South Korea’s leading steel mill Posco has formalized the sale of its own technologies.
The company announced plans for the new business outline offering to market its steel-making and engineering technologies during the 48th general shareholders meeting held at POSCO Center in Seoul on March 11, attended by Chairman Kwon Oh-joon.
Accordingly, POSCO will sell its self-developed steel-making technologies as well as engineering models for design and operation. The company is currently seeking to sell FINEX technology with 15 clients and compact endless cast & rolling mill (CEM) technology with seven. It is also developing over 100 technologies.
POSCO has been forced to seek out a new revenue source other than the sale of steel products amid prolonged global slump from overcapacity. In addition, its R&D efforts have led to the development of advanced technologies that can be sold to global leading steel companies.
The company plans to boost its overall revenue in various ways, including royalties from other steel firms. It will receive royalties from construction companies using POSCO’s technology and engineering models after they earn from winning building orders. POSCO will also make profits through labor services by dispatching its engineers to oversee the projects.
Its FINEX and CEM technologies are the ones that can be sold right now. FINEX is a technology which produces molten metal using cheap iron ore fines and non-coking coal powder as feedstock without a preliminary treatment process. It will be useful to and in great demand in developing countries lacking in funding and infrastructure for the construction of steel mills due to the cost-saving technology.
CEM is a new eco-friendly technology that integrates the processes of casting, which hardens molten metal, and rolling, which makes steel into a thin sheet. The technology can reduce processing cost and energy loss by not cooling down hot slab but rolling coils right away. It can sell well in advanced countries in need of high- efficiency and less-carbon-emitting facility.
At the shareholders’ meeting, the company changed its bylaws, allowing quarterly dividends from this year in order to maximize the shareholder value and boost up the responsible management.
POSCO Chairman Kwon Oh-joon said, “POSCO has been actively pushing forward restructuring. Accordingly, the company has recorded the lowest debt ratio since its founding, and is suggesting the same level of dividends as last year considering the improvement of cash flow. We will make every effort to live up to your expectations with active income capitalization policy.” POSCO paid out cash dividends of 8,000 won (US$6.70) per share last year.
After Lee Myung-Woo, CEO of Dongwon Industries Co., was reelected as the outside director, he has become chairman of the board of directors. Lee has been serving as the outside director of POSCO since 2013. Generally, outside directors automatically heads the board of directors at POSCO.