Under New Leadership

POSCO will foster the cutting-edge material and biotech businesses as Choi Jeong-woo, who led the development of lithium in POSCO Chemtech, has been named as new chairman of POSCO.
POSCO will foster the cutting-edge material and biotech businesses as Choi Jeong-woo, who led the development of lithium in POSCO Chemtech, has been named as new chairman of POSCO.

As POSCO Chemtech president Choi Jeong-woo was tapped as new chairman of POSCO, the nation’s largest steel manufacturer is expected to step up its efforts to implement the 100-Year-Old Enterprise project.

The project calls for shifting the steel giant's strategic focus from steel production and sales to the lithium and biotech businesses. The strategy aims to increase the group’s overall competitiveness and synergies by reorganizing its existing business divisions in the era of the 4th Industrial Revolution.

POSCO picked lithium development as its core business item last year under the outgoing chairman Kwon Oh-joon, who was re-elected in March last year. The company employed a strategy to boost its profitability by commercializing lithium, a metal considered to be one of the three growth engines for POSCO. The other two are Finex and nickel. Often called the diamond of the Fourth Industrial Revolution, lithium is an indispensible material for rechargeable batteries for electric cars. The development of information technology (IT) is fueling the growth of the lithium market. The price of lithium carbonate, which had been around US$6,500 per ton in 2015, has recently risen to a US$10,000 level.

Lithium development has been a long cherished project for POSCO since 2009, when Kwon was appointed to take the helm of the Research Institute of Industrial Science and Technology (RIST). Kwon planned to create synergies by integrating the secondary battery material businesses of POSCO Chemtech and POSCO ESM into one platform in the mid- to long-term.

POSCO's push for the development of the new growth engines, which had been on a roll, hit a major snag in April when Kwon announced his willingness to step down as chairman. At the time, industry watchers anticipated that POSCO’s lithium development project would lose steam in the absence of the man who orchestrated it.

However, the appointment of Choi Jeong-woo as next chairman of POSCO removed the market’s concerns. This is because Choi is the person who showed enthusiasm for lithium development as much as Kwon did. The CEO Recommendation Committee at POSCO chose Choi as next chairman as the committee judged that Choi was the person who would be able to make a crucial breakthrough in the non-steel business.

POSCO Chemtech, which has been headed by Choi since the beginning of this year, is a representative affiliate responsible for discovering and developing future growth engines of the group. POSCO Chemtech made a foray into the lithium ion battery market in August 2010 by acquiring the cathode material business from LS Mtron. A cathode material is a carbon material made of graphite, which generates electricity by storing lithium ions during charging and discharging them. It is considered a core component for lithium ion batteries together with anode materials, separation membranes and electrolytes among others. POSCO Chemtech is the only company that is capable of making cathode materials for rechargeable batteries in Korea.

POSCO Chemtech has built a total of seven facilities up to date as the company started an expansion project to increase production of anode materials. When the addition of the eighth and ninth facilities are completed this October, the plant will have an annual production capacity of 24,000 tons. POSCO Chemtech has spared no efforts to increase the sales portion of high-value-added products. Following the signing an agreement for technical cooperation with Mitsubishi in Japan, POSCO Chemtech struck a deal with LG Chem for supplying cathode materials worth 306 billion won in February of last year.


Industry watchers say that when Choi takes office as chairman on July 27, his inauguration will accelerate the POSCO Group's new business-centered restructuring. In addition, Choi successfully carried out an intensive restructuring for the group as head of the Office of Value Management and chief financial officer at POSCO from 2015 to 2017. This fact is increasing the anticipation that POSCO under the leadership of Choi will realize widespread innovation.

In the meantime, the news that CEO Choi Jung-woo is confirmed as candidate for the next POSCO chairman sent the stock price of POSCO rising after a long interval.

politicians criticized that many close aids of former chairman Kwon were included in the list of candidates for the chairmanship during the election of the next chairman. But the rise of the stock price means that there is big anticipation for the stability of the management of POSCO in the market.

In the stock market on June 25, POSCO was trading at 357,500 won (US$320) which was 4.08% higher than the previous day's closing price and enjoyed the rise of its stock price for two trading days in a row. The stock price of POSCO Chemtech whose CEO is Choi also started to rise and was trading at a price up 6% as of the morning of June 25.
 

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