POSCO
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The Pohang Iron and Steel Company, or POSCO (KSE: [005490]
In June of 2005, POSCO signed a memorandum of understanding with the state government of Orissa, India. Under the agreement, POSCO plans to invest US$12 billion to construct a plant with four blast furnaces, an electricity plant, housing, and an annual production capacity of 12 million tons of steel, which is slated to start production in 2010. This will be the worlds biggest greenfield steel plant ever.
History
In the 1960s, the government of President Park Chung-hee concluded that self-sufficiency in steel and the construction of an integrated steelworks were essential to economic development. Since South Korea had not had a modern steel plant before 1968, many foreign and domestic businesses were skeptical of Seoul's decision to invest heavily in constructing a steel plant. Despite the skepticism, however, POSCO began production in 1972, just four years after the company's inauguration in April 1968 with only thirty-nine employees.Japan provided the money for the construction of the initial plant, following an agreement made at the Third South Korea-Japan Ministerial Meeting in 1969. Financing included US$73.7 million in government grants and loans, US$50 million in credit from the Japan Export-Import Bank, and technical assistance from Nippon Steel and other corporations. This cooperation was one consequence of the normalization of relations with Japan in 1965 and reflected the view of the government of Japan as noted in the Nixon-Sato communique of November 21, 1969, that "the security of the Republic of Korea is essential to the security of Japan."
Pohang, reviously a fishing port whose major industry was processing fish and marine products, is now a major industrial center with almost 520,000 people. In addition to the huge integrated steel mill, Pohang has an industrial complex housing companies that manufacture finished steel products of raw materials provided by POSCO.
POSCO first began to sell plate products in 1972 and focused its sales policies on the domestic market to improve steel self-sufficiency at home. Special efforts were made to supply quality iron and steel to related domestic companies at below export price to strengthen their international competitiveness.
POSCO's growth has been immense. By the late 1980s, POSCO was the fifth biggest steel company in the noncommunist world, with an annual production approaching 12 million tons worth 3 trillion won. The further expansion of POSCO's productivity and size, however, was sought at a time when the steel industries of the United States and Japan were declining. POSCO's second-phase mill at Gwangyang was completed in August of 1988. A third-phase mill was expected, by the early 1990s, to further increase crude steel production to a total output of approximately 17.2 million tons a year. In terms of productivity, POSCO was rated the world's best steel manufacturer throughout the late 1980s and also was rated at the top in terms of facilities.
In 1987, Seoul announced that it was going to transform POSCO into a private company in line with the government's new policy of privatizing state-run corporations. The government planned to retain a majority share of the stock; initial reports in the South Korean press in 1988 indicated that the sale of public shares was going slower than anticipated. However, by 1998, the South Korean government had reduced its ownership of shares in POSCO to less than 20%, and more than 50% of the shares in POSCO were in the hands of foreign investors.
Much of the information in the above paragraphs copied from [South Korea: Country Study, Federal Research Division, Library of Congress].
Timeline
| April 1968 | Pohang Iron and Steel Co., Ltd. (POSCO) established |
| April 1970 | Pohang Works Phase 1 begun |
| July 1973 | Pohang Works Phase 1 completed (Annual crude steel capacity: 1.03 million tons) |
| March 1976 | Pohang Works Phase 2 completed (Annual crude steel capacity: 2.6 million tons) |
| December 1978 | Pohang Works Phase 3 completed (Annual crude steel capacity: 5.5 million tons) |
| February 1981 | Pohang Works Phase 4-1 completed (Annual crude steel capacity: 8.5 million tons) |
| May 1983 | Pohang Works Phase 4-2 completed (Annual crude steel capacity: 9.1 million tons) |
| March 1985 | Gwangyang Works Phase 1 begun |
| April 1986 | USS-POSCO Industries (UPI) established |
| March 1987 | The Research Institute of Industrial Science & Technology (RIST) established |
| June 1988 | POSCO stock listed on the Korea Stock Exchange |
| July 1988 | Gwangyang Works Phase 2 completed (Annual crude steel capacity: 14.5 million tons) |
| December 1990 | Gwangyang Works Phase 3 completed (Annual crude steel capacity: 17.5 million tons) |
| October 1992 | Gwangyang Works Phase 4 completed (Annual crude steel capacity: 20.8 million tons) |
| December 1993 | ISO 9002 certification acquired |
| May 1994 | Cellular operator Shinsegi Telecomm established |
| October 1994 | Pohang Light Source completed |
| July 1995 | POSCO Center in Seoul completed |
| October 1995 | POSCO ADRs listed on the London Stock Exchange |
| November 1995 | Pohang Works COREX plant completed |
| September 1996 | POSENERGY established |
| October 1996 | Gwangyang Works No. 5 Blast Furnace begun |
| October 1996 | Gwangyang Works No. 1 Mini-Mill completed |
| March 1997 | Non-standing directorships introduced |
| August 1997 | Gwangyang Works No. 4 Cold Rolling Mill completed |
| September 1997 | Pohang Works No. 3 Plate Mill completed |
| April 1998 | POSCO marks 30th anniversary |
| July 1998 | Government announces POSCO privatization plan |
| December 1998 | PI initiative launched |
| March 1999 | Gwangyang Works No. 5 Blast Furnace completed |
| August 2000 | Strategic alliance with Nippon Steel announced |
| October 2000 | Privatization completed |
| July 2001 | POSPIA operation launched |
| March 2002 | Company name changed to POSCO |
| November 2005 | POSCO listed on the Tokyo Stock Exchange |
Competitors
- Hyundai Hysco
- Hyundai INI Steel
- BNG Steel
- Dongkuk Steel
- Dongbu Steel
- Sinhwa Steel
- Union Steel
See also
External links
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