Chairman Kwon Oh-joon of the Korea Iron & Steel Association (KOSA) called for a major restructuring of the Korean steel industry to build a foundation for stable and competitive growth.
Kwon, also chairman of POSCO, made the remarks while speaking at a ceremony to mark the 17th anniversary of Iron Day at the Seoul POSCO Center on June 9.
Among about 30 people on hand at the event were Minister of Trade, Industry and Energy Joo Hyung-hwan; Hyundai Steel Vice Chairman Woo Yoo-cheol; SeAh Steel Chairman Lee Soon-hyung; Dongbu Steel President Kim Chang-soo; and KOSA Vice Chairman Song Jae-bin.
“The global steel industry is today at a crossroads, and the Korean steel industry has to strengthen its fundamentals through structural advancement and protect the domestic market from low-priced, poor products and unfair imports,” Chairman Kwon said.
Kwon called for the development of world-class premium products through technological innovation to secure global competitiveness and create new demand.
The Korean steel industry is undergoing a massive restructuring amid hard times, caused by a glut of Chinese-made steel products for over the past few years.
POSCO, the leader of the Korean steel industry, disposed of its 34 subsidiaries in Korea and abroad last year, but the company plans to sell or liquidate 35 more subsidiaries this year. Hyundai Steel shut down the reinforcing bar lines of its plant in Pohang, and the company is now reshaping them into profit-taking areas. MOTIE Minister Joo designated the steel industry as one of the five sectors that are subject to restructuring.
The government is backing up steel companies’ restructuring drives by effectuating the Special Act on Boosting the Vitality of Companies from August.
The so-called One Shot Act stipulates tax and financial support to companies undergoing restructuring.
KOSA has commissioned the Boston Consulting Group to present a report on a glut to determine the intensity of restructuring of the steel industry. Steel companies plan to determine whether they will employ the One Shot Act based on the report.
“The Korean steel industry has been carrying out M&As for improving the scale of economy and specialization and partially shutting down inefficient facilities, but such things are short-lived,” MOTIE Minister Joo said. He urged the industry to dramatically eradicate non-essential businesses so the sector can make it through a global glut in steel and secure an upper hand in competition with global companies.
Minister Joo said the government will provide such support as procedural simplification, tax benefits and regulatory reform to help steel companies restructure themselves on a voluntary basis. POSCO President Hwang Eun-yeon was honored with the Order of Industrial Merit, Silver Tower in recognition of his contribution to the development of the Korean steel industry.
The Order of Industrial Merit, Bronze Tower went to Executive Vice President Yim Chun-seop of HUSTEEL for introducing the Korean industry’s first latest facility, while Managing Director Min Kyung-pil of Hyundai Steel received the Industrial Medal for his leading roles in tapping new markets.
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