By Kim Tae-gyu
Staff reporter
DANGJIN ― Dongkuk Steel, one of the foremost steelmakers in Korea, opened its third production line for thick steel plates in Dangjin, a port city around 90 kilometers south of Seoul, which will churn out 1.5 million tons of the high-end product every year.
Dongkuk held an opening ceremony Wednesday for the Dangjin facilities, into which the Seoul-based company channeled 926.4 billion won ($809 million) to increase its annual capacity of heavy plates to 4.4 million tons.
The high-valued products are typically used to build ships. The yearly capacity of 4.4 million tons is large enough to make a total of 315 8,000 TEU (20-foot equivalent unit) container ships.
The corporation expects the Dangjin plant to add 1.5 trillion won to its sales, which means that its revenue will substantially increase in 2010 from last year's 4.6 trillion won.
In addition, Dongkuk said that its initiative will jack up the country's trade surplus by $1 billion because local shipbuilders have depended on imports to secure a sufficient amount of heavy steel plates.
Asia's fourth-largest economy is home to the such primary shipyards of Hyundai Heavy Industries, Samsung Heavy Industries, STX Heavy Industries and Daewoo Shipbuilding & Marine Engineering.
Dongkuk Steel Chairman Chang Sae-joo promised that the company would come up with top-tier products under a strong mindset, which he calls the "spirit of masterpiece steel."
"Dongkuk Steel, during the course of its construction of a plate mill at Dangjin, has worked extremely hard to realize the 'spirit of masterpiece steel' with the soul and passion of all the employees," Chang said in the opening ceremony.
"This 'spirit of masterpiece' must be preceded with efforts to possess the world's best competitiveness and with an unhesitating improvement of facilities, and the company must be able to produce the best steel products."
Hundreds of dignitaries participated in the event including Minister of Knowledge Economy Choi Kyung-hwan.
Chang reiterated the company's commitment to establishing a pair of blast furnaces in Brazil in order to increase its overall yearly capacity for a variety of steel items from the present 7.5 million tons to 10 million tons by 2015.
"To Dongkuk Steel, today is very significant not only because we are opening a new plant but also because we are securing a blast furnace steelworks in Brazil and as such, starting a full-fledged challenge to construct a global production system of 10 million tons of steel products," Chang said.
"We are determined to establish a global integrated steel system in resource-rich Brazil, connecting Korea and Brazil with the passion and technology of Dongkuk. I believe that through the full-scale operation of high value-added steel plate production base today, the construction of blast furnace steelworks will gain momentum."
On top of its electric arc furnaces in Incheon, west of Seoul, and Pohang, in the southeast of the peninsula, Dongkuk is mulling over establishing two blast furnaces in Brazil in the not-so-distant future.
Toward that end, Dongkuk joined hands with iron ore giant Vale in 2008 and finished research on the commercial viability of the Brazil plant last month. The firm is currently working on detailed plans.
A blast furnace makes first-rate steel products from iron ore. In comparison, an electric arc furnace melts scrap metal.
Electric arc furnaces fail to offer high-quality steel, which is used to make thick plates for ships or automobiles. Accordingly, Dongkuk imports steel slabs from blast furnace-equipped makers in Brazil, Japan, Australia, China and Russia.
When the plants in Brazil are completed, however, they will be able to procure steel slabs in-house without having to depend on outside suppliers.