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 POSCO Tower, Seoul | |
Native name | 포항종합제철 주식회사 (Until 2002) 주식회사 포스코 (Since 2002) |
|---|---|
| Revised Romanization | Pohang Jonghap Jecheol Jusikhoesa (Until 2002) Jusikhoesa Poseuko (Since 2002) |
| Company type | Public |
| KRX:005490 NYSE: PKX (POSCO Holdings Inc.) | |
| Industry | Steel Industrial manufacturing |
| Founded | April 1968; 57 years ago (1968-04) |
| Founder | Park Tae-Joon |
| Headquarters | Pohang,South Korea |
Area served | Worldwide |
Key people | Kim Hak-dong (Chief Executive Officer) |
| Products | Steel, flat steel products, long steel products,wire products, plates |
| Revenue |  KRW 75.16 trillion(2021)[1] |
| KRW 9.25 trillion(2021)[1] | |
| KRW 7.22 trillion(2021)[1] | |
| Total assets | KRW 79.08 trillion(2020)[1] |
| Total equity | KRW 47.68 trillion(2020)[1] |
| Owner |
|
Number of employees | 29,648 (2009) |
| Subsidiaries | POSCO International POSCO E&C |
| Website | posco.co.kr |
POSCO (formerlyPohang Iron and Steel Company) is a South Korean steel manufacturer headquartered inPohang,South Korea. It had an output of 42,000,000 metric tons (41,000,000 long tons; 46,000,000 short tons) of crude steel in 2015, making it theworld's sixth-largest steelmaker by this measure.[2] In 2010, it was the world's largest steel manufacturing company by market value.[3] Also, in 2024, it was named as the world's 233rd-largest corporation by theFortune Global 500.[4]
POSCO currently operates two integratedsteel mills in South Korea, inPohang andGwangyang. POSCO previously operated ajoint venture withU.S. Steel,USS-POSCO Industries, inPittsburg, California, United States, but U.S. Steel acquired full ownership of the facility in February 2020.
In the 1960s, South Korean administration concluded thatself-sufficiency in steel and the construction of an integrated steelworks were essential to economic development.[5] Since South Korea had not possessed a modernsteel plant prior to 1968,[6] many foreign and domestic businesses were skeptical ofRepublic of Korea Government's decision to invest so heavily in developing its own industry.[5] The Korean government created Pohang Iron and Steel Company, Ltd (POSCO) in 1968 and appointed as president of the mill a competent retired army general and friend of PresidentPark Chung Hee,Park Tae-joon, a man with a track record of having turned around the government-ownedKorea Tungsten Company. Construction of thePohang plant began on April 1, 1970, and was dedicated on July 3, 1973, with an initial annual capacity of 1.03 million metric tons.[7]
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.[8] Financing included US$119 million in governmentgrants andloans,[9][10] US$54 million incredit from theExport-Import Bank of Japan, and technical assistance fromNippon Steel and other corporations.[8][11] This cooperation was one consequence of the normalization of relations withJapan in 1965 and reflected the view of the government of Japan as noted in theNixon-Sato communique of November 21, 1969, that "thenational security of the Republic of Korea is essential to the security of Japan."[12]
POSCO first began to sellplate products in 1972 and focused its sales policies on the domestic market to improve steel self-sufficiency at home. It made special efforts to supply qualityiron andsteel to related domestic companies at belowexport price to strengthen their international competitiveness.[citation needed]
Beginning in 1973, South Korea's government used its National Investment Fund and theKorea Development Bank to invest large amounts of money into what Park Chung-hee's government viewed as the six strategic industries: steel, non-ferrous metals, shipbuilding, industrial machinery, electronics, and petrochemicals.[13]: 136 This strategy helped develop companies POSCO and reduced input costs for production in downstream industries as well.[13]: 136
POSCO produced 6,200,000 t (6,100,000 long tons; 6,800,000 short tons) of raw steel in 1980, recording a 13% increase over the previous year,[citation needed] and was one of the few exceptions when almost all areas of the Korean economy were in economic depression. Domestic industries absorbed POSCO's major products such as automobile and home appliance manufacturers consuminghot rolled products,shipbuilding andconstruction andengineering companies consuming medium plates, andelectric motor andtransformer manufacturers consuming electrical sheets. Some over-produced products were exported to foreign countries but the significantimport of sections for construction left Korea as a net importer. Globally, POSCO was already the most efficient steel producer in certain products.[citation needed]
By the late 1980s, POSCO's growth had been immense. It was the fifth biggest steel company in the world, with an annual production approaching 12 million tons worth 3 trillionwon.[citation needed] POSCO continued to expandproductivity and size at a time when the steel industries of theUnited States andJapan were declining. POSCO completed its second-phase mill atGwangyang in August 1988. A third-phase mill completed in 1992 further increased crude steel production to a total output of approximately 17.2 million tons a year.[citation needed] In terms of productivity, POSCO was the world's best steel manufacturer throughout the late 1980s and also was at the top in terms of facilities.[citation needed]
Pohang, previously afishingport whose major industry was processingfish andmarine products, became a major industrial center with almost 520,000 people.[citation needed] In addition to the huge integratedsteel mill,Pohang became an industrial complex housing companies that manufacture finished steel products ofraw materials provided.
POSCO CEO Park Tae-joon was quoted as saying, "You can import coal and machines, but you cannot import talent".[citation needed] Park realized the need for Korea to educate their youth in science and technology to ensure Korea's position in the high technology arena. Park founded thePohang University of Science and Technology (POSTECH) in 1986 as Korea's first science and technology research-oriented university with the mission to educate young Koreans who can contribute to national prosperity through the advancement in science and technology. In 2012 and 2013, theTimes Higher Education ranked POSTECH 1st in their "100 Under 50 Young Universities" rankings.[14]
Changes in managerial systems andorganizational structure accelerated in 1993 when POSCO'spresident and founder, Park Tae-Joon, who had wielded absolute managerial authority for more than 25 years, resigned.
With the change in leadership—from Park Tae-Joon to Ryu-Sang Bu, POSCO increaseddecentralization and diversification. POSCO's management emphasized greaterflexibility,autonomy, and consensual decision-making processes. The chairman also moved to devolve moreautonomy to theprofit centers and changing from a strictly hierarchicalorganizational structure to one based on teams.
In July 1994, POSCO created two subsidiary companies, POSTEEL and POSTRADE. POSTEEL is the domestic sales and service arm of the company, while POSTRADE handles international trading of POSCO products. Both subsidiaries commenced full operation in September 1994, with all international POSCO affiliates transferred to POSTRADE by the end of that year. The landmark Posteel Tower onTehran Street, in Seoul'sGangnam district (not to be confused with the POSCO Center, also on Tehran Street) was completed in 2003.
In 1997, Seoul announced that it was going to transform POSCO into aprivate company in line with the government's new policy ofprivatizingstate-owned enterprises. The government planned to retain a majority share of thestock; initial reports in the South Korean press in 1998 indicated that the sale ofpublic shares was going slower than anticipated. However, the administration led byKim Young Sam changed the initial policy direction ofprivatization of POSCO and decided not to sell government-owned stock to keep it as a government investment enterprise.
But, theKim Dae Jung administration following theKim Young Sam administration listedprivatization ofpublic enterprise as a high priority policy ineconomic policy agenda to implement mainly because of outbreak of theeconomic crisis. The new administration decided toprivatize POSCO and by 1998, the South Korean government had reduced itsownership ofshares in POSCO to less than 20%, and more than 58% of the shares in POSCO were in the hands offoreign investors.[15] In 2000, fullprivatization of POSCO was completed.
As part of theprivatization process, new Chairman Lee Ku-Taek began efforts to introduce a professionalmanagement andgovernance system of global standards for POSCO. Under the new governance system, management madeaccountability to shareholders a priority. POSCO also introduced a new performance-based evaluation and compensation system. Throughout most of itsprivatization drive, POSCO increased itsrevenue and businessprofit. Thanks to robustdemand at home and inChina, POSCO recorded the largest profits in the global steel industry in 2004.[citation needed] Netearnings from POSCO's array of steel products – used in everything fromscrews toskyscrapers – shot up 80% to $1.66 billion in 2004 from the previous year.[citation needed]
With increasing global competition, POSCO looked toChina andIndia for new opportunities. South Koreanwages were too high to support a whole range of activities and POSCO looked elsewhere for new projects while keeping the areas where they have acomparative advantage inSouth Korea. By 2006, POSCO had 26subsidiaries and invested over $2.4 billion in freshinvestment onmainland China,[citation needed] especially ingalvanized andstainless steel to supply globalauto and appliance makers that have opened plants there. In 2006, POSCO started operating the Zhangjiagang Pohang Stainless Steel (ZPSS)steel mill capable of producing 600,000tons ofstainless steel andhot-rolled products annually in China'sJiangsu Province. As a result, POSCO became the first foreign firm operating an integratedstainless steel mill inChina, handling the entire production process from smeltingiron ore to finished products, including thecold rolled stainless plant it already operates. In June 2022, POSCO is temporarily cutting production lines in Pohang plants as thousands of truckers go on a strike for higher pay, causing disrupted cargo transport in the country.[16]
In May 2012,Nippon Steel filed a lawsuit against POSCO, which was established in the 1960s with technical assistance from Nippon Steel, for illegally acquiring the technology for grain-oriented electrical steel sheets developed by Nippon Steel. It was alleged that POSCO hired ex-employees of Nippon Steel to obtain the technology. An ex-POSCO official stated that the company's Tokyo research centre was effectively an espionage base, whose primary purpose was to collect information about Japanese steel companies on orders from the Korean head office.[17][18] The lawsuit was settled in 2015 through an agreement under which POSCO paid 30 billion yen to Nippon Steel.[19]
POSCO has maintained its presence in Russia through its local subsidiary, even as the country faces widespread condemnation and international sanctions for its invasion of Ukraine. Operating through its Russian subsidiary, POSCO remains engaged in the Russian market, a decision that has drawn criticism for undermining global efforts to economically isolate Russia. While numerous companies have withdrawn from the Russian market in response to the ongoing war, POSCO's decision to continue operations has sparked significant criticism. Observers argue that its actions contradict global efforts to isolate Russia economically and may be seen as enabling a regime responsible for atrocities and the loss of innocent lives in Ukraine.[20][21][22]
In June 2005, POSCO signed amemorandum of understanding with theState of Orissa inIndia. Under the agreement, POSCO plans to invest US$12 billion to construct a plant with fourblast furnaces, an electricity plant, housing, and an annual production capacity of 12,000,000 metric tons (12,000,000 long tons; 13,000,000 short tons) ofsteel, which is slated to start production in 2010.[citation needed][needs update]The project, which would start with a 3,000,000-metric-ton (3,000,000-long-ton; 3,300,000-short-ton) capacity initially, would fetchrevenue for the government to the tune ofRs 700crore to Rs 800 crore (Rs 7-8 billion) annually. It would also provide direct employment to 13,000 people and ensure indirect employment for another 35,000.[citation needed] TheOdisha state government also promised to provide a total of 600 million tons of iron sources, and will allow POSCO to useiron ore from these sources over the next 30 years. If the project goes ahead, it will be the single largestforeign direct investment inIndia as well as being the world's biggestgreenfield steel plant ever.[citation needed]
However, from 2005 till date (as of August 7, 2010), the India project has not been able to proceed due to strong opposition from the local residents in the area proposed to be given for the steel plant. There have been allegations that the federal and State governments have been illegally trying to take lands and forests for the project, in violation of theForest Rights Act.[23] There have also been claims that the project will only benefit the company while displacing more people than it employs, damaging the environment and taking India's mineral resources at a very low price.[24]
Further, a study[25] undertaken by the Mining Zone Peoples' Solidarity Group, an international research group focused on India, finds evidence of irregularities in dealings with state, bureaucracy and judiciary and questions and debunks the social, economic and environmental claims that the project has made.
The MoU between POSCO and State of Odisha expired in 2010. Following allegations that the ministry had not adhered to Forest Rights Act, Ministry of Environment and Forests (MoEF) set up the N.C. Saxena committee in July 2010 to review the clearance. Despite the committee's report indicating that provisions of the Forest Rights Act had been violated, the MoEF issued final order on January 31, 2011, and gave environment clearance to POSCO. In May 2013, theNational Green Tribunal (NGT) halted land acquisition for the POSCO projects. In July 2013, POSCO completed land acquisition despite the order given by NGT. In December 2013, POSCO began construction of a boundary wall around its plant site. In December 2013, the NGT criticised the forest clearance granted by the Union Ministry of Environment and Forests (MoEF) to the proposed steel plant of South Korean steel giant, POSCO, in Odisha.[26] There have been reports that during protests and land acquisition during Feb - Mar 2013, there has been bombing attack on the resisting villages and naked protest against the police atrocity.[27]
TheCentral Government of India came out confident on 15 January 2014 that with the renewal of environment clearance, South Korean steel giant POSCO's project in Odisha would take off soon. After a meeting with visiting South Korean Minister of Trade, Industry and Energy Yoon Sang-jick, Mr. Sharma told the media: "So far, 1,700 acres of land — out of 2,718 acres — have been transferred to POSCO and the rest will soon be given." On July 17, 2015, news reported that South Korean steelmaker POSCO may halt a $12 billion US dollar plan agreed with Odisha, India a decade ago due to the delay in regulatory approvals.[28] In 2016, POSCO confirms withNational Green Tribunal (NGT) that it will suspend the steel plant project inOdisha, India.[29] POSCO finally exited from this project on March 18, 2017 (Saturday).
On 13 January 2022, theAdani Group announced that it had signed an MoU with POSCO to explore the setting up of an Integrated Steel Mill in Mundra, Gujarat, with an estimated total investment of US$5 billion.[30]
POSCO have pursuedinvestment opportunities in otherdeveloping countries such asVietnam andMexico. It was announced in August 2006 that POSCO will build a large-scalesteel mill in southernVietnam.[31] POSCO plans to build the US$1 billion plant in two phases forhot-rolled by the end of 2012 andcold rolled products by the time of December 2009.[32] When completed, the mill is expected to produce three-milliontons of steel products annually. Posco also plans to build a $250 million plant in the city ofAltamira,Mexico, to produce 400,000 tons of galvanized steel sheet a year forautomakers.[33] Theventure will be Posco's first wholly owned steel-plate plant inNorth America. Posco beganconstruction in early 2008, and started operations in 2009, producinggalvanized andgalvannealed steel.
On June 30, 2006, POSCO completed the construction of its sixth continuous galvanizing line (CGL) at itsGwangyang mill in theSouth Jeolla Province. With this new addition, POSCO becomes the no.2 producer of sheet-steel just behindArcelorMittal. In early 2007,Warren Buffett'sBerkshire Hathaway purchased a 4% stake in POSCO.[34] Berkshire sold its share later in 2014.[35] In February 2013 POSCO signed aMemorandum of Understanding with Afferro Mining, Inc, with a view to developing iron ore resources inCameroon.[36] In December 2013, the steel plant Krakatau Posco inCilegon, Indonesia began operation. Its annual production capability is 3 million tons of steel.[37] Posco Holdings opened a 25,000-tonlithium hydroxide factory inGüemes, Argentina in October 2024.[38]
POSCO's Headquarters, along with the POSCO Center, form the 'brain' of the company, overseeing major tasks, such as themanagement,planning, andfinances of the steelworks atPohang andGwangyang. The construction of POSCOheadquarters at 1 Goedong-dong, Nam-gu,Pohang, was completed on April 1, 1987.
Pohang - Constructed in four phases between April 1970 and February 1981 along Korea's southeast coast, the nation's first integrated steelworks has produced 230 million tons ofpig iron through March 2004 - enough to build some 250 millioncompact cars. Crude Steel Production (2008) = 13.6 million tons.[39]
Gwangyang - Constructed in four phases between September 1982 and October 1992 onKorea's southern coast, the nation's second integrated steelworks. Gwangyang focus on manufacturing automotive steel, high-strength structure steel, API line pipe steel, and other strategic product categories. Crude Steel Production (2008) = 17.4 million tons.[39]
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