In addition, President In-hwan Oh and Vice President Jeong-woo Choi were re-elected as inside directors at the general shareholders’ meeting, and Vice Presidents In-hwa Chang and Seong Yu were newly appointed as inside directors. Those appointed as new outside directors were Shin-bae Kim, former vice chairman of SK Group; Seung-hwa Jang, a professor of law at Seoul National University, and Moon-ki Jung, an associate professor of Business Administration at Sungkyunkwan University.

During his first three-year term that began in 2014, Ohjoon Kwon worked to enhance the corporate structure and profitability by focusing on strengthening POSCO’s core competitiveness as a steel company, its financial soundness, and group restructurings for his first three years in the role.

Kwon, who worked as CTO (Chief Technology Officer) before becoming the CEO, is a steel technology expert who has previously served as the director of the Technology Research Center and director of the Research Institute of Industrial Science and Technology. Under his leadership, POSCO secured exclusive technology competitiveness and also moved forward with its Solution Marketing offerings that combine hardware, steel products, software integration and application technology, commercial support, and human solutions.

POSCO significantly drove up its operating profits by 19% to KRW 2.6 trillion at the end of last year from KRW 2.2 trillion in 2013, Kwon’s first year as CEO. During the same period, its operating profit ratio also increased from 7.3% to 10.8%, POSCO’s first double-digit operating profit ratio in five years. Since Kwon’s inauguration as CEO, a total of 126 restructurings have been implemented to achieve a cumulative financial improvement of KRW 5.8 trillion by the end of last year. Its debt ratio stood at 17.4 percent, the lowest level since the foundation of POSCO.

As CEO Kwon succeeded in improving POSCO’s structure while enhancing its financial soundness and profitability. The company’s credit ratings by international credit rating agencies also improved. In October 2016 Moody’s upgraded POSCO’s long-term credit rating outlooks from Baa2 (negative) to Baa2 (stable), and in February 2017, Standard & Poor’s upgraded their rating from BBB+ (negative) to BBB+ (stable).

On March 10, POSCO held its 49th general shareholders’ meeting at the POSCO Center. More than 200 domestic and overseas shareholders, including representatives of overseas shareholders and institutional investors, attended the general shareholders’ meeting.

“With a low growth rate, higher raw material costs, and the spread of protectionism throughout the overall domestic industry, we are facing a tough business environment,” CEO Kwon said at the general shareholders’ meeting. “But we will lay the foundation for future growth and strengthen the profitability of steel.”

To this end, Kwon laid out his vision for the future to:

• strengthen the steel business by reinforcing its World Premium Products that are based on proprietary technologies such as high-manganese steel and giga-grade steel,
• solidifying the group’s business structure through structural improvements and efficiencies,
• discovering and promoting new synergy projects among group affiliates, and
• preparing a future growth engine based on smart solutions.

In-hwa Chang, who was newly appointed as an inside director, is responsible for the steel production sites at Pohang Works and Gwangyang Works. He previously served as head of the New Business Management Office, head of the Steel Solution Marketing Office and head of the Technology Investment HQ. As head of the Technology Investment HQ, Vice President Seong Yu is heading up new business endeavors such as in high value-added product technologies as well as the development of POSCO’s lithium production ventures and cathode materials business. Yu previously served as head of the New Business Management Office, head of ESM Business Office and head of the PosLX Business Group.

Outside director Shin-bae Kim is a high-profile IT business entrepreneur who served as president of SK Telecom and vice chairman of SK C&C. Due to his excellent management skills, he was promoted to become a vice chairman of the SK Group.

Outside director Seung-hwa Chang is a professor of law at Seoul National University. Previously he served as a judge of the Seoul District Court and also worked as a lawyer in the United States. As a specialist in international trade law, he worked as an arbitrator for the International Court of Arbitration and was appointed as the first Korean judge of the WTO Appellate Court.

Outside director Moon-gi Jeong is an Associate Professor of Business Administration at Sungkyunkwan University. Jeong worked at Samil PwC as a member of the Financial Supervisory Service’s Accounting Review Committee for many years and has served as the Vice Chairman of the Korean Accounting Society.

The meeting was attended by about 200 domestic and overseas shareholders including representatives of overseas shareholders and institutional investors.

At a Board of Directors meeting held after the general meeting of shareholders, POSCO elected outside director Byoung-won Park as chairman of the Board of Directors. In-hwan Oh and Jeong-woo Choi were appointed as new presidents.

In-hwan Oh, promoted to president in February, is serving as Chief Operating Officer (COO) of the Steel Division and COO of the Steel Business Division. Before, Oh served as the head of marketing and the head of the Steel Business Strategy Office. President Jeong-woo Choi is currently the head of the Corporate Strategy & Finance Center after serving as the chief financial officer, head of the Corporate Audit Department, and vice president of POSCO Daewoo.

Byoung-won Park, chairman of the Board of Directors, is now chairman of the Korea Employers’ Federation and has been working as an outside director of POSCO since 2015. Park also served as chairman of the Woori Financial Group, chairman of the Korea Federation of Banks, and chairman of the National Happiness Fund.

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To better understand those dramatic developments, POSCO invited noted futurist Thomas Frey to address this year’s POSCO EVI Forum, held Oct. 31-Nov. 2 in Incheon, South Korea. Every two years, POSCO invites hundreds of its customers and partners to learn about POSCO’s unique approach to steel solutions and to talk about the future of the steel industry. So Frey’s presentation gave all the attendees plenty of food for thought.

Frey is the founder of the DaVinci Institute, a think tank and research firm dedicated to exploring the deep transformations that technology is bringing to our world. Frey pointed out that all industries have an arc, with a beginning, middle and an end, and at the moment most of the biggest and most-profitable industries are in the latter half of that curve. In other words, big changes are underway.

A Challenging New World

Frey pointed out that there are two major aspects to innovation: disruptive and catalytic. Disruptive innovation refers to industries that are hurt or eliminated by technology (like how cars took the place of horses and carriages). But catalytic innovation creates whole new fields and economies (like how the rise of electricity completely changed manufacturing and what industry produced).

So far, the modern digital revolution has had two big catalytic innovations – the internet and smart phones. But Frey sees eight more fields that could be just as transformative:

• Driverless vehicles
• The trillion sensor movement
• 3D printing
• The Internet of Things (IoT)
• Contour crafting
• Artificial Intelligence (AI)
• Virtual Reality (VR)
• Flying drones

Each mobile app has the potential to eliminate a few jobs, but with thousands of apps, those jobs begin to add up. Together, these innovations could see 2 billion jobs disappear, as machines take over for up to 47 percent of current jobs. And, Frey noted, some 8,000 startups received $12 billion last year, all looking to take a bite out of traditional industries. “There are no safe industries out there,” Frey said.

But Frey didn’t make this prediction in a “doom and gloom” sort of way – “It’s a wakeup call,” he said. While challenging, these changes could also lead to all new jobs and possibilities.

Cruisin’ Into a New World of Cars

To illustrate what these catalytic innovations might mean, Frey went in-depth about the implications of the rise of driverless vehicles. Most obviously, self-driving cars and trucks will eliminate a wide range of driving-related jobs, like taxi drivers and couriers.

But the changes caused by driverless vehicles to our world will go much deeper than that. Self-driving cars will change society from a buying model to an access economy, where people will just order a vehicle when they need one instead of owning their own. That eliminates the need for most parking lots, gas stations and other automotive fields.

The improved safety potential of driverless vehicles could greatly reduce repair-related work. And, because nearly 10 percent of retail sales are car-related, this could result in major changes for our economy as a whole. Some parts will change from B2C to B2B, while other aspects of the industry will just disappear.

Steel and the New Era of Megaprojects

All businesses have an arc, and steel will, too, noted Frey. “How long before we reach peak steel? Don’t know yet, but we think there’s a long run here still.”

So, with the rise of new substances and manufacturing, as well as the digitizing of much of the economy, what does that mean for steel?

“The future of steel will be defined by megaprojects,” Frey asserted. Indeed, megaprojects represent 8 percent of the global GDP, so the changing infrastructure needs caused by rising digitization will transform economies and the steel industry. “By 2030, we’ll see more changes to our core infrastructure than in the combined total of human history.”

These megaprojects include huge new bridge and tunnel projects, often linking countries across great bodies of water, as well as new high-speed transportation options, like hyperloops and ET3s. With hyperloops promising speeds of 1,100km/hour and ET3s theoretically able to go 6,000km/hour, the ability to go halfway around the world in a couple of hours could once more revolutionize how our societies work. But building the tracks and systems needed for these technologies would require massive amounts of spending – and massive quantities of steel.

“We are entering into an era of unprecedented opportunity,” summarized Frey, talking about both the steel industry and society as a whole. Thanks to Thomas Frey, the EVI Forum attendees gained many valuable insights to think about and discuss during this year’s event.

POSCO EVI Forum Impresses With Solution Marketing

Solution Marketing Revs Up POSCO’s Steel Business

2014 POSCO Global EVI Forum #1 ‘From Steel Supplier to Solution Partner’

2014 POSCO Global EVI Forum #2 Program Details and Client Interview

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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.

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He was one of more than 1,000 attendees at this year’s POSCO Global Early Vendor Involvement (EVI) Forum, held Oct. 31 to Nov. 2 in Incheon, South Korea. Every two years, POSCO invites hundreds of its customers and partners, to learn about solution marketing, POSCO’s unique approach to building proactive steel solutions for its customers.

“Since I’m from an Australian electrical steel company, I appreciate the chance to learn meaningful information regarding advance manufacturing and relevant industries,” added Andonovski.

Three Days of In-Depth Presentations

The Forum kicked off with a signing ceremony for more than 100 agreements with global clients in the field of joint technology research and sales. And throughout the three-day event, a variety of speakers kept the audience engaged with a series of presentations.

“POSCO’s future-oriented solution marketing focuses on three solutions,” said Ohjoon Kwon, president of POSCO, in his keynote speech. “Technical solutions that providing steel utilization technology, commercial solutions that support the sales of clients’ products, and human solutions that value connecting with our clients at heart. Using these three solutions, we strive to become a reliable partner that helps our clients find success.”

In addition to a presentation by President Kwon, some of the featured speakers included GM Korea Vice President Greg Tyus, ExxonMobil CTO Douglas Fairchild, the Minister of Trade from Indonesia Thomas Trikasih Lembong and futurist Thomas Frey.

Trends and Demonstrations

Once again, the theme of the forum was “From Steel Supplier to Solution Partner,” and explored three years of solution marketing and the company’s latest products. Additionally, talks examined future trends for the steel industry, including “Eco-Friendly Vehicles,” “Upheavals in Energy,” “Mega Cities” and “Premium Living Infrastructure.”

For example, POSCO had a model car on display made from Giga Steel – an ultra-high strength steel that can withstand a load of 100kg per 1mm². Another type of high-strength steel, HSA800, is twice as strong as ordinary steel and is considered to have very good seismic resistance. And “Inkjet printing steel sheets” are designed for the application of high-resolution images, and is expected to find many uses in home appliances.

The company also introduced high-manganese steel, made from 3%-27% manganese. High-manganese steel has a range of properties – such as abrasion resistance, being non-magnetic, high strength and high formability – making it useful for the energy industry, including LNG tanks.

The Power of Solution Marketing

After the keynote address and general sessions, the attendees were divided into nine industry-specific themes, to allow more detailed discussions and presentations relevant to each field.

“The general session has provided such a great opportunity to expand my knowledge about the different areas of steel,” said Teguh Sarwono, general manager of PT KRAKATAU Steel in Indonesia. “The special lecture about Indonesia’s steel industry was especially insightful for me as a foreign vendor of POSCO.”

In addition to talking about new products, there were also presentations about outstanding examples of POSCO’s solution marketing. For example, POSCO has worked with Volkswagen to make stronger steel and reduce the weight of vehicles, and it worked with Daewoo Shipbuilding & Marine Engineering to create high-strength wire products.

“I feel honored to have been invited to the POSCO EVI Forum, and happy to have gotten the chance to meet clients from all over the world,” said Christiawaty Kasger, general manager of POSCO Indonesia Inti. “By taking part of this kind of event, I have gotten a greater sense of connection with POSCO and look forward to working together more in the future.”

Smart Factory, Smart Company

POSCO has already involved the IoT to develop improved safety measures, but now with the Smart Factory, the entire production process has advanced for the sake of creating better products in the future.

The Smart Factory transforms the conventional idea of a steel mill into an intuitive operating system, promising faster production, higher-quality goods and safer work environments.

Matching its position as a leading global steelmaker, POSCO’s Smart Factory gives evidence of the company’s optimized facilities for creating the most reliable steel products available worldwide.

Solution Marketing Revs Up POSCO’s Steel Business

2014 POSCO Global EVI Forum #1 ‘From Steel Supplier to Solution Partner’

2014 POSCO Global EVI Forum #2 Program Details and Client Interview

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POSCO held POSCO Tech Day for Renault Samsung on September 21. (From right) Renault Samsung Purchasing Division Executive Director Kapshik Hwang, POSCO Automotive Materials Marketing Managing Director Yangsu Yun and Renault Samsung Manufacturing Division Managing Director Juhyoung Baek listening to an overview about the performance of the SM6 joint development.

POSCO holds Tech Day to expand technical and commercial cooperation with its clients and to strengthen strategic partnerships. The company is planning to do this through enthusiastically promoting the excellence of world premium automotive steel products and the best practices of innovative solutions marketing.

POSCO and Renault Samsung are maximizing synergy between the two companies through active technical cooperation in automotive materials and collaboration in marketing as well. The SM6, released by Renault Samsung in 2016 and has since been well-received in the market, was created through four years of close technical cooperation. It featured Korea’s first mass production of high-strength steel for outer panels (260Y BH) and also the first TWB-HPF processing technology, thereby applying an ultra-high strength steel that is higher than 1.2GPa to 18.5% of the car body. This enabled the model to obtain a KNCAP Grade 1 and an ENCAP 5 Stars in a new car safety evaluation, ensuring excellent safety even with a lightweight car body. In March, POSCO and Renault Samsung also strengthened their win-win partnership with a joint promotion for the SM6 at the POSCO Center.

The Tech Day for Renault Samsung featured three concepts under the slogan “Innovation Partner, POSCO”: 1) innovative solutions, 2) win-win growth and 3) the POSCO experience. In particular, the show focused on vividly and effectively delivering the features and competitiveness of POSCO’s automotive materials.

Furthermore, by holding a technology seminar on the current status of POSCO’s advanced technology development and new weight reduction solutions, the show also provided a venue to discuss the future direction in these areas for new cars and strengthen the partnership between the two companies.

POSCO plans to secure its place as the world’s best automotive steel sheet supplier while reinforcing cooperation with domestic automakers by holding Tech Days for Ssangyong Motor Company and GM Korea.

TWB-HPF (Tailor Welded Blank-Hot Press Forming) is a converged technology combining TWB (tailor welded blank), which cuts steel sheets of different thicknesses and grades in desired shapes and welding them with a laser, and HPF (hot press forming), which adds high heat to the steel sheets and then rapidly cools it in order to increase grade intensity.

POSCO Announces New Steel Sheets at Detroit Motor Show

Solution Marketing Revs Up POSCO’s Steel Business

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