By Kang Seung-woo
NILUFER, TURKEY — POSCO is pushing to beef up its portfolio as a premium auto steel supplier. The POSCO-Turkey Nilufer Processing Center (TNPC) is solidifying the company’s presence to extend its reach across the lucrative European region.
The comprehensive auto steel processing center, which has an annual production capacity of 170,000 tons of automotive steel, is the Korean steel giant’s first processing facility specializing in the metal in Europe.
Blossoming in northwest Turkey, the world’s No. 3 steelmaker broke ground for the plant in November 2009 and construction was completed in October last year in the Hasanaga Industrial Complex in Bursa Province.
Turkey has seen its economy grow steadily in recent years thanks to its geographical location as a bridge between Europe and Asia. Bursa, in which Nilufer is located, has become a key industrial area, as it features major infrastructure such as expressways and ports linking important Turkish cities, including Istanbul, Ankara, and Izmir.
The northwestern part is a key car production base for global automakers including France’s Renault, Italy’s Fiat and Japan’s Toyota and global auto parts producers, like Delphi, Valeo and BOSCH because vehicle manufacturers use the country as a production base for exports to Europe, the Middle East and Asia, opening opportunities for the steel firm to supply the carmakers.
According to the Pohang-based firm, POSCO-TNPC has built partnerships with top-tier auto manufacturers like Hyundai Motor, Honda, Ford and Renault by providing them with high-quality automotive steel products.
In addition, if a Free Trade Agreement (FTA) between Korean and Turkey is struck in the future, which will eliminate tariffs, POSCO expects to see an edge in terms of market share.
The firm’s Chairman Chung Joon-yang, is progressively seeking ways to efficiently enter the European market. The steelmaker has been channeling more money and efforts into expanding overseas and enhancing its auto steel sheet technology in recent years to increase value-added and higher margin products in its sales mix.
POSCO attributes the Turkish processing center’s solid achievements to its effective customer-first marketing strategies despite the unfavorable market environment in the Eurasian country.
“We have just started laying ground for a new marketing development in Europe, where it has traditionally been recognized as a heavyweight in auto sheets,” said Kim Cheol-min, managing director of POSCO-TNPC.
“With POSCO-TNPC at the forefront, we will try to emerge in the European market. With client-oriented plans, we can survive.”
The steelmaker built its first overseas auto sheet plant in one of Mexico’s largest automobile clusters in August 2009 to target manufacturers in the North, Central and South American regions, where major companies including Volkswagen, Chrysler, General Motors and Nissan are located. A lot of auto parts makers flock there to take advantage of relatively cheap labor costs.
POSCO has set up more than 50 steel processing plants in 14 countries including Japan, China, India, Malaysia, Mexico and Turkey.