During the first week of the training program, nine PECSA employees took a tour of Pohang Works, participated in the Global EVI Forum and visited the construction site of the Songdo Convensia II. During the second week, they received job training at the Korea Institute of Construction Technology Education to build on the capabilities required for working at construction firms, such as project and contract management.

From October 31 to November 11, the POSCO HR Development Center trained the first set of new PESCA employees. Left, tea time with Chan-gun Han, the CEO of POSCO E&C. Right, the employees directly experience an aspect of Korean culture.

One notable meeting in particular, took place on November 9, when the new recruits had tea with Changun Han, the CEO of POSCO E&C, and talked about the history and the future direction of the company. At this meeting, the CEO explained the POSCO E&C 2030 plan, focusing on the company’s history and strengths, along with information on architecture, infrastructure and energy projects.

“POSCO E&C plans to concentrate on building stability through carrying out projects to advance into overseas markets while securing base nations through a selection and concentration strategy,” Han said. “I look forward to PECSA becoming the first business partner of POSCO E&C and the bridgehead to entering the overseas markets. I believe that PECSA and POSCO E&C will take the initiative in creating a success story in Saudi Arabia based on this sense of mission.”

PECSA’s new employees and POSCO Group University Educators pose for commemorative photos at the POSCO Global EVI Forum (left) and POSCO Center in Seoul (right).

Meanwhile, PECSA recently landed a $900 million hotel project in Madinah Hajj City near Medina City, Saudi Arabia in a construction and joint work system. PECSA is planning to become a “GCC* Top 5 construction company” by 2025 based on orders from the PIF and POSCO E&C’s advanced construction technology and know-how. In order to nurture the talent to support this, PECSA is planning to expand cooperation with the POSCO Group University.

GCC (Gulf Cooperation Council): A council consisting of six member countries, including Saudi Arabia, Kuwait, UAE, Qatar, Oman and Bahrain.

Be sure you never miss any of the exciting steel stories from The Steel Wire by subscribing to our blog.

Saudi Vision 2030 is a mid-long term national project established by the Saudi government last April in response to the rapidly changing energy market. It plans to reform industry regulations, establish economic strategies and decrease the country’s economic dependence on oil exports.

President Chankun Han said in an Arab News article published on June 23rd, “The main purpose of corporate partnerships in many cases is the possible revenue made from the said country after the project’s completion. However, we hope to make a mutually beneficial relationship with our partnership with Saudi Arabia’s Public Investment Fund (PIF),”

“POSCO E&C will utilize its expertise in urban development to pass on advanced construction techniques and total solutions, as well as create more job opportunities. We will also contribute to the development of the construction industry of Saudi and Gulf Cooperation Council (GCC) through frequent mutual interactions,” Han added. This interview was also published in Al Eqtesadia, Saudi Arabia’s influential daily newspaper.

The POSCO E&C and Saudi PIF partnership allowed for a joint establishment of PECSA last December, the venture company POSCO E&C Saudi Arabia. PECSA, owned 38% by Saudi PIF, will actively participate in urban development, housing and infrastructure construction projects in Saudi Arabia.

POSCO E&C has already been involved in Saudi Vision 2030 by being a part of 17 projects including the ones already in progress. In particular, the Ghazlan Power Plant and hotel construction projects currently under negotiation with the Saudi government are considered mega construction projects that cost $2.92 billion in total.

Be sure you never miss any of the exciting steel stories from The Steel Wire by subscribing to our blog.

CEO Kwon talked with several employees who have experience working in the Middle East at a lunch meeting on June 28.

The lunch meeting was held at the POSCO Center, and those attending shared their thoughts about the Middle East region and its growth potential, along with their unique experiences.

POSCO has been expanding its business partnerships around the Middle East, including with Saudi Arabia and Iran, since last year. The lunch meeting was organized to reflect that increasing interest in the region, and to learn more from employees who have studied or worked there.

The participating employees had a range of experiences in the Middle East, such as working at the POSCO Dubai office, studying as a graduate exchange student in Iran and working for a cement company in Bahrain.

CEO Kwon said, “The success of an overseas business ultimately depends on people. You have to understand the local culture first if you want to successfully manage a business in the Middle East. I hope you continue to play an active role in our Middle East-based projects and teams, sharing your valuable experiences.”

In addition, on June 22 CEO Kwon met with the 16th and 17th members of the board to receive case studies about employee workload and efficiency, as well as how to build employee confidence and morale.

Be sure you never miss any of the exciting steel stories from The Steel Wire by subscribing to our blog.

Global steel information service provider World Steel Dynamics (WSD) announced the World-Class Steelmaker Rankings on June 13 in New York. POSCO has topped the list as the world’s best steelmaker for the seventh consecutive year.

This year’s achievement is especially meaningful, as the company faced a tough business environment in 2015 due to global oversupply, a downturn of major demand industries and import restrictions on exporting countries. POSCO also underwent a strict restructuring process to improve its financial structure.

The WSD assessed 37 steelmakers around the world in 23 categories including technological innovation, cost competitiveness, financial stability and procurement.

POSCO ranked at the top with a score of 8.02. The company was credited for its investment attraction of Saudi Arabia’s sovereign wealth fund and the reorganization of its corporate structure, including its sale of POSCO Specialty Steel.

POSCO was also applauded for making use of innovative technologies such as FINEX and CEM, improving the technical skills and productivity of its engineers, increasing sales of value-added high-end products such as World Premium products and reducing costs.

Japanese Nippon Steel and Sumitomo Metal Corp ranked second, having improved export competitiveness thanks to a weak yen. US-based steelmakers Nucor and SDI ranked third and fourth, respectively, having improved competitiveness in energy costs through the use of shale gas.

Russian steelmaker NLMK, who boasts iron ore and coal mines, came in fifth while Severstal, another Russian company, ranked sixth. Hyundai Steel placed twelfth this year.

Be sure you never miss any of the exciting steel stories from The Steel Wire by subscribing to our blog.

1. Announcing ‘Innovation POSCO 2.0’: Accelerating Business Restructuring
In July, POSCO announced “Innovation POSCO 2.0,” which included five major management reform plans and focused on restoring public trust and securing core competitiveness for the next 50 years. After the announcement, POSCO resolved to overcome crises by holding a briefing on management reform plans and a resolution meeting. POSCO also implemented large-scale company restructuring in August to improved organizational efficiency. Meanwhile, CEO Ohjoon Kwon and executives took the lead in overcoming the management crisis by giving up part of their salaries and repurchasing treasury stocks.

2. POSCO Sold 38 Percent Stake in POSCO E&C to PIF in Saudi Arabia
POSCO sold a 38 percent stake in POSCO E&C to Saudi Arabia’s Public Investment Fund (PIF) in exchange for the sales amount of 1.24 trillion won on September 30. The PIF investment is expected to bring positive improvement to POSCO in its financial structure, and the PIF can rapidly respond to the post-oil era in Saudi Arabia. POSCO E&C and PIF opened a joint operation, POSCO E&C Saudi Arabia (PECSA) in Saudi Arabia on December 21.
Related Article: POSCO Strengthens Business Alliance

3. Extension of Retirement Age to 60 and Introduction of Salary Peak System
POSCO extended the retirement age from 58 to 60, and introduced a 4–year salary peak system. Starting next year, the retirement age will be extended to 60, and according to the salary peak system, employees aged 56 will receive 90 percent of the amount they are paid at the age of 55. The salary will be reduced by 10 percent over the next two years. They will receive 80 percent at the age of 57, and 70 percent from the age of 58 through to 60. POSCO initiated salary peak system in 2011 and reached an agreement with labor on major labor innovation issues, such as the expansion of the salary peak system and a salary system restructuring based on performance.

4. POSCO Named World’s Most Competitive Steelmaker for Six Consecutive Years
POSCO was named the world’s most competitive steelmaker for the sixth consecutive year. The WSD (World Steel Dynamics) ranked 36 steelmakers from around the world by analyzing 23 categories, including production capacity, profitability and technology innovation. POSCO ranked at the top of the world-class steelmaker list, receiving the highest score in four categories, and an average of 7.91 points out of 10. POSCO received positive responses in its sales expansion of World Premium products and solutions marketing, proving POSCO is the world’s best steelmaker.
Related Article: POSCO Named World’s Most Competitive Steelmaker for 6th Consecutive Year

5. POSCO Exports Its Own CEM Technology Abroad for the First Time                                                                                                                                        POSCO signed an agreement on POSCO’s own compact endless casting and rolling mill (CEM) technology licensing and co-marketing with German engineering group, SMS on July 3. CEM is an innovative technology which produces hot rolled coils by integrating continuous casting and rolling process into one. According to the licensing agreement, POSCO will be paid a technology transfer fee from the SMS group, and engage in co-marketing efforts with SMS group for the sale of CEM technology.

6. Visible Progress in Solutions Marketing, Including EOLAB Project
The EOLAB Project, which succeeded in creating new demands by offering technologies for steel materials for car body and chassis, was selected as the best case of POSCO’s solutions marketing. The EOLAB Project is the result of POSCO’s constant effort to improve customer value by providing total solutions, from the development of new steel materials to the manufacturing of components. POSCO has been focusing on expanding its sales channel of World Premium products and improving customer value through human.
Related Article: Renault’s EOLAB Shines at 2015 Seoul Motor Show

7. Introducing ‘POSCO Masters,’ the Highest Honor Awarded to On-Site Engineers
POSCO selected its first POSCO Masters, who are equipped with professional knowledge, and have been leading on-site creative improvement activities and technical competitiveness. Beginning this year, the honorary recipients of the first POSCO Masters are Master Son Byoung-rak, EIC Technology Department at Pohang Works, Master Jo Gil-dong, Steelmaking Department at Gwangyang Works, Master Kwon Yung-kug, Hot Rolling Department at Pohang Works and Master Cho Young-ki, Ironmaking Department at Gwangyang Works. The four POSCO Masters will receive special benefits including treasury stocks, prize money, overseas couple trips and special promotions.

8. Making POSCO an Accident-Free Workplace through Self-Directed Safety Spread
POSCO set 2015 as the starting year for the settlement of its self-directed safety culture and has been striving for the realization of POSCO the Great through the expansion of safety Self-Directed Safety Spread (SSS) activities. POSCO held its “POSCO Family Safety SSS Festival” in January, and awarded prizes to excellent groups and individuals in August. POSCO takes the lead in making POSCO an accident-free workplace through constant safety SSS activities.

9. The 1st and 2nd Special Reward for Innovation POSCO Project
POSCO selected Construction Steel Materials Solution Project Team as the first recipient of Innovation POSCO (IP) Project’s special reward on July 23, awarding 150 million won of incentives for their achievement of excess profit. The IP Project special reward is given to the IP project team in proportion to the outcome, when achieving over 1 billion won of extra profit and the second special reward was awarded to PJT for the construction of a high profit PO-expanded production system in December.
Related Article: Innovation POSCO Grand Project Kick-Off

10. Cessation of POSCO Weekly, Smartization of Communication
POSCO Weekly, a weekly newspaper which delivered POSCO’s latest news and its development and innovation internally and externally for the past 21 years, ceased its publication on July 30. POSCO Today is serving the role of POSCO Weekly, creating POSCO’s unique communication culture, and delivering real-time news of POSCO to its employees. In line with the increased use of internet and mobile devices, POSCO Today is solidifying its position as a group-integrated communication channel, accommodating various needs of POSCO group employees.

Be sure you never miss any of the exciting steel stories from The Steel Wire by subscribing to our blog.

On September 30, POSCO and POSCO E&C sold shares owned by POSCO E&C as well as issued new shares, finalizing the deal which was first discussed in August 2014 following a letter of intent rendered by the PIF. Following this agreement, POSCO E&C retains 58.2 percent of its shares.

The deal accommodates the needs of each party. POSCO is expected to fortify its internal stability, while Saudi Arabia can rapidly respond to the changing energy markets in the post-oil era. In June of this year, after POSCO signed an agreement with PIF, Standard and Poor’s (S&P) raised POSCO’s credit rating from Better Business Bureau BBB+, Negative to BBB+, Stable. This agreement will serve as momentum for POSCO to improve the group’s entire financial health. Furthermore, POSCO E&C will improve its financial structure and achieve both transparency of management and efficiency of operation, with two directors appointed by PIF to be involved with the company’s management.

In the future, POSCO E&C and PIF will establish a joint venture, POSCO E&C SAUDI ARABIA, with an investment ratio of 4:6, respectively. By doing so, the two parties will expand their cooperative business efforts for a series of infrastructure projects including a railway, hotel and other construction projects for the Saudi Arabian government, as well as energy and plant businesses. Through this partnership, both parties are expected to enjoy gains as POSCO will see results in profitability and stability by expanding businesses in the Middle East, and the PIF will have access to POSCO’s advanced construction technologies.