New blast furnace raises Hyundai Steel’s status
By Kim Tae-gyu
People believed that Hyundai Steel is a competitor of POSCO but that is not 100 percent true as the latter cranked out high-quality products from blast furnaces while the former mainly churned out less expensive ones from electrical arc furnaces.
But Hyundai Steel has emerged as a genuine contender in the game as the Incheon-based outfit opened a new state-of-the-art blast furnace in Dangjin, South Chungcheong Province last month after years of construction.
The affiliate of the Hyundai-Kia Automotive Group can currently produce up to 4 million tons of steel products annually. The capacity will rise to 8 million tons this November and 12 million tons in 2015 when additional facilities are installed.
Hyundai Steel expects that the Dangjin mills will be able to contribute to the Hyundai Automotive Group and the country as well as local communities.
Hyundai Motor and Kia Motors, which together make up the world's sixth-largest carmaker, have mostly depended on steel from POSCO to build vehicles because Hyundai Steel's products made of scrap metal were not suitable.
More often than not, Hyundai complained POSCO failed to provide sufficient steel at the right time and at reasonable prices. Yet, the automaker had few alternatives as POSCO was the only blast furnace-based manufacturer in Asia's fourth-largest economy.
However, Hyundai Steel now manufactures high-quality products from its blast furnace and its capacity will double in about six months. With this new ammunition on hand, the competitiveness of Hyundai Motor and Kia Motors is expected to strengthen.
In addition, Korea has been a net importer of steel products although the nation is the world's sixth-largest manufacturer ― it imports more than 20 million tons of steel every year.
``The Dangjin furnaces are expected to replace $8 billion worth of imports annually,'' a Hyundai spokesman said.
Undoubtedly, the new facilities will balloon the revenue of Hyundai Steel itself as it projects 9.2 trillion won in sales this year, up 15.3 percent from a year ago. It also forecasts that the Dangjin mill will create around 78,000 jobs down the road. It already generated about 100,000 jobs while building up the blast furnace.