘Win-win for the Great’, inspired by ‘POSCO the Great’, to promote both POSCO group and SMBs to expand further in the future. As a result of POSCO’s contribution to creative economy, President Park Geun-hye visited No.3 FINEX plant and Pohang Creative Economy Innovation Center to encourage the notable performance. Officially opening in 2015, the Creative Economy Innovation Center is expected to promote POSCO’s creative economy activities and add more to revitalization movement for creative economy.

3. Solution Marketing

The key point of solution marketing lies in clients. By combining technology and marketing, POSCO has strengthened its competency by offering new and distinctive values to POSCO’s clients. With Steel Solution Center’s operation, POSCO provided preemptive actions to the clients and focused on the sales of strategic products such as marine and energy steel material. Moreover, the launch of Technical Service Centers has created opportunities to provide various solutions to clients more closely. Furthermore, other examples of successful solution marketing include POSMAC, an ultra-corrosion resistant alloyed steel plate, high-manganese steel LNG storage tank and a concept car ‘EOLAB’ which received spotlight at 2014 Paris Motor Show. As a result to many efforts, POSCO’s Global EVI Forum in October, was lauded as POSCO’s distinctive client-oriented marketing festival. POSCO’s solution marketing to enhance client value will continue in 2015 as well.

More details are available here at 2014 POSCO Global EVI Forum.

4. POSTIM
POSCO’s POSTIM is an innovative model developed and applied to achieve the corporate vision of `POSCO the Great’. POSTIM, which stands for POSCO Total Innovation Methodology, is designed to improve the previous innovation system by integrating employees, affiliates, tasks and innovation. POSTIM consists of PWS, QSS+, and SWP activities. Each activity act as an engine for implementation to practice the management ideologies. In fact, on the 4th of December, the Innovation POSCO Festival 2014 took place for the purpose of looking back on the efforts and traces of innovation throughout the year.

More details are available here at POSTIM.

5. Financial Structure Reformation
The financial structure reformation is one of the innovation agendas suggested by CEO Kwon. In April, POSCO successfully won project financing for Australia’s Roy Hill Mine project. By this means, POSCO, holding 12.5% of the mine’s stake, will be provided with at least 11 million tons of high-quality iron ore every year for the following 27 years. Moreover, POSCO promoted to sell its LNG Terminal, Posfine and POSCO-Uruguay while signing a MOU with SeAH Group and sold specialty steel affiliate to SeAH Besteel. In addition, POSCO has secured financial liquidity by selling Vietnam’s Diamond Plaza (POSCO E&C) and Masan city’s Daewoo Department Store (Daewoo International). As shown, this year was a significant time period for POSCO, considering that POSCO pursues to secure its steel business competency by achieving financial solvency.

6. Working Process

Experiencing a series of innovation throughout the year, POSCO has stepped forward in working method as well.

[Applying ‘Project-based Working Process’]
The ‘Project-based Working Process’ identifies projects that will help to improve profitability and accomplish qualitative goals. Also, this work method puts heavy emphasis on creating outcomes.

[Specialist and PCP-oriented Project in Progress]
Specialists and PCPs are promoting projects by drawing issues from their vast array of knowledge and experiences.

[IP Project Counsel]
Last July, the IP Project Counsels were held simultaneously in Seoul, Pohang and Gwangyang to share the results for the first half and plans until the yearend. At the event, CEO Kwon monitored projects in process and provided his ideas to project managers.

[IP Project Special Reward System]
POSCO established the ‘IP project special reward system’ for employees to be encouraged to challenge themselves to take on new projects and concentrate on excellent performance. This system gives substantial rewards to teams or individuals with outstanding results.

More details are available here at Project-based Working Process and IP Project.

7. POSCO the Great!

POSCO has been named the world’s most competitive steelmaker for the 7th consecutive time during the past five years by World Steel Dynamics (WSD). Moreover, POSCO was selected as a global sustainable leading company in the SAM-Dow Jones Sustainability Indices (SAM-DJSI) and was named as the ‘Most Respected Companies in Korea’ by the Korean Management Association Consultants (KMAC). Also, in July, POSCO was named as the 177th world’s largest corporations by the Fortune’s global 500.We hope POSCO will continue to create further accomplishments in 2015!

More details are available here at World’s Most Competitive Steelmaker and Most Respected Companies in Korea.

8. Future Competency

In 2014, POSCO focused on preparations to attain future competency. Three FINEX plants have started operation since January and POSCO-Thailand’s CGL has started its construction in August. Also, POSCO has been building a large demo plant in South America as a prelude to the entry in the global market for world’s first lithium extraction technology, developed by POSCO. In November, Gwangyang Steelworks’ hot rolling plant No.4 was completed. Now indeed, high-quality steel production is capable purely with POSCO Family’s technical ability. This production system supplies 3.3 million tons per year. Lastly, POSCO-Krakatau which has initiated its iron-making in January, also appears to be making pleasant results. 2014 was surely a year of productive and diverse constructions. We expect for more remarkable activities in 2015!

More details are available here at POSCO’s Global Competency.

9. Safety
This year, safety has been a very important keyword to everyone in Korea. Through safety exercises like POSCO center fire drills, Pohang and Gwangyang group fire trainings, POSCO Family Safety and Disaster Prevention Resolution Conference, POSCO has been engaging in preemptive activities in safety to stress the importance. Also, POSCO has enhanced inspection in Seoul, Pohang and Gwangyang for sites that are prone to fatal accidents while conducting customized emergency response trainings to reduce risk factors beforehand. In addition, POSCO has created curriculum for safety professionals and conducted cross audits for each steelworks.

10. Pride
Establishing the world-class training process for technical professionals, POSCO has been striving to maintain as a company where employees hold pride in their hearts. In fact, through ‘Great Work Place’ activities, POSCO has been providing a working environment of flexible commuting time and improved work engagement. Also, POSCO has prepared a 5-level job competency level system to foster technical workforce while also selecting employees with professional knowledge and colleagues’ respects as ‘POSCO Master Craftsmen’ and providing exceptional rewards to them. Lastly, through ‘IP Concert’, which was held 19 times in Pohang, Gwangyang and Seoul, employees and executives shared new business philosophy and reinforced the pride in POSCO.

More details are available here at ‘The Great Company to Work At’.

11. POSCO Family News

[Daewoo International]
The hottest issue of 2014 Daewoo International would be about Myanmar Gas field. Starting in June 2013, the field has been enlarging supply ever since its first production which was approximately 500 million cubic feet. It now has become the main source of profits at Daewoo International.

[POSCO ICT]
In the smart energy sector, 2014 was a fruitful year for POSCO ICT. For instance, energy storage system ESS and energy efficiency system for factories and buildings have achieved outstanding outcomes. Including Building Energy Management System (BEMS), which is currently applied at POSCO ICT Pangyo office and Portable Emissions Measurement System (PEMS) at Gwangyang Steelworks’ oxygen plants, POSCO ICT’s various energy-related business will continue to advance in 2015.

[POSCO Energy]
‘Beyond Energy, Better Life’! Acquired by POSCO Energy, TONGYANG Power has marked its new start with the new name of POS Power. Thus, it is gaining many people’s expectations as they expand abroad into private development business. Furthermore, POSCO Energy has secured a license for 450MW power coal cogeneration plant which is the biggest in size in Mongolia. As a result, POSCO is now the largest shareholder of the fifth power plant business in Mongolia.

[POSCO E&C]
The Northeast Asia Trade Tower is a landmark in Songdo City and the tallest building existing in Korea. 305m in height and 68 floors in total, the building was under construction for approximately eight years. Besides its office and accommodation, the building features many additional facilities. In fact, Daewoo International will soon be joining the office space. Please look forward for POSCO E&C’s activities to become one of the top 10 global construction companies in 2020!

More details are available here at Northeast Asia Trade Tower.

Today, we took a look back on the keywords of 2014 in POSCO. Among the keywords above, we wonder which word stays in your memory the most. As a closure to 2014, we would like to thank you and all employees who trusted POSCO group for the sincere support!

Pictured here: POSCO booth at OTC 2014

Pictured here: Tape cutting ceremony in front of the Korean booth

‘Energy industry’ is a core part of POSCO’s future competitiveness strategy. As such, POSCO has dedicated efforts to develop energy steel technology. Energy steel refers to steels used for the mining, production, transportation, storage and processing for oil and gas. In a nutshell, energy steel serves as a crucial component that is necessary for transporting energy sources around the world. Formerly energy steel business was dominated by European and Japanese steel mills. However, POSCO has made efforts to bolster the collaboration of steelworks, research and marketing department in order to advance technologies to take on a fresh central role in the energy steel market. Through these efforts, POSCO has been able to create high-tech energy steel that is appropriate for extreme environments such as polar and deep sea mining.

POSCO ushers in energy technology 

At the 2014 OTC, POSCO was able to use Solution Marketing to promote its energy steel processing and application technology. POSCO first took part in the OTC in 2008 and since then, has been operating a booth at each conference and has steadily assessed demand in the energy industry. As a result, POSCO secured offshore projects with three domestic shipbuilding corporations, and made long term contracts with Shell and Petronas. In addition to product sales, POSCO has been able to develop steel materials based on needs of oil majors, EPC corporations and other clients. Technical partnerships for steel materials and engineering with companies such as Exxon Mobil, SINTEF, AMEC and Fugro were made possible as well.

Pictured here: The honorable guest Moon Seung-wook, chief of Ministry of trade, industry & energy of Korea, and Park Seong-bum, counsel general of Houston, viewing the exhibitions by Korean companies

Based on the results of Solution Marketing efforts, the POSCO booth at OTC this year garnered more visitors than in the past with about 1,050. This was a great opportunity to showcase the POSCO brand to the global energy market. Below are two greatest outcomes from the conference.

 Outcome 1. Sign and discuss steel material supply contracts  

Pictured here: Steel Solution Center Head, Kim Ji Yong, speaks with distinguished VIP guests

POSCO proactively marketed to energy companies such as IOC (International Oil Company), NOC (National Oil Company), and EPC by actively networking and opening business discussions. There were many opportunities to build relations with high-level personnel from about 71 major energy companies. The main purpose for marketing was to raise awareness of POSCO’s specialized advanced technology by promoting solutions for steel used in energy projects such as finished steel plates, STS, Titanium and wire rods.

Pictured here: OTC 2014 conference attendees touring the POSCO booth

Based on consideration of technology exhibition traits, POSCO set up experts to promote technologies for each field. Moreover, in addition to steel production, POSCO has capabilities for engineering, construction, equipment manufacturing and other differentiating value chain strengths which has helped POSCO distinguish itself to win energy projects. As a result, POSCO was able to sign agreements to supply steel to major energy businesses. Going forward, POSCO aims to continue to create new business opportunities in this way.

Outcome 2. Sign MOU and JDA, and discuss joint research opportunities

Pictured here: POSCO booth at OTC 2014

On this day, POSCO was able to showcase five special solutions including wear resistant steel, slurry pipes, welding, LNG tanks and other steel application technology on a global stage. It was a great opportunity to raise awareness and gather interest from major energy corporations for joint research on technology cooperation, polar region steel and welding materials. In addition, MOUs and JDAs were signed with major companies for more growth.

Prepare for the future with future growth engines!

As the weight of energy projects on the overall business grows, POSCO plans to strengthen collaboration between POSCO E&C, POSCO SPECIALTY STEEL and POSCO PLANTEC in order to develop its capabilities to meet various market changes and be a Total Solution Provider. By making meaningful relationships with some of the largest energy corporations in the world, POSCO can compete in the global top tier level by continuing to develop new projects and technologies that are appropriate to changing market and customer needs.

POSCO Holds an IR Conference Call To Announce The First Quarter Earnings, Reports 15,440 Billion In Sales Revenue On A Consolidated Basis

POSCO (NYSE:PKX) held a conference call on 24 April to announce the results of their first quarter for fiscal year 2014. On a consolidated basis, the company recorded KRW 15,440 billion in sales revenue and KRW 731.3 billion in operating profit.

The company saw a drop in sales and operating profits due to global economic recession. However, its operating profit margin grew by 4.7 percent, as a result of improved profitability in non-steel businesses. Net profits decreased to KWR 55.6 billion, due to the weakened won and tax audit expenditure.

On a Non-consolidated Basis, POSCO Records KRW 7,363.8 Billion in Sales Revenue and KRW 517.7 Billion in Operating Profit

On a non-consolidated basis, the company recorded a sales revenue of KRW 7,363.8 billion and operating profit of KRW 517.7 billion.

The volume of crude steel production and sales for Q1 dropped to 9.3 million tons and 8.4 million tons respectively, effected by shorter calendar days, as well as the maintenance of main facilities.

The seasonality also had an impact to POSCO’s quarter-to-quarter sales in the major steel-consuming industries such as automobile, and shipbuilding & ocean plant, which decreased to 2.0 million tons and 0.7 million tons respectively.

Despite the drop in Chinese steel prices, POSCO was able to record an operating profit margin of 7.0 percent, reporting a quarter-to-quarter increase of KRW 30 billion on a non-consolidated basis, by maintaining its price while cutting down on raw material costs.

POSCO further improved its profitability by converging marketing and technology to reinforce customer-oriented sales activities. The company increased the sales portion of its seven ‘high value-added’ and ‘strategic’ core product areas including automobile, shipbuilding, and energy steel pipes from 48 percent in 2013 to 51 percent. The company also strengthened its solutions for the demand industry by building high manganese steel LNG storage tanks, expanding automobile steel plate supplies for super high strength complicated structures on the 1Gpa grade, and developing 16 new steel grades that respond to customer needs.

Continued Efforts to Improve Financial Soundness

Efforts to improve its financial soundness were also continued.

In March, POSCO reimbursed high-yield bonds valued at USD 700 million to cut down the debt, reducing the cost of interest by using its own funds and low-yield Japanese Yen bonds issued in December 2013. Furthermore, the company made various efforts to improve financial conditions, such as reducing turnover period of the assets. As a result, its cash and cashable assets increased by 46 percent compared to the end of 2013, reaching up to KRW 2,033 billion.

POSCO is expected to further improve its cash flow as it cuts down on investment this year. The company is readjusting its investment shares in project-financing for POSCO E&C, and the funds implementation plan for its joint venture with Dongkuk Steel and Vale, Brazil CSP Steel Plant Complex, was also delayed.

Improved Performances of Key Affiliates In Trade and Construction Businesses

Performance from its major affiliate companies including trades and constructions also improved this quarter. POSCO E&C reported 6.6 percent in operating profit margin, recording a 2.2 percentage point  growth quarter-to-quarter, and Daewoo International also reported 1.3 percent in operating profit margin, recording an increase of 0.4 percentage point.

POSCO anticipates that the global demand for steel in second quarter to recover slightly, as steel prices rebound after the Chinese New Year due to inventory adjustment and restored demand. The global demand will turn to a stable 3 percent growth level in 2014 ~ 2015, as the demand from the U.S. and Europe recovers to 3 ~ 4 percent range.

POSCO plans to go all out in improving management performance, by reinforcing sales activities that incorporates technology into marketing. The company will also continue its efforts to increase the sales portion of ‘high value’ products by providing customized solutions that touches all aspects of the business, from product planning to sales, and services, while at the same time maximizing its financial soundness.

2014 Q1 Business Results

-Declared the 4 part innovation agenda that includes enhancement of steel competitiveness and financial structure to address crisis management

-Headed to steel plant immediately after inauguration ordering “world’s best products with competitive costs and quality”

Pictured here: POSCO’s Chairman, Ohjoon Kwon giving his inauguration speech at the Pohang headquarters on March 14^th

POSCO’s Chairman, Ohjoon Kwon has officially been inaugurated. On March 14, POSCO held its annual meeting of shareholders and board of directors to install Ohjoon Kwon as the 8^th Chairman & CEO. Following the shareholders meeting, he attended an inauguration ceremony at the Pohang headquarters wearing a Steel plant uniform and stated, “Oversupply in the global steel market puts a significant risk to POSCO’s competitive advantage” and therefore, “We need to regain our steel competitiveness based on the differentiated technology and a financial and organizational structure reform  to once again become the world’s leading steel company.”

Pictured here: POSCO’s Chairman, Ohjoon Kwon giving his inauguration speech at the Pohang headquarters on March 14^th

At the inauguration, CEO Kwon unveiled the new vision ‘POSCO the Great’ and stated that to achieve this, the ‘innovation POSCO 1.0’ would be actively promoted. ‘POSCO the Great’ implies ‘Let’s create a great POSCO’ and signals that the company will continue to contribute to the national economic development and create values for the world in order to become the most respected company nationally as well as globally. Reflecting Chairman Kwon’s philosophy and volition, POSCO 1.0 proposes a departure from pride and appearances and a return back to basics to regain unity and be the forerunner again. The goal is to become the world’s best in all business divisions by creating customer value through new ideas and unifying all employees under one vision.  Chairman Kwon announced a four part innovation agenda in order to quickly overcome the current crisis situation and prepare for the next 50 years of POSCO.

Pictured here: POSCO’s Chairman, Ohjoon  Kwon at the inauguration with ‘POSCO the Great’ and ‘innovation 4.0’ banners in the back ground

The first priority on the innovation agenda is to enhance the competitiveness of the steel industry. Its main focus is to create new, differentiating customer value through the combination of technology and marketing. The Company will create a Steel Solutions Center within the steel business division  to provide proactive response to customer needs and, also it will increase the sales of strategic products such as marine energy steel, high performance steel plates to cement its market position as a leading global steel company.

The second priority is to focus on the selection and concentration of plans that promote future growth. POSCO has been pushing ahead in materials, energy and other diverse new businesses, however going forward it will analyze business fit, core competencies, and market attractiveness to boldly determine whether to stop, sell or merge businesses for those businesses that are not globally competitive.  It will concentrate its growth energy in developing materials such as lithium and nickel that are essential for the future high-tech industry, as well as eco-friendly chemicals such as fuel cells and clean coal that are core of the clean energy business.

The third priority is to streamline the business structure and to dramatically improve the financial structure. For the time being, investment strategy will be focused on value-added growth rather than new investments for qualitative growth. Furthermore, at the appropriate time, it will list on the stock exchange certain subsidiaries that meet the IPO requirements or sell the equity holdings in order to maximize liquidity.

Finally, the management infrastructure will be reformed in areas such as internal organization, processes, and corporate culture . The current six divisions will be minimized to four for greater efficiency and to streamline decision-making hierarchy within the company. Furthermore, the number of executives in the supporting divisions will be reduced by 40% and transferred to marketing, steel mills, overseas offices and other divisions in order to boost performance. Especially, in order to promote strong performing organizational structure, individuals that hold expertise and experience will be appointed as expert executives and will be assigned to individual project with appropriate accountability and performance evaluations.

Pictured here: POSCO’s Chairman Kwon shaking hands with employees on the day of his inauguration

Shortly after the inauguration, Chairman Kwon paid a visit to #3 steelmaking plant in Pohang and encouraged employees with an indication of his management priority in the job sites. Steel plant furnaces are the heart of steelmaking companies as the filtered impurities from molten metal are transformed into high quality, top grade steel. On this day, Chairman Kwon announced, “POSCO will continue to invest in innovation in order for Pohang and Gwangyang Steelworks to once again produce the world’s best products with competitive costs and quality.”

 Pictured here: POSCO’s Chairman, Ohjoon Kwon visited workers at #3 steelmaking plant in Pohang shortly after the inauguration to reassure employees that he would help make POSCO the world’s best

Earlier, at the annual meeting of shareholders and board of directors, candidate Jinil Kim was appointed as in-house director and president of steel manufacturing, and Dongjoon Yoon and Younghoon Lee were both appointed as vice president in-house directors. Moreover, Ilsup Kim, President of Seoul School of Integrated Sciences & Technologies, Youngsun Woo, Executive Partner at law firm Seah, and Donghyun Ahn, Professor of Economics at Seoul National University were appointed as outside directors. Ilsup Kim and  Youngsun Woo will also assume the responsibility over the Audit Committee members.

See below for the full inaugural speech that Chairman Kwon gave.

[box]Fellow colleagues,

Valued shareholders, customers, stakeholders,

Ladies and gentlemen,

I am truly honored and thrilled to stand here today as the 8th CEO of POSCO. In my excitement, I also acknowledge the large responsibility I have to follow in the great success of POSCO’s past generations.

[showhide type=”post” more_text=”Show less…” less_text=”Show more…”]

Looking back to previous years, I can see the noble vision of the founders of POSCO. The first generation of this outstanding company strived to make something out of nothing, to build a solid foundation for our company in accordance with the direction of this nation.

Moreover, the following generations, armed with a passion for technology development and innovation, contributed to POSCO becoming one of the most globally competitive steelmakers in the shortest time in history.

With our unmatched commitment to staying competitive, POSCO has continued to create sound profits and consistent value. Furthermore, in the spirit of mutual partnership, we have shared growth with our various stakeholders. Such efforts have boosted Korea`s economic development, and have been praised by the Korean people.

Members of POSCO!

POSCO, once the pride of the nation, is now in the midst of unprecedented challenges. With credit ratings being downgraded and share prices being weakened, “expansion” may no longer be our highest priority. At its worst, survival of the company itself could be threatened.

As I begin my term at this important juncture, I ask a few questions to both myself and to all POSCO employees.

Do we still have the same passion and sense of duty that we used to have toward the nation’s economic development?

Do we still have our spirit of embracing challenge, embodied in our slogan “Resources Are Limited, Creativity Is Unlimited”?

Is our spirit of self-sacrifice still alive in placing our company and our country before ourselves?

Fellow colleagues,

As members of POSCO sharing the same fate, none of us are free from the current crisis. We all have to avoid living off of past glory. We must now dedicate ourselves to a fresh start and a new direction.

As of now, there are a number of urgent issues that we must resolve.

While the global economy is expected to remain stagnant for the time being, the steel market has long suffered from serious oversupply. Under such circumstances, we can no longer resort to our traditional competitive edge.

Meanwhile, our global expansion projects, once enthusiastically promoted, have yet to be settled. What concerns me even more is these projects may become a burden to the company depending on how the market unfolds.

Members of POSCO,

I would like to take today`s inauguration ceremony as an opportunity to declare our new corporate vision, “POSCO the Great.”

“POSCO the Great” refers to a POSCO that continuously contributes to the country`s economic development and is ultimately loved by the Korean people. We can achieve this goal through the following three values – Creativity, Harmony, and Top class management.

“POSCO the Great” also refers to a POSCO respected internationally by consistently creating new customer value and growth engines based on steel, POSCO’s core strength.

Today, I propose the key program of “Innovation POSCO 1.0” that will drive our corporate vision of “POSCO the Great.” The “1.0”  in “Innovation POSCO 1.0” represents being New, being Unified, and being No. 1.

“Innovation POSCO 1.0” aims to create customer value through “New” ideas, “Unifying” all of its members under the same vision, and with POSCO being the world’s “No. 1” company in all its business sectors.

Respected members of POSCO!

“Innovation POSCO 1.0” is an urgent plan to swiftly overcome the current crisis, but more importantly, it is a plan to prepare for the 50 years ahead of us.

Under the “Innovation POSCO 1.0” program, we have four initiatives.

First, we will fundamentally strengthen the core competitiveness of the steel business through technology-based solution marketing.

We will launch a Product Solution Center within the Steel Business Division to preemptively respond to potential needs of our customers.

We will fortify our status as the global top supplier in our seven key product domains which include steel products used in the energy industry; this emulates our past achievement of securing global leadership in the ultra-light automotive steel business.

We will transform Pohang and Gwangyang Steel Works into the world’s most competitive manufacturing sites by further intensifying our unique innovation capabilities and rooting out all the safety and environmental risks.

Overseas steel projects in regions such as India and Indonesia will be stabilized as early as possible by actively cooperating with partnering companies based on our spirit of shared growth and prosperity.

Second, we will nurture future mega-growth engines through strict selection and concentration among our non-steel business segments.

New projects currently being pursued in the fields of materials, energy, and other various areas will undergo a rigorous process of re-evaluation.

Our business feasibility assessment based on technology and market competitiveness yielded the tentative result of  “core materials” and “clean energy” as our potential mega-growth engines.

“Core materials” are essential ingredients for future high-tech industries, with Nickel and Lithium as promising candidates.

In the area of “clean energy”, technology in response to global warming, fuel cells and clean coal chemicals are promising candidates.

Just as we used steel, “the Rice of Industry”, to lead the economic development of Korea, we will usher in the new era of “Creative Economy” by generating more jobs in the sectors of “core materials” and “clean energy.”

Third, we will streamline our business structure and significantly improve the financial soundness of POSCO.

To maximize the synergy in each business segment, we will manage our key subsidiaries more effectively while massively trimming out non-core businesses.

Rather than pursuing expansion-oriented investments, we will adhere to high value-add investments, which will have a profound positive impact on our enterprise value.

We will move to lower the risk on our ongoing investments by inviting and cooperating with strategic and financial investors.

As for the suitable subsidiaries, we will file for an IPO at an appropriate time depending on the capital market situation. Our equity holdings in subsidiaries could be reduced to secure sufficient liquidity.

Furthermore, we will strengthen our communication with the capital market so that we can earn trust from investors.

Fourth, we will overhaul our management infrastructure such as organization, systems, processes, and corporate culture.

We will ensure that our organization will function more efficiently by downsizing the current six divisions into four divisions and simplify organizational hierarchy to streamline the decision making process.

In addition, we will curtail the number of executives in supporting departments, and some of the back office employees will be relocated into the value creating front line such as marketing, production and overseas sites, thereby producing higher financial outcomes.

Any employee who has generated additional profits by proposing and completing a challenging project will be given corresponding incentives.

We will also discard the “insider-only” practice and “the sense of superiority” that have been prevalent in POSCO as remnants from the legacy of a steel monopoly.

Meanwhile, we plan to further upgrade POSCO’s proud tradition of sharing activities so that we can fulfill our responsibility as a corporate citizen.

Fellow colleagues!

We are about to embark on a grand journey toward “POSCO the Great.”

Although we are facing a steep cliff to our rear and a fierce storm to our front, we do not have the luxury of hesitation because time is not on our side.

Fortunately, the path ahead of us is not all too unfamiliar to us.

Engrained deep within our DNA are the memories of great achievements during the days where we thrived without any capital, technology, and experience.

For the future of a reunified Korea and for another 50 years of POSCO, let us fortify the stepping-stones so that our next generation can continue to build upon the history of “POSCO the Great.”

When “POSCO the Great” is finally realized where POSCO is loved by the Korean people and respected by the citizens of the world, we will later look back to the cliff and storm of today and see that these were only part of a short-lived prelude to the great achievement of our vision for the future of POSCO.

Let us embark this new journey together for our greater POSCO.

I express my deep gratitude to the members of POSCO who have dedicated themselves in our operations, with their trust in management. I pay tribute to your loyalty to the company.

Whenever we have faced difficult times throughout our 45-year history, our management and employees have fought together, in unity, to sail through each and every hardship. I am strongly convinced that we can overcome today`s crisis based on our triumphs of the past.

Last but not least,

I give you my firm commitment.

To our customers, suppliers, and partners, we will bring you mutual growth in return for your steadfast support.

To the shareholders and investors, we will reply with higher profits in return for your unwavering trust.

To the communities and the Korean people, we will respond to your warm encouragement by making POSCO your pride and joy.

Thank you. (End) [/showhide] [/box]

This was the second case where all thick plates of a single project were supplied altogether, and POSCO is the only global steel company to have done so. The first being was for FPSO unit of the Daewoo Shipbuilding and Marine Engineering (DSME) where 90,000 tons of thick plates were supplied.

The 150,000 tons of thick plates supplied was approximately 58% of the entire 260,000 tons of steel materials required in Shell’s LNG development project structure, and is equivalent to an amount that can build 7 buildings at the POSCO Center scale which used 20,000 tons of thick plates.

The ‘Shell’s FLNG Project’ to which the company successfully supplied all thick plate materials is a 3 billion USD scale order won by Samsung Heavy Industries from Shell in 2010 for the world’s first LNG drilling, production, and storage facility (FLNG: Floating Liquefied Natural Gas).

It is a mega-scale offshore plant that has a length of 468 m, a width of 74 m, and a height of 100 ml, producing 3.5 million tons of LNG annually, with the capacity to store 450,000㎥ of LNG which is equivalent to three days of all LNG consumption in Korea.

▲ Image of the world’s first LNG drilling and FLNG facilities led by Shell

POSCO was able to supply all thick plates to the massive project as it was recognized for excellent materials, timely supply, and responsiveness to urgent requests.

POSCO satisfies strict safety and quality standards applied to energy steel materials used in offshore and deep sea plants such as the FLNG, as they must be able to be processed for application to various parts, have corrosion resistance against water, and have high toughness and solidity of steel materials, as they must firmly connect each part of the facilities and equipment.

To supply all products within the appointed date of delivery, the company also prepared all necessary thick plate production lineups for the project and minimized defect rates.

In addition, the ability to efficiently respond to urgent steel material orders due to inevitable frequent changes in design played a factor in being able to supply all the materials.

This project is particularly being seen as an exemplary case where joint correspondence with the client company led to successful execution.

POSCO has successfully carried out steel material development for LNG partitions and low temperatures, as well as applicability tests and the WPQT (welding procedure qualification test) for shipyard drydock equipment through joint technology cooperation with Samsung Heavy Industries.

POSCO prepared a project task force where all related departments of quality control, manufacturing, production, and transportation logistics participated so that there was no delay or mishaps in supply through production status monitoring as well as quality and supply management.

The company will continue to proactively provide support at early project stages so that client companies can receive large-scale overseas orders, and plans to provide a firm system to be able to supply excellent quality steel materials at the right time when needed.

Furthermore, considering energy steel materials as a future match for the steel industry, the company expects to see results in its efforts of strengthening R&D and investment, through marketing in the field, and to also strengthen its position in the energy steel material market.

The global energy steel material market has been supplied by select steel companies of Europe and Japan with high technology levels and excellent supply records, but POSCO has rapidly increased market share by successfully completing major global projects based on its technology.

Meanwhile, the company has completed development of 23 types of steel, with an additional 60 types of energy steel material developments planned for completion.

Further, POSCO family companies POSCO E&C, Daewoo International, and Sungjin Geotec, by supplying steel materials concurrently with energy plant orders, has the goal of reaching a market share of more than 10% in the global energy steel material market by 2020.