Entering into Material Business
During a press conference on April 1, Kwon Oh-jun, chairman of POSCO Co. which celebrates its 50th anniversary this year, stressed that POSCO needs new business other than steel in order to leap toward greater 50 years ahead. He said, “We cannot last 100 years with steel business alone. We should make our steel business higher value added and diversify business portfolio as well.”
In particular, Kwon highly rated the potential of the materials industry, including lithium, the essential material for electronic vehicle and laptop batteries. He said, “Lithium is a huge business that will feed POSCO. We have already completed the stage of research and reached the stage of commercialization.” In fact, POSCO operates its lithium extraction plant with an annual production capacity of 2,500 tons in Gwangyang. The company also came up with plans to provide nickel and cobalt, which are cathode active materials. Kwon said, “South Korean companies are key players in the secondary battery market but they have imported 100 percent of lithium, the essential material of secondary batteries. We are aiming to stably produce and supply the materials of secondary batteries to domestic companies.”
In regard to some critics who recently criticized for POSCO’s failure in lithium development project, he said, “We pushed three contracts with Bolivia, Argentina and Chile in the past five or six years but all the contracts came apart. The biggest reason for this is that Chinese companies offered a higher amount of money. We also can buy the project with more money but we cannot guarantee the success in business when we do that.”
Nevertheless, Kwon is determined to continuously push ahead with more mergers and acquisitions (M&As). He said, “We proceeded with some M&As. We failed to succeed in all of them but we will continue to work on M&As.” POSCO established a joint venture for cathode active materials after being chosen as the operator for Samsung SDI and Chile’s lithium project.
Kwon considered the bio industry as new business to focus on, along with the material industry. He said, “The biggest reason to promote the bio industry is that Pohang University of Science and Technology (POSTECH) is the most competitive in terms of biotechnology in South Korea and POSTECH is recently producing fine results. POSCO has come up with plans to promote new business by making use of several patents filed by POSTECH professors.”
Based on such new industries, Kwon proposed the company’s goal to record consolidated sales of 500 trillion won (US$470.81 billion) in 2068, the year marking the 100th anniversary of its founding.