Since 2014, POSCO successfully completed 150 cases of restructuring.

Back in the 2000s, POSCO suffered its worst financial crisis due to failed investments in growing businesses. Its consolidated operating profit, which exceeded KRW 7 trillion at one time, recently fell to about KRW 2.5 trillion. POSCO’s cash on hand, which peaked at more than KRW 8 trillion, declined to nearly KRW 5 trillion, and credit ratings worsened as well.

That’s when CEO Kwon implemented the Innovation POSCO (IP) 1.0 and 2.0 projects successively to innovate the company’s financial structure and began broad-based restructuring. CEO Kwon recalls, “POSCO sold its non-core steel business, and merged similar businesses to increase efficiency and eliminate waste. We also liquidated low-yielding substandard businesses to prevent the aggravation of insolvency.”

As a result, the number of POSCO’s domestic affiliates decreased from 71 to 38, and the number of its overseas affiliates declined from 181 to 124. The company also recovered KRW 7 trillion over the 4-year period, and prevented annual losses of about KRW 400 billion.

Moreover, POSCO’s consolidated cash on hand increased to KRW 8.55 trillion at the end of the third quarter, repaid its debts by more than KRW 5 trillion and POSCO’s consolidated debt ratio dwindled to 67.6 percent, the lowest since 2010. Moody’s, an international credit rating agency, recently upgraded the forecast for POSCO’s issuer rating, Baa2, from negative to stable, and then to positive, and predicted that POSCO’s financial health will continue to improve in the next 1-2 years.

POSCO’s Future growth strategy is two-track: smartization and development of new growth engines.

CEO Kwon expressed his vision for the company In 2018 and beyond. He said, “POSCO plans to implement smartization with efforts such as combining ICT with its core businesses, ranging from steel and energy to construction and chemicals to develop newly converged businesses to lead the 4th Industrial Revolution.”

CEO Kwon delivering his new year’s message at the POSCO Family Kick-off Meeting 2018.

SEE ALSO: Building on a Year of Success: POSCO’s Top 9 News of 2017

The company will also accelerate the development of smart factories utilizing big data and artificial intelligence, and further enhance core processes for environmentally-friendly, highly-efficient and future-oriented steel mills.

In addition, CEO Kwon mentioned that POSCO will carry out new growth businesses this year in the energy and materials sectors. In the energy sector, POSCO will work to stabilize its power generation business, and expand its LNG midstream business by developing the Gwangyang LNG Terminal into the energy hub of Northeast Asia. POSCO is also planning to increase investments in renewable energy and seek business opportunities in line with government policies to reduce greenhouse gas emissions.

The company will also work to secure stable supplies of saline water and ores containing lithium in South America and Australia for its lithium business. It also plans to build accompanying infrastructure for mass production.

POSCO will also develop its own manufacturing processes for high-capacity cathode and anode materials used in secondary cells, and work to increase the sales of electric vehicles at home and abroad.

POSCO CEO Kwon Ohjoon greets employees after the kick-off meeting.

To close the event, CEO Kwon remarked, “For the next 50 years, let’s make greater efforts toward our goals with a clear and long-term perspective.”

Here’s a look at how steel is produced in a steel mill or factory, and what the “smartization” of steel factories will look like.

So, how is steel made?

Iron Making

To make steel, manufacturers first need molten iron. Molten iron comes from two raw materials; iron ore and coal. Iron ore is converted into sinter ore in a sintering plant and coal is converted into raw coke using a coke oven. The processed materials are poured into a blast furnace where hot air reaching 1200℃ is blown in from the bottom through tuyeres, causing a chemical reaction. This process oxidizes the coke and reduces the sintered ore, creating molten iron.   

Steelmaking

In the steelmaking stage, the molten iron is transported to the steel making plant via a torpedo car, where the liquid is poured into a converter. Then, oxygen is blown into the converter to burn off all the impurities. All that is left is pure molten steel.

Continuous Casting

This is where steel finally becomes solidified into different shapes such as slab, bloom and billet. Liquid steel is poured into molds and cooled as it passes through a continuous casting machine until it solidifies into the desired shape.

Hot steel passes through rolling machines to be rolled into specific sizes and thicknesses. (Source: Global Sourcing Blog)

Rolling Process

During the rolling process, steel is heated once more to achieve various sizes and thicknesses. Steel slabs are heated to over 1100℃, then pass through rolling machines. This results in hot-rolled coils that can be shaped for different uses such as thick plates. They can also be processed into long, wire-shaped rods for billets. Often, the hot-rolled coils are rolled at room temperature for cold-rolled coils. Cold-rolled coils can be fabricated to produce galvanized and electrical steel products.

“Smartizating” these processes will involve converging IoT, Big Data, and AI to connect the different facilities, IT systems and workers in order to collect and analyze data for optimization.

POSCO is “smartizing” the steel-production process

POSCO is a steel company looking to lead the industry in adopting smart factories. CEO Kwon Ohjoon made “smartization” one of the 4 key priorities for POSCO starting back in 2014, and Kwon will continue to increase those investments.

POSCO smart factory incorporates artificial intelligence to enhance safety and efficiency.

SEE ALSO: How Smart Factories are Changing the Manufacturing Industry

In 2016, POSCO established its Smart Solution Council in order to research AI, big data and IoT applications. In the same year, POSCO ICT’s smart factory platform, PosFrame, was completed and installed in POSCO’s Gwangyang Steel Mill. PosFrame allows engineers to collect and monitor big data. So far, the company has saved over USD 14 million by incorporating the new technology in its production practices.

Here are some other features of POSCO’s Smart Factory.

POSCO’s Smart Blast Furnace

The Pohang Blast Furnace No.3 became a smart furnace in 2017, following a 102-day repair period. The furnace is now equipped with automated sensors that monitor and control its internal conditions using AI technology. Smart sensors monitor the blast furnace for factors like raw material quality and ventilator status, preventing breakdowns and ensuring a much longer lifecycle.

SEE ALSO: Will Artificial Intelligence Lead to Breakthroughs in the Steel Industry?

Worker Safety

Smart sensors can be used for more than just process monitoring. The company is working toward a full implementation of smart sensors for safety purposes, using IoT to create a better working environment.

Steel manufacturing involves high temperatures and high pressure levels, which is dangerous for workers who come in close contact with the equipment. With smart sensors monitoring all of the factory information, workers will instead be monitoring operation from a safe distance.

Workers in POSCO’s smart factory wear smart sensors for safety.

Wearable sensors, in conjunction with factory smart sensors, will be able to detect if and when workers are approaching potentially dangerous areas, and will alert them. These sensors will also detect and alert with regards to any impending accidents, or life-threatening situations like gas leaks, explosions, or fires.

Also, dust, sulfur, and nitrogen compounds will be removed via a high-plasma method, creating an eco-friendly steel plant and a healthier environment for workers.

POSCO will continue to add more smart features to its steel mills to increase efficiency, safety and sustainability. In efforts to learn and implement new technologies, POSCO CEO Kwon Ohjoon visited GE’s smart factories to learn about their technology earlier this year. POSCO also held the 2017 Smart POSCO Forum to share its insights with clients and affiliates, all as part of its expanding smartization efforts.

Since 2014, sales of products combined with Solution Marketing have tripled, and sales of POSCO’s World Premium Products (WPP) have increased by 56 percent.

It Wasn’t Always Smooth Sailing

When the 2008 global financial crisis hit, the global economy as a whole suffered. The steel industry experienced stagnant growth, even in its subsequent recovery. From 2012 to 2016, annual steel sales remained fixed at 35 million tons.

The 2008 Financial Crisis was felt in markets all over the world. (Source: South China Morning Post)

The main culprit for the slow recovery was overproduction, mostly from the heavily-subsidized Chinese steel industry. Between 2000 and 2014, steel production doubled from 800 million to 1.6 billion tons, exceeding the global demand for steel by 100 million tons.

As a result, steel markets around the world saw prices falling, layoffs and steel mill closures.

SEE ALSO: Asian Steel Watch: Megatrends Shaping the Future of the Steel Industry

A Strategy for Success

In order to stay competitive in a stagnant market, POSCO made the decision to focus on Solution Marketing and the sales of its World Premium Products (WPP) such as POSCO GIGA STEEL for cars and PosMAC for solar panels.

Solution Marketing involves hyper-customization for POSCO’s partners to deliver optimal material solutions for their products. Some notable projects this year have been with automakers GM Korea and Ssangyong Motors for the launch of their new models made of POSCO GIGA STEEL. POSCO gave them full support from development and R&D to testing and post-production evaluations, redefining the role of a steel supplier.

GM Korea and POSCO worked together to incorporate POSCO GIGA STEEL into the 2017 All New Chevy Cruze. (Source: GM Korea)

As a result, POSCO’s operating profit margin (individual basis) was 10.8 percent in 2016, making it one of the highest performing steel companies in the world. Its recovery and growth continued into 2017.

SEE ALSO: 6 Reasons Why POSCO GIGA STEEL is Ideal for Automakers

Cultivating the Industry

Following its continued success with Solution Marketing, POSCO is now determined to share its insights and technology with up and coming small and medium-sized enterprises (SMEs). POSCO has completed 32 shared-growth projects through which they work with SMEs to develop ways to cut costs, improve the quality of their work, provide financial assistance and education and training.

One of the most recent projects for shared growth is a collaborative business model called “System Construction” that provides a framework for effective technical cooperation among POSCO’s partners in the construction industry. The model was developed jointly with NI Steel and entails systemizing composite materials such as beams, floor decks, exterior panels and roofing materials, all based on joint R&D from both parties.

Under System Construction, workers from various sectors come together for joint development.

POSCO is continuing its efforts to advance its competitiveness by providing material and technical solutions to its partners, and along the way, fostering the growth of SMEs in various industries to ensure a more stable and robust economy.

In the opening speech, CEO Kwon remarked, “As global economic conditions are rapidly changing, our two countries must work together to expand our cooperative relationship,” and emphasized the protection of free trade and reinforced complementary cooperation between the two countries.

At the general meeting, the panelists of the two countries discussed industries with potential for bilateral cooperation including investment, resources and infrastructure, the 4th Industrial Revolution, and food and agro-livestock.

In particular, the panelists discussed ways to uncover new industries in line with the 4th Industrial Revolution, methods of treating energy waste, and joint development of the health and food industries, and current global issues.

The Korean delegation to this annual meeting consisted of over 50 people, including CEO Kwon, Chairman of SM Group Oh-hyun Woo, GS E&C President & CEO Sang-gi Lee and Lotte International Senior Managing Director Gi-ho Jeong. The Korean council members attended the joint meeting, and visited the Startup Precinct in the outskirts of Brisbane, and discussed the venture firms and start-up ecosystem of Australia.

The AKBC is the only private economic consultative organization of the two countries. It has been promoting bilateral cooperation between the two countries for about 40 years since its establishment in 1979.

Photo cover courtesy of Federation of Korean Industries.

SDGs are common goals of prosperity and development adopted by the UN in 2015 for the international society to achieve by 2030. There is a total of 17 goals, including eradicating poverty, quality education, good health and well-being, human rights and climate action.

The organization commended POSCO’s initiatives for tackling the housing crisis in its overseas and affiliate communities, and its commitment to improving the quality of life of local residents. Details of the POSCO Steel Village Project will be posted on the UN SDG official website, and if selected as the exemplary case of SDGs at the UN ministerial meetings, the project will be recorded in a permanent document of the UN as an example for other companies and organizations.

POSCO CEO Kwon Ohjoon said, “POSCO will carry out social contribution activities to help realize a better world in the best way we know how. As a global corporate citizen, we will fulfill our social responsibilities by aligning our goals with those of the UN SDGs.”

The POSCO Steel Village Project is a part of the POSCO 1% Foundation which uses POSCO’s materials and construction techniques to build houses, bridges and welfare facilities for people living in poverty. Over the years, POSCO has built steel houses, indoor playgrounds for children and steel bridges for the underprivileged living near its business operations in Korea and abroad.

Cover photo courtesy of the UN.

It all started 49 years ago in a small fishing village on the East coast of Korea and has grown to be the fourth-largest steel producer in the world.

A Small Fishing Village with 39 Employees

To help rebuild the country after the end of the Korean War, President Park Chung-hee made steel production and heavy industry the centerpiece of his Second Five Year Plan (1967-1971). Despite there being no steel industry in Korea, President Park wanted to be able to manufacture steel domestically without relying on imports and foreign technology.

Opening of POSCO in April 1968

In 1965, President Park visited Pittsburgh, PA, where he gained insight into the steel industry and what would be required if Korea were to develop its own independent production facilities. One year later, Korea International Steel Associates (KISA) was formed. KISA included a consortium of eight companies from five different countries whose goal was to help Korea start its own integrated steelmaking facility. By 1967, the government approved a plan from KISA that included a basic agreement on technology & funding.

Pohang, a small fishing village on Korea’s eastern coast, was chosen as the official site of the steel mill. POSCO was officially incorporated on April 1, 1968, as a joint public-private venture with just 39 employees. Park Tae-joon came on board to serve as CEO and by May 1968, construction of POSCO’s headquarters had begun.

In May 1968 the POSCO headquarters construction had begun

Setbacks to Success  

Despite the steps taken to move Korea’s steel industry forward, there were many setbacks along the way. First, overshadowing each step of its development was the skepticism coming from both foreign and domestic fronts. Foreign investors could not understand why Korea would expand into industries it had no history with. And local leaders doubted their ability to overcome all of the technological, economic, and infrastructural hurdles facing them. To make matters worse, KISA was disbanded in September 1969 – leaving plans for POSCO up in the air.

Korean President Park Chung-hee was instrumental in getting POSCO off of the ground. Here he is at one of the blast furnaces at Pohang Works. (1976)

Determined to complete the project, President Park began negotiations with Japan who later provided the grants, loans, and technology for the construction of the initial plant. Construction of the steel mill started in 1970 and on June 9, 1973, at 7:30 am, the first steel came off of the line. By April 1974, they had decided to expand the capacity of the third furnace at Pohang Words to 5.5 million tons and the fourth furnace capacity was increased to 8.5 million tons.

Expansion

Because of POSCO’s early successes, the Korean government decided to build a second facility on the peninsula’s southern coast in Gwangyang. After the completion of the fourth phase of construction at Gwangyang, POSCO had a total of 20.8 million tons of crude steel production capacity. Of that total, Pohang was producing 9.4 million tons with Gwangyang producing 11.4 million tons. It earned the distinction of being the world’s largest steel mill and POSCO become one of the main driving forces behind the industrialization of Korea’s economy.

After its completion, Gwangyang Works was the largest integrated steel mill in the world. (1992)

In 1986, POSCO entered into a 50/50 joint venture with US Steel (UPI). Their partnership was set to develop a comprehensive modernization program that would upgrade the processes and equipment of the facility. Since the establishment of USS-POSCO Industries (UPI), POSCO has continued to branch out all over the globe. It has set up STS production plants at Zhangjiagang Pohang Stainless Steel (China) and POSCO Tai Knox (Thailand), and automotive steel plate production lines (CGL) in Mexico, India, and China. PT Krakatau POSCO was built in 2013 and was the first integrated steel mill in Southeast Asia.

POSCO Becomes the Most Competitive Steelmaker in the World

By 2014, production capacity had increased to 37.7 million tons. Pohang now has three heavy plate mills, four cold rolling mills, five blast furnaces, heavy plate mills, and four hot rolling mills. Beyond its scope and production capacities, POSCO is committed to developing advanced, high-quality World Premium Products. In addition, POSCO’s innovations in other industries, integration of smart factory technologies into the production process, and its commitment to local communities continue to push POSCO forward.

Advanced World Premium Products

With a focus on advanced steel solutions, POSCO has developed a wide range of products that can be customized to fit a customer’s unique needs. These World Premium Products are the reason POSCO has been listed as the most competitive steelmaker for seven years in a row. For example, PosMAC has been utilized in many different ways from floating solar cells to durable public art pieces. Also, POSCO’s award winning PosCozy floor plates provide soundproofing and heat insulation.

The hot rolling process at Gwangyang produces 3,400,000 tons per year

Lithium Extraction & Other Ventures

POSCO has also strengthened its global competitiveness by accelerating new businesses in the materials and energy industries. POSCO has developed a fuel cell plant that was completed in 2008, a Myanmar gas field that produces 500 million cubic feet of gas each day, and lithium extraction technology that is 10 times faster than previous methods.

Solution Marketing

In addition to manufacturing advanced, high-quality steel, POSCO’s Solution Marketing provides customers with added technology solutions and commercial support. Instead of just supplying products and stepping away from the customer, POSCO works with its customers to create customized solutions that ensure successful implementation. Partnering with manufacturers early on in the production process, POSCO has stepped beyond its role as a steel supplier and now serves as a solutions provider.

Smart Factory Technology

POSCO also incorporates cutting edge technology and innovations into its production processes. At its automotive steel plate factory in Gwangyang, POSCO introduced AI technology into its coating weight control system, improving quality and reducing waste. Also, POSCO CEO Ohjoon Kwon remains committed to developing more smart factory solutions and has been meeting with executives of other companies, such as GE and Siemens, to explore partnerships and best practices.

President Park Chung-hee comes to POSCO to celebrate the opening of Pohang Works

Someone seeing the successes of POSCO today might have a hard time understanding how it even started, much less how it was able to overcome the immense barriers it faced. POSCO continues to be a leader in the steel industry with its advanced, high-quality World Premium Products. Also, POSCO’s successes in its non-steel ventures show its commitment to remaining on the cutting edge of technological trends and industrial innovation. Watch the video below to see for yourself.

https://www.youtube.com/watch?v=nq574Ivp7c0

The key components of POSCO’s new strategy include strengthening POSCO’s World Premium Products, improving the profitability of its non-steel businesses, investing in future growth engines, and introducing smart technologies to its group businesses.

Kwon announces a new strategy and the preliminary first-quarter earnings report at the CEO Forum that was held in Yeouido, Seoul, on March 30.

POSCO plans to differentiate itself from competitors by continuing to invest in their advanced World Premium Products. The strategy to expand sales of World Premium Product was implemented at the beginning of Kwon’s first term as CEO and has proven to be highly successful. The share of World Premium Products now represents 50% of total sales.

As for future growth areas, POSCO will push to supply energy storage materials, such as lithium and nickel, using proprietary technologies that extract lithium from salt water or recycled batteries and that refine nickel using low-grade nickel ores. Other key future growth businesses include the production of titanium and magnesium sheets, which are expected to be used in aerospace materials and in luxury cars. POSCO is also planning to expand its natural gas storage and overseas IPP (Independent Power Producer) businesses while continuing to push ahead with its new and renewable energy businesses. By investing KRW 2.5 trillion in these new growth engines over the next three years, POSCO hopes to achieve their goal of KRW 11.2 trillion by 2025.

Aside from pursuing new growth engines, POSCO aims to increase profits from KRW 600 billion to KRW 1.5 trillion in its non-steel businesses by restructuring to focus on its more lucrative businesses. Additionally, POSCO plans to incorporate smart technologies into its group businesses (POSCO E&C, POSCO Energy, and POSCO ICT) and establish a new group-level business platform.

CEO Ohjoon Kwon pledges to double operating profits in three years through the strengthening of both of its steel and non-steel businesses.

In 2014, when Kwon was inaugurated as CEO of POSCO, there were many difficult market conditions both at home and abroad, such as the increasing global oversupply of steel and sluggish industrial demand. Despite these market conditions, POSCO was able to achieve a double-digit operating margin by reducing KRW 1 trillion in costs, restructuring the company, and recording the lowest debt ratio in its history.

POSCO is seeking to create a more balanced portfolio of steel and non-steel businesses as well as domestic and overseas businesses. The company is working to find ways to transform itself into a flexible and advanced enterprise by introducing more smart technology solutions to its existing business areas.

According to the preliminary first-quarter earnings announcement on March 30, POSCO’s sales and operating profit increased YoY by 21% and 27% to KRW 6.99 trillion and KRW 740 billion, respectively. The consolidated sales and operating profit are forecast to increase YoY by 17% and 82% to KRW 14.6 trillion and KRW 1.2 trillion, respectively.

POSCO’s operating margin slightly decreased in the fourth quarter of 2016 but rebounded to 10% in the first quarter of 2017. POSCO E&C is also expected to become profitable in the first quarter. Operating losses at the integrated steel mill in Indonesia and Vietnam decreased while POSCO Daewoo and POSCO C&C saw their operating profits increase.

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More than 290 people attended the presentation ceremony, including Ohjoon Kwon, chairman of the POSCO TJ Park Foundation; Chang-hee Kang, former chairman of the National Assembly; Hong-goo Lee and Deok-soo Han, former prime ministers of Korea; Gong-il Sa, chairman of the Institute for Global Economics; Nak-in Sung, president of Seoul National University; and prize winners from previous years.

Ohjoon Kwon, POSCO CEO and chairman of the POSCO TJ Park Foundation, said, “For the past 10 years, the POSCO TJ Park Prize has been a way to recognize those who tackle the never-ending challenges of today’s world. In the next 10 years, we aim to make the POSCO TJ Park Prize an even more noteworthy honor.”

This year, the POSCO TJ Park Prize was awarded to the following honorees:

• Excellence in Science: Prof. Jong-heun Lee, Department of Materials Science and Engineering at Korea University
• Excellence in Education: Attached Middle School at Kyungpook National University
• Excellence in Community Development & Philanthropy: Jimmy Pham of Vietnam, CEO of KOTO
• Excellence in Technology: Myeong-hwan Kim, head of the Battery Research Institute at LG Chem.

POSCO CEO Ohjoon Kwon (far right) stands with recipients of the POSCO TJ Park Prize. The award recognized their noteworthy achievements in science, education, community development, and technology.

The Excellence in Technology award was added this year to highlight how technology has contributed to the renewal of the Korean economy. Eligible candidates for this category include persons or organizations that contributed to national and global market development.

Prof. Jong-heun Lee of Korea University, winner of the TJ Park Science prize, was honored for his work on the oxide nano hierarchical structure in which nano building blocks are regularly self-assembled, and the p-type oxide semiconductor, which has a high level of catalytic activity that allows for gases to be detected quickly and selectively. His achievements are expected to be widely utilized in various areas such as safety, environment, medical science, and IoT.

Kyungpook National University Attached Middle School, winner of the Excellence in Education prize, was awarded for its model of creative public education. Unlike a typical learning environment, the middle school introduced project-based learning in 2012, which allowed students to switch roles with teachers and also collaborate with one another on a deeper level.

Jimmy Pham, winner of the Excellence in Community Development and Philanthropy prize, established KOTO (Know One, Teach One), the first social enterprise in Vietnam. For 17 years, the organization has been giving at-risk youth a chance to stand on their own by teaching various life-skill classes.

Myung-hwan Kim, head of the Battery Research Institute at LG Chem, received the foundation’s very first Excellence in Technology prize. Kim began to oversee battery R&D in 1996 when the secondary battery business was first starting to become active. Through much trial and error and over 20 years of experience in the field, Kim successfully developed the first lithium-ion battery for electric vehicles. He is considered to have greatly contributed to making Korea a leader in the secondary battery industry.

Chang-hee Kang, former chairman of the National Assembly, delivered a congratulatory address, saying, “I would like to thank POSCO for contributing not only to the development of science and technology, but also for actively recognizing scholars and citizens who made a great impact in their respective fields.”

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POSCO CEO Ohjoon Kwon (left) shakes hands with Tom Schuessler, president of ExxonMobil Upstream Research Company, at the signing ceremony between ExxonMobil and POSCO.

ExxonMobil, the world’s largest oil company, upholds strict standards when choosing materials, and for the last five years has been working with POSCO to manufacture and test slurry pipes at worksites. Last year, a 1.2 m long slurry pipe – made with POSCO’s high manganese steel – was installed at ExxonMobil’s Kearl Oil Sands Project in Canada. It demonstrated a resistance to wear five times higher than conventional materials.

With its abrasion-resistant properties, POSCO’s high manganese steel can greatly reduce overall operating costs and increase oil production. “Seamless collaboration has led to the quick commercialization of this new high manganese steel technology, which will set a new standard for oil sands mining operations,” said Tom Schuessler, president of the ExxonMobil Upstream Research Company, who attended the ceremony.

POSCO and ExxonMobil employees pose for a commemorative photo shoot after inking a high manganese steel supply contract at the POSCO Center.

In response to president Schuessler, CEO Kwon suggested furthering their partnership by utilizing high manganese steel in various other businesses within the oil sands industry.

POSCO also plans to use its high manganese steel in the making of heavy construction and bulletproof military equipment as well as steel pipes and facilities to move various minerals including oil sand slurry.

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The MOU-signing ceremony was held on October 17 in the POSCO magnesium plate factory in the Haeryong Industrial Complex in Suncheon. Approximately 20 people were present, including National Assembly member Jeonghyeon Lee, the governor of Jeolla-namdo Nakyeon Lee, the mayor of Suncheon Choonghoon Cho and POSCO CEO Ohjoon Kwon.

POSCO and Suncheon, Jeolla-namdo entered into an MOU on October 17 to expand the number of magnesium production facilities. Third from the left, National Assembly member Jeonghyeon Lee, governor of Jeolla-namdo Nakyeon Lee, POSCO CEO Ohjoon Kwon and the mayor of Suncheon Choonghoon Cho.

According to this MOU, POSCO and Suncheon will join forces in the purchase of a lot and the expansion of the facilities for producing automotive wide magnesium plates. They will also work side by side in transforming the Haeryong Industrial Complex into a light materials industry cluster by fostering and actively supporting magnesium-related SMEs.

Magnesium is in the spotlight as an ultra-light material that is lighter than aluminum and steel. As environment-friendly issues have emerged in the automotive industry, POSCO has focused on developments with magnesium, as it can be more effective than aluminum in terms of weight reduction. POSCO completed the magnesium plate factory in Suncheon in July 2007, and has since been producing and supplying alloy plates to domestic and overseas automakers and electronics companies.

POSCO’s magnesium was applied to Renault’s concept car ‘EOLAB,’ which was unveiled at the Paris Motor Show in October 2014. The roof of a standard car weights about 10kg, but the roof of ‘EOLAB’, which is made from POSCO’s magnesium plates, weighs about 4.5kg, and has accordingly attracted public attention.

POSCO is planning to capitalize on this expansion to preempt the anticipated increasing demand for magnesium for foreign automobiles, and become the first to make a move in the global market.

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