POSCO Chairman Kwon Oh-joon welcomes shareholders prior to an shareholder's meeting at the POSCO Center in Seoul on March 10 in which he was officially reelected for his second term.(Photo: POSCO)

POSCO Chairman Kwon Oh-joon, after being reelected for a second term, unveiled an ambitious plan to embark on the next 50 years by building a “smart industry.” His perspective focuses on long-term development corresponding with changes of the times, including “smart steelworks,” “smart buildings” and “smart cities.”

The plan also includes POSCO’s determination to strengthen its non-steel business sector to create diversified growth engines, on top of maintaining a competitive edge in the company’s flagship business ― steel. 

Chairman Kwon plans to keep ramping up the competitiveness of the non-steel business arena. The plan is meant to concentrate POSCO’s capabilities to nurture substances, the nonferrous business, and energy businesses as part of efforts to shore up the company’s global competitiveness. Chairman Kwon’s strategy involves boosting its competitive edge in its flagship steel business by expanding sales of premium products around the world and promoting solution marketing.

During his three-year term, Chairman Kwon said he plans to pursue a so-called Smart POSCO plan that involves “smart transformation,” which is a paradigm shift to “smart” trends to prepare for the next 50 years. POSCO plans to solidify its standing as the global No. 1 steelmaker by leading technology and unit price. The company plans to strengthen its unit price competitiveness by employing smart factories using such smart technologies as artificial intelligence, big data and IoT, while furthering the upgrading of profitability through “world premium strategies” in the marketing sector. 

POSCO plans to secure new growth engines based on its capabilities to differentiate itself from its rivals in the energy and substance segments. In particular, the company plans to focus on the fostering of electrode materials for lithium batteries, lightweight materials for automobiles and aircraft, and new and renewable energy sectors. 

POSCO plans to transform group projects into business models to create profits through the employing of smart technology. In order to implement group projects, POSCO plans to converge “Domain Excellency” and ICT technology while securing capabilities that differentiate itself from its rivals. POSCO plans to study and implement ways of connecting value chains among its subsidiaries and enhancing its synergetic effects. POSCO plans to devote itself to the successful employment of the Smart Transformation Strategy by promoting a corporate culture based on creativity and collaboration. When he first took office as POSCO chairman in 2014, he implemented the vision “POSCO the Great.” Kwon has been credited with helping POSCO restore its competitiveness through intensive restructuring. 

POSCO held a board of directors’ meeting on Jan. 25 in which the committee for screening CEO candidates concluded that Chairman Kwon had the right track record to continue as POSCO’s CEO. 

Chairman Kwon disclosed his willingness to seek reelection during a board of directors’ meeting last Nov. 9. 

The committee that screens CEO candidates, consisting of six outside directors, conducted an intensive scrutiny. The committee said Chairman Kwon was evaluated for improving corporate fundamentals through intensive restructuring, strengthening its competitiveness in the flagship steel business and improving profitability.  POSCO posted 2.2 trillion won in operating profit in 2013 before Chairman Kwon took office. POSCO saw operating profit surge 19 percent to 2.6 trillion won last year and the operating profit rate rise from 7.3 percent to 10.8 percent between 2013 and 2016.  

Under Stewardship of Chairman Kwon, POSCO’s Non-Ferrous Scheme Pays Off

POSCO will mass-produce lithium carbonate, a core substance for secondary batteries in smartphones, notebook PCs and EVs. POSCO succeeded in commercializing the material about seven years after it launched a project to develop it on its own. Korean rechargeable battery makers, which have depended on foreign countries to import lithium carbonates, will benefit from its mass-production. POSCO held a ceremony to dedicate a plant capable of producing 2,500 tons of lithium carbonate annually at the Gwangyang Steelworks on Feb. 7. Currently, lithium carbonate prices fetch $10,000 per ton. POSCO will earn an estimated $25 million (about 28 billion won) in annual revenues from its production.

Among those on hand at the event were POSCO Chairman Kwon Oh-joon; Jeollanam-do Vice Gov. Woo Ki-jong; Gwangyang Mayor Chung Hyun-bok; LG Chem President Lee Wong-beom; Samsung SDI President Cho Nam-sung; POSCO E&C President Han Chan-gun; POSCO Chemtech President Lee Yeong-hoon; POSCO ESM President Park Jong-min; and President Park Sung-ho of the Research Institute of Industrial Science & Technology.