PT. KRAKATAU POSCO sold 1.7 million tons of steel in 2014, its first year of operation, then increased its sales to 2.8 million tons in 2016. The company’s annual sales volume has increased continuously, and its cumulative sales reached 10 million tons as of January 15, 2018. Last year’s tentative performance showed an operating profit of about USD 12 million, enabling the company to turn a profit for the first time.

PT. KRAKATAU POSCO, which began operations in December 2013, is the first integrated steel mill in Southeast Asia with a production capacity of 3 million tons. POSCO and Indonesia’s state-operated steelmaker Krakatau Steel invested 70 percent and 30 percent respectively.

PT. KRAKATAU POSCO is the only steel mill in Southeast Asia with a 3 million ton capacity.

As PT. KRAKATAU POSCO is POSCO’s first overseas steel mill, POSCO concentrated all the competencies of its group affiliates including POSCO E&C, POSCO Energy and POSCO ICT into constructing and operating the facility. After 4 years of hard work, PT. KRAKATAU POSCO is now the leading steelmaker in Southeast Asia.

Instead of resorting to imports, Indonesia can now procure high-quality steel products from  PT. KRAKATAU POSCO, greatly enhancing the competitiveness of Indonesia’s steel-consuming industries.

PT. Bukaka Teknik, manufacturing steel-frame structures, is planning to purchase 120,000 tons of thick plates from PT. KRAKATAU POSCO, and construct Indonesia’s first steel-framed elevated expressway, and PT. Kenertec, Korindo Heavy Industry’s wind turbine tower production subsidiary, will build wind power generators and wind turbine towers with PT. KRAKATAU POSCO steel for export to the US and Europe.

PT. KRAKATAU POSCO also plans to further reinforce partnerships with local steelmakers and increase investments in downstream industries to continue providing quality steel products to its partners in Southeast Asia.

Cover photo courtesy of Universitas Gadjah Mada.

The Matarbari power plant construction project includes the construction of a 1200㎿ (600㎿ x 2ea) coal-fired thermal power plant on Matarbari Island, Chittagong, approximately 280km southeast of Dhaka, the capital of Bangladesh. Site improvement and port construction are also part of the project, expected to last 7 years. POSCO E&C invested a total of USD 4.5 billion in this project which is the largest coal-fired thermal power generation project in Southwest Asia. POSCO E&C is in charge of civil engineering for the power plant worth USD 840 million and the construction of the coal processing facilities and subsidiary facilities.

The Bangladeshi government and the Japanese government have been working together on this project as a means to speed up the low electrification rate of Bangladesh. The Sumitomo Corporation Consortium, which has been cooperating with POSCO E&C, won the contract last month from the project owner Coal Power Generation Company Bangladesh Limited.

POSCO E&C also recently won the contract to build the Yangon Waterworks Improvement Project in Myanmar worth USD 53 million. POSCO E&C selected Myanmar as one of its 5 strategic countries, and built the Yangon Hotel, the tallest landmark building in Myanmar. It is now accelerating its efforts to make inroads into the Myanmar construction market. Both projects are funded by the Japan International Cooperation Agency.

POSCO E&C President Chan-geon Han said, “We won this contract thanks to our world-class EPC technology and expertise, which has been recognized in the Central and South American energy plant markets. This contract is all the more meaningful because we won it at a time of declining overseas business due to a dip in international oil prices.”

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POSCO has been ranked as the world’s most competitive steelmaker for seven years in a row. It has remained competitive in part by focusing on its World Premium Products, which offer advanced steel solutions for their customers. POSCO has also put extensive effort into maximizing its non-steel technologies and products to find new growth in non-steel sectors. In addition, POSCO has been a leader in innovating its own manufacturing processes, incorporating advanced AI and IoT technologies into its smart factories. POSCO has also remained committed to not only growing its non-steel secondary businesses, but advancing upon existing technologies to create new and eco-friendly production methods.  Below we take a closer look at how POSCO has continued its work to innovate and stay competitive.

POSCO Expands Lithium Manufacturing Business

Amid the rising demand for rechargeable lithium-ion batteries used in smartphones, laptops, and electric vehicles, POSCO has been working on proprietary technology for lithium extraction. Earlier this year, POSCO opened Korea’s first lithium plant, PosLX, and commercialized the production of lithium carbonate from rechargeable batteries after 7 years of development.

From left to right: Jae-chun Song, chairman of Gwangyang City Council, Hyun-bok Jeong, mayor of Gwangyang, Gi-jong Woo, deputy governor of South Jeolla Province, POSCO CEO Ohjoon Kwon, Ung-beom Lee, president of LG Chem and Nam-seong Cho, president of Samsung SDI who can be seen pressing symbolic buzzers to show that the plant is now online.

The PosLX Plant is expected to produce 2,500 tons of lithium carbonate per year using a new eco-friendly technology, which is enough to manufacture about 70 million laptop batteries. This output will supply POSCO’s battery making partners LG Chem and Samsung SDI, as well as POSCO ESM, a subsidiary that produces cathodes for secondary batteries.

POSCO incorporates AI into Smart Factories

POSCO is also breaking through technical barriers by designing smart factories connected through IoT technology and artificial intelligence (AI) that produce higher quality products with less waste. POSCO has also begun incorporating advanced AI technology into its smart factories in order to more efficiently manufacture automotive steel.

Smart factories operate autonomously as the machines talk to each other through sensors – reducing faulty products and waste.

In particular, the ‘Smart Solution for Coating Weight Control Based on AI‘ technology uses an automated control technology that predicts the coating weight in real time and accurately meets the target coating weight. When coating weight is controlled manually, quality deviates depending on the skill level of the worker, which inevitably results in significant amounts of wasted zinc. However, when it is automatically controlled by AI, the quality of POSCO’s automotive coated steel can be enhanced while production costs are decreased. These new automated processes have also helped increase work efficiency and productivity with workers.

Also, CEO Ohjoon Kwon recently visited Siemens in Germany and GE in the U.S., both of which are known to have successfully operated advanced smart factories to observe how other companies have implemented highly sophisticated smart factory models. Through close cooperation with POSCO’s major affiliates such as POSCO E&C, POSCO Energy, and POSCO ICT, Kwon aims to embrace smart technology and reorganize POSCO’s entire business structure (Smart Factory, Smart Buildings & Cities, and Smart Energy).

POSCO’s Thailand CGL, Southeast Asia’s First Automotive Steel Sheet Plant

Faced with sluggish growth due to the oversupply from China and a decline in steel demand, POSCO has been looking to expand sales in new markets. In a bid to become the world’s largest steel provider for automobiles, POSCO completed its Thailand CGL (Continuous Galvanizing Line) in 2016. The plant has an annual production capacity of 450,000 tons and incorporates some of the most advanced AI technologies in its smart factory system.

In addition to being one of the strongest automotive production bases in Asia, Thailand is also the center of the consumer-electronics industry in Southeast Asia.

With the newly established automotive steel plate plant in Thailand, POSCO’s global volume will reach over 9 million tons in 2017 and more than 10 million tons per year starting in 2018. The automotive steel sheets manufactured by the facility will be supplied to global auto parts companies and carmakers operating in Thailand including Toyota, Nissan, and Ford. Despite the increase in competition from other steelmakers, POSCO aims to become a market leader through building strategic partnerships with global automakers operating in the country.

POSCO CEO Ohjoon Kwon and Deputy Prime Minister and Minister for Foreign Affairs Tanasak Patimaprakorn shake hands at hands at Thailand CGL.

As cities around the world get more crowded, urban dwellers are facing more and noisier neighbors. To help combat this problem, POSCO introduced PosCozy in 2016, a unique flooring system that combines manganese (Mn) Z-clips with continuous galvanized steel plates that greatly reduce impact noise, save space, and lower costs (product video).  

Unlike conventional flooring that uses non-steel materials such as styrofoam insulators and rubber buffer materials, POSCO’s floor plates are developed by combining high Mn steel Z clips – a material that is 4 times more vibration-resistant than general steel – giving it the ability to reduce noise between floors. PosCozy is able to reduce the sound of typical walking from 50dB to just 40dB, while impact sounds are lowered from 58dB to 38dB.

PosCozy is the world’s first high manganese steel floor plate with first-class floor noise reduction.

PosCozy is the world’s first high manganese steel floor plate with top quality floor noise reduction. It is also the first flooring system to receive the highest rating in sound insulation from Korea’s industrial rating agency.  Due to its unique and superior qualities, PosCozy won the prestigious Jang Young Sil Award in 2016.

POSCO’s High Manganese Steel Used in the World’s Largest LNG-Fueled Bulk Carrier

Due to the rising number of shipbuilding orders for large-sized liquefied natural gas (LNG) carriers, there has been a shortage of nickel,  requiring new and innovative solutions to construct LNG-fueled ships. In order to address these issues, POSCO developed a new type of high-performance manganese steel and announced in 2016 that it would be applied to the LNG-fueled bulk carrier built by Hyundai Mipo Dockyard.

Developed independently by POSCO, this high manganese steel contains an Mn content of 20%. Compared to traditional materials, it boasts improved performance through unique properties that include high strength, low-temperature toughness, wear resistance, non-magnetic, and damping properties.

It is the first time a bulk carrier will have been constructed to include an LNG-fueled system and a fuel tank made of high manganese steel.  Its higher strength, ability to withstand an extremely low temperature (-162℃), and cost competitiveness make it superior to the nickel and aluminum alloys that are typically used in tanks. The ship, which will be the world’s largest LNG-fueled bulk carrier, is expected to have a capacity of 50,000 tons, seven times more than previous ships.

POSCO’s high-performance manganese steel will be applied to the world’s largest LNG-fueled bulk carrier built by Hyundai Mipo Dockyard.

POSCO has been able to overcome immense barriers, from the nickel scarcity in the LNG market to the oversupply of steel from China. POSCO strives to be a pioneer across all industries with its innovative products and will continue to do so in the years to come.

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PT Krakatau POSCO held a meeting with export firms on February 9. Attendees strengthened their relationships as partners and exchanged ideas on POSCO’s sales strategies and goals.

PT Krakatau POSCO recognized the three trading companies with the highest performance in 2016. These three companies included Samsung C&T Co., Hyosung (Europe), and ThyssenKrupp (Brazil). Samsung C&T Co. was recognized for achieving the highest number of sales (88,000 tons, which accounts for 17%), while Hyosung and ThyssenKrupp were recognized for pioneering new markets. Awards were handed out to Yong-soo Kim, a senior managing director at Samsung C&T, Wolfgang Schnittker, CEO of ThyssenKrupp, and representatives from Hyosung. “We want to thank PT Krakatau POSCO for holding this event and hope to continue building our partnership for continued success,” said a representative from Samsung C&T.

Executives from three trading companies accept prizes for recording strong sales or developing new markets in 2016. From left to right: Kyung-joon Min, head of PT Krakatau POSCO; Frederik Bremsteller, a senior manager at ThyssenKrupp; Yong-soo Kim, a managing director at Samsung C &T; Bon-seok Koo, a manager at Hyosung; and Si-young Choi, head of PT Krakatau POSCO Headquarters.

During the main portion of the event, participants discussed marketing strategies to expand the sales of World Premium Products (WPP), countermeasures for common issues, and sales strategies. In addition, with its eye on overcoming recently strengthened protectionist policies, PT Krakatau POSCO also discussed ways to improve its own brand management, which included a regional sales quota management plan with further emphasis on indicating the place of origin on its products. PT Krakatau POSCO is steadily ramping up sales by implementing strategies to promote high-end products (such as WPP).

Kyung-joon Min, head of PT Krakatau POSCO, delivers his opening speech before kicking off the event.

PT Krakatau POSCO is in its fourth year of operation since beginning its full-scale sales activities in 2014. The steel mill has sold 7.7 million tons of products, including a total of 2.3 million tons of steel plates in Southeast Asia. Its cumulative exports of steel plates amounted to 290,000 tons in 2014, 445,000 tons in 2015, and 510,000 tons in 2016 due to aggressive new customer acquisition and local market development activities. The company has also connected with 307 new buyers in 23 countries including Southeast Asia, Europe, and Brazil.

In the future, PT Krakatau POSCO plans to continue developing partnerships with trading companies and to make efforts to strengthen its position and competitiveness as Southeast Asia’s first integrated steel mill and as a leading steel plate maker for the region.

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Take a look back at the 8 biggest stories from The Steel Wire in 2016.

1. World’s Most Competitive Steelmaker for the 7th Consecutive Year

POSCO was once again named the world’s most competitive steelmaker for the 7th consecutive year by World Steel Dynamics (WSD). In addition, POSCO became the only steel company in the world to be simultaneously listed on both the Global 100 Most Sustainable Corporations in the World and the Dow Jones Sustainability Index (DJSI).

2. POSCO Earns More than KRW 1 Trillion in Profits and Improved Credit Ratings

For the first time in four years, POSCO’s consolidated quarterly operating profits exceeded KRW 1 trillion. POSCO also saw significant improvements in the overseas subsidiaries as operating profits for Mexico’s CGL, Vietnam’s cold-rolling factory, and India’s POSCO Maharashtra shot up considerably last year. In addition, CEO Ohjoon Kwon’s corporate restructuring initiatives helped pave the way for improved credit ratings.

3. POSCO Expands with Thailand CGL and other Overseas Endeavors

Thailand CGL (Continuous Galvanizing Line), Southeast Asia’s first automotive steel sheet plant was completed in August 2016. In addition, POSCO expanded its overseas presence by signing agreements with Iranian steelmaker PKP to construct a FINEX-CEM integrated steel mill capable of producing 1.6 million tons a year.

4. Taejoon Park’s Induction into the Korean Business Hall of Fame

POSCO’s honorary chairman, Taejoon Park, was inducted into the Korean Business Hall of Fame. He was recognized for transforming Yeongil Bay in Pohang from what was considered a wasteland into a steel mill that produces more than 21 million tons per year.

5. POSCO Strengthens its Foundations with its Unique Innovation Model

POSCO’s unique innovation program, QSS+, part of POSCO’s POSTIM, celebrated its 10^th anniversary. Compared to previous years, the number of ideas suggested by employees tripled, and six smart factory pilot activities were also promoted. A ‘special compensation system’ was also implemented to award outstanding IP projects.

6. A Culture of Shared Growth is Set into Motion through “Human Solutions”

In 2016, POSCO’s advanced Solution Marketing and World Premium Products reached new heights. At the 2016 POSCO Global EVI Forum, customers heard from experts and industry leaders about POSCO’s unique approach to building proactive steel solutions for its customers. And in 2016, sales of World Premium Products reached a record high and accounted for 48.1% of POSCO’s total sales.

7. POSCO Completes its 4^th-generation Synchrotron Radiation Facility

POSCO completed its 4th-generation synchrotron radiation facility in September, the third of its kind in the world after America and Japan. With the accelerator, researchers can capture movements as brief as a femtosecond (1/1,000,000,000,000,000 of a second). POSCO has high hopes for the accelerator to play a role in future pharmaceutical research & development, biotechnology, clean energy, IT, new material technology, and semiconductors.

8. A Fresh Start as POSCO Daewoo

Daewoo International, incorporated by POSCO Group in 2010, announced its new name, POSCO DAEWOO, as a step towards establishing itself as a leading global trade company. Soon after, POSCO Daewoo signed agreements with a gas-fired powerplant in Myanmar, an Indonesia state-owned shipyard, the Ministry of the Interior of Peru, and the Brazilian navy.

The steel industry continues to face challenges in many areas, but the outlook for the metal seems to be generally positive. Along with North America and Europe, emerging economics such as South and Southeast Asia are showing resilient growth in their steel forecasts.

One of the reasons why this metal is so carefully observed is due to its role as a key contributor to the circular economy. As a permanent and affordable material that can be repeatedly recycled, its sustainability makes it more appealing than competing industrial materials.

Specific markets are looking strong in terms of steel demand – the automotive sector will maintain growth momentum, supported by strong demand in many countries, and the construction sector is showing steady improvement.

For 2015, the world’s crude steel production amount reached 1,622.8 million tons, and production decreased in all regions except Oceania. Annual production of crude steel for Asia in 2015 was 1,113.8 million tons, 166.2 million tons for the EU, 110.7 million tons for North America and 43.9 million tons for South America.

In 2015, the leading steel-producing countries included: China, Japan, India, the United States and Russia. Countries following closely behind are South Korea (69.73 million tons of crude steel production), Germany (42.68 million tons), Brazil (33.25 million tons), Turkey (31.52 million tons) and Ukraine (22.93 million tons).

South Korea’s economic growth has been greatly aided by the steel market, and it is ranked first for countries using the most steel per capita (1,113.6 kilograms). POSCO has been a crucial part of this growth, placing in the international rankings for top steel-producing countries. The company produced 41.975 million tons in 2015.

We can see there have been relatively modest changes for each of these economies in the table above, and we can expect more shifts in the coming year.

For more information on The World Steel Association’s expected outcomes for 2016 and 2017, click here.

Read on to learn some interesting facts about how steel has been utilized in the histories of the top five steel giants.

5. Russia

Crude Steel Production: 71.11 million tons

Interesting fact: The city of Magnitogorsk, celebrated as the “steel heart of the motherland,” is home to Russia’s largest iron and steel works. During the 1930s, the city was designed under one of Stalin’s Five-Year-Plans, when he erected the then-largest steel plant in the world, the Stalin Magnitogorsk Metallurgical Complex.

4. United States

Crude Steel Production: 78.92 million tons

Interesting fact: Andrew Carnegie, who made his fortune on steel, was the first to initiate the development of a mass-produced version of the material. With his solution, he built the St. Louis Bridge, and convinced people of its stability by having an elephant walk across it on its opening day.

3. India

Crude Steel Production: 89.58 million tons

Interesting fact: The use of iron in India goes back to ancient times, and is even mentioned in epic and religious Sanskrit literature. The Vedas and the Puranas, both sacred texts of Hinduism, reference the metal and speak of its uses during times of peace and war.

2. Japan

Crude Steel Production: 166.18 million tons

Interesting fact: The traditional katana sword, wielded by samurais, is crafted using only the purest steel, tamahagane (“jewel steel” in Japanese). The sword is made from shoveling 25 tons of iron-bearing river sand and charcoal over a course of three days and nights into a tatara, a clay furnace built specifically for a single batch of tamahagane. The smelting process yields about two tons of the material.

1. China

Crude Steel Production: 803.83 million tons

Interesting fact: After inventing the predecessor to the compass (the Sinan) during the Han Dynasty, China developed some of the first compasses in the 11^th century. While initially made of lodestone, magnetized steel needles were used as the core pointer of the navigation tool, suspended in water to create a wet compass. Trading ships during the Song Dynasty were then able to travel to as far as Saudi Arabia without getting lost, expanding on their trade routes.

Production rates according to the World Steel Association (worldsteel) 2015 World Crude Steel Production Performances.

The World’s Top 5 Steel Producing Countries

worldsteel Outlook: Down in 2016, but Rebounding Next Year

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The completion ceremony of Thailand CGL (Continuous Galvanizing Line), which has an annual production capacity of 450,000 tons, was held on August 31 in the Amata City Industrial Estate in Rayong, Thailand. Over 250 people attended the ceremony, including POSCO CEO Ohjoon Kwon, Deputy Prime Minister and Minister for Foreign Affairs Tanasak Patimaprakorn, Minister of Industry Atchaka Sibunruang, Rayong Governor Somsak Suwansujarit, Korean Ambassador to Thailand Kwangil Noh and employees of local clients.

Members of the Thailand government and executives from parent companies, including POSCO CEO Ohjoon Kwon (featured in the middle), participated in the ribbon cutting ceremony for the completion of POSCO’s Thailand CGL on August 31 in Rayong Province, Thailand.

“Thailand is the hub of the AEC (ASEAN Economic Community) that was launched last year, and is positioning itself as the automotive production base in Southeast Asia as well as the center of the home appliances industry,” claimed Kwon in the welcoming speech that day. “With today’s completion of Thailand CGL, POSCO will be devoted to becoming a total solutions partner that provides differentiated products and customized solutions in Thailand, while also creating value and growing with our clients.”

POSCO CEO Ohjoon Kwon and Deputy Prime Minister and Minister for Foreign Affairs Tanasak Patimaprakorn shaking hands after handwriting a message on a coil produced in Thailand CGL.

The completed CGL is a premium automotive steel sheet production base that began construction in September 2014 with a total investment of $300 million. POSCO plans to expand into the premium automotive steel sheet market in Thailand by supplying the products manufactured at the new operation to global automakers and parts manufacturers such as Toyota, Nissan and Ford stationed within the country. The company also plans on providing the processing services of POSCO-TBPC, which is a processing center near Bangkok.

Thailand is one of the biggest automobile producers in the world, with more than 50% (2 million vehicles a year) of the automobile production capacity in Southeast Asia. It also has a large-scale automobile market, in which China’s SAIC Motor will be establishing production facilities with a production capability of 200,000 by 2017, and where Japanese automakers are constantly expanding their facilities.

In particular, with the recent zero-tariff measures taken among AEC member states and the Thai government’s eco-friendly car industry policy, the Thai market has high growth potential that will expand to an annual production capacity of 2.8 million by 2020.

Automakers and parts manufacturers in Japan have been advancing steadily in this region since the 1960s. In 2013, to supply materials to Japanese companies on site, steelmakers such as JFE and NSSMC completed automotive steel sheet plants with capacities of 400,000 tons and 360,000 tons, respectively.

Despite the increasing production scale of automotive steel sheets in Thailand, the supply still falls short of demand, which inevitably results in greater dependence on imports from overseas markets. Thus, POSCO plans to build stronger strategic partnerships by smoothly supplying materials to global automakers and parts manufacturers (including Japanese companies) in Thailand, and to expand sales of premium plating materials in the automotive steel sheet market. Accordingly, POSCO reviewed the project to establish a local production subsidiary in 2011, launched the CGL project in 2014 and finally completed the construction on August 31, 2016.

POSCO-TCS employees will contribute to the reinvention of POSCO the Great by securing a leading competitive edge in the automotive steel sheet market in Southeast Asia.

By completing the plant, POSCO has established an optimized solution marketing system in Southeast Asia, covering departments from production to processing, sales and technical support with the local processing subsidiary and the production facility in Vietnam. POSCO will be able to strengthen its position in competition with global steelmakers by expanding the production capacity for automotive steel sheets in Thailand, in addition to its production output from India and China.

With the completion of Thailand CGL, POSCO’s production capacity for automotive steel sheets overseas has increased to 2.25 million tons a year. POSCO also plans to establish and extend the CGL operation in Gwangyang and China, operating seven lines in Korea and six lines overseas, thereby producing more than 9 million tons this year. After 2018, the company will complete a 10-million-ton sales system to secure its place as the world’s best supplier of automotive steel sheets.

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As 2014 Paris Motor Show is still on the show, car fanatics around the world are continuing to devote their attentions to the automobile industry. For today’s last episode of our globalblog’s 2014 Paris Motor Show series, we would like to share another context of POSCO’s engagement in the automobile industry. Recently, POSCO participated in an automobile event in Malaysia. Let’s find out about POSCO’s activity in the event!

POSCO’s Participation in Malaysia’s ‘PROTON Technology Day’
Over the course of 2 days in Malaysia from September 27^th to 28^th, POSCO participated in the PROTON Technology Day for the first time in Southeast Asia. PROTON, headquartered in Kuala Lumpur, Malaysia renowned for its strong automobile manufacturing business in Southeast Asia, hosted this technological event and invited a number of world-famous technology giants, including Bosch and 3M, and over 25 other automobile-related electronic components manufacturers of the automobile industry. Despite the fact that POSCO was the only company invited globally from the steel industry, it was highly praised for its technological breakthroughs,  super strength steel such as PosM Steel or Aluminum Plated HPF, and a wide range of various automobile parts from the audience.

POSCO, the ‘Solution Provider’ powered by EVI Program and PROTON Automobiles
Through this opportunity, POSCO emphasized its competitiveness as the world-leading steel manufacturer and actively promoted itself as the ‘Solution Provider’ by introducing the EVI program that supports developments of new cars and relevant technologies for its clients. Regards to POSCO’s presentation at the PROTON Technology Day, PROTON’s CTO Mr. Rashid stated that, “I was deeply intrigued by POSCO’s effort to support technological breakthroughs in automobile industry through the EVI program and I hope we can build a stronger corporate relationship with POSCO concerning joint technological development for the new cars”.

At the PROTON Technology Day, board members of POSCO held a business meeting with the CEO Mr. Harith from PROTON to discuss how both parties could mutually enhance the corporate relationship. Furthermore, both corporates held an in-depth discussion session on the 26^th to review potential technical exchange gathering programs for board members of the two companies to achieve joint technological development in more effective and efficient manner.

POSCO in Malaysia
POSCO saw a big potential in the local steel market for automobiles and appliances in Malaysia and has been aggressively investing in Malaysia for the past years. Accordingly, POSCO currently operates POSCO-Malaysia that manufactures electronic galvanized steel sheet, POSCO-MKPC that acts as a processing center for steel products, and POSCO-South Asia Kuala Lumpur Office in Malaysia.

To briefly introduce, POSCO-MKPC is a steel-processing center located in Selangor, Malaysia that operates 2 separate processing factories that account for processing 100 and 120 thousand tons of steel per year respectively; POSCO-Malaysia is responsible for operating manufacturing factory that produces approximately 18 thousand tons of steel products per annum. By operating these facilities, POSCO aims to expand supply and clients by providing high-quality steel products to the Malaysian market.

Though 2014 Paris Motor Show will be closing on the 19^th this month, we hope all of our POSCO fans to maintain the interests in POSCO in the automobile industry. We will continue to post more content on POSCO’s technology in various fields of industries, so stay tuned for our next series!

This marked the first time in 40 years that POSCO began producing molten iron overseas since its first effort on Yeongilman Bay in Pohang. POSCO’s 40 years of devotion to steel has begun to make its appearance overseas.

Approximately 500 employees and government officials of both countries attended the ceremony. These attendees included the Indonesia president Yudhoyono, the head of Indonesia’s Ministry of Trade Hidayat, the Vice Minister of  Korea’s Ministry of Trade, Industry, and Energy Kim Jaehong, Korean Ambassador to Indonesia Kim Yeongseon, ASEAN Ambassador Baek Seongtaek, POSCO CEO Chung Joonyang, Krakatau President Irvan, client companies, construction companies, suppliers, external partners, and regional representatives.

In his congratulatory speech President Yudhoyono said, “I anticipate that Krakatau POSCO’s steel products, manufactured at these cutting edge facilities will both satisfy steel demand in Indonesia, and greatly contribute to economic growth and job creation.”

CEO Chung said, “The past 30 months of integrated steelworks construction was not an easy journey, but we have succeeded with the strength of Korean technology and Indonesia’s excellent manpower. Just as POSCO’s philosophy of serving its home country by the means of steel production became the basis for national economic development in Korea, I am certain that Krakatau POSCO will serve Indonesia in the same capacity.”

Krakatau POSCO was jointly established by POSCO and Indonesia’s state-run Krakatau Steel at a share ratio of 7 to 3, and boasts iron making, steelmaking, and steel plate production facilities. The company is capable of producing 1.8 million tons of slab and 1.2 million tons of steel plate.

Krakatau POSCO plans to reach positive operating profits in 2014, its first year of operation, through proactive market development and low-cost production technologies. The company will proactively secure sales networks in the domestic market where prices are higher than exports, and sell 1.5 million tons of slab and 600,000 tons of steel plate in Indonesia.
The company also plans to secure competitiveness in its early stages, through innovative cost reduction activities such as utilizing POSCO’s unique production technology which can employ low grade materials, and thus gradually utilize Indonesian steel ore in place of costly imported steel ores.

Over the course of the integrated steel works project, the POSCO Family companies in each field, including construction, power generation, and IT, gathered together to mark a new milestone in overseas steelworks construction. When the Pohang Steelworks was first built 40 years ago, POSCO had to solely rely on overseas technologies but it can now construct overseas steelworks on its own.

POSCO E&C was responsible for overall engineering and construction of the integrated steelworks including iron making, steelmaking, and steel plate production facilities, while POSCO Energy was in charge of constructing a steam power plant. POSCO ICT established the EIC engineering and IT integrated system, while POSCO CHEMTECH supplied a processing facility producing limestone furnace and coke byproducts. POSCO M-TECH built a factory to produce aluminum deoxidizers, necessary for molten iron production. Daewoo International will support overseas exports and domestic sales of the steel materials produced in Indonesia, as well as new resource development in Indonesia.

In addition, 248 Korean small and medium sized companies participated in the construction of the Indonesian integrated steelworks, setting an example for win-win cooperation between large scale and small and medium sized companies. These small and medium sized companies were thus enabled to be involved with advanced steel facilities and global capabilities via POSCO.

The necessary equipment for the steelworks was provided by 222 small and medium sized companies, including Taechang Machinery which provided equipment to custom cut steel plates according client requirements, and Hyundai Mechanic & Electric which provided electric power receiving and distribution facilities. Overseas on-site construction was carried out by 26 companies, including Dongjin and Daeah E&C.

Indonesia makes up a large market, with a population of 250 million, maintaining an average annual growth at 6%. The market has excellent steel consumption potential, as 12.5 million tons of steel are necessary for economic growth. However, Indonesia has mostly relied on imports, with annual steel consumption per person of 50kg, less than one-twentieth that in Korea. There are no quality and cost competitive steelworks in surrounding economic areas, including Vietnam, Malaysia, and Myanmar, thus ensuring further market potential for the steel industry in Indonesia. By commencing operations of the Indonesia integrated steelworks POSCO plans to complete a steel belt spanning China-Vietnam-Indonesia-India to target the Southeast Asian market, and continue to grow as a global steel company offering the world’s best competitiveness.

POSCO joined hands with PT Krakatau Steel, Indonesia’s state-run steel company, and started construction of an annual 3 million ton scale integrated steelworks in Cilegon, Indonesia, in October of 2010.  Krakatau POSCO, the local subsidiary, is targeting completion of construction by the end of December, with construction progress currently at 98%.

On the 7^th, one day before the first coke was produced, Krakatau POSCO charged the first coal into the coke oven as the blower, the core facility of the coke making process, was operated.  Approximately 36 hours after coal was charged into the 58.9 ton coke oven, and at a temperature of 1150℃, carbonized coal was made into coke for the first time in Indonesia, on the 8^th.

Fandi, who was in charge of driving the first charging car said, “I am happy and excited that Indonesia has produced its first coke.  The results of eagerly learning from the consultants dispatched from Korea can be seen in the outcome.  I am once again amazed by their will and feel thankful.”

Through the construction of the Krakatau POSCO integrated steelworks, POSCO plans to firm its position as a major global steel company and continue to prepare a stepping stone to enter the Southeast Asia market, which has high growth potential.