By Kang Seung-woo
POSCO has become the world’s No. 2 stainless steel producer after expanding the capacity of its Chinese stainless steel joint venture, the steel giant said Monday.
In addition, the Korean company plans to list the joint venture in Hong Kong or Shanghai after 2013.
According to POSCO, Zhangjiagang Pohang Stainless Steel (ZPSS) has completed building additional facilities that enable the joint venture firm to boost its annual production capacity of stainless steel to 1 million tons from 800,000 tons a year.
The facility expansion has helped POSCO, the world’s No. 3 steel firm, earn the title of the second-largest stainless steelmaker with an annual production capacity of 3 million tons ― 2 million from POSCO’s plants in Korea and 1 million from ZPSS ― behind Acerinox whose capacity is 3.4 million tons a year.
In addition, it also became the first foreign entity in China to produce 1 million tons of stainless steel.
The joint venture between China’s Shagang Group and POSCO was established in 1999, with POSCO holding an 82.5 percent stake.
“ZPSS has contributed to the Chinese stainless steel industry with the development of new products and technologies and it will be a centerpiece of POSCO’s global competitiveness,” POSCO Chairman Chung Joon-yang said during a ceremony held to mark the completion of the expanded plant.
Taking advantage of the success in China, POSCO is seeking to raise its stainless steel production in Turkey and Vietnam to achieve a turnover of 17 trillion won ($15.65 billion) by 2020.
Meanwhile, ZPSS plans to launch an initial public offering (IPO) after 2013 in Hong Kong or Shanghai as part of boosting its corporate value.
“To be listed on the Chinese stock market, a company has to report a net profit for the third straight year,” said a POSCO official.
“We believe that ZPSS will be able to meet the requirement after 2013 and if listed at that time, it will be the first foreign affiliate to have an IPO in China.”