Hyundai Motor to build steel plants

The third blast furnace, right, under construction at Hyundai Motor Group’s Dangjin Industrial Complex in South Chungcheong Province is scheduled to be completed in September. The group announced it will build fourth and fifth furnaces in the complex upon the completion of the third. / Courtesy of Hyundai Motor Group

By Kim Tae-jong

Hyundai Motor Group said Monday it will build two new plants to process special steels and iron powders, core materials to manufacture automobile engines and transmissions.

The announcement came as part of the group’s ongoing efforts to increase investment for the development of next-generation materials.

The nation’s largest automaker group will invest 1.2 trillion won to build the plants in Dangjin, South Chungcheong Province, which are expected to produce 1 million tons of special steels and 25,000 tons of steel powders annually.

The group has two blast furnaces in the Dangjin complex with another under construction, which are operated by the group’s affiliates Hyundai Steel and Hyundai Hysco.

The group will add the two new plants after the completion of the third blast furnace in September.

The Dangjin plants are used to produce high-quality automotive steel parts for Hyundai Motor and Kia Motors’ vehicles.

“The two new plants will contribute to the improvement of the product quality of Hyundai and Kia by supplying better quality materials,” a Hyundai official said.

Completion of the plants is also expected to contribute to the nation’s economy, as it will create added value worth 6.1 trillion won and 22,000 new jobs, he said.

It will also help improve the nation’s trade balance, as Korea annually imports 2.31 tons of special steels, accounting for about 30 percent of the total local consumption, and depends entirely on imports for the 70,000-tons of steel powder.

Under the investment plan, Hyundai Steel will begin the construction of a new blast furnace-type steel mill on an area of 236,000 square-meters and aim for completion in 2014, while Hyundai Hysco will build a new plant to process iron powders on a plot of 33,000 square meters.

The group believes the completion of the third blast furnace-type steel mill in the complex will strengthen the close cooperation between the group’s automakers and steelmakers ― Hyundai Motor, Kia Motors, Hyundai Steel and Hyundai Hysco.

“It is critical to produce next-generation material for the development of future cars, which need to be lighter and safer,” the official said. “All the major global automakers have been strengthening cooperation in research & development sectors with steelmakers.”