POSCO Holdings, the holding company of POSCO Group, elected Chang In-hwa as its chairman in a general shareholders meeting and a Board of Directors meeting at the POSCO Center in the Gangnam district of Seoul on March 21. Chang will serve a three-year term.
Tough challenges are facing Chang, who started with high expectations from inside and outside POSCO Group. POSCO Group’s steel business, which is its main business, is going through a slump and even its secondary battery materials business has been slowing down after rapid growth.
POSCO Group urgently needs to boost its competitiveness in the steel business. POSCO, the flagship subsidiary of POSCO Group, faced the challenge of a sluggish global steel market and the rise of Chinese and Japanese steelmakers in 2023.
This led to a slowdown in business performances. In 2023, POSCO’s sales and operating profit totaled 38.772 trillion won (US$28.956 billion) and 2.083 trillion won, down 8.7 percent and 9.2 percent, respectively, from 2022. These figures even meant drops from 2022 when the steelmaker was hit by the flooding of its steel mill due to the flooding of a stream during a typhoon.
Under former Chairman Choi Jung-woo’s tenure, POSCO improved its business with a transformation drive that included increased investment in future materials such as secondary batteries, but steel remains the group’s mainstay with more than 60 percent of sales generated in the steel business.
“The steel business is the foundation of POSCO,” Chang said at a press conference held shortly after his appointment. Most notably, the new POSCO chairman wants to increase its competitiveness in the steel sector where competition is intensifying, industry observers say.
At his inauguration ceremony held later on the day, Chairman Chang also gave specific directions, saying, “We will apply artificial intelligence and robotics to evolve our current smart factories into intelligent ones that encompasses the entire process from ordering to production and sales. Through this, we will significantly boost our productivity and develop our steel industry into a technology-intensive convergence industry.”
A problem at hand with POSCO is transitioning to a carbon-neutral production system in response to increasingly stringent global environmental regulations. Chang is expected to focus on advancing hydrogen reduction steel technology and strengthening strategies to invest in eco-friendly facilities such as electric furnaces.
Chang is also expected to focus on promoting POSCO’s joint projects with the Korean government in the field of research and development (R&D), which requires advanced technology development. Since the outline of POSCO Group’s leadership change was shown, the government’s support has been taking shape with the Korean Ministry of Trade, Industry and Energy (MOTIE) confirming POSCO’s hydrogen reduction steel technology development project as a subject of a new preliminary feasibility study.
This has been a sign that POSCO’s awkward situation with the current government formed during the previous POSCO chairman’s tenure being smoothly adjusted again under Chang, some industry insiders say. Under the current government, former chairman Choi of POSCO Group, the fifth-largest conglomerate in Korea, has been repeatedly scratched off a list of Korean business leaders for the Korean President’s economic tours and events, leading those in the Korean business community to believe that the current government and POSCO has had an unfriendly relationship.