Dongbu Steel Begins Producing Hot Strips
By Jane Han
Staff Reporter
DANGJIN, South Chungcheong Province ― Dongbu Steel, the country's fifth-largest steel maker, inaugurated Wednesday its first hot strip mill with a capacity of 3 million tons per year, upgrading the leading cold-roller into an integrated steel mill capable of producing both hot- and cold-rolled steel products.
The new meltshop at Dongbu's Asan works in Dangjin, south of Seoul, will enable the company to self-supply hot-rolled sheets, the main raw material to make the firm's flagship product cold-rolled steel sheets.
This will help boost the steelmaker's competitiveness and profit, as Dongbu has been entirely dependant on purchased hot strips until now.
The company's operating profit ratio is expected to jump from the current 3-percent level to 12.5 percent next year and 13 percent the year after, said Han Kwang-hee, president & CEO of Dongbu Steel.
``Being equipped with both hot- and cold-strip mills is not only going to boost Dongbu's profitability, but also its overall efficiency,'' Han told reporters before taking a tour of the plant stretched over 1.6 million square meters of land in Asan Bay.
The 870-billion-won facility, housing two 160-ton electric arc furnaces and attached thin slab casters, is the largest scale of its kind in the world, exceeding the size of U.S.-based Nucor, which is capable of producing 2.5 million tons a year.
The steel-making method using electric arc furnaces is simpler, environmentally friendlier and cheaper than the traditional blast furnace, according to Dongbu officials, because electric arc furnaces are fed steel scraps instead of iron ore.
Prices of hot-rolled coil, a roll-up of finished hot steel sheets, have fallen worldwide due to falling demand in line with the steel industry's overall down-cycle. However, company officials painted an optimistic near-term forecast.
``Steel makers have been cutting back production significantly in recent months, so we're hopeful that prices will make a rebound,'' said Han.
In a separate press conference with reporters, Dongbu Group Chairman Kim Jun-ki said the construction of the new mill has been strategically planned to power the company into becoming a global steel powerhouse.
The integrated plant is the nation's third after those operated by POSCO and Hyundai Steel.
``We have a lot of competitive factors to lead our new mill to success,'' said Kim, who shrugged off recent liquidity concerns surrounding Dongbu's parent firm.
The steel maker is a unit of the country's 19th-largest conglomerate Dongbu Group, which is rushing to sell off assets to secure cash after its ailing subsidiary Dongbu HiTek has been faced with dire liquidity problems.
``A good company should carry out restructuring at all times,'' said the chairman, who implied that Dongbu will continue to press on with its restructuring drive.