Steel Business in Mexico
The nation's steel giants, POSCO Group and Hyundai Steel, are strengthening the automotive steel plate business in the Mexican market. Since Mexico is a gateway for Latin America and close to the U.S., the world's largest auto market, it has been considered to be an optimal production base for cold-rolled steel plates for automobile production.
According to steel industry sources on March 23, POSCO-America, the group's affiliate in the U.S., acquired a local steel distributor and a human resources company in Mexico City last December. Both companies' assets were estimated at 55.7 billion (US$47.96 million) and 79 million won, respectively, as of the end of 2014.
Such a move is believed to be part of POSCO's recent reform to improve its finances. The group sold a total of 34 affiliates at home and abroad, including 13 overseas subsidiaries, last year and is expected to sell more of its remaining 35 units this year.
Since its Mexican office was founded in 1981, POSCO has been focusing on the establishment of stable sales networks. The group has opened four cold-rolled steel plants in Mexico called the Mexico Puebla Processing Center (MPPC) from 2007 to 2013. The annual production of the four plants combined now reaches 560,000 tons annually, and global auto makers such as Nissan, Honda, Mazda, Volkswagen and Ford are POSCO's major clients.
Hyundai Steel will complete the construction of its steel service center (SSC) in Mexico next month, gearing up for entering the Latin America market. The SSC in the northeastern Mexican city of Monterrey mostly produces cold-rolled steel plates for cars, and it was established as part of the company’s efforts to expand overseas car production of Kia Motors, the largest shareholder of Hyundai Steel.
The company currently has 11 SCCs around the world, and will have 12 soon when the Mexican plant is completed. The SSC in Mexico is expected to produce cold-rolled steel plates for around 400,000 cars every year.