The Korean steel giant wants its development of titanium in Kazakhstan to contribute to helping strengthen ties between Kazakshtan and Korea as well as boosting business interactions
POSCO has been actively developing and doing businesses with related companies in Kazakshtan in natural resource areas such as steel and coal. BusinessKorea held an interview with Baek Sung-kwan, Executive Vice President at the Overseas Steel Business Department at POSCO to hear the status and plans for operations in the core Central Asian nation.
Please explain about POSCO current projects and future plans in Kazakhstan.
First of all, it is my pleasure to be discussing issues relevant to Kazakshtan projects on the 20th anniversary of diplomatic relations between Kazakhstan and Korea. In regards to business relations between Kazakhstan and POSCO, I would like to point out that POSCO has various interests in Kazakhstan, including embarking on a Titanium Slab production project and establishing the POSUK Titanium company (POSCO 50%, UKTMP 50%). The construction of the plant for the production in Ust-Kamenogorsk began on October 18, 2011 and is expected to be completed by November 30, 2012. In addition, our steel business department is currently discussing the possibilities of cooperation with Tau-Ken Samruk, a Kazakhstan national mining company.
How would you evaluate the business environment in Kazakhstan?
Kazakhstan has abundant natural resources such as iron ore, coal, oil, and gas which are attracting foreign investors and helping to develop the national economy. Furthermore, the recent Custom Union signed between Kazakhstan, Russia and Belorussia on July 1 last year will have a good influence on prospective markets for many industries. From the steel industry’s perspective, Kazakhstan is a land of opportunities, containing approximately 4.5 billion tons of iron ore reserves, the 6th biggest in the world, as well as approximately 34 billion tons of coal reserves, both of which are essential materials in the steel industry.
What in your opinion needs to be improved in order to boost investment and trade in Kazakhstan?
In order to attract foreign investors and stimulate trade, the role of the government is essential. First of all, the provision of incentives and tax holidays for particular industries, the availability of infrastructure, and stable economic and political environments are some of the key factors needed to attract foreign investors.
What role do you expect Kazakhstan Embassy to play in Korea?
The embassy of Kazakhstan was established in Korea in 1996. Since then, we have seen a number of events designed to promote relations between the two countries, such as state visits by the Presidents of both countries. I hope that the Kazakhstan Embassy will continue to assist in future business development between Korea and Kazakshtan.
This year marks the 20th anniversary of diplomatic relationships between Korea and Kazakhstan. Could you please comment on this?
Diplomatic relations between the Republic of Kazakhstan and Republic of Korea were established on January 28, 1992. During that period, Presidential visits were conducted, which had a profound effect on boosting bilateral relations between the two countries; increasing bilateral trade and improving the business environment between Kazakhstan and Korea. Cooperation in the areas of energy and mineral resources are just two examples of some of the promising areas for more effective interactions. I hope that there will be new business opportunities in the steel industry for mutually profitable cooperation between the two countries, and which may further enhance the good diplomatic relations between Kazakhstan and Korea.
On October 10 last year, construction of the world’s 4th biggest titanium slab production plant began in Kazakhstan. Could you please provide some background about the project as well as its current status?
Kazakhstan UKTMP and POSCO have each invested 50% of the construction costs of the titanium ingot production plant (Company name: POSUK Titanium). The plant will be located in Eastern Kazakhstan, with construction expected to be completed by November 2012. UKTMP’s titanium sponge production technology will be well combined with POSCO’s titanium manufacturing technology to represent a good synergy for future development of the business. The titanium project in Kazakhstan will contribute not only to the development of titanium industry of both Kazakshtan and Korea, but also to strengthening the ties between two countries. Raw materials needed for the production of titanium ingots will be supplied by UKTMP. These titanium ingots will then be brought back to Pohang Mills in South Korea for the production of hot rolled plates. Construction of the site is currently ongoing in Kazakhstan.