POSCO cuts ribbon on new automotive steel plate plant in Thailand

By Anil Mathews (ScrapMonster Author)

September 02, 2016 03:15:54 AM

SEOUL (Scrap Monster): Korean steel giant POSCO Co. has unveiled its first automotive steel plate plant in Southeast Asia. The plant is expected to offer premium, high-quality steel products to the automotive industry at affordable prices. The company had begun construction of the US$300 million plant in September 2014.

The plant is located in Amanta City Industrial Estate, Pluak Daeng, Rayong Province, about 140 kilometers southeast of Bangkok, Thailand, in close proximity to major automakers’ production lines and the Laem Chabang Port-Thailand’s key logistics hub. The official ribbon-cutting ceremony was held Wednesday in presence of top-level government officials and company executives. The function was attended by POSCO Chairman Kwon Oh-joon and Thailand Deputy Prime Minister Tanasak Patimapragorn. The new plant is expected to have a production capacity of 450,000 tons per annum of zinc-coated steel sheets for use in automobiles. POSCO’s continuous galvanizing line will supply automotive sheets to world’s top automakers including Toyota, Nissan and Ford who operate factories in Thailand.

This is the third automotive steel plant in the region, being operated by a Japanese steelmaker. The commissioning of the facility takes the total production capacity of all such steel plate manufacturing facilities in the region to 1.210 million tons per annum. The other two plants in the region are the ones operated by subsidiaries of JFE Steel and Nippon Steel with production capacities of 400,000 tons and 360,000 tons per annum respectively.

POSCO Chairman Kwon Oh-joon noted that the new plant will take the company’s global automotive steel production capacity to 2.25 million tons per annum. In a press conference held at the Conrad Hotel, Bangkok, prior to the ribbon-cutting ceremony, Kwon stated that Korea’s domestic steel industry is currently at a saturation point. Weak domestic market conditions have forced the company to focus more on its overseas business so as to sustain its growth momentum. The company is in the process building similar plants in other Southeast Asian countries including China and Korea, which is expected to drive the production to over 10 million tons per annum by 2019.

Kwon further stated that the company will speed up its ongoing restructuring process. POSCO has secured about 4.6 trillion won in cash through a total of 149 restructuring activities carried out so far. This represents almost 60% of the original target of 7.7 trillion won. The company has been focusing on improving financial soundness until now. It is well positioned to make new investments to fuel future growth, Kwon added.

As per estimates, Thailand is the largest automobile producer in Southeast Asia. The country accounts for more than 50% of the total installed automobile production capacity in the region. Also, POSCO is the second auto steel sheet manufacturer in the world, next to ArcelorMittal. The company had reported 8.7 million tons of sales last year with overall market share of nearly 10%. It aims to expand its market share through building strategic partnerships with key automobile manufacturers in the region. Incidentally, global automobile industry is poised to grow by nearly 20% over the next decade, according to recent studies.