With the performance increase in both steel and non-steel businesses in Korea and overseas, operating profit was highest it’s been in the last 6 years, and the operating profit to sales ratio was 7.6 percent. Year-on-year consolidated sales increased by 14.3 percent and operating profit and net profit increased by 62.5 percent and 183.7 percent respectively.

The total operating profit of POSCO’s non-steel businesses, which reached KRW 10 billion last year, also turned into a surplus. There was an overall increase in non-steel businesses including trade, energy, ICT, chemicals and materials, resulting in KRW 1.0927 trillion of profits, up KRW 1.0798 trillion from last year.

This is in line with POSCO CEO Ohjoon Kwon’s strategy to focus on group management by securing future growth engines and reforming non-steel businesses.

※ Total operating profit per sector

Indonesia-based integrated steel mill, PT. KRAKATAU POSCO, also generated a surplus for the first time since operations began in 2014. Mexico-based automotive steel sheet plant, POSCO Mexico, as well as India-based cold rolled steel corporation, POSCO Maharashtra, also achieved their highest operating profit, tripling the total operating profit of overseas steel business.

Moreover, separate sales and operating profit increased year-on-year by 17.4 percent and 10.1 percent respectively to KRW 28.5538 trillion and KRW 2.9025 trillion, and the net profit was KRW 2.5457 trillion.

Production and sales decreased year-on-year due to the repair and facility rationalization of Pohang Blast Furnace No. 3, but the sales ratio of World Premium products with better technology and higher returns increased to 53.4 percent, its higher ever.

Financial soundness was also saw improvements. POSCO’s Consolidated debt ratio decreased by 7.5%p year-on-year to 66.5 percent, the lowest since 2010. Separate debt ratio also decreased by 0.5%p year-on-year to 16.9 percent, constantly renewing the lowest record on a yearly basis.

POSCO also demonstrated a cumulative financial improvement of KRW 7 trillion with 150 cases of restructuring in the last 4 years, reinforcing the business structure as well as financial competency. Accordingly, this year the company expects to make more investments in new growth engines such as lithium and cathode materials as well as energy and construction in addition to renewing the facilities at its steel mills. Thus, there will be a budget of KRW 4.2 trillion for consolidated investment, an increase of KRW 1.6 trillion compared to last year. The consolidated sales target is KRW 61.9 trillion.

※ POSCO’s 2017 business performance

“Nowadays, all of the electrical instrumentation control facilities use a digital control system with Programmable Logic Controllers (PLC) or Distributed Control Systems (DCS). At that time, the Cold Rolling Maintenance manager gave me the task of drawing up each of the 25 A3 pages of the equipment control block diagram by memory, in a month. It seemed impossible, but I did it faster than anyone.”

The training paid off. In his third year, he quickly detected a disconnection in the winding part of a motor during a daily inspection of the cold rolling mill, preventing what could have been a catastrophic equipment accident.

“As a result, I found the same defect in 5 other motors and repaired them in advance. It was the first time I was commended for my work and since then, I immersed myself in my work because of the rewarding experience.”

Milestones in Suh’s Career

There was plenty more to be commended for after that as Suh became a crucial member of the cold rolling mill.

In 1995, Suh was in control of the rolling equipment brought in from Japan at the Pohang Cold Rolling Mill 1. “I had special orders to figure out how to work with the brand-new equipment without any difficulties as soon as possible. For that to happen, I knew I had to be able to communicate freely with the Japanese supervisor. I spent all my free time outside of working hours learning Japanese. Soon, I was able to converse with the supervisor without any trouble. Of course, I was able to operate the equipment faster and better than anyone else.”

His passion for achievement continued. Starting from 1997, he became a member of a new development Task Force Team (TFT) for the the Cold Rolling Mill 1. Together the team achieved a processing speed of 2,150 mpm which was the fastest among all the steel mills in the world at the time.

Sheets of cold rolled steel

His next task was at Zhangjiagang Pohang Stainless Steel Co., Ltd., in China. It was the source of many problems for POSCO, starting with the vibrations coming from the payoff reel (POR) of the annealing and pickling lines. He tried stabilizing the base and frame, but the vibrations wouldn’t stop. He finally found the root of the problem: it was the oxygen that seeped into the hydraulic oil that caused the vibrations. Right away he installed an air vent and the vibrations stopped.

In 2001, Suh joined the Double Reversing Mill’s new line TFT and successfully completed the planning, design and installation construction of all the equipment. All that was left was the trial when they ran into issues. The Japanese supervisors couldn’t properly laminate the thinnest sheet of steel that was 0.05 millimeters as they insisted on using a roll gap to roll out the steel. Suh thought of a better way. He persuaded his team and supervisors to try combining the roll gap method with the stretch rolling method for better results. His idea was applied right away, to achieve the desired thickness.

Expertise in Cold Rolling

Suh’s numerous achievements coupled with his endless efforts to learn made him an expert in his field of cold rolling.

In 2006, Suh developed a technology called the Roll Force Mode to take care of plate breakage problems. From 2008 to 2009, Suh took successful steps to improve the welding machine for the annealing and pickling process. He achieved an error margin of less than 0.001 millimeters on all the welding equipment.

His latest achievement was in February of this year when his team completed the trial run of the cold rolling process 3 without any external support. The process of rolling Hyper NO had never been done before, so they had to try numerous times to find the most desirable settings for the equipment and the inputs. At the end of the demanding process, they were successful.

Working Philosophy/ Results

In 2011, Suh received the CEO’s Exemplary Award, and was named the Maintenance Man of the Year in 2013. When asked for his secret to success, he answered, “steady learning, deeply caring for the facilities and communicating with my colleagues. If I did not practice these three things, I would not be where I am today.”

Suh Gwang-Il on site at POSCO’s steel mill with his colleagues

Among his colleagues, Suh is known for his ability to identify different equipment and machinery by the sound it makes. It is this kind of practice, unending curiosity and genuine interest in his work that makes Suh Gwang-Il a true master.

In addition to working as a sales engineer in Indonesia and Singapore for two years starting from 1993, Lee was also in charge of establishing technology strategies for automotive steel sheets as well as producing Tailor Welded Blanks (TWB) at the Gwangyang steel mill. Already equipped with knowledge of cold rolled steel products and automotive steel plates, Lee was able to build two manufacturing centers in Mexico, POSCO-MPPC plant 1 and POSCO-MPPC plant 2. He made big contributions in stabilizing the plants during their early stages while working as the Director of Production for CGL (Continuous Galvanizing Line) 1 and 2 in Mexico, which was POSCO’s very first overseas construction.

Lee, who has successfully completed the construction of Thailand CGL last May, said, “I would like to compete in the Southeast Asian market with our unique POSCO style.” POSCO Today had a chance to speak with Lee directly and hear about his goal of creating the best CGL in Southeast Asia, specifically through taking full advantage of POSCO employees’ work capabilities.

What is the background behind the construction of Thailand CGL and what are some of its expected outcomes in the future?

Thailand has not only positioned itself as the base for the automotive industry in Southeast Asia, but it is also known as the center of the manufacturing for products like home appliances. Speaking of the automotive industry, Japanese automobile companies, which entered the Thai market during the 1960s, currently occupy over 90% of the total automobile production, and these companies all share a demand to receive material supplies from local suppliers. In order to meet such needs and to expand the market further, Japanese steel companies, such as NSSMC and JFE, have entered the Thai market and have been operating CGLs since 2013.

POSCO, which provides around 150,000~200,000 tons of galvanized steel sheets to Thailand every year, has also entered the Thai market in order to provide stable supplies for its existing clients and to further expand the market. This will be accomplished through fulfilling localization needs for the material supply and demand of the Southeast Asian clients, and responding proactively to the recently heightening commerce regulations.

Moreover, with the launch of the AEC (ASEAN Economic Community) last December, it is expected that POSCO will be able to provide an extended supply of its high-quality plating materials to even intra-regional countries such as Vietnam, Indonesia and Malaysia.

What differentiates POSCO’s technologies and products from those of Japanese and other international companies?

Although NSSMC and JFE have been operating CGLs since 2013, they are still facing some quality issues. This is not because Japanese steel companies fall behind in terms of their technology, but because of their lack of global experience and inadequate ability in operating overseas production corporations.

POSCO, however, is currently implementing systematic technology support at a favorable time, based on the CGL operation know-hows learned from previous CGL locations, such as Mexico, Indonesia and China. POSCO is also working to standardize operation methods in more detail for employees. Although POSCO may not have been able to get a head start in terms of operating CGLs, the future for POSCO is looking bright from facility and quality aspects.

Tell us about POSCO’s unique marketing strategy in the Southeast Asian market, including Thailand.

Thailand CGL was established in order to stably produce automotive steel sheets and to provide highly competent materials to regional clients. Prior to providing automotive steel sheets, however, a quality certification from each automobile company is required, which usually takes about 1.5~2 years.

Therefore, until quality certification is acquired, POSCO plans on creating profit and expanding its contract base through differentiating the quality of GI products for home appliances and painting, areas in which our competitors are having a hard time producing for.

There is also a number of small local automobile companies in Thailand. These companies do not have an established material buying channel, and they cannot even attempt to establish a relationship with a large steel company like POSCO due to their outdated technology. POSCO, therefore, plans to provide manufacturing technologies, such as mold technology, and automotive steel sheet buying channels for these small local companies through Thailand CGL, which will also allow POSCO to expand its contract base based on a solution marketing system.

What is your plan in terms of creating a synergy with local employees?

No one should be treated differently, no matter where you are from. By all means, standards for employee management should not differ by one’s country or region of origin.

If you are respectful and considerate of others – local employees, that is – synergy among the employees will be maximized regardless of their nationality or region of origin. As long as every employee works with a strong sense of vocation for working at the best steelmaking company, the outcome is going to be successful. For better performance, problems faced among people should be resolved through humane respect and care, while their working styles should resemble that of POSCO’s.

Lastly, what is the ultimate goal of Thailand CGL? And, do you have any final words?

Thailand CGL must compete in the same industry, serve the same clients and compete with the same galvanized steel sheet products as the Japanese steel companies, which are known as the world’s best within the industry.

Every employee at Thailand CGL will be devoted to securing a comparative advantage in advance in all aspects, including quality, facility and corporation operation, and be able to write a POSCO success story in Thailand.

POSCO continues to strive to maintain its role as a leader in the steel industry, integrating into the Southeast Asian market seamlessly through producing premium products for the automotive industry while utilizing their global expertise. Lee is determined to make Thailand CGL a success, and he believes that with the help of POSCO’s dedicated employees and the company’s competitive edge over other major steel producers, this goal can soon become a reality.

POSCO Holds Completion Ceremony for Thailand CGL, Southeast Asia’s First Automotive Steel Sheet Plant

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POSCO hosted Best Case Presentation session of POSCO TRIZ on the 6^th of November. POSCO and PTA (POSCO group TRIZ Association) participated in the event, which was themed around ‘Creative Thinking with TRIZ’. Among the 260 TRIZ utilized project cases, 2 Grand Prize cases and 4 Runner-Up Prize cases were selected through two different preliminary selection process.

POSCO has established TRIZ University in 2010 to provide structured training programs for its entire employees in order to provide improvement in creativity capabilities. The employees has been sharing their successful cases at an annual presentation for projects of excellent results.

POSCO has implemented project-oriented working method this year, establishing their unique innovation model called POSTIM (POSCO Total Innovation Methodology) and replacing it with unified methodology. TRIZ has been used as a tool to provide creative solution to solve technical difficulties within its frame.

Also, Corporate Project Management Department will be supporting this through following activities: providing creative solution related to future corporate cost-reduction, and reducing risk through preliminary verification of ideas using computer simulations.

POSCO’s Strategic TRIZ Methodology

POSCO set-off an insight that problem-solving logic and algorithm of TRIZ can be applied to business category and has been brainstorming about harmony business strategy and TRIZ.

Value of Strategic TRIZ comes from 1) how it develops algorithm that can provide several effective solutions on specific problem, 2) the fact that anyone can easier use it, and 3) how it provides creative ideation method and logical procedure in strategy establishment and business contradictory problem solving by combining traditional strategy and a thought process.

POSCO is now moving one-step forward from strategic TRIZ on to creating process that solves business strategic problem with TRIZ and eventually developing it into ‘POSCO-type Strategic TRIZ Methodology’.

Excellent Cases of ‘POSCO’s TRIZ Application’

[Best Example] Development of Wireless Power Transmission Technology for Cylinder Sensor

–Lee, Ki-bum/ RIST Team Leader

Problems to Solve

In a general steel mill, there are two types of rolling process for a slab: hot rolling and cold rolling. In order to roll a slab, there are spins connected between spins and the rolling mill.

As the motor spins the rolling mill, the mill rolls the slab and creates a torsion which damages the spins. To prevent this from happening, it is possible to attach a strain gauge sensor, the torque sensor, on the surface of spin to diagnose the torsion status. However, the spin continues its circular motion even with the strain gauge sensor which makes it impossible to supply power to the torque sensor. For a consistent monitoring, wireless energy transmission technology could be an alternative solution. As a part of this technology, electric resonance method enables wireless power transmission to the rotating body that is 30cm distant from the power source.

However, a recieving coil attached on the spin for wireless power transmission experiences centrifugal force due to its large size. In order to reduce the centrifugal force, it was attempted to reduce the size of the coil but it caused a contradiction by also creating a decline in the receiving rate. Therefore, TRIZ method was applied to discover a solution to reduce the size of the receiving coil and its tie bar.

Problem Solving Result of TRIZ Method

As a result of various TRIZ method research, it was able to reduce 85% of the frequency shift even when the tie bar was shortened. Also, by applying pattern layering and wave method, more than 30% of the size of the receiving coil was reduced.

The rotating body wireless power transmission system can be used in thick plate, hot and cold rolled steel sheet roughing mill and finishing mill spindle diagnostics. Also, the system is applicable on diagnostics of chatter mark which occurs to hot and cold rolled steel strip.   

[Best Example] Bloom Continuous Casting Machine Claim Reduction and Strand Extracction Improvement 

– Kim, Sung-jul / Research Institute Senior Researcher

Problem to solve

Continuous casting of different grades of steel is a casting method for each different steel grades in a same tundish. Because the areas of blended ingredients that result from this method cannot be retailed as quality products, they are processed as scraps or redundant members.

Since the 4-Bloom continuous casting machine does not have a system that predicts the blended areas, every 12m of a strand has been truncated en bloc. As a result, each process of different grade casting generated 150 tons of scraps. Despite the excessive truncation amount, claims for ingredients of strand products processed through this casting method.

The problem is that if the truncation amount is increased, the claims will decrease but the strand extraction rate will decrease as well. On the other hand, if the truncation amount is decreased, the strand extraction will increase, but the claims will increase as well.

Problem Solving Result of TRIZ Method

According to the analysis on the length of 4-bloom continuous casting mixer, there are differences depending on the strands but they did not exceed a certain length. In other words, if the length of various mixers depending on each processing condition, claims can be reduced and the shortened length for truncation will lead to a situation where extraction rate can be raised.

The very first step of the TRIZ method was a thorough analysis on the cause of the phenomenon and on available resources. The reason for an inaccurate prediction on the mixer and the phenomenon of mixer’s long appearance were thoroughly analyzed. As a result, eight core problems and eight concept solutions for the corresponding problems were concluded.

Furthermore, specific solutions for the eight concept solutions were suggested. The suggested solutions are practical and effective because of their imminent applicability and capability to utilize the existing resources without any capital investment.

In steps of the TRIZ method, the actual situation was reflected for a better prediction for the mixer and established a new forecasting system by utilizing a real-time operation data. When the detailed solutions drawn by the TRIZ method were applied to different steel grades processes, it was successful in both reducing claims for the bloom continuous casting machine and increasing the strand extraction rate.  

[Excellent Case] Drastic Decrease in Working Time for Covering Work Using Water 

– Kim, Seung-Moon / Raw Material Technology Development Team, POSCO

In order to solve two following solutions, water is used for its readily-availability as natural resource: Gunnysack is not suitable for fixing and covering the materials and takes-up too much time manufacturing. Therefore, this can drastically decrease working time and evolutionally increase effectiveness of the covering work.

[Excellent Case] Cost Reduction through Internal/external Steel Structure Unification 

– Kim, Ah-rem/ POSCO A&C

Potential problem caused by temperature change that could occur when modular construction method is applied in Russia and other arctic region was improved through a new idea called ‘Unification of Internal/external steel structure’. In fact, company could achieve 39% cost reduction in comparison to an existing panel.

[Excellent Case] Advanced Supporting Capacity of Electrode Bar through Reverse Thinking 

– Lee, Jae-min/ SNNC

Electrode bar in electric furnace is a crucial function supplying heat to the furnace, therefore, rupture of electrode bar leads directly to revenue loss. With reserve thinking, company could improve supporting capacity of electrode bar and minimized weight of electrode bar placed at bottom part, achieving decrease in electrode bar breakage by 64% using electricity.

[Excellent Case]  Continuing Undersea Tunnel Project with Strategic TRIZ 

– Kim, Sang-min / New-Business Development Team 

TRIZ can not only be applied in technology (IT) area, but also in strategic area. Company could come up with an effective countermeasures using strategic TRIZ for complicating business structure of the undersea tunnel project that connects KwangYang and YeoSu, saving the project from foundering.

[Innovative Steel Technology] Amplification of Green and Economical Technology through Endless Research & Development 

FINEX Process
FINEX is an innovative steelmaking process that has altered the conventional paradigm of ‘producing molten metal in a blast furnace’. It is designed to produce molten metal using cheap, powder-type iron ore and bituminous coal and as a result, saves much in investment and fuel processing costs while reducing the amount of polluting substances produced. Commercialized for the world’s first by POSCO, FINEX plant with the annual production capacity of 1.5 million tons, has been running successfully since its launch in 2007. Moreover, 2 million tons of additional facilities has been on-stream in recent years.

Hydrogen-based Steelmaking Process
‘Hydrogen-based steelmaking process’, using Hydrogen (H) instead of coal as a reducing agent, is also at the research stage. Generally, iron ore exists in a state which iron and oxygen are in combination (Fe₂O₃, Fe₃O₄). If coal is used as the reducing agent for separating oxygen, carbon dioxide emission is inevitable in the process. However, if hydrogen replaces carbon as the reducing agent, the reaction with oxygen will result in water and thereby process steel without any CO₂ emission. However, technical and financial issues on securing a large amount of hydrogen follow in accordance. As a possible solution, nuclear energy is currently being considered.

Thin Slab Casting
The steel industry is heading to the direction of environmental-friendly business by revamping the steel process as a direct and consecutive procedure. The new eco-friendly steel process that remarkably reduces energy consumption, is being developed. The most representative case is the ‘thin slab casting’ which manufacturers ‘slab’, the intermediary material, in the thinnest possible form in order to minimize the additional heating temperature.

Compact Endless cast-rolling Mill (CEM) Process
Lately, a new method for creating hot-rolled steel sheet that does not reheat the thin slab has been under development. This innovative technology developed by POSCO is called CEM (Compact Endless cast-rolling Mill) process. The CEM process consecutively produces thin slabs and immediately connects them with the hot-rolling process as a means to create hot-rolled steel products. Through this process, energy consumption of the previous casting process will be saved up to 50%.

[Innovative Steel Products] Leading the Automobile and Energy Industry with High-Quality Materials

Automobile
The automobile industry, which is large in steel consumption, is reaching the pinnacle of eco-friendly vehicle development. Engine efficiency should be enhanced by lightening the vehicle weight in order to improve fuel efficiency. That is, automotive flat products, which occupy most of the vehicle weight, should be lightened. The best method for this issue of the current state is the Hot Press Forming (HPF).

However, there has been a development of new steel material that has sufficient strength and processability without being processed. The best-known example is PosM Steel which was developed by POSCO in 2010. Compared to regular automotive flat products, the PosM Steel sheet, a mixture of iron, manganese, and aluminum, is 3-4 times stronger and about 30% lighter. As a matter of fact, POSCO reduced 130kg from an auto body of ‘EOLAB’ concept car which was a recent cooperation with Renault. The weight reduction enabled the car to run at 100km per liter of fuel. In response to the commercialization of electric automobiles, the innovative electrical steel of high electrical efficiency is under development while super metal with better strength is also in the research process.

Energy
Innovative steel products are being expanded in the energy sector as well. Due to the generalization of deep-sea oil field development, a competition for exploitation of unconventional resource such as shale gas is now at its heights. Accordingly, FPSO (Floating Production Storage and Offloading) for energy development, is expanding in its demand. Used in the offshore plant, the steel material for energy is known for its high quality and safety standards because it must endure the extreme condition of deep sea and the Polar Regions.

In order to meet the strict standards, an alloy steel that holds strength and impact toughness even in an extremely low temperature is under development. Notably, the newly invented high manganese steel is an advanced product of 25% increase in manganese content. The increment in content improved the steel’s low thermal expansion, machinability, and processability. Thus, the steel can dramatically increase the storage capacity of an LNG tank.

Manufactured at a lower price through the environmentally friendly production process, the innovative steel products will solidify its status as key materials within the steel industry. The advancement in the automobile, shipbuilding and energy industry would have been impossible if the innovation of the steel material did not occur. The joint-growth paradigm which is brought by the cooperation between the demanded industry and the steel industry will continue to go on even in the future.

Growing Need for Rust-free, Corrosion-Resistant Steel

Steel is an essential industrial material, but exposure to water, salt, or oxidation can cause it to rust. Rust and corrosion can drastically reduce the safety of buildings by posing a constant potential threat to their structural stability. Additionally, rust has a negative effect on the aesthetics of a structure and its surrounding environment. There has been a jump in interest and demand for corrosion-resistant steel to avoid the high costs of frequent maintenance and replacements.

POSCO Presents Ultra Corrosion-Resistant PosMAC Steel

POSCO’s undying focus on the research and development of steel material products has produced PosMAC, a revolutionary plated steel sheet that is five to ten times more resistant to rust and corrosion than existing versions. The product is an upgrade of existing generic plated steel imbued with resistance to the corrosion of the cut edges that is superior to competing products in strength and resilience. This innovative product, PosMAC represents over 30years of technological progress in the field of steel plate production, as well as POSCO’s commitment to the research and development of ultra-resistant steel plates for the past six years.

PosMAC, or POSCO Magnesium Alloy Coating Product, is an ultra-corrosion resistant alloyed steel plate developed with unique POSCO technology. One of the world’s highest quality steel surface treatment products, PosMAC is five to ten times more resistant to rust and corrosion than existing alloyed steel plate products. Being less expensive than other corrosion-resistant material such as stainless steel, the revolutionary PosMAC steel is highly sought after not only for its strength and resistance but also for its affordability.

PosMAC: Resistant to scratches and steel cut edges corrosion

Existing rolled steel is vulnerable to steel cut edge corrosion

PosMAC is highly resistant not only to rust in general, but also to alkali, scratches and steel section corrosion, thanks to PosMAC’s superior steel plating technology. The magnesium in PosMAC’s plating accelerates the formation of highly stable corrosion products, which in turn forms a layer on the surface of the steel plating, preventing the steel plate from corrosion. While existing rolled steel are vulnerable to steel cut edge corrosion, PosMAC’s steel edges form a protective layer from corrosion products after six months, preventing steel cut edges from forming corrosion. This makes PosMAC five to ten times more resistant to corrosion compared to existing products, as well as giving it resistance to steel cut edges corrosion, a unique advantage not found in other general plated metal products.  Furthermore, PosMAC is highly resistant to alkali and ammonia, which makes it highly suitable for use in livestock handling facilities or in situations where components are in contact with concrete tar.

Let’s have a look at the various applications of PosMAC technology

Reducing production costs of solar panels

PosMAC is being highly sought after in the solar panel market for its high resistance and affordability

The demand for highly durable PosMAC is on the rise in the solar panel industry where solar panel structures are expected to be fully functional for up to 20 to 30 years from their installment. We expect PosMAC to become highly popular in the solar panel market: the plated steel used in the manufacture of supporting fixtures of solar panel structures are extremely costly, and using highly durable and resistant PosMAC steel will significantly lower costs by removing the need for frequent replacement.

Manufacturing automobile motor cases with PosMAC

PosMAC is used for motor cases which require extra-high resistance and durability

POSCO is also offering PosMAC as a solution for automobile components that require extra-high resistance and durability such as ABS, power windows and motor cases. PosMAC will take the lead in a new era of more durable and long-lasting automobiles!

The PosMAC Initiative: Expand PosMAC’s applications

PosMAC has been expanding its market presence mainly in agriculture/livestock/fishing, solar panels, motor cases, and road facilities. Now it’s time for the next phase of the PosMAC Initiative: plans to expand PosMAC’s applications to home electronics and automobile steel plates are under way!

POSCO takes the lead in a new era in the steel industry with PosMAC, the revolutionary product developed through years of research and development. POSCO will continue its commitment to leading the global steel market with the highly resistant and durable PosMAC.

POSCO named most competitive in Global steel information provider WSD’s assessment of 36 steelmakers around the world

POSCO has been named the world’s most competitive steelmaker for the 7th consecutive time during the past five years.

Global steel information service provider World Steel Dynamics (WSD) announced the World-Class Steelmaker Rankings during the 29^th Steel Success Strategies (SSS) forum on Tuesday, June 17 New York Time.

POSCO earned high points in technological innovation and human resource management

WSD gave the top mark of 7.91 points out of 10 to POSCO. It said POSCO received highest points in four segments, including technological innovation and human resource management.

As of June 2014, WSD made an assessment of 36 steelmakers around the world in 23 categories including production size, profitability, technological innovation, cost competitiveness, cost saving, financial stability, and procurement.

WSD gave credit for POSCO’s improvement on its core steel competitiveness

WSD also gave credit for POSCO’s effort to bolster stable growth and improve core corporate competitiveness by increasing sales of value-added high-end products and engaging in technology-based solution marketing. The company got higher points compared to the previous year on technological innovation, value-added rolled steel production and doing more to bolster downstream steel-related industries.

Following second was American mini-mill steelmaker Nucor Corp. which has enjoyed shale gas development privileges along with a recent recovery in the steel industry among developed nations. Japanese steelmakers NSSMC and JFE followed third and eighth with sales rising due to increased export competitiveness under Abenomics.

Meanwhile SAIL and Jindal, Indian companies that were among the top 10 last year, failed to remain in the list this year. Instead, Hyundai Steel, which secured 24 million tons for production, ranked ninth to join the top 10.

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.