A previous article from last month that promoted the second annual Steel Safety Day outlined the five major causes of injury, which are: Moving Machinery, Falling from Heights, Falling Objects, Gas and Asphyxiation and Overhead Cranes. Each year, Steel Safety Day will focus on one of the five major causes. This year’s Steel Safety Day, which takes place on April 28, 2015, will focus on Moving Machinery.

To download the infographic, click here.

The infographic above lists the five key areas of Moving Machinery, which are training & competency, safe access, guarding & signage, isolation & immobilization, and roles & responsibility. The infographic is meant to give workers a better understanding of the risks and to prevent or reduce any injuries. Similarly, the video below goes into detail about these areas, and suggests a few tips on how to avoid accidents.

It is now our turn to be aware of these practices and apply them in daily life! And remember we learned about only first cause, there will be articles about other causes in the future, so please stay tuned!  

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.

In honor of his first year at POSCO, CEO Ohjoon Kwon encouraged more than 2,700 employees and board members to have a leader’s attitude and innovate even further during a speech on Feb. 28, 2015.

CEO Kwon’s Special Lecture on ‘POSCO Business Innovation and Leader’s Attitude’

During his speech, Kwon shared three lessons for the company’s future: promoting Innovation POSCO 1.0, having a leader’s attitude, and achieving management objectives and priorities.

“Many people say that the whole world is in a crisis this year, but a business that keeps its ‘top position’ can overcome such a crisis,” Kwon said.

He added that in a situation like this, the company should increase its competitiveness and not rely on outside factors to make it successful. Kwon referred to a few case studies of businesses that overcame a crisis and shared POSCO’s future direction to achieve its five priorities.

Management objectives and priority promotion direction/plan in 2015

CEO Kwon thanked all the employees who worked hard for the company in order to reach last year’s business goals. In his speech, Kwon emphasized the company’s future direction to achieve its next goals. The five main priorities include strengthening the profit structure based on solutions; accelerating business restructuring and clarifying the balance sheet; establishing a commercialization foundation of newly growing core businesses; establishing and expanding work processes based on projects; and strengthening group management efficiency and synergy.

He said to pay particular attention to a platform business model based on technology, a strategy for solution marketing that applies to “steel (hardware), application techniques and commercial support (software).”

Total Leadership and Leader’s Attitude

In order to achieve this year’s business goals and the promotion plan, CEO Kwon says the company needs to focus on “total leadership.”

In his outline of the three main principles of a total leader, Professor Stewart Friedman from the University of Pennsylvania’s Wharton School said authenticity, integrity and creativity makes up “total leadership.” To match with POSCO’s philosophy, the company set Top POSCO, One POSCO and New POSCO as the next steps to achieve “POSCO the Great.”

CEO Kwon’s speech gave employees the opportunity to reflect on the true qualifications of a leader and where POSCO hopes to be in the future. With these principles in mind, POSCO looks forward to achieving its goal to become “POSCO the Great” based on total leadership, which encompasses Innovation POSCO 1.0.

We hope you stay with us as we strive toward our goals!

POSCO was recently named by WSD as the world’s most competitive steelmaker for the seventh time in a row during the past five years. Apart from receiving credit for technological innovation and human resource management, POSCO has also been making continuous socio-economic and environmental efforts side by side with its stakeholders to create value and bolster mutual growth. The recently published 11^th annual sustainability report sums up these efforts. Let’s have a closer look.

About the 2013 Sustainability Report

[Download the 2013 Sustainability Report HERE]

First, the Report includes both financial and non-financial data.

POSCO and listed subsidiaries within the POSCO Family*, or those having more than KRW 1 trillion in sales are included in the consolidated ESG(environment, society, governing structure) data, which was verified by Samil PricewaterhouseCoopers.

Second, we report ‘Key Issues’ which have high ranks in the materiality test.

The report also includes specific information on the issues selected from the materiality test in order to include detailed information that the stakeholders want to know.

Third, we gathered the opinions of internal and external stakeholders and reflected them in the materiality test before publishing this Report.

Previously, there were some difficulties in reflecting stakeholders’ opinions because they were gathered in the course of preparing the Report. For this Report, however, we listened to stakeholders’ opinions from the planning stage and linked them to the materiality analysis process.

Fourth, we reported the cases of CSV (Creating Shared Value), ‘a management principle that seeks opportunity for business in solving social problems’.

We marked CSV cases separately within the contents describing POSCO’s management activities, including building a Saemaul Village in Ethiopia, training agricultural leaders in Mongolia, the Benefit Sharing Program, and Techno Partnership.

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Note: 2013 Sustainability Report further references

Reporting approach
The 2013 Report is based on the GRI (Global Reporting Initiatives) G4 guideline, ISO 26000, UN Global Compact, and POSCO’s unique report publishing process. The financial information reporting standards and definitions are based on the K-IFRS (Korean International Financial Reporting Standards.

Period of reporting
POSCO publishes the report annually. This Report contains information from January 1st, 2013 to December 31st, 2013. In some instances information up to April 2014 were included. The corporate governance section is based on the decisions made by the Board of Directors at the meeting held on March 14, 2014.

Scope of reporting
The Report contains the sustainability activities and performances of Pohang Steelworks, Gwangyang Steelworks, Pohang headquarters and the Seoul office. The ESG (Environment, society, governing structure) data covers POSCO and nine POSCO subsidiaries that are listed in the stock exchange or have more than KRW 1 trillion in sales. Information on shareholders, investors, and new green growth businesses cover the whole POSCO subsidiary.

Independent assurance
Assurance on this Report was conducted by Samil PwC, an independent assurance institution, in order to assure stakeholders on the credibility of the major data and publishing process of the Report. Assurance was conducted in accordance with ISAE3000 and AA1000AS Type II.

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POSCO 2013 Highlights

Why don’t we take a look at what efforts POSCO made during the year 2013, and their results?

[Click titles for details]

1. POSCO WINS THE ‘WORLD’S MOST COMPETITIVE STEELMAKER’ AWARD FOR 4 CONSECUTIVE YEARS!

On February 1, POSCO was named “The World’s Most Competitive Steelmaker” for the fourth time in a row. This was the result of the evaluation conducted by WSD (World Steel Dynamics) on 34 of the world’s steelmakers in 23 categories including production capacity, profitability, and technology innovation. POSCO had held the top position from 2002 through 2004, then was surpassed by Russian and Indian steelmakers, but regained top spot again in 2010 after 6 years, and has hence remained no.1 for 4 consecutive years.

2. POSCO RENOVATES WORLD’S BIGGEST FURNACE AT GWANGYANG STEELWORKS!

On June 7, after 108 days of repair works, POSCO held the blow-in ceremony for Gwangyang Steelworks’ No.1 blast furnace that was renovated as the world’s largest blast furnace. After its third enhancement made in 2013, Furnace 1’s volume now reaches 6,000 bigger than the previously world’s largest furnace (5,800) built by Shagang Group in China. The Gwangyang blast furnace applies a new cooling system, a production technology involving oxygen enrichment, and reduces fuel consumption by using high-temperature reducing gas efficiently, achieving a cost effective and environmentally friendly process.

3. DAEWOO INTERNATIONAL STARTS PRODUCTION AT MYANMAR GAS FIELD

On June 22, Daewoo International successfully began production at the Mya gas field, located in the northeastern sea of Myanmar. The Myanmar gas field project came in full swing when Daewoo International signed a PSC with the Myanmar Government. The gas produced was passed through the subsea pipeline, subsea production facility, and the production platform to check the gas production and treatment facility, and began selling to CNPC, a Chinese state-owned petroleum company from the gas selling location in Kyauk Phyu, west of Myanmar, since July 2013!

4. DECLARATION OF THE NEW ETHICAL MANAGEMENT PRINCIPLES

Celebrating the 10th anniversary of the proclamation of POSCO’s Code of Conducts, POSCO held a declaration ceremony for the New Ethical Management principle. The new principle, dubbed “Happiness Management” presents the vision “Let’s Come Together to Build a Better World!” and its 3 core values – future, common good, and win-win.

5. POSCO INCLUDED IN THE SUSTAINABILITY INDEX FOR NINE CONSECUTIVE YEARS!

For the first time in the steel industry, POSCO was included in the Sustainability Index by SAM-Dow Jones as a leading company for 9 consecutive years! In the 2013 evaluation, 31 steelmakers were evaluated, and POSCO received 77 points – 3 points higher than the previous year – and was selected as an outstanding company for the 9th consecutive year.

6. FIRST EXPORT OF FINEX TECHNOLOGY

On September 22, POSCO signed an MOA with state-owned Chongqing Iron and Steel Company, to construct a FINEX integrated steel plant. POSCO and Chongqing will each invest 50% in the joint project to build the FINEX integrated steel plant with an annual capacity of 3 million tons.

7. 1% FOUNDATION INAUGURATED!

POSCO’s 1% Foundation was officially inaugurated on November 18. The 1% Foundation was first started in October 2011, where executives and management-level personnel donated 1% of their salaries. POSCO and 26 POSCO Family companies participate in the campaign. The Foundation will implement sharing campaigns using the KRW 4 billion’s worth fund raised through donations during 2013 and the company’s matching grant.

8. INTEGRATED STEEL PLANT IN INDONESIA BEGINS OPERATION

On December 23, POSCO held the blowing-in ceremony for the 3 million tons/year blast furnace in Cilegon, Indonesia. Krakatau POSCO is expected to produce 1.8 million tons of slab and 1.2 million tons of thick plates annually. Krakatau POSCO will secure the domestic sales network which can fetch higher prices than exporting the products, and plans to sell 1.5 million tons of slab and 600 thousand tons of thick plates in the Indonesian market during 2014.

POSCO’s vision is to become a company “loved by the people and admired by the world.” As CEO Ohjoon Kwon promised in his foreword to this report, POSCO will fulfill its duties and obligations as a corporate citizen. As a company built upon the very wishes and aspirations of the nation, POSCO will remember that it is forever in debt to the people and act accordingly. From the endeavors in preserving biodiversity to sharing with those in need through the 1% foundation, POSCO’s corporate philosophy will always be about the betterment of humanity.Thank you.

I’m under a lot of pressure at the moment to make multiple big decisions that will have a deep impact in the company’s future. POSCO’s current financial structure is faced with various issues, to say the least. In order to break through this critical moment, we must manufacture and sell a lot of steel and generate a lot of profit. This need led us to our new initiative that is “Solution Marketing.” Solution marketing, in our terms, is bringing our unique hardware – steel products – and software – insights on how to use a given technology to the greatest effect – together. The idea is to secure customer loyalty by forming a sound solution with these two elements. 

Next in the line of focus is new business. I keep a look out for important new projects which seem promising for the company, and put concentrated investment on them. In addition, I focus on employees as well as new business. I always care about employees and their needs. I also think of what I can do to make my employees become happier. I do not agree that a higher income is the only thing that employees care about and want from the company. I always try to make POSCO become the best company, and that all employees are happy.

The team of Innovative POSCO 1.0, established on January 29, 2014, has been working under the new vision POSCO the Great on discovering 380 new business projects until March 14. POSCO employees engage in short term “Quick-Win” projects in stages. By cutting down the number of senior management and introducing project specialists named POSCO Certified Professionals (PCP) or an executive-level project manager, we were able to radically boost decision making speed by trimming down the organization and establish a project-based management infrastructure. In addition, a revamp in the organizational structure brought the number of divisions down from six to four, which are: Steel Business Division, Steel Production Division, Finance and Investment Division, and Corporate Infrastructure Division. We also installed the Value Management Department under CEO supervision to support the successful implementation of Innovative POSCO 1.0.

On May 16, we transferred all discovered new projects to each division, and the head of each division organized the team in charge and established detailed kick off plan to implement and discover Quick-Win assignments. The ‘Great Work Place Commission’ is taking steps to elicit real and tangible improvement in the workplace by merging and discarding certain administrative processes and education policies. Setting EVA (Economic Value Added) as a core performance indicator of POSCO and POSCO group affiliates, efforts are being made to lay the foundation for upholding company values and bolster work engagement by increasing the influence of evaluation.

Revolutionary projects that will change the future of POSCO will soon be implemented in full swing. I hope all of you will regard yourselves as the owner of POSCO and participate enthusiastically and voluntarily.

Although we have been making significant investments both domestically and internationally, sluggish return from large investments during the past few years took a toll on company value and credit ratings. Therefore, I have concentrated on ‘Innovative POSCO 1.0’ to overcome the current problematic situation and prepare the next 50 years of POSCO under ‘POSCO the Great’ since I have taken CEO position. I will change the POSCO’s management paradigm, and it is going to be the big transform from the external growth to internal growth.

Utilizing cash generated from the Chinese super-cycle, POSCO has made aggressive investments for a revival of economic growth for the past few years. Despite massive investments, however, sales and profitability in the steel business dwindled due to deteriorating management conditions. I expect the new projects will take time to be settled because all new projects are at an early stage. Under unfavorable circumstances, all employees and executives should work together to improve internal stability and secure profitability. In light of this, I am planning a full re-evaluation and revamp of POSCO group’s investment businesses.

Firstly, steel investment will prioritize on boosting core steel competitiveness by developing high value-added products, enhancing solution marketing, and establishing a global customer service infrastructure. As for global investment, businesses that are currently under review will be subject to a full-scale re-evaluation, with the main priority being the early stabilization of international production sites which had been adding a burden to the group’s financial structure. In addition, new growth business will promote future mega growth engine through select and concentration. I believe in ‘source material’ and ‘clean energy’ will be the future growth engine for POSCO under the evaluation of technology competitiveness and business fitness of what we have been working on. As POSCO has been leading national economic development with steel business which is the ‘rice for industry’, source material and clean energy business is expected to be a new engine to lead POSCO’s mega growth in the future.

For the “POSCO the Great” ideal to work, we need creative people. There are two types of the creative individual I have in mind: the Expert and the Molder. The Expert creates novel complex technology by utilizing his/her experience and knowledge accumulated throughout a long and focused devotion to a certain field. The Molder fuses professional knowledge from multiple fields to form new values. Because it is difficult for a single individual to have both qualities, we plan to select and support the growth and development of promising individuals for each type.

New employees are trained to become the Expert through the PCP (POSCO Certified Professional) program. A PCP is a talented individual who is knowledgeable of key operations/installations/control technology and is responsible for carrying out strategic tasks and solving technical issues that may emerge in the field. We plan to select experts in commerce, taxation, technical support and overseas as PCP and actively support them as key figures. Meanwhile, we are training the Molders by circulating them in various fields. The Molders are talented individuals who have work experience in various fields including operations and maintenance engineering. Additionally, we are providing education opportunities including MBA/study abroad programs, e-learning, and humanities classes for leaders. We believe that individual effort and an enthusiastic attitude are as important as organizational support. My philosophy in the development of human resources is to establish a virtuous cycle of employees becoming creative experts by utilizing their company’s programs, and their excellent work contributing to the overall increase in the company’s competitiveness.

The most rewarding work was doing focused research on automobile steel, the kind of steel which became POSCO’s lifeline since the 2000’s. I think that period was when we began to conduct “real” research which allowed us to develop unique products and improve POSCO’s competitiveness and productivity. The person who made all this possible was the RIST director Kang Chang-oh. When he was the manager of the steelworks, director Kang used to complain that “researchers are goofs who do nothing but spend money on going to overseas exhibitions.” I seriously considered changing my job when he came over as director of the research center, but he turned out to be a man with an extraordinary sense of responsibility. When he was at the field, he complained about the research center because it did not contribute much to improving the field. When he came to the research center, however, he actively sought for ways to improve the role of the research center. Director Kang and I had many conversations, and the result of our debates on which technology to develop for the future of POSCO was that we should focus on automobile steel. I believe that behind POSCO’s world-class steel today lies director Kang’s automobile steel-focused research policy.

Located at Gwangyang is the Automobile Rolled Steel Research Center, constructed in January 21, 2003. There used to be a heliport for VIPs at the façade of the research center. The problem used to be that we needed a place for an experiment lab facility to develop automobile rolled steel. While sharing ideas in a corridor with director Kang on where would be a good place to install the facility, I looked at the heliport outside the corridor and said, “That heliport would be nice.” Director Kang responded with a silent nod. The next day, he gave me a call from Seoul ordering me to get the automobile rolled steel research center built on the heliport. He had submitted a proposal and gotten approval from the president as soon as he arrived at Seoul. This is how the Automobile Rolled Steel Research Center at Gwangyang was born, and the center became the seed for POSCO’s competitiveness in the field of automobile steel today. It is indeed very rewarding.

POSCO’s technological levels have changed since the year 2000. Prior to 2000, we simply borrowed new technology from Nippon Steel or Thyssen-Krupp. Afterwards, however, we began to develop unique POSCO technology that no other company had. Unique technology is POSCO’s biggest asset in shaping future competitiveness. Products like automobile steel and electrical steel were developed after continuous research. In short, it was POSCO’s competitiveness was spearheaded by its unique technology. The pride of the researcher is to develop a unique product through single-handed research instead of simply borrowing technology. Of course, R&D alone cannot lead to the development of new technology. Mutual cooperation between the engineer at the field and the researcher is needed for a new product to actually be produced, and for that product to be sold cooperation with the marketing team is also necessary. I think such mutually cooperating system is the source behind shaping the future. POSCO’s competitiveness is the integrated and close cooperation of R&D, Manufacture and Sales.

First of all, I thank them with all my heart when I meet them at the field. They all sweat profusely while dealing with melted iron in extreme heat (1,500~1,600℃) with many unexpected risks around, and also sacrifice themselves by working in the cold weather depending on the location. If I am asked as to what I want from them the most, I always answer that I really hope every single employee to work safely. Even a trivial finger injury can make daily activities difficult. Losing one’s life is the disaster of disasters. An entire family may be affected with despair. That said, safety is the most important element. It is my hope to make a work environment that every employee can work safely. I repeat this idea over in my head whenever I go to the field and see my employees’ faces and shake their hands.

It might be an overstatement to say this is my life philosophy, but there are two guidelines that make me behave in a certain way. First of all, I always make an effort to make things better. So, I always keep the phrase ‘No pain, no gain’ in my mind. One cannot see the joy of pleasure without making an effort and experiencing how bitter it was to go through hard times. The saying always keeps me from getting lazy. In terms of personal relationship, I always keep the saying ‘People in glass houses shouldn’t throw stones.’ Everyone is different. Therefore, it always causes trouble when trying to understand others in one’s own perspective. This is the saying that I have in mind when I try to understand others in their own perspectives. Also, I aspire to be like ‘water.’ Water always changes shape depending on its container. Water is life’s fundamental element and exerts great force when focused on a singular point. This is how I want to be.

My dream is to make POSCO competitive and also a company that is much prosperous for the next generation. This might be the same to all the CEOs and also to employees. Speaking of the corporations, people tell to ‘manage the company for making the profit of stakeholders as high as possible.’ To me, I consider the role of CEO to make employees inspired and motivated to work. When employees are happy and satisfied with what they do, it automatically brings the profit to stakeholders. If every single employee at POSCO is happy and satisfied with what they do at work, POSCO will definitely be grown. In this sense, ‘the company with employees that are happy with work’ is the most elements for POSCO to be the outstanding company. I would be the CEO to make such a company.

POSCO is different from most of other corporations since our company was made by funds from a claim to Japan as a sacrifice of our ancestors. Therefore, we have to be responsible and in charge of making the way out for POSCO. I would say about three spirits to make such dreams come true. The first is the *Right Turn Spirit as the foundation of our company. *Saemaeul spirit that encouraged us to be well off when we were poor back in the days is the second one. Lastly, the phrase of POSCO ‘Resources are limited, Creativity is unlimited’ is what we should have in mind. Company only grows when something new is accomplished by creativity. Making new technology and methodology based on creativity along with new marketing strategies are specifically needed. Hereupon, everyone at POSCO shall make the greatest effort to build competitiveness of POSCO. POSCO will be developed and grown further if right turn spirit, Saemaeul spirit, and creativity are added. I sincerely hope employees of POSCO to actively participate in ‘POSCO the Great’.

*Right Turn Spirit: The ‘right turn spirit’ comes back to the time when POSCO founder Park Tae Jun was working to construct the first iron and steel mill. The name comes from his legendary saying, “It is the matter of life and death. If we fail, we’ll come out of our offices, turn right, and drown ourselves into the East Sea. We never fail. Never.”

*Saemaeul Sprit (Saemaeul Undong Movement): The new community movement for rural development in South Korea in the 1970s led by the government.

POSCO will be modifying its mid-term strategy in order to achieve “growth with substantiality”. On May 19 at the Korea Exchange in Yeouido, Seoul, POSCO had its first investors forum since CEO Kwon was installed as the new CEO. On this day, new management strategies to restore financial soundness based on a focus on the core steel business, mega growth, and management restructuring for efficiency were announced.

 Pictured here: CEO Ohjoon Kwon, speaking at the POSCO Investors’ Forum

According to the new management strategies, POSCO has plans to strengthen its EBITDA to 8.5 trillion won with Credit A ratings by 2016, to be at the global top standards for financial soundness.  At the same time, POSCO has plans to cultivate its source material and clean energy businesses to promote mega growth.

Pictured here: CEO Ohjoon Kwon, speaking at the POSCO Investors’ Forum

In order to achieve its mid-term management goals, POSCO plans to change from its former ‘Own & Compete’ based M&A strategy to a ‘Connect & Collaborate’ based strategic partnership, with plans to seek a diverse range of domestic and international companies.

POSCO’s business structure will be reformed so that the strategy that previously focused on expanding steel, materials, energy industries will now be focused on the core steel business and promote mega-growth engines in the two sectors of source material and clean energy. The projects nominated for focused development are source material which encompasses lithium, nickel and clean energy which includes fuel cells and clean coal businesses.

Other fields can be subject to subsequent business restructuring if it will increase the company value and meet the following principles:

1)      First, evaluate whether the entity is recognized as top tier in the domestic market or is seen as essential towards strengthening the competitiveness of the core steel business

2)      Second, even if it is a blue-chip affiliate, consider pushing ahead with the sale or IPO of shares that exceed what is necessary to maintain right of management

3)      Third, plan internal restructuring to strengthen efficiency based on business consolidation, divisions or other adjustments

 Pictured here: Attendees at the POSCO Investors’ Forum

The priority will be placed on restructuring that has the most impact and can relatively be done easily. Although specific plans for restructuring have not been confirmed yet, entities that have been selected will promptly push ahead to show results.

The reorganization that emphasizes the steel business will select seven strategic industries including automotive, marine and energy to grow sales and expand the sales percentage of profitable, premium products. In addition, in order to turnaround overseas business to surplus by 2016, POSCO plans to develop high added-value products in a timely matter to meet market demands and also strengthen solution marketing offerings.

The energy business plans to grow the domestic coal power plant market and target emerging markets for overseas growth while also fostering the fuel cell industry. It also has plans to devote initial investment towards securing technologies for the source material business to strengthen competitiveness.  Business entities including E&C, Trading, and ICT will focus on core competencies that will provide profitability and growth for the entire company.

Pictured here: Q&A session during the POSCO Investors’ Forum

If POSCO’s new management strategies run smoothly, POSCO can expect 32 trillion KRW in sales with 3 trillion KRW in operating profit, 9% operating profit margin, on a stand-alone basis.  On a consolidated basis, that would mean 78 trillion KRW in sales with 5 trillion KRW in operating profit, 6% operating profit margin. Debt-to-equity ratio can be expected to be lower as well.

Pictured here: Panel discussion at the POSCO Investors’ Forum

At the investors forum, CEO Kwon announced, “The strategy paradigm will change in order for POSCO to have stable growth and we will focus on strengthening competitiveness and improving profitability.” Moreover, he said, “With drastic restructuring focused on internal efficiency, we will give back to shareholders, investors, customers, partners, employees, local communities and all those who support and love POSCO.”

Pictured here: Ohjoon Kwon, speaking at the POSCO Investors’ Forum

Growth laid on internal strength will allow POSCO to achieve the new vision of ‘POSCO the Great!’

The Background and Story on Solution Marketing

POSCO’s technology-based Solution Marketing blends technology support with marketing activities to solve customer problems which allows customer value to be strengthened. It can be divided into five steps: 1) Industry·Market Analysis, 2) Solution Development & Care, 3) Solution Release & Promotion, 4) Support and Accelerated Sales, 5) Enhanced Customer Relationship Management.

Solutions provided from the steel industry come in the form of a combination of rolled steel (hardware) and utilization technology (software) which can be modified based on market situations and customer demands. By offering such solutions, POSCO is looking towards not only meeting customer demands but also to greater profitability by aggressively expanding sales of high-grade steel.

An Example of Solution Marketing

Until now, POSCO has used EVI to find customer needs first and then sold the appropriate kinds of steel. The new Solution Marketing is not only about finding customer needs, but also proactively finding the necessary technologies and workforce. During an internal presentation for POSCO employees, CEO Kwon used automotive steel sheets as an example of Solution Marketing.

He explained, “Although automotive steel sheets require high strength, if this compromises its formability, auto companies can face difficulties since weldability opportunities for car design decrease. In order to reduce problems that high strength steel used for light weight benefits can create, POSCO is providing molding and welding technologies, as well as, evaluation methods. By supplying more than just the steel hardware, we can provide our customers with optimal solutions. This is Solution Marketing. Instead of limiting to a single product, we must provide a “package” solution for our customers.”

Meeting with Domestic Shipbuilders to put Solution Marketing into Action

POSCO has sought to improve the domestic ship building industry through building trust, sharing visions, and providing win-win technology-based solution marketing to increase value for customers.

In order to strengthen “Solution Marketing” that is mutually beneficial to POSCO and its clients, CEO Kwon has made in-person visits to meet with clients in the shipping building industry including Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering (DSME), in order to promote and underline Solution Marketing.

Make Listening to Client Needs a Priority

On April 4, 2014, CEO Kwon went to Ulsan to meet with the Jaesung Lee, CEO of Hyundai Heavy Industries. After having a meeting and touring the facilities, he made his way to meet with the head of Samsung Heavy Industries to discuss ways to strengthen cooperation.

Pictured here: POSCO’s CEO Ohjoon Kwon listening to a presentation about LNG Vessels by Daeyoung Park, CEO of Samsung Heavy Industries

During these meetings, CEO Kwon was able to listen to client needs and promote POSCO’s Solution Marketing. During his meetings with clients that week, CEO Kwon said, “In order to recover from the global economy downturn, shipbuilding and the steel industry must strengthen mutual trust and cooperate for quick recovery.”

Pictured here: POSCO’s CEO Ohjoon Kwon meeting with Jaesung Lee, CEO of Hyundai Heavy Industries on his visit to Ulsan on April 4, 2014

On April 21, 2014, CEO Kwon went to Geojedo Island which is where one of the dockyards for POSCO’s customer, Daewoo Shipbuilding & Marine Engineering, is located. He met with the Jeho Ko, CEO of DSME, and visited sites just like he had done in Ulsan. On this day CEO Kwon emphasized, “POSCO is focusing on strengthening its competitiveness to be the global top company. Using technology-based Solution Marketing, we hope to substantially contribute to improving value for our customers.”Pictured here: POSCO’s CEO Ohjoon Kwon in Geojedo Island during a visit with DSME on April 21, 2014.

How Solution Marketing fits into the Future for POSCO and Its Customers

Pictured here: Offshore plant utilizing POSCO steel

Daewoo Shipbuilding & Marine Engineering and other Korean shipbuilders are making developments for LNG vessels for polar regions, deep sea offshore plants, eco-friendly and efficient ships. Therefore, it is crucial that POSCO can continuously supply the necessary materials to foster such advancements. In the past, technology advancements were based on meeting client needs. However, in the present, it is important for POSCO to anticipate material developments to grow and make advancements together.

POSCO also plans to reinforce R&D strategies and consolidate strategic partnerships. In addition, POSCO aims to provide materials necessary for individual customer projects. The responsiveness to customer needs in terms of product quality, size and more must be met in order to improve the overall satisfaction of POSCO’s customers. As such, strengthening Solution Marketing will be an important tool to make value-added offerings a reality.

Case Study for Solution Marketing: Fast Response to Steel for Ships and Technology Development

A good case study for Solution Marketing is how POSCO quickly created steel products for shipbuilders to use after the International Association of Classification Societies (IACS) created new regulations to improve ship vessel stability. Soon after the IACS announced these changes, POSCO developed technologies to provide steel products and technology that would meet these new standards. Customers in the shipbuilding industry could utilize POSCO’s solutions to design new ships. The pre-emptive technology development and quick response from POSCO allowed domestic shipbuilders to design and construct ships without delays and helped POSCO customers increase their value.

In the coming months and years, POSCO will continue its efforts to make advancements for customers across various industries by building trust, sharing visions, and cooperation for technology advancement and cooperation. Solution Marketing is a strategy that can help POSCO become “POSCO the Great”.

Pictured here: POSCO’s CEO, Kwon Ohjoon, visiting Hyundai Heavy Industries on April 4, 2014. Hyundai Heavy Industries’ CEO, Jaesung Lee (left) having a discussion with POSCO’s CEO Kwon Ohjoon (right).

Pictured here: CEO Ohjoon Kwon visiting employees at steel mills after his inauguration on March 14, 2014

Efforts to Create the Best Workplace for Women

the first open conversation session with the CEO invites female executives

In order to achieve ‘POSCO the Great’, CEO Kwon firmly believes in the need for open communication. On this basis, the first open conservation meeting was organized on April 24 to create a space where CEO Kwon could listen to the voices of female executives and hear the company needs while having a casual lunch.

At this particular meeting, seven of POSCO’s female executives gathered to discuss topics pertaining to career advancement for women, work-life balance, how to communicate with colleagues and opinions about childcare benefits.

Pictured here: POSCO female executives gathered together with CEO Ohjoon Kwon

Policies and Direction for Female Employees

Female mentoring, corporate culture changes for better employee benefits, securing female talent

It is very normal for each and every one to worry about something different. During the session, the importance of offering women employees with mentoring opportunities that are appropriate for whatever level they may be at so that their work life feels less stressful was discussed.

In addition, POSCO employees who have children are provided with daycares and women are offered a leave of absence for up to 2 years on top of the given 90 days of maternity leave, before and after giving birth. At the meeting, there was a consensus for this well-designed benefit to be used freely. This is based on the long-term relationship that POSCO hopes for with its employees and how the company sees ‘children of employees as the children of our company’.

CEO Kwon carefully listened to the opinions of the women executives. He said for an efficient and effective system, ‘we need a corporate culture that embraces the maternity, childcare and other needs shared by colleagues and women staff’. He also stressed the need for continuous efforts from leaders to instill a warm corporate culture within the organization.

CEO Kwon ended the meeting on a positive note by expressing his expectation for great things to come from POSCO’s women workforce. He told the attending executives that he hopes they will use their executive positions to be a positive influence and provide guidance for future leaders within the company.

Listen to the Voices of Employees that make ‘POSCO the Great’ 

The open conversation session with CEO Kwon and POSCO’s female executives is only the first of many more sessions to come. In the future there will be more sessions to create opportunities for other employees including human resources, on-site staff, researchers and more to meet with CEO Kwon to have an open, honest communication. Through these proactive initiatives to gain greater insight into the opinions of POSCO employees, POSCO can come one step closer to making “POSCO the Great” a reality.

Pictured here: POSCO’s CEO, Ohjoon Kwon

Direction for POSCO amid Current State of Steel Industry 

In the Financial Times story printed on April 20, CEO Kwon expressed anticipation for POSCO’s future. CEO Kwon, aims to more than double the steelmaker’s operating profit margin to 10 per cent over the next three years. In order to improve profitability and financial strength, CEO Kwon’s goal is to find the most urgent business areas to let go of and to focus on developing technologies to create high-value advanced steel and further invest in core materials business, particularly for lithium and nickel. CEO Kwon elaborated on this during his speech about ‘POSCO the Great’ which you can read about here.

Nickel is an essential component for the production of stainless steel. POSCO is working towards reducing the production costs for nickel by as much as 20 per cent which could in turn reduce costs for stainless steel which is prevalent in every day objects around us including kitchen appliances, medical equipment, exterior walls and roofs and more.

According to the World Steel Association, global steel demand is expected to see lower growth this year. Weak demand and oversupply of steel is an issue that will not disappear any time soon. Demand from China has dropped to 3% from 6.1% last year and it is expected to drop even further to 2.7% in 2015.

Nevertheless, with a strategic focus, CEO Kwon is optimistic for greater performance over the next three years.

Click here to read the full article.

Pictured here: POSCO steel mill employee juxtaposed with steel production

Let’s take a look back at how POSCO came to be the foundation of the nation’s steel industry as well as one of the most respected companies!

 Founding Period: 1965~1969

Pictured here: 1965.12 – Four countries including U.S. & U.K. convene to establish KISA / 1967.7 – Pohang is selected as site for steel mill / 1967.11 – Steel Industry Committee is established

The growth of POSCO happened at the same time as the growth of Korea. The 1960s was a period when poverty and chaos plagued the nation. However, through steadfast hard work and perseverance, steel became the foundation of a strong economy. Just three years after the launch of Korea International Steel Association (KISA), POSCO was born in 1968.

Establishing Pohang: 1970~1981

Pictured here: 1976.5 – Pohang Works under construction / 1978.12 – Phase 3 of Pohang Works construction completed / 1981.2 – Phase 4 of Pohang Works construction completed

Building steel mills was a daunting task but that did not deter POSCO from finishing it. Through four stages of construction, Pohang Works was completed. For more information on Pohang Works check out our previous post

Establishing Gwangyang: 1982~1992

Pictured here: 1985.3 – Beginning of Gwangyang phase 1 construction / 1978.12 – Establishment of Pohang University of Science & Technology / 1987.5 – Phase 1of Gwangyang Works construction completed

Despite the global economic depression of the 1970s, Korea’s economy flourished and steel business boomed. With experience in building Pohang Works, POSCO had the capabilities and know-how to establish Gwangyang Works.

Building on Great History: 1993~

Pictured here: 1994.10 – POSCO listed on the NY stock exchange / 1995.9 – POSCO Center in Seoul Opens / 2000.10 – Privatization of the company

Since its early beginnings, POSCO has come long ways. In efforts to become number one, POSCO has been contributing monumental achievements to the global steel industry.

Pictured here: Molten iron being transformed into high-quality steel

It has been recognized among the Top 100 Davos Forum Global Companies, #1 by Forbes Magazine as the Most Respected Korean Company and #1 Most Competitive Steel Manufacturer by World Steel Dynamics.

Pictured here: Still shots from the POSCO film which portrays steel which surrounds us in everyday products

In celebration of POSCO’s foundation day, we’d like to share a video about the roots of POSCO.

POSCO has made monumental achievements to the global steel industry by creating world’s best, world’s first technologies. Its products are recognized as one of the most competitive in the global market. As the first to develop Automobile PosM Steel technology, POSCO has made advancements in safety and weight reductions in automobiles.

Beyond being the number one steel company, POSCO is also looking towards the future for transformation and growth. POSCO is strategically pursuing opportunities in the energy and integrated materials business. It is also exerting efforts to increase competitiveness and efficiency in the renewable energy sector. POSCO is also gaining ground in the energy market with applicable high-quality products that can withstand extreme environments.

Pictured here: Finished high-quality steel products inside one of POSCO’s steel mills

POSCO’s Focus on Mutual Growth & Coexistence

POSCO understands that we live in an era where sharing and mutual understanding is essential. POSCO’s goal is to flourish with those who have been working with us to create a better world. To do this it has set improving the earth’s environment and giving back to the community as key goals.

We ask for your support as POSCO continues to build upon its rich history. Celebrating POSCO’s 46 years and recent inauguration of CEO Ohjoon Kwon, we are excited to bring “POSCO the Great” to life.