POSCO named the world’s best steelmaker for 7 consecutive years

POSCO has been named the world’s most competitive steelmaker by the World Steel Dynamics (WSD), a global steel information service provider. It has maintained the No.1 position for seven consecutive years since 2010.

According to POSCO on Tuesday, the WSD held the 31st steel success strategies forum in New York on Monday local time and announced the rankings of 37 global steelmakers. Since 2002, the WSD has eval‎uated the steelmakers in 23 categories including technological innovation, cost competitiveness, financial stability, and procurement.

The Korean steelmaker won 8.02 out of 10 points, garnering high scores in corporate restructuring including attracting the Saudi Arabian national wealth fund and the sale of POSCO Specialty Steel and in technological innovation such as FINEX and CEM. It also won good eval‎uation in engineers’ skills and productivity and the sale of value-added products such as world premium (WP) products. It was followed by Japanese Nippon Steel and Sumitomo Metal Corp. (NSSMC) at 7.77 points and U.S.-based steelmaker Nucor with 7.74. Hyundai Steel, another Korean steelmaker, ranked 12th. “It is a valuable achievement amid the rigorous restructuring as well as the challenging business environment driven by oversupply, the downturn, and stricter import regulations of our export destinations.”

POSCO is now in the midst of challenges with a net loss of 96 billion won (81.4 million U.S. dollars) last year, the first loss in 47 years since its foundation in 1968. It announced an intensive restructuring plan in July last year and is currently reducing the number of its subsidiaries in Korea. It has completed the restructuring of its subsidiaries including the liquidation of POS-HiAL and the sale of PONUTech last year.

This year, it plans another 35 cases of subsidiary restructuring, and has completed three cases in the first quarter of this year. It also plans to implement restructure 19 assets including the sale of its stakes in subsidiaries and properties. Kwon Oh-joon, POSCO’s CEO, said in the 17th Steel Day event held on June 9, “It is important to boldly realign the business by focusing on the selected few.” The steelmaker sees that such efforts will save around 4 trillion won (3.3 billion dollars).

POSCO plans to maximize profitability from the diverse business portfolio consisting of solution trading, smart infrastructure, power generation solution and energy materials in addition to steel. Increasing the share of the value added WP products based on its own technology is also part of such efforts. POSCO sold 3.6 million tons of WP products, increasing the share in its entire products to 44.5 percent, up by 4.8 percentage points quarter-on-quarter.

Fortunately, POSCO shows some signs of improvement this year. It recorded an operating income of 659.8 billion won (559.6 million dollars) and net income of 352.5 billion won (298.98 million dollars) in the first quarter, up by 93.7 percent and 221.9 percent year-on-year. “As China starts to restructure the steel industry, this led to an increase in the price steel products including Korean steel products early this year,” a source from POSCO said. “As the market sentiment shows some recovery, the steel market would improve going forward in our view.”

박은서 기자clue@donga.com