Profile: Posco (PKX)

PKX on New York Consolidated

50.83USD
2 Jul 2015
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$1.53 (+3.10%)
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POSCO, incorporated on April 1, 1968, is an integrated steel producer. The Company operates in four segments: steel segment, trading segment, construction segment and others segment. The steel segment includes production of steel products and sale of such products. The trading segment consists of global trading activities of Daewoo International, exporting and importing a range of steel products that are both obtained from and supplied to POSCO, as well as between other suppliers and purchasers in Korea and overseas. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas. The others segment includes power generation, Liquefied Natural Gas (LNG) logistics, and network and system integration.

The Company produced approximately 37.7 million tons of crude steel, as of December 31, 2014, a portion of which was produced at Pohang Works and Gwangyang Works. As of December 31, 2014, Pohang Works had 17.4 million tons of annual crude steel and stainless steel production capacity, and Gwangyang Works had an annual crude steel production capacity of 20.8 million tons. The Company is engaged in businesses that complements its steel manufacturing operations, as well as seeks out investment opportunities to diversify its businesses both vertically and horizontally. POSCO Engineering & Construction Co., Ltd. (POSCO E&C), its subsidiary, in which it holds an 89.5% interest, is an engineering and construction company in Korea that primarily engages in the planning, design and construction of industrial plants and architectural works and civil engineering. Daewoo International, its subsidiary, in which it holds a 60.3% interest, is a global trading company that primarily engages in trading of steel and raw materials, as well as investing in energy and mineral development projects throughout the world. POSCO Energy Corporation, its wholly owned consolidated subsidiary, in which it holds an 89.0% interest, is the power generation company in Korea.

Steel

The Company has established various subsidiaries and joint ventures around the world that engage in steel production activities. It manufactures and sells a diversified line of steel products, including cold rolled and hot rolled products, stainless steel products, plates, wire rods and silicon steel sheets, and it is able to meet a range of customer needs from manufacturing industries that consume steel, including automotive, shipbuilding, home appliance, engineering and machinery industries. It sells primarily to the Korean market. The Company established POSCO Coated and Color Sheet Co., Ltd., which has an aggregate annual production capacity of 600 thousand tons of galvanized and aluminized steel sheets used in the construction, automotive parts and home appliances industries. POSCO Coated and Color Sheet Co., Ltd. also has an aggregate annual production capacity of 350 thousand tons of color sheets that are mainly used for interior and exterior materials and home appliances. In the year ended December 31, 2014, POSCO Coated and Color Sheet Co., Ltd. produced 594 thousand tons of galvanized and aluminized steel sheets and 312 thousand tons of color sheets.

The Company, through Zhangjiagang Pohang Stainless Steel Co., Ltd., manufactures and sells stainless cold rolled steel products. Zhangjiagang Pohang Stainless Steel Co., Ltd. produced 1,100 thousand tons of stainless steel products, in the fiscal year ended December 31, 2014. The Company, through Qingdao Pohang Stainless Steel Co., Ltd., which is a wholly owned subsidiary of the Company, manufactures and sells stainless cold rolled steel products in China, and produced 180 thousand tons of such products, in the year ended December 31, 2014.

The Company, through POSCO Vietnam Co., Ltd., manufactures and sells cold rolled steel products with an annual production capacity of 1.2 million tons of cold rolled products and commenced commercial production, which produced 930 thousand tons of such products, in the year ended December 31, 2014. The Company, through POSCO Thainox Public Company Limited, produced 165 thousand tons of stainless cold rolled products, in the fiscal year ended December 31, 2014. Through PT. Krakatau POSCO Co., Ltd., the Company manufactures and sells plates and slabs with an annual production capacity of 3.0 million tons of plates and slabs. PT. Krakatau POSCO Co., Ltd. produced 2.1 million tons of plates and slabs in 2014. The Company sells hot rolled products to USS-POSCO Industries Corporation, which uses such products to manufacture cold rolled and galvanized steel products and tin-plate products for sale in the United States.

The Company, through United Spiral Pipe LLC, produces American Petroleum Institute-compliant pipes (API Pipes) and non-API pipes. In Mexico, the Company, through POSCO Mexico S.A. de C.V., has an annual production capacity of 0.4 million tons of cold rolled products and commenced commercial production to supply automotive manufacturers in Mexico, Southeastern United States and South America. In addition, it has also established supply chain management centers around the world to provide processing and logistics services such as cutting flat steel products to smaller sizes to meet customers' needs. In the fiscal year ended December 31, 2014, its 34 supply chain management centers recorded aggregate sales of 5.4 million tons of steel products.

Trading

The Company's trading activities consist primarily of trading activities of Daewoo International Corporation (Daewoo International). Its subsidiaries that also engage in trading activities include POSCO Processing & Service Co., Ltd. that primarily focuses in the domestic market, and POSCO Asia Company Limited located in Hong Kong, POSCO Japan Co., Ltd. located in Tokyo, Japan, POSCO America Corporation located in New Jersey, U.S.A. and POSCO South Asia Co., Ltd. located in Bangkok, Thailand. Daewoo International is a global trading company that primarily engages in trading of steel and raw materials, as well as investing in energy and mineral development projects. It also manufactures and sells textiles and operates a department store in Korea.

Daewoo International's trading activities consist of exporting and importing a range of products and commodities, including iron and steel, raw materials for steel production, non-ferrous metals, chemicals, automotive parts, machinery and plant equipment, electronics products, agricultural commodities and textiles. Daewoo International is also engaged in third-country trade that does not involve exports from or imports to Korea. The products are obtained from and supplied to numerous suppliers and purchasers in Korea and overseas, which are procured through a global trading network consisting of overseas trading subsidiaries, branches and representative offices. Such subsidiaries and offices support Daewoo International's trading activities by locating local suppliers and purchasers on behalf of customers, identifying business opportunities and providing information regarding local market conditions. Daewoo International also invests in energy and mineral development projects throughout the world.

Construction

The Company's subsidiary, POSCO E&C, is primarily engaged in the planning, design and construction of industrial plants and architectural works and civil engineering projects. In Korea, POSCO E&C has also focused on diversifying its operations into construction of apartment complexes and participating in a range of architectural works and civil engineering projects, as well as engaging in urban planning and development projects and expanding its operations abroad. One of its urban planning and development projects includes the development of a 5.7 million-square meter area of Songdo International City in Incheon. It is also engaged in the energy field obtained from the construction of various power plants for member companies of the Company and its subsidiaries, specializing primarily in engineering and construction of liquefied natural gas (LNG) and coal-fired thermal power plants. POSCO E&C has obtained various orders for such power plants, including LNG-fired power plants in Incheon, Korea and coal-fired thermal power plants in Ventanas and Angamos, Chile.

Others

The others segment includes power generation, Liquefied Natural Gas (LNG) logistics, and network and system integration. Its subsidiary, POSCO Energy Corporation, a domestic private power utility company, operates LNG combined cycle power generation facilities with total power generation capacity of 1,800 megawatts. As part of its efforts to geographically diversify its power generation facilities, POSCO Energy Corporation is engaged in constructing two 1,200 megawatts class coal power plants in Vietnam. In Indonesia, POSCO Energy Corporation has completed construction of a 200 megawatts by-product gas power plant, which is used to power the Company's integrated mill. POSCO Energy Corporation's total power generation capacity was approximately 3,950 megawatts, as of December 31, 2014.

The Company operates an LNG receiving terminal that is equipped with two 100,000 kiloliters storage tanks, two 165,000 kiloliters storage tanks and additional facilities with an aggregate capacity to process up to 2.4 million tons of LNG annually in Gwangyang. It has established several subsidiaries that address specific services to support the operations of Pohang Works and Gwangyang Works. Its POSCO ICT Co., Ltd. provides information and technology consulting and system network integration and outsourcing services. Its POSCO Processing & Service Co., Ltd. provides material processing and fabrication services. Its POSCO Plantec provides engineering services related to plant construction and operations. Its Sungjin Geotec is a manufacturer of specialized equipment used in the power and energy industries. The Company's, POSCO Chemtech Company Ltd., formerly POSCO Refractories and Environment Company, Ltd., specializes in the manufacturing of refractories and lime used in steel manufacturing processes, as well as a range of chemical products.

Company Address

Posco

6261, Donghaean-Ro, Nam-Gu
POHANG     790300
P: +8254.2200114
F: +8254.2206000

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