POSCO, GE strengthens ties
By Park Si-soo
POSCO and General Electric (GE) have formed a strategic partnership for five new business areas ranging from power generation to high-end steel and information and communications technologies.
POSCO Vice President Park Ki-hong and GE Korea CEO Khang Sung-wook signed a memorandum of understanding for the partnership in Seoul, Thursday, with POSCO Chairman Chung Joon-yang and GE Chairman and CEO Jeffery R. Immelt present.
This is the latest in a series of partnerships forged between the two firms.
“The two sides have conducted joint studies for a while to select segments suitable for mutual corporation and the five are our final choice,” Chung said during the signing ceremony. Immelt made no official comment during the event, according to POSCO.
Under the pact, the two companies will cooperate to secure the right to develop or upgrade power plants at home and abroad.
In doing so, the Korean steelmaker, which owns POSCO Engineering and Construction (POSCO E&C), will take responsibility for the building operation, while the New York-based GE will supply core equipment such as turbines and boilers for the plants, it said.
The Korean steelmaker also expects to engage in joint efforts with GE to develop high-end steel products used in oil and gas drilling offshore facilities, it said.
The agreement will enable POSCO to use GE’s global network and financial knowhow in joint infrastructure development projects in emerging countries. Analysts said the combination of GE’s invisible assets and POSCO’s competitive edge in engineering, procurement and construction will create great synergy.
The two firms have also agreed to share each other’s best practices to improve their corporate culture, human resource development and employee training.
POSCO said in a statement that the partnership with GE is a reflection of the former’s “long-term growth strategy” centered on expanding to high-end steel and plant industries.
The two companies will open a joint committee to regularly check the operations of the partnership.
POSCO, struggling with weak demand and oversupply, acquired Daewoo International in late 2010 to strengthen its presence in resources development and power plant markets.
Immelt, who landed here Wednesday, will leave for the United States after meeting with Korean government officials.
Late last month, POSCO signed another pact with GE, in which the American company will provide advanced zero liquid discharge (ZLD) technology to POSCO’s steel plant in Maharashtra, India. POSCO is planning to produce steel using GE’s technology from the second quarter of 2013.
POSCO has maintained a strategic partnership with GE over the last few years and the two are partners in various mutual projects.
In 2009, GE struck a deal with the Korean steelmaker to provide its electrodialysis reversal (EDR) technology, an electrochemical separation process that removes ions and other charged species from water and other fluids, to POSCO E&C.