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Hyundai Steel, which has become a mega steel company with assets of 31 trillion won (US$27.14 billion) and sales of 20 trillion won (US$17.51 billion) after the merger with Hyundai Hysco on July 1, said it would increase its sales to 26 trillion won (US$22.77 billion) by 2020 and 31 trillion won (US$27.14 billion) by 2025 through making inroads into the special steel market and expanding overseas production. In addition, the company has plans to expand its business into the non-steel sector under a blueprint to advance into a “materials business-based value creation company.”
Hyundai Steel plans to increase its sales by 30 percent in the next five years and 10 trillion won (US$8.76 billion) within a decade. More specifically, it will boost the sales by 1.5 trillion won (US$1.31 billion) in the special steel sector, 2.5 trillion won (US$2.19 billion) in overseas production facilities expansion and overseas steel service centers (SSC), 1 trillion won (US$875.58 million) in weight reduction and 1.5 trillion won (US$1.31 billion) in new products and market expansion.
The construction of its special steel mill in Dangjin, South Chungcheong Province is now in its final stage and it will start mass producing next February.
By producing special steel which is used in automobile engine and transmission as a core material, synergy effects with Hyundai-Kia Motors are also expected. The existing SeAH Besteel-centered special steel market will be reorganized into the system of two powers base with Hyundai Steel.
Its overseas sales network that the company acquired from Hyundai Hysco’s overseas SSC is considered another factor for the rise in sales. Through 13 SSCs around the world, such as the U.S., China and India, Hyundai Steel expects to supply various products, including section steel and steel indicator, to local energy and power plants and machine and electric appliance companies.
For weight reduction, the company is expanding the plant, which was previously carried out by Hyundai Hysco, in Yesan, South Chungcheong Province. The production capacity will be increased from the current 27.4 million sheets to 37 million sheets next March. Accordingly, the company will have no difficulty to achieve additional sales of 1 trillion won (US$875.58 million).
Also, Hyundai Steel will diversify steel pipe products and integrate its forging business from ingot production (high process) to forming (low process), improving efficiency.
Moreover, the company has plans to expand its business structure from the current steel sector into the non-steel sector, such as aluminum, in the long term in a bid to boost its sales to 31 trillion won (US$27.14 billion) by 2025. Accordingly, M&A with related companies and new investment are expected to be carried out.