By Kim Hyun-cheol
Staff Reporter
Last year was a tough time for POSCO, even forcing the steel giant to reduce production amid the slumping economy worldwide and a glut in the business in general. But this won't keep the company from making efforts to advance in the global market this year.
Earlier this month, CEO and Chairman Chung Joon-yang said at an investor relations meeting in New York that aggressive moves to take the initiative in post-crisis opportunities ``will run parallel with emergency management for survival.''
``This is going to be a year of a huge change for POSCO, with major overseas projects and M&As becoming visible,'' Chung said.
Consequently, POSCO's overseas growth plan will not be confined to India this year ― it is set to aggressively push its boundaries in other countries also.
The maker will begin to lay the ground work in Indonesia in September for an integrated mill, which will be built in collaboration with state-run local maker PT Krakatau Steel.
In overseas supply chain management units, POSCO plans to add more centers in its key overseas production bases including China, Vietnam, India and the United States.
The company will complete a second POSCO-VHPC stainless steel plant in Vietnam in June, which will be a sales foothold in Southeast Asia. Its Turkish processing center in Nilufer, scheduled for completion in July, will help enhance sales of sheet metal for cars aimed at global carmakers there such as Ford, Renault as well as Hyundai.
In August last year, POSCO opened a continuous galvanized line (CGL) plant in Mexico to establish an integral system from production to sales of auto sheets, and completed a cold-rolling mill with a capacity of 1.2 million tons in Vietnam two months later.
The pair of new overseas units helped expand the company's car markets beyond Asia and give it an advantageous spot in sales competition for cold-rolled products in Southeast Asia. A 3-million-ton hot-rolled plant and a 400,000-ton CGL facility will be additionally built in Vietnam after 2012.
POSCO is active in developing markets in other parts of Southeast Asia _ it reached an agreement for a joint venture to establish a steel plate plant this year in Banten, Indonesia.
In its expansive efforts, another huge focus will be a series of sizable mergers and acquisitions (M&As).
Most of POSCO's 9.3 trillion-won ($8.6 billion) budget earmarked for investment will be spent purchasing companies and building overseas integrated mills, Chung said earlier this month. In spite of struggling in its 2009 showings, POSCO is positive on its outlook for this year, saying its recovery is faster than global rivals in the industry.
Its earnings were up 77 percent from a year earlier in the fourth quarter of last year. POSCO set this year's production target at 34.4 million tons, up 16.6 percent from last year, and raised annual sales projections 9.3 percent to 29.5 trillion won in value as well.
At an investor relations meeting in Seoul, Chung said the company will carry out several M&As this year, and Daewoo International, a local trading firm mainly engaged in energy development, is at the top of the list because the deal will give POSCO a huge synergetic effect in resources development and global marketing.
He also mentioned Daewoo Shipbuilding & Marine Engineering will be under review if it is put up for sale.
Acquiring Asia Stainless in Vietnam and Taihan ST Corp. in South Korea over the past few years, POSCO is currently in talks to buy Thailand's Thainox Stainless, and looks to finalize the deal this month.
Efforts are also expected to continue to develop and secure overseas resources. On the same day, the company announced that it had signed a deal to buy a 15-percent stake in the Roy Hill Mining Project in Australia.