POSCO to focus on new businesses for future growth
POSCO Holdings eyes future growth by focusing on seven core businesses including steel, secondary battery materials, lithium/nickel, hydrogen, energy, construction and biotechnology. Courtesy of POSCO Group
By Kim Hyun-bin
Green, digital and biotechnology businesses are becoming the new norms in the rapidly changing business environment. And eco-friendly businesses such as electric vehicles and renewable energy are growing rapidly amidst fierce global competition.
Such changes, on the surface, appear to leave little room for smokestack industries like steelmakers.
But POSCO, the world's sixth-largest steelmaker, plans to embrace eco-friendly technologies to achieve further growth by nurturing new growth engines such as secondary battery materials and hydrogen. With its newly established holding company structure, it aims to strengthen decision-making capabilities and enhance specialization in each unit.
In addition, POSCO expects to reassess the value of its new growth engines following its transformation into a holding company.
Despite POSCO's recent record-breaking performance in steel, as well as its active initiatives in domestic and overseas secondary battery materials and hydrogen, its stock price has been undervalued. This is believed to stem from an inaccurate assessment of the value of POSCO's new growth businesses due to the perception that it is a steel-oriented company.
A POSCO building in Seoul / Yonhap
Accordingly, POSCO has promoted its upcoming transition to a holding company system aiming to renew its corporate identity and, therefore, gain necessary momentum for sustainable growth.
POSCO Group's transformation into a holding company will require it to split off the steel business into a wholly owned subsidiary of the holding company, which will also be able to better focus on new directions.
POSCO Holdings will remain as a listed corporation, while POSCO the steelmaking unit will be operated as a new, unlisted company. Other new businesses established under the holding company will also remain unlisted for the time being.
This is intended to protect the existing shareholder value and prevent conflicts of interest between the holding company and its subsidiaries.
The holding company will develop future businesses, reorganize existing operations and manage R&D strategy as well as ESG practices.
With the goal of establishing a balanced business portfolio by 2030, POSCO Group said it plans to foster core businesses and future growth engines including steel, secondary battery materials, lithium, nickel and hydrogen.