Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
POSCO boosts shareholder value by reshaping business portfolio
POSCO Group Chairman Chang In-hwa speaks during the firm's regular shareholders' meeting in Seoul, March 20. Courtesy of POSCO Group
By Lee Min-hyung
POSCO Group is ramping up efforts to maximize shareholder value and lay the foundation for sustainable growth with a renewed business focus on steel, secondary battery materials and new growth engines, the company said Friday.
The realignment strategy, called 2 Core + New Engine, is aimed at strengthening its core businesses and securing new growth drivers amid growing trade uncertainties abroad.
POSCO is pursuing a localized and end-to-end strategy by proactively responding to global trade barriers and establishing strategic footholds in markets with high growth potential and high returns.
In October last year, POSCO clinched an agreement with India’s largest steelmaker, JSW Group, to jointly push for a fully integrated steel mill project. In April this year, the company also announced a joint investment plan in a steel plant in the United States by partnering with Hyundai Motor Group. At the time, the company signaled its plan to expand collaboration in both steel and battery materials.
POSCO Group is also accelerating its carbon reduction efforts in response to rapid changes in the market and policy dynamics here and abroad. POSCO is also elevating its research and development capabilities for hydrogen-based steelmaking technologies, targeting commercial viability by 2030.
The company is constructing an electric arc furnace in Gwangyang, South Jeolla Province, with an annual capacity of 2.5 million tons.
For secondary battery materials, POSCO is strategically leveraging the ongoing market slowdown to secure high-quality resources, such as lithium, and to build efficient mass-production systems. The moves will enable the firm to achieve rapid growth in the area once the market bounces back, according to POSCO Group.
"New business areas — another key pillar for the group's portfolio — are being developed in domains that align with POSCO's strategic direction," a spokesperson at the company said.
At the same time, POSCO Group is accelerating the restructuring of low-profit and noncore assets. Since launching the effort last year, the company has generated approximately 950 billion won ($689.3 million) in cash, with a cumulative target of securing 2.1 trillion won by the end of this year. The capital will be reinvested into high-growth opportunities and help enhance the firm’s financial stability and asset efficiency.
A robust shareholder return policy remains central to the group’s strategy. POSCO Holdings will retire 6 percent of its treasury shares over the next three years starting from 2024.
Additionally, the company will maintain a dividend policy that pays a base dividend of 10,000 won per share, funded by 50 to 60 percent of its standalone free cash flow. Any surplus cash may be used for additional payouts, with a minimum total dividend of 2.3 trillion won over the period.