By Jane Han
Staff Reporter
POSCO capped off its whirlwind personnel reshuffle Friday after its shareholders and board approved a three-year term for new Chief Executive Chung Joon-yang, who spoke of more production cuts and bold overseas expansion in steering the world's No. 4 steel group through the global economic downturn.
The 61-year-old, who succeeds outgoing CEO Lee Ku-taek, takes the helm at a challenging time when the steel demand worldwide has been slipping due to a slowdown in consumer goods and steel-consuming industries.
``We're expecting an output reduction of up to 800,000 tons in the first three months of the year,'' Chung told reporters in his first press conference after the company's annual shareholders meeting.
Following rivals Arcelor Mittal and Nippon Steel, POSCO cut production in December for the first time in its 40-year history to help ride out the slumping steel demand worldwide.
Chung said that more cuts will be made ``as needed'' if the demand fails to recover.
The company recorded a record profit of 4.45 trillion won and revenue of 30.64 trillion won last year, but it is forecasting a 12 percent decline in sales this year and a drop in steel production by as much as 12 percent to 29 million tons.
Despite the uncertainties and grim outlook, the new CEO remained optimistic as he stressed that POSCO will capitalize on the downturn as an opportunity to expand.
Chung said the company's plan to make investments totaling 7.5 trillion won will go unchanged. POSCO said earlier this year that it would increase investment this year by as much as 53 percent compared to last year.
``This isn't a time to remain skittish,'' he said, adding that the steel firm will actively explore merger and acquisition opportunities overseas this year, citing falling asset values.
He added that investments in POSCO's Greenfield projects will continue ``even though the undertakings take a long time.''
The company has been seeking to build a $12 billion integrated steel mill in Orissa, India and a $490 million steel plant in Ho Chi Minh City, Vietnam for the past several years, but both have been seeing slow progress due to local resistance.
``We're committed to riding out this crisis through all possible measures,'' said Chung, who shared his goal of making POSCO a top three player with annual revenue of 100 trillion won by 2018.
Industry experts said the tough steel industry is a major challenge Chung has to overcome, but stressed that shielding the company from political influence is another crucial task.
The company's latest personnel reshuffle has been tainted with rumors that the government peddled heavy influence in forcing former CEO Lee to resign despite his achievements over the past six years.
After Lee's resignation, Chung, former chief of POSCO's construction arm, and his colleague and POSCO President Yoon Seok-man tussled for the top seat.
Despite losing the race, Yoon, who has one year left to his term, is expected to become chairman of POSCO Engineering & Construction.