CEOs of Korean steelmakers pledged to tide over the hardships facing the Korean steelmaking industry and turn the current crisis into an opportunity. Even though they recognize the hard times, some steelmaking CEOs came out of the meeting with a rosier business outlook.
The Korea Iron & Steel Association (KOSA) hosted the New Year’s gathering in which some 200 representatives from government, industry and academic circles participated at the POSCO Center in Daechi-dong, southeastern Seoul, on Jan. 11.
In his opening speech, KOSA Chairman Kwon Oh-joon, concurrently POSCO Chairman, said, “Challenges and hardships the Korean steelmaking industry undergo is tremendous, and let’s show steelmakers’ reserved strength anew by renewing a strong determination of making last-ditch efforts and creative innovation.”
“We have to respond to the market paradigm shift by turning to substantive growth rather than outward growth based on the expanding of facilities,“ he said. He called for drastic restructuring and strengthening the fundamentals of the industrial ecosystem with coexistence with consumer companies, as well as the developing of value-added products with core technologies.
Chairman Kwon urged Korean steelmakers to strengthen their competitiveness through more drastic restructuring to cope with a structural supply glut and sagging demand. “Steelmakers are staging a cut-throat competition with a surplus capacity of 700 million tons, so the Korean steelmaking industry is experiencing a critical situation.
As cheaper imports disrupt the Korean market, Korean steelmakers will have to establish partnerships with the automobiles, shipbuilding and machinery industries while concentrating on such innovative steps as the development of value-added steel products to chase away such late-comers as China.
In his commemorative speech, Minister of Trade, Industry and Energy Yoon Sang-jick said, “Of late, the Korean steelmaking industry has hard times, with a global supply glut, sagging major industries, steel importers’ strengthening of restrictions and late-comers’ pursuit.”
But the Korean steelmaking industry managed to maintain its global standing as the fifth-biggest steel producer and the 3rd largest steel exporter in the world, he noted. The effectuation of the Korea-China Free Trade Agreement could lead to falling tariffs in the Chinese market, so the Korean steelmaking industry is not in such a stark situation, Minister Yoon added.
Minister Yoon said the Korean shipbuilding industry is experiencing such uncertainties as a global supply glut, sagging major industries, importers’ imposing of stricter restrictions and pursuit from industry newcomers.
Japan and Euro Zone economies have not yet turned around sufficiently, and the outlook in such emerging economies as China and Brazil is unpredictable, said Minister Yoon, adding that the Korean steelmaking industry will have to establish itself as a cash-cow industry to support the Korean economy by restructuring itself on a voluntary basis and investing in new growth engines this year.
Hyundai Steel Vice Chairman Woo Yoo-cheol offered a toast, saying that he wished for the resurging of the Korean steelmaking industry, recalling the fact that the Korean economy has made strides thanks to the leap of the steelmaking industry.
While meeting reporters on the sidelines of the ceremony, Hyundai Steel Vice Chairman ruled out the possibility of his company’s acquisition of Donbu Steel. Hyundai Steel was considered one of the candidate companies to take over Dongbu Steel because the two companies, which have steelworks in Dangjin, Chungcheongnam-do, are engaged in the cold-rolled steelmaking business.
Dongkuk Steel Vice Chairman Jang Sae-uck said his company is forecast to graduate from a deal on improving its financial soundness with creditors this year. He said his company is likely to graduate from the agreement on rescheduling of loans in June after consulting with creditors during the period between March and May. He also came out with a rosy outlook on his company’s business performance in 2016. Wide flange beams, section steel, cold-rolled sheet segments are predicted to remain unchanged this year, but Dongkuk Steel is likely to make a surplus operating profit since the company is focusing on plates. Dongkuk Steel will likely see operating profit rise this year, he added.
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