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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Automotive coated steel, one of POSCO’s World Premium Products (WPP), is a high-grade product that requires a high level of sophisticated technology. Only 20 out of 800 steel companies in the world can produce it at this time. Last year, POSCO sold approximately 9 million tons of automotive steel sheets, accounting for 10% of the global automotive steel sheet market.

The ‘Smart Solution for Coating Weight Control Based on AI‘ is a technology that drastically reduces the deviation of coating weight by using artificial intelligence to precisely control the Continuous Galvanizing Line (CGL), the primary technology used in automotive steel sheet production.

In particular, this technology uses an automated control technology that predicts the coating weight in real time and accurately meets the target coating weight by combining the coating weight production model of the artificial intelligence technique with the control model of the optimization technique.

A developer and worker are seen in the operating room monitoring the optimal coating weight predicted through artificial intelligence. POSCO succeeded in developing the ‘Smart Solution for Coating Weight Control Based on AI‘ through a joint industry-university effort, and applied it to POSCO 3CGL last January. With artificial intelligence, it is now possible to collect hundreds of different types of data in real time, as well as accurately predict and control target coating weights.

Coating weight control is a highly-sophisticated technology that keeps the thickness of the coating layer consistent even when operating conditions change at the request of automakers. When coating weight is controlled manually, quality deviates depending on the skill level of the worker, inevitably resulting in significant amounts of wasted zinc. However, the plating process is now automatically controlled by artificial intelligence, increasing the quality of POSCO’s automotive coated steel while decreasing production costs. These new automated processes have also helped to increase work efficiency and productivity with workers.

Since the inauguration of CEO Ohjoon Kwon in 2014, POSCO has been preparing to take the lead in smart solutions by integrating AI into its smart factories. Last June, POSCO Technical Research Laboratories identified the need for an automated coating weight control system and collected the relevant data after discussing with several departments. POSCO worked with Prof. Jon-seok Lee of the Department of Systems Management Engineering at Sungkyunkwan University in Seoul, Korea, to develop the artificial intelligence coating weight prediction model algorithm. Prof. Lee is an expert in statistics, data mining, machine learning and optimization methodologies. He collaborated with POSCO researchers to develop the coating weight prediction program after analysis of the plating process.

Starting in July 2016, a beta program was introduced for two months. After successful completion of the beta test, POSCO Technical Research Laboratories added an additional program to ensure quality control even under changing operating conditions.

The core AI technology that was applied to the coating weight control automation is a self-learning software that utilizes big data deep learning techniques. This method operates in real time allowing the AI program to stay up-to-date by analyzing hundreds of different types of data generated during the plating process. It can accurately predict and control coating weight through real-time, even if equipment has been replaced or operating conditions have changed.

The completed coating weight control automation solution was applied to POSCO’s 3CGL line in Gwangyang on a trial basis for approximately 2 months, enhancing accuracy and stability. Normally, when operating manually, deviations in the coating weight can extend up to 7g per m², but with POSCO’s AI-based technology, this number is reduced to 0.5g per m². After a technical verification process, the technology was incorporated into the 3CGL line on January 5.

To maintain its position as a global leader in automotive coated steel technology, POSCO is planning to apply this coating weight control automation solution to other CGLs at home and abroad, like the recently opened Thailand CGL. POSCO is also taking steps to introduce artificial intelligence technology to the manufacturing processes of other steel products while also continuing to build smart factories that can help POSCO continue to be a leader in the steel industry.

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At POSCO, there are many talented researchers, engineers, and factory workers, who are working constantly to make steel stronger, lighter, and longer-lasting. The Steel Wire sits down with three of those POSCO employees who have played essential roles in helping to establish POSCO as an industry leader in automotive steel solutions.

Q1. POSCO has relied on its experts to become an industry leader in advanced automotive steel manufacturing, and you have all played important roles within POSCO’s development of automotive steel. Can you tell us about the fields you are in and what your role has been?

[Shin Seung-cheol] For the last three decades, my main focus was to secure POSCO’s position as an industry leading automotive steel producer. Currently, I am at Gwangyang Steelworks working to create steel innovations and develop new technologies.
[Cho Byeong-ho] I work in the cold rolling department at Gwangyang Steelworks. Since joining POSCO in 1990, I have been working to develop World Premium Products, which account for 70% of the cold-rolled products manufactured in my department.
[Lee Jin-soo] I began my career at POSCO in 1993 working as a sales engineer in Indonesia and Singapore. After that, I moved to Gwangyang Steelworks where I was in charge of establishing technology strategies for automotive steel sheets as well as producing Tailor Welded Blanks (TWB). More recently, I guided the completion of Thailand CGL in 2016 to help POSCO be more competitive in the SE Asian market. Now, I serve as the corporate head of POSCO-Thailand Coated Steel (TCS).

“POSCO’s mission in 2009: Develop the best, most advanced automotive steel solutions that only POSCO can produce.”

Q2. Starting is often the most difficult step and we have sure faced some hurdles along the way. Can you tell us about the some of the problems you faced while developing automotive steel products?

[Shin Seung-cheol] Sure, in 2009, our team’s goal in the rolling sector was to ensure the productivity and quality of the World Premium Products. In the annealing process of the cold rolling sector of the Gwangyang Steelworks, I was told to make “the best automotive steel plates.” However, compared to other products, automotive steel plates demand a much higher quality than other products, and our equipment was outdated and rundown, making it almost impossible to create the flawless steel plates that were required. Achieving both high quality and continuous mass production required a new level of innovation.

[Cho Byeong-ho] When I was at the cold rolling mill, we were facing challenges from both domestic and foreign competitors. So, we streamlined old equipment and increased production of the World Premium Products such as automobile steel plates and high-grade steel. However, there were many problems. At one point, the cold rolled steel kept falling off before reaching the rolling process.

Q3. There’s a famous quote that says ‘Patience is bitter, but its fruit is sweet.’ Does this make sense when you think about the work you accomplished in developing advanced automotive steel for POSCO?

[Shin Seung-cheol] Yes, that quote rings true for our team. After three years of testing the steel surface quality and improving the Continuous Annealing Line (CAL) facility, we eventually succeeded in securing high-quality automotive steel plates. Strict management standards along with systematic & rigorous product inspections from the customer’s point of view were also put in place in order to ensure that the products met the client’s needs.

[Cho Byeong-ho] When we couldn’t keep the steel from falling off before reaching the rolling process, we decided to visit the cold-rolling mill at Pohang Steelworks to help us find a solution. There, we worked on solving the problems with a small-scale laser welding team and we got support from maintenance experts. With proper facility training and data improvements, the 2nd cold rolling mill was ultimately able to work consistently.

“Now, it’s more than a mission. We will be the leading automotive steelmaker in Asia.”

[Lee Jin-soo] Thanks to our team’s endless efforts, POSCO was able to succeed in producing highly competitive automotive steel. POSCO provides around 150,000 – 200,000 tons of galvanized steel plates to Thailand every year. But we did not want to be #1 only in Korea; we wanted to have a stronger presence in the growing Thai market as well.

In order to expand our presence in the Thai market and provide stable supplies to existing clients, we differentiated ourselves from competitors through the quality of GI products for home appliances and painting – areas where we held a competitive advantage.

Q4. Your passion for finding innovative solutions, as well as your success at POSCO, is impressive. What are some of the most meaningful accomplishments you have made at POSCO?  

[Shin Seung-cheol] I was very grateful to be named as one of the POSCO Masters of Korea in 2016. This honor is reserved not only for the best field technicians with the highest levels of skill, but also for those who help their coworkers by sharing their expertise. I was happy to be acknowledged for my own skills as well as my efforts to help others.

[Lee Jin-soo] I am proud that I was able to be a part of the efforts to bring two manufacturing centers in Mexico online. POSCO-MPPC plant 1 & plant 2 were POSCO’s very first overseas construction sites and were very important for the future of POSCO’s global growth. And recently, getting the chance to guide Thailand CGL to its opening was very important for POSCO and very meaningful for me.

[Cho Byeong-ho] When I started, I believed that it would be really helpful to gain knowledge about each part of the steelmaking process. As a result, I taught myself about each step and acquired certificates in various fields including ‘Master of Craftsman Welding’ and ‘Master Craftsman of Rolling.’ This allowed me to do more specialized work for POSCO and for its automotive steel solutions.

Q5. Lastly, please share with us your vision moving forward.

[Shin Seung-cheol] While I’m somewhat confident in my operational skills after 34 years on the job, I still want to study more. I want to learn more about engineering theory and process development. My dream is to become the best possible technician I can be.

[Cho Byeong-ho] Moving forward, I want to continue the work to boost our equipment capacity while also improving our technology so that we can continue to produce the best World Premium Products.

[Lee Jin-soo] At Thailand CGL, we want to move forward to provide manufacturing technologies, such as mold technology and automotive steel sheet buying channels, to small local companies. This will allow POSCO to expand its contract base into a solution marketing system.

The advancements made in POSCO’s advanced automotive steel are driven by people like Shin Seung-chel, Cho Byeong-ho, and Lee Jin-soo. Without their determination, intelligence, and innovative thinking, POSCO could not be where it is today.

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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.

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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