Achieving Record-breaking Trillions of Won in Profits
POSCO International is rapidly transforming into an eco-friendly comprehensive business company and a business platform provider.
POSCO International announced on Dec. 19 that, in its first year since the merger with POSCO Energy, it has successfully established three major business value chains -- eco-friendly energy, materials, and food -- entering the main track this year. The company is expected to achieve a record-breaking operating profit of around 1.2 trillion won (US$918.13 million) this year.
In specific terms, the eco-friendly business encompasses energy steel, mobility, secondary battery materials, and steel raw materials. For energy steel, POSCO International aims to sell 2.23 million tons by 2030, driven by long-term contracts for POSCO’s eco-friendly specialized steel, known as “Greenate.” The company plans to seize the future eco-friendly market by participating in projects such as the development of an offshore carbon capture and storage (CCS) platform in Texas in May and winning contracts for an offshore carbon capture, utilization, and storage (CCUS) platform project in Malaysia.
In the mobility business, POSCO International will focus on securing integrated package orders for batteries, components, motors, and chassis. For drive motor cores, a key component in electric vehicles, the company plans to invest 680 billion won by 2035 to establish a production system of 10 million units globally, including in the United States, China, and India. In connection with this, POSCO International has secured a 10-year supply agreement with Hyundai Motor for 10 million units of the drive motor core, with the total transaction amount reaching 2.5 trillion won.
For secondary battery materials, there are plans to establish a supply system of 350,000 tons by 2030, ten times the existing capacity. The goal is to build a value chain covering mining for graphite, lithium and nickel, raw materials for copper foil, materials such as cathode materials, anode materials, active materials, and batteries including recycling. For steel raw materials, the company aims to supply materials from a total of 26 global iron scrap collection bases by 2030.
In the energy business, POSCO International aims to complete the value chain from gas exploration and production (E&P) to power generation. By 2030, the plans include securing gas reserves of 2.5 trillion cubic feet (Tcf), a trading volume of 12 million tons of liquefied natural gas (LNG), a total LNG terminal capacity of 3.14 million kiloliters, a power generation capacity of 6.7 gigawatts (GW), and offshore wind power rights for 2 GW or more.
In the food sector, the company has set a goal of establishing a system handling 21 million tons of global food by 2030 and leaping into the top 10 global food companies.
POSCO International is also making focused investments in secondary battery materials, rapidly expanding the value chain for graphite, lithium, nickel, copper foil, and used batteries through its network of over 100 global locations. This year, it has sequentially invested in mines such as the Molo mine in Madagascar and the Mahenge mine in Tanzania, securing 1.8 million tons of natural graphite from Africa.
POSCO International, which was dominated by the energy sector at 91 percent as of 2015, has rebalanced its portfolio since the restructuring as a comprehensive business company last year. The operating profit distribution among three sectors – investment at 30 percent, trading at 35 percent, and energy at 35 percent – has now achieved a balance around the 30 percent mark.
Until the third quarter of this year, POSCO International recorded sales of 25.22 trillion won and operating profit of 948.5 billion won.