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POSCO CEO set to get 2nd term

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By Kang Seung-woo
  • Published Jan 17, 2012 7:07 pm KST
  • Updated Jan 17, 2012 7:07 pm KST

By Kang Seung-woo

POSCO Chairman Chung Joon-yang’s quest for a second term is going smoothly, as he has been nominated as the sole candidate to lead the world’s third-largest steelmaker for the next three years.

According to the Pohang-based company, its CEO recommendation committee Tuesday finalized Chung as its selection for the chairmanship at a board meeting after a one-month review of the 63-year-old’s achievements during his three-year tenure. Subsequently, the board of directors nominated him as a formal nominee.

The final nod will be given at a shareholders’ meeting, which is scheduled for March 16. The company’s internal regulations stipulate that if an outgoing CEO wants to be reappointed, they are required to express their intention three months ahead of a shareholders’ meeting.

Chung said in the firm’s December board meeting that he will seek a second term.

Market watchers say that Chung, who stepped in for former Chairman Lee Ku-taek in March 2009, is expected to remain at the helm of the steel company for another three years on the back of his solid performance.

“Chung and POSCO have aggressively gone global, contributing to the firm holding a bigger presence in world markets,” said an analyst at a Seoul-based brokerage.

“In addition, POSCO needs Chung’s leadership in order to wrap up ongoing businesses and projects.”

Underscoring the need for self-sufficiency in resources since taking office, the chairman has laid out an expansion strategy on a “U&I” growth axis that links China, Mongolia, Laos, Vietnam, Indonesia, Myanmar and Uzbekistan in a U shape, while connecting North America, Mexico, Bolivia and Brazil in an I.

Meanwhile, POSCO gave earnings estimates for 2011. The steelmaker estimated that its net profit plunged 13.6 percent year-on-year to 3.27 trillion won ($2.85 billion) last year, as costs of raw materials ate into its profitability.

Operating income also declined 12.3 percent to 4.19 trillion won over the cited period, while sales increased 20.2 percent to reach 39.17 trillion won last year.