Profile: Posco (PKX)
9 Dec 2013
POSCO, incorporated on April 1, 1968, is an integrated steel producer in Korea. It produced approximately 31.7 million tons of crude steel during the year ended December 31, 2009, a substantial portion of which was produced at Pohang Works and Gwangyang Works. Pohang Works has an annual crude steel and stainless steel production capacity of 15 million tons, and Gwangyang Works has an annual crude steel production capacity of 18 million tons. POSCO manufactures and sells a diversified line of steel products, including hot rolled and cold rolled products, plates, wire rods, silicon steel sheets and stainless steel products. POSCO operates in four segments: steel, engineering and construction, trading, and others. The steel segment includes production of steel products and sale of such products. The engineering and construction segment includes planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas. The trading segment consists of 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 others segment includes power generation, liquefied natural gas production, network and system integration, logistics and magnesium coil and sheet production. On November 5, 2010, the Company established a wholly owned subsidiary, DAEWOO INTERNATIONAL CORPORATION (M) SDN BHD. In December 2010, the Company acquired 51% interest in Genesis.
On October 9, 2009, the Company established a new wholly owned subsidiary company, POSCO Maharashtra Steel Private Limited, engaged in manufacturing and sale of steel. In November 2009, the Company acquired a 65% stake in PT. Motta Resources Indonesia (PT. MRI). On December 16, 2009, the Company acquired a 65% stake in INTERNATIONAL STEEL INDONESIA. On January 26, 2010, POSCO's wholly owned subsidiaries, POSCO Plant Engineer Co.,Ltd. and POSCO Machinery Co., Ltd merged. In April 2010, the Company established a wholly owned subsidiary, POSCO-South Asia Co., Ltd. Effective June 1, 2010, POSCO established a wholly owned subsidiary company, which is engaged in cleaning and parking management services. On July 5, 2010, POSCOs Australian unit POSCO Australia Pty. Ltd.(POSA) acquired 70% interest in the Australias Sutton Forest Mine, a mining company. On July 26, 2010, the Company established a wholly owned subsidiary, POSCO WA Pty Ltd. Effective August 12, 2010, it established POSCO Australia GP Pty Limited as its wholly owned subsidiary. On November 1, 2010, the Company announced that it has established two Korea-based wholly owned subsidiaries, mainly engaged in the manufacturing and sales of steel.
Hot Rolled Products
Hot rolled coils and sheets are used to manufacture structural steel used in the construction of buildings, industrial pipes and tanks, and automobile chassis. The Company’s deliveries of hot rolled products amounted to 8 million tons in 2009, representing 25.8% of its total sales volume of steel products. The Korean market accounted for 5.2 million tons or 65.3% of its hot rolled product sales in 2009. The largest customers of its hot rolled products are downstream steelmakers in Korea who use the products to manufacture pipes and cold rolled products.
Plates are used in shipbuilding, structural steelwork, offshore oil and gas production, power generation, mining, and the manufacture of earth-moving and mechanical handling equipment, boiler and pressure vessels and other industrial machinery. Its deliveries of plates amounted to 4.6 million tons in 2009, representing 14.7% of its total sales volume of steel products. The Korean market accounted for 4.2 million tons or 91.2% of its plate sales in 2009.
Wire rods are used mainly by manufacturers of wire, fasteners, nails, bolts, nuts and welding rods. Wire rods are also used in the manufacture of coil springs, tension bars and tire cords in the automotive industry. The Company’s deliveries of wire rods amounted to 2.4 million tons in 2009, representing 7.8% of its total sales volume of steel products. The Korean market accounted for 1.7 million tons or 69.7% of its wire rod sales in 2009.
Cold Rolled Products
Cold rolled coils and further refined galvanized cold rolled products are used mainly in the automotive industry to produce car body panels. Other users include the household goods, electrical appliances, engineering and metal goods industries. Its deliveries of cold rolled products amounted to 11.2 million tons in 2009, representing 36.2% of its total sales volume of steel products. The Korean market accounted for 5.9 million tons or 52.4% of its cold rolled product sales in 2009.
Silicon Steel Sheets
Silicon steel sheets are used mainly in the manufacture of power transformers and generators and rotating machines. Its deliveries of silicon steel sheets amounted to 915 thousand tons in 2009, representing 2.9% of its total sales volume of steel products. The Korean market accounted for 338 thousand tons or 36.9% of its silicon steel sheet sales in 2009.
Stainless Steel Products
Stainless steel products are used to manufacture household goods and are also used by the chemical industry, paper mills, the aviation industry, the automotive industry, the construction industry and the food processing industry. Its deliveries of stainless steel products amounted to 2.3 million tons in 2009, representing 7.3% of its total sales volume of steel products. The Korean market accounted for 0.8 million tons or 34.5% of its stainless steel product sales in 2009.
The Company competes with Hyundai Steel Co., Ltd. and Dongbu Steel Co., Ltd.