Largest Investment Ever since Foundation
POSCO chairman Choi Jeong-woo has announced the largest-ever investment and employment plans in just one month after taking office. POSCO plans to invest 45 trillion won (US$40.43 billion) to create 20,000 jobs in the next five years.
The group announced the investment plans on Sept. 3, saying that they are designed to fulfill the “With POSCO” strategy proposed by Choi at the inauguration ceremony at the end of July. The scale of the proposed investment plan is nearly 2.5 times higher than the aggregate investments made by POSCO in the past five years from 2014 to 2018, which amounted to 17.7 trillion won (US$15.9 billion).
POSCO will evenly make the investment to advance the steel business, seek for new growth engines and the environmentally friendly energy and infrastructure sector in a bid to strengthen its core businesses.
The group will first invest 26 trillion won (US$23.36 billion) in the steel business. Based on the large-scale investment, it will automate the No. 3 blast furnace of its Gwangyang Steel Mill by applying artificial intelligence to raise productivity and expand facilities exclusive for its Giga Steel and PosMAC to produce more of the premium products. It will also establish power generation facilities using byproduct gases and strengthen investments in eco-friendly facilities for desulfurization, denitrification and dust collection to maximize energy efficiency of the steel mill.
POSCO will invest 10 trillion won (US$8.98 billion) to advance its technology and capacity for secondary battery materials as the demand has been rapidly increasing due to the growth of the electric vehicle market. The group will also streamline its ore lithium smelting technology and build new facilities to set up mass production systems. In addition, it will acquire more lithium facilities in order to raise the material procurement safety. POSCO sealed a deal to buy lithium mining rights in Argentina from Australia-based Galaxy Resources. The group will also expand and establish new facilities for anode and cathode materials using synthetic graphite at home and abroad. As POSCO built a joint venture with a Chinese company earlier this year to push into the local lithium-ion battery material market, it will first set up the new facilities in China.
For energy and infrastructure businesses, the group will earmark 9 trillion won (US$8.09 billion) for clean thermal, solar and eco-friendly power generation projects, expanding liquefied natural gas storage facilities to strengthen the mid-stream business, upgrading POSCO Daewoo's Myanmar gas field facilities and enhancing its construction businesses such as front-end engineering and design (FEED) and operation and maintenance (O&M).
Along with the massive investment plan, POSCO will hire 20,000 new employees in the next five years, 4,000 per year. The hiring volume will be up 250 percent from 1,500 the group hired this year. This is to accelerate the new investment by securing talent in advance.