By Kang Seung-woo
POSCO and its affiliates have been getting serious about cost reductions amid persistently increasing raw material prices.
Along with improving in facilities and developing technology, they are making efforts to collect ubiquitous scrap steel and scale at still mills while recycling working uniforms to help lower expenses.
In May, the steel giant launched campaigns to collect scrap steel that was wasted or left around at Pohang and Gwangyang Steel Works ― from May 16 to 27 in Pohang and from May 23 to June 3 in Gwangyang ― to be reused at steel mills.
Scrap steel is one of three raw materials, along with iron ore and coking coal, and is the core base material in the steel manufacturing process. The price of scrap steel has jumped to around 600,000 won per ton of late from roughly 400,000 late last year due to the shortage of raw materials, weighing on the company’s wallet.
“We started the campaign because we estimated that it will pay off in terms of reusing resources and cleaning up the environment,” said a POSCO official.
“As a matter of fact, we have saved in various fields more than we expected.”
Through the efforts, POSCO collected some 3,200 tons of scrap steel to save 1.8 billion won in the purchasing expenses of the metal.
In addition, POSCO, the world’s No. 3 steel producer, recently collected scale that dropped during the transport process at Gwangyang mill.
They retrieved approximately 110 tons of scale enabling them to save some 13 million won.
The move also got rid of scale, which can create arsenic acid dust, favorably contributing to preventing environmental pollution.
POSCO plans to continue to carry out the campaign, proposed by an official of its affiliate, with its subsidiaries on a regular basis by reflecting it in their work process.
A complete recycling center, opened in 2009, in Gwangyang allowed POSCO to save 25 million won spent on the clothes in March and April.
Separately, the steel company has set its sights on a 1-trillion-won cost reduction this year. The amount makes up 20 percent of its total operating profit for last year.
Its goal was established as commodity prices are rising sharply. An aggressive cost-reduction move is required to maintain profitability, the firm said.
Meanwhile, POSCO plans to continue cost-saving campaigns in the second half of the year after settling on a diversity of measures.