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| A grain terminal operated by POSCO International in Ukraine Courtesy of POSCO International |
By Lee Kyung-min
A grain terminal in Ukraine operated by POSCO International, a trading subsidiary of steelmaker POSCO, is facing increasing threat of Russian attacks amid the escalating military conflict across the Eastern European nation, the company said Tuesday.
Any artillery attack on the terminalan with an annual grain capacity of 2.5 million tons located in Mykolaiv could lead to a significant dent in the POSCO subsidiary's corporate profit. Its food business accounts for about 24 percent of its sales alongside steel manufacturing and energy.
POSCO International will have to revisit its business plans. The firm sought to increase grain capacity to 25 million tons worldwide by 2030, up from the current 8 million tons, thereby becoming the world's 10th-largest food firm.
Its growth prospect was solid, as evidenced by the 12 percent year-on-year increase in both sales of 8.1 trillion won ($6.7 billion) and operating profit of 25.8 billion won last year.
"Signing of purchase and sales contracts in Ukraine and Russia have been suspended for the time being," a POSCO International spokesperson said. "We evacuated eight employees and their family members before the invasion began, and are now monitoring the developments closely. No damage to the terminal has yet been reported."
POSCO International said initially that any damage to the terminal would be limited, since it was located far from where the military attacks were reported.
However, the sentiment changed rapidly following reports of airstrikes all across the country.
The Wall Street Journal reported Feb. 26 that intense fighting "went on through the night near the southern cities of Odessa, Kherson, Mykolaiv and Mariupol."
The terminal was set up in September 2019, and has since been a hub for overseas sales of grains including corn and wheat to countries in Europe, the Middle East, North Africa and Asia.
Also postponed are plans to expand the business into farming in Ukraine. "We do not have plans for business expansion including new investments in Ukraine, not until after the geopolitical volatility dies down," the official said.
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