MIRA
INFORM REPORT
|
Report Date : |
21.06.2013 |
IDENTIFICATION DETAILS
|
Name : |
POSCO
|
|
|
|
|
Registered Office : |
1, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
31.12.2012 |
|
|
|
|
Date of Incorporation : |
01.04.1968 |
|
|
|
|
Legal Form : |
Public Parent Company |
|
|
|
|
Line of Business : |
manufacturer of steel products |
|
|
|
|
No. of Employees : |
17623 |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
No Complaints |
|
|
|
|
Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
South Korea |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
South Korea - ECONOMIC OVERVIEW
South Korea over the past four
decades has demonstrated incredible growth and global integration to become a
high-tech industrialized economy. In the 1960s, GDP per capita was comparable
with levels in the poorer countries of Africa and Asia. In 2004, South Korea
joined the trillion dollar club of world economies, and is currently the
world's 12th largest economy. Initially, a system of close government and
business ties, including directed credit and import restrictions, made this
success possible. The government promoted the import of raw materials and
technology at the expense of consumer goods, and encouraged savings and
investment over consumption. The Asian financial crisis of 1997-98 exposed
longstanding weaknesses in South Korea's development model including high
debt/equity ratios and massive short-term foreign borrowing. GDP plunged by
6.9% in 1998, and then recovered by 9% in 1999-2000. Korea adopted numerous
economic reforms following the crisis, including greater openness to foreign
investment and imports. Growth moderated to about 4% annually between 2003 and
2007. Korea's export focused economy was hit hard by the 2008 global economic
downturn, but quickly rebounded in subsequent years, reaching 6.3% growth in
2010. The US-South Korea Free Trade Agreement was ratified by both governments
in 2011 and went into effect in March 2012. Throughout 2012 the economy
experienced sluggish growth because of market slowdowns in the United States,
China, and the Eurozone. The incoming administration in 2013, following the
December 2012 presidential election, is likely to face the challenges of
balancing heavy reliance on exports with developing domestic-oriented sectors,
such as services. The South Korean economy's long term challenges include a
rapidly aging population, inflexible labor market, and heavy reliance on
exports - which comprise half of GDP.
|
Source : CIA |
Company name & address
POSCO
1, Goedong-Dong,
Nam-Gu
Pohang, 790300
Korea, Republic of
Tel: 82-54-2200114
Fax: 82-54-2206000
Web: www.posco.com
Synthesis
Employees: 17,623
Company Type: Public Parent
Corporate Family: 136
Companies
Traded: Korea
Stock Exchange: 005490
New York Stock Exchange: PKX
Incorporation Date: 01-Apr-1968
Auditor: KPMG LLP
Financials in: USD
(Millions)
Fiscal Year End: 31-Dec-2012
Reporting Currency: South Korean Won
Annual Sales: 56,444.3 1
Net Income: 2,184.9
Total Assets: 74,330.3 2
Market Value: 24,951.4 (07-Jun-2013)
Business Description
POSCO is a Korea-based company engaged in the manufacture of steel products. Along with its subsidiaries, the Company operates in steel business, engaged in the manufacture of hot rolled steels, steel plates, wire rods, cold rolled steels, galvanized steels, electrical galvanized steels, stainless steels and others; trading business, engaged in the trading of steel products, chemical products, automobile parts and others; construction business, mainly engaged in the construction of commercial and residential buildings, and other business, engaged in the operation of power plants, sale of refractory products, among others. For the three months ended 31 March 2013, POSCO sales decreased 11% to W14.582T. Net income decreased 56% to W278.01B. Revenues reflect a decrease in demand for the Company's products and services due to unfavorable market conditions. Net income also reflects Finance Expense increase of 40% to W1.003T (expense), Finance Income decrease of 12% to W691.59B (income), Other Non-Operating Income decrease of 66% to W38.42B (income).
Industry
Industry Iron and Steel
ANZSIC 2006: 2110 - Iron
Smelting and Steel Manufacturing
NACE 2002: 2710 - Manufacture
of basic iron and steel and of ferro-alloys
NAICS 2002: 331111 - Iron and
Steel Mills
UK SIC 2003: 2710 - Manufacture
of basic iron and steel and of ferro-alloys
UK SIC 2007: 2410 - Manufacture
of basic iron and steel and of ferro-alloys
US SIC 1987: 3312 - Steel
Works, Blast Furnaces (Including Coke Ovens), and Rolling Mills
Key Executives
|
Name |
Title |
|
Yin Hwan Jang |
Co-Chief Executive Officer, Vice President, Director |
|
Oh Jun Gwon |
Co-President |
|
Dong Wuk Shim |
Assistant Managing Director |
|
Seung Gwan Baek |
Vice President |
|
Joon-Yang Chung |
Chairman & CEO |
Significant Developments
|
* number of significant developments within the last 12 months
Financial Summary
|
Stock Snapshot
|
1 - Profit & Loss Item Exchange Rate: USD 1 = KRW 1126.849
2 - Balance Sheet Item Exchange Rate: USD 1 = KRW 1066.4
Corporate Overview
Location
1, Goedong-Dong,
Nam-Gu
Pohang, 790300
Korea, Republic of
Tel: 82-54-2200114
Fax: 82-54-2206000
Web: www.posco.com
Quote Symbol - Exchange
005490 - Korea
Stock Exchange
Sales KRW(mil): 63,604,152.0
Assets KRW(mil): 79,265,848.0
Employees: 17,623
Fiscal Year End: 31-Dec-2012
Industry: Iron
and Steel
Incorporation Date: 01-Apr-1968
Company Type: Public
Parent
Quoted Status: Quoted
Chairman of the
Board, Co-Chief Executive Officer:
Jun Yang Jung
Industry Codes
ANZSIC 2006 Codes:
2110 - Iron Smelting and Steel Manufacturing
3739 - Other Goods Wholesaling Not Elsewhere Classified
3019 - Other Residential Building Construction
3322 - Metal and Mineral Wholesaling
3419 - Other Specialised Industrial Machinery and Equipment
Wholesaling
3504 - Motor Vehicle New Parts Wholesaling
3323 - Industrial and Agricultural Chemical Product Wholesaling
26 - Electricity Supply
3020 - Non-Residential Building Construction
NACE 2002 Codes:
2710 - Manufacture of basic iron and steel and of ferro-alloys
5187 - Wholesale of other machinery for use in industry, trade and
navigation
4521 - General construction of buildings and civil engineering
works
5030 - Sale of motor vehicle parts and accessories
5152 - Wholesale of metals and ores
5147 - Wholesale of other household goods
4011 - Production of electricity
5155 - Wholesale of chemical products
NAICS 2002 Codes:
331111 - Iron and Steel Mills
423510 - Metal Service Centers and Other Metal Merchant Wholesalers
236116 - New Multifamily Housing Construction (except Operative
Builders)
423990 - Other Miscellaneous Durable Goods Merchant Wholesalers
423840 - Industrial Supplies Merchant Wholesalers
2211 - Electric Power Generation
424690 - Other Chemical and Allied Products Merchant Wholesalers
423120 - Motor Vehicle Supplies and New Parts Merchant Wholesalers
236220 - Commercial and Institutional Building Construction
US SIC 1987:
3312 - Steel Works, Blast Furnaces (Including Coke Ovens), and
Rolling Mills
1522 - General Contractors-Residential Buildings, Other Than
Single-Family
5169 - Chemicals and Allied Products, Not Elsewhere Classified
5085 - Industrial Supplies
5013 - Motor Vehicle Supplies and New Parts
5051 - Metals Service Centers and Offices
4911 - Electric Services
1542 - General Contractors-Nonresidential Buildings, Other than
Industrial Buildings and Warehouses
5099 - Durable Goods, Not Elsewhere Classified
UK SIC 2003:
2710 - Manufacture of basic iron and steel and of ferro-alloys
5187 - Wholesale of other machinery for use in industry, trade and
navigation
5152 - Wholesale of metals and ores
5030 - Sale of motor vehicle parts and accessories
45212 - Construction of domestic buildings
4011 - Production of electricity
5155 - Wholesale of chemical products
5147 - Wholesale of other household goods
UK SIC 2007:
2410 - Manufacture of basic iron and steel and of ferro-alloys
4675 - Wholesale of chemical products
41202 - Construction of domestic buildings
4532 - Retail trade of motor vehicle parts and accessories
4669 - Wholesale of other machinery and equipment
3511 - Production of electricity
4649 - Wholesale of other household goods
4672 - Wholesale of metals and metal ores
Business
Description
POSCO,
incorporated on April 1, 1968, is an integrated steel producer in Korea. It
produced approximately 31.7 million tons of crude steel during the year ended
December 31, 2009, a substantial portion of which was produced at Pohang Works
and Gwangyang Works. Pohang Works has an annual crude steel and stainless steel
production capacity of 15 million tons, and Gwangyang Works has an annual crude
steel production capacity of 18 million tons. POSCO manufactures and sells a
diversified line of steel products, including hot rolled and cold rolled
products, plates, wire rods, silicon steel sheets and stainless steel products.
POSCO operates in four segments: steel, engineering and construction, trading,
and others. The steel segment includes production of steel products and sale of
such products. The engineering and construction segment includes planning,
designing and construction of industrial plants, civil engineering projects and
commercial and residential buildings, both in Korea and overseas. The trading
segment consists of exporting and importing a range of steel products that are
both obtained from and supplied to POSCO, as well as between other suppliers
and purchasers in Korea and overseas. The others segment includes power
generation, liquefied natural gas production, network and system integration,
logistics and magnesium coil and sheet production. On November 5, 2010, the
Company established a wholly owned subsidiary, DAEWOO INTERNATIONAL CORPORATION
(M) SDN BHD. In December 2010, the Company acquired 51% interest in Genesis.
On October 9,
2009, the Company established a new wholly owned subsidiary company, POSCO
Maharashtra Steel Private Limited, engaged in manufacturing and sale of steel.
In November 2009, the Company acquired a 65% stake in PT. Motta Resources
Indonesia (PT. MRI). On December 16, 2009, the Company acquired a 65% stake in
INTERNATIONAL STEEL INDONESIA. On January 26, 2010, POSCO's wholly owned
subsidiaries, POSCO Plant Engineer Co.,Ltd. and POSCO Machinery Co., Ltd
merged. In April 2010, the Company established a wholly owned subsidiary,
POSCO-South Asia Co., Ltd. Effective June 1, 2010, POSCO established a wholly
owned subsidiary company, which is engaged in cleaning and parking management
services. On July 5, 2010, POSCOs Australian unit POSCO Australia Pty.
Ltd.(POSA) acquired 70% interest in the Australias Sutton Forest Mine, a mining
company. On July 26, 2010, the Company established a wholly owned subsidiary,
POSCO WA Pty Ltd. Effective August 12, 2010, it established POSCO Australia GP
Pty Limited as its wholly owned subsidiary. On November 1, 2010, the Company
announced that it has established two Korea-based wholly owned subsidiaries,
mainly engaged in the manufacturing and sales of steel.
Hot Rolled
Products
Hot rolled coils
and sheets are used to manufacture structural steel used in the construction of
buildings, industrial pipes and tanks, and automobile chassis. The Company’s
deliveries of hot rolled products amounted to 8 million tons in 2009,
representing 25.8% of its total sales volume of steel products. The Korean
market accounted for 5.2 million tons or 65.3% of its hot rolled product sales
in 2009. The largest customers of its hot rolled products are downstream
steelmakers in Korea who use the products to manufacture pipes and cold rolled
products.
Plates
Plates are used in
shipbuilding, structural steelwork, offshore oil and gas production, power
generation, mining, and the manufacture of earth-moving and mechanical handling
equipment, boiler and pressure vessels and other industrial machinery. Its
deliveries of plates amounted to 4.6 million tons in 2009, representing 14.7%
of its total sales volume of steel products. The Korean market accounted for
4.2 million tons or 91.2% of its plate sales in 2009.
Wire Rods
Wire rods are used
mainly by manufacturers of wire, fasteners, nails, bolts, nuts and welding
rods. Wire rods are also used in the manufacture of coil springs, tension bars
and tire cords in the automotive industry. The Company’s deliveries of wire
rods amounted to 2.4 million tons in 2009, representing 7.8% of its total sales
volume of steel products. The Korean market accounted for 1.7 million tons or
69.7% of its wire rod sales in 2009.
Cold Rolled Products
Cold rolled coils and further refined galvanized cold rolled products
are used mainly in the automotive industry to produce car body panels. Other
users include the household goods, electrical appliances, engineering and metal
goods industries. Its deliveries of cold rolled products amounted to 11.2
million tons in 2009, representing 36.2% of its total sales volume of steel
products. The Korean market accounted for 5.9 million tons or 52.4% of its cold
rolled product sales in 2009.
Silicon Steel Sheets
Silicon steel
sheets are used mainly in the manufacture of power transformers and generators
and rotating machines. Its deliveries of silicon steel sheets amounted to 915
thousand tons in 2009, representing 2.9% of its total sales volume of steel
products. The Korean market accounted for 338 thousand tons or 36.9% of its
silicon steel sheet sales in 2009.
Stainless Steel Products
Stainless steel
products are used to manufacture household goods and are also used by the
chemical industry, paper mills, the aviation industry, the automotive industry,
the construction industry and the food processing industry. Its deliveries of
stainless steel products amounted to 2.3 million tons in 2009, representing 7.3%
of its total sales volume of steel products. The Korean market accounted for
0.8 million tons or 34.5% of its stainless steel product sales in 2009.
The Company
competes with Hyundai Steel Co., Ltd. and Dongbu Steel Co., Ltd
More Business Descriptions
POSCO is a
Korea-based company engaged in the manufacture of steel products. Along with
its subsidiaries, the Company operates in steel business, engaged in the
manufacture of hot rolled steels, steel plates, wire rods, cold rolled steels,
galvanized steels, electrical galvanized steels, stainless steels and others;
trading business, engaged in the trading of steel products, chemical products,
automobile parts and others; construction business, mainly engaged in the
construction of commercial and residential buildings, and other business,
engaged in the operation of power plants, sale of refractory products, among
others. For the three months ended 31 March 2013, POSCO revenues decreased 11%
to W14.582T. Net income decreased 56% to W278.01B. Revenues reflect a decrease
in demand for the Company's products and services due to unfavorable market
conditions. Net income also reflects Finance Expense increase of 40% to W1.003T
(expense), Finance Income decrease of 12% to W691.59B (income), Other
Non-Operating Income decrease of 66% to W38.42B (income).
Manufacture and
distribution of steel rolled products and plates in the domestic and foreign
markets
Iron, Steel &
Rolled Products Mfr & Distr
POSCO is one of
the largest steel manufacturing companies in the world. The company engages in
the manufacture and sale of steel products in South Korea and internationally.
The key product offering of POSCO include hot rolled and cold rolled products,
plates, wire rods, stainless steel, galvanized steel, and titanium products,
among others. The company produces steel for automobiles, machinery, nuclear,
power plants, ship building, aeronautics and electronics. POSCO, together with
its subsidiaries and representative offices, operates in Asia-Pacific,
Australia and North America.POSCO operates business operations through four
reportable segments, namely, Steel, Engineering and Construction (E&C),
Trading, and Others. The company’s Steel segment is engaged in the production
and sale of steel products. The Specialty Steel manufacturing division produces
high-quality steel for industrial products, whereas the Coated and Color Steel
division produces galvanized, aluminized, and color steel sheets. The
company’s broad product portfolio consists of hot rolled products, plates, wire
rods, cold rolled products, silicon steel sheets, and stainless steel products.
The company produces hot rolled coils and sheet products which are used in the
manufacturing of structural steel in the construction of buildings, industrial
pipes and tanks, and automobile chassis. Plates of company are used in
structural steelwork, shipbuilding, power generation, mining, offshore oil and
gas production, and in the manufacturing of earth-moving and mechanical
handling equipment, boiler and pressure vessels and other industrial machinery.
During 2011, the company recorded total crude steel production 37.3 million
tons (Mt), representing 55% of the domestic market share. During the same
period, the company’s crude sales volume was 34.5 Mt. During 2011, the company
recorded total domestic steel sales of KRW299,826m, and export steel sales of
KRW263,079m. For the fiscal year ended December 2011, the Steel segment
reported revenue of KRW39,151.93 billion, an increase of 10.20% over 2010. This
accounted for 56.8% of the company’s total revenue in 2011.The Engineering
& Construction segment plans, designs and constructs industrial plants,
civil engineering projects and commercial and residential buildings in Korea
and overseas. The key operating subsidiary under Engineering & Construction
segment includes POSCO Engineering Company Co., LTD (POSCO Engineering).
Recently, POSCO Engineering expanded its business markets to the Southeastern
Asian countries such as Thailand, Indonesia and Vietnam. For the fiscal year ended
December 2011, the Engineering & Construction segment reported revenue of
KRW5,476.20 billion, an increase of 25.92% over 2010. This accounted for 7.9%
of the company’s total revenue in 2011.The Trading segment engages in export
and import of steel products that are both obtained from and supplied to POSCO.
The company operates its steel trading activities through a network of overseas
subsidiaries, branches and representative offices. The key operating subsidiary
of segment includes Daewoo International Corporation, a global trading company
engaged in trading of steel and raw materials. For the fiscal year ended
December 2011, the Trading segment reported revenue of KRW21,097.35 billion, an
increase of 238.31% over 2010. This accounted for 30.6% of the company’s
total revenue in 2011.The Others segment business operations include power
generation, liquefied natural gas production, network and system integration,
logistics and magnesium coil and sheet production operations. The major
operating subsidiaries of the segment include POSCO Energy, POSCO ICT and POSCO
Chemtech. POSCO Energy owns heat power plant in Korea. POSCO ICT engages in
computer hardware and software distribution business. Currently, POSCO ICT is
promoting new businesses for light emitting diode, smart grid, and cloud
computing. POSCO Chemtech manufactures refractories, lime used in steel
manufacturing processes as well as chemical and environmentally friendly
products. POSCO Chemtech offers refractories to a wide variety of industries
including steel, cement, and glass companies. Currently, POSCO Chemtech is
currently expanding its markets to Japan, China and Indonesia. For the fiscal
year ended December 2011, the Others segment reported revenue of KRW3,213,23
billion, an increase of 81.02% over 2010. This accounted for 4.7% of the
company’s total revenue in 2011.Geographically, the company categorizes its
business operations into six areas, namely, Domestic, Japan, China, Asia, North
America and Others. For the fiscal year end 2011, Domestic region contributed
78.3% of the company’s total revenue, followed by Japan with 3.5%, China with
8.8%, Asia with 3.8%, North America with 1.9% and Others with 3.7%.In November
2012, POSCO plans to sell 2.5% stake in Roy Hill Holdings Pty Ltd.In October
2012, POSCO announced SK Telecom Co Ltd sold 1.43 percent stake in the
company.In March 2012, POSCO launched the world's first direct lithium
extraction technology without evaporation. The company was associated with the
lithium carbonate technology development program since April 2010, which was
supported by the Ministry of Knowledge Economy, Korea Institute of Geoscience
and Mineral Resources and Korea Resources Corporation. POSCO plans to construct
lithium extraction plants internationallly through strategic associations with
lithium producers, based on the newly launched lithium extraction technology.In
February 2012, POSCO signed a Memorandun of Understanding (MoU) with the Great
Wall Motor Company (GWMC). Under the terms of the MoU, POSCO will participate
in GWMC's design, material selection, molding, development and assessment
process of its new auto development efforts. GWMC agreed to work in
coordination with POSCO to develop new cars that will include POSCO's
high-strength steel technology. The same month, POSCO-Africa signed a
memorandum of understanding (MoU) with Legend Mining Limited (Legend Mining) to
form a joint venture (JV) to develop the Ngovayang iron ore project in
Cameroon, which is owned by Legend Mining. The project mine comprises three
exploration blocks and contains magnetite iron ore deposits.
POSCO is an
integrated steel manufacturing company. The company is engaged in the
production and marketing of steel rolled products and plates in the domestic
and overseas markets. POSCO offers hot rolled and cold rolled products, plates,
wire rods, silicon steel sheets and stainless steel products for automotive,
shipbuilding, home appliance, engineering, and machinery industries. It is
involved in planning, designing and construction of industrial plants, civil
engineering projects and commercial and residential buildings. POSCO also
actively participates in other businesses such as power generation, liquefied
natural gas production, network and system integration, logistics and magnesium
coil and sheet production operations. The company, together with its
subsidiaries and representative offices, operates in Asia-Pacific, Australia
and North America. POSCO is headquartered in Seoul, Korea.The company reported
revenues of (Won) KRW 68,938,725.06 million during the fiscal year ended
December 2011, an increase of 43.96% over 2010. The operating profit of the
company was KRW 5,408,101.37 million during the fiscal year 2011, a decrease of
0.47% from 2010. The net profit of the company was KRW 3,648,136.03 million
during the fiscal year 2011, a decrease of 11.14% from 2010.
Iron and Steel
Mills and Ferroalloy Manufacturing
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
strategic Initiatives
Planning
The JV aimed to
target the Indian transformer market, which is expected to produce 6,000 tons of
El Core and 10,000 tons of Lamination on an annual basis. In January 2011,
POSCO’s affiliate Daewoo International declared to start the development of
gas resources at Myanmar’s A1 and A3 offshore blocks in early 2013. With such
strategic initiatives POSCO will be able to expand its business presence in
various geographies with increased production that would help it to meet the
increasing demand for its various products.Operational RisksThe metal and
mining companies are subject to various risks associated with the industry and
its processes. These risks range from prospecting to extraction and getting the
product to the market. The risk category includes project risks, technical
risks, social risks, product chain risks, and political and security risks.
|
|
Helpful |
Harmful |
|
Internal Origin |
Strengths ·
Growth in Revenues ·
Diverse Business Operations ·
Products Portfolio |
Weaknesses ·
Substantial Debt ·
Revenue Concentration: Korea ·
Lawsuits and Project Delays ·
Trade Account Receivable |
|
External Origin |
Opportunities ·
Rebound in Steel Demand ·
Strategic Collaborations ·
Operational Expansion Initiatives |
Threats ·
Operational Risks ·
Volatile Raw Material Prices ·
Environmental Regulations |
Overview
POSCO is one of the largest steel manufacturing and marketing companies in the world. The company is engaged in production and distribution of steel rolled products and plates in the domestic and overseas markets. The diverse business operations combined with strong products portfolio in the steel segment enables the company to enhance its revenue sources and operational base. However, POSCO’s business is threatened by volatile raw material prices, operational risks and stringent environmental regulations that could affect its normal business operations thereby affecting its profits and operations.
Strengths
Growth in Revenues
POSCO’s revenues grew consistently in the last three years (2009-2011). The company's compound annual growth rate (CAGR) for revenue was 36.8% during 2009-2011, increasing from KRW36,855,001.09m to KRW68,938,725.06m. In 2011, its revenues increased by 44% from KRW47,887,255m to KRW68,938,725.06m in 2011. The increase in revenue could be attributed to improvement in its business operations. The Steel segment recorded revenue of KRW39,151,930m during fiscal year 2011, an increase of 10.2% over that in 2010. Revenue from the Trading segment increased to KRW21,097,356m in 2011 from KRW6,236,030m in 2010. The Construction segment’s revenue increased by 25.9% to KRW5,476,209m in 2011. Additionally, revenue from the Others segment also increased to KRW3,213,230m in 2011 from KRW1,775,056m in 2010.
Diverse Business
Operations
The company has diverse business operations with strong presence in steel sector, E&C (engineering and Construction), IT (Information Technology) and energy. Moreover, POSCO has a strong R&D support. In steel sector, the company operates through Posco (carbon steel), Posco (stainless steel), Posco Specialty Steel Co, Ltd (Posco ss), Posco Coated and Color Steel Co Ltd. In energy sector, the company focuses on a wide range of energy-related projects. The company is the largest power generating company in Korea, with a total installed capacity of 1,800 MW. POSCO E&E is engaged in the generation of electricity from waste-to-energy. In the Engineering and Construction segment, the company operates through POSCO Plant EC, POSCO E&C, POSCO A&C, Daewoo Engineering and Sung Jin Geotech, all engaged in engineering and construction related business activities. In IT sector, the company operates through POSCO ICT that is engaged in businesses such as engineering, process automation, IT services and outsourcing, and communication network. It also conducts business operations in steel support and other businesses as well. Through diverse business operation, the company has minimized the risks associated with concentrating on a particular business segment.
Products Portfolio
The company offers wide varieties of steel products. POSCO’s product offerings include hot rolled steel such as atmospheric corrosion resistant steel, hot rolled steel for automotive parts, cold rolled steel sheet and steel for tubes and others. The steel plate product offerings find applications in ships, general structures, boilers, petroleum transportation and atmosphere corrosion-resisting and corrosion-resisting steel. In the wire rod product category, POSCO offers spring steel wire rod, wire rod for bearing steel, piano wire rod, wire rod for tire cord and wire rod for high strength steel and others. The cold rolled steel product category comprises of commercial steel, structural steel, enameling and high tensile strength steel. The electrical steel product category comprises grain-oriented electrical steel, non-oriented electrical steel, electrical steel for magnetic switches and cold magnetic steel plates. In the stainless steel product category, the company offers austenite-system stainless steel, ferrite-system stainless steel, mertensite-system stainless steel and dual system. The wide ranges of product offerings enable POSCO to meet different customer requirements, which further helps in improved revenue for the company.
Weaknesses
Substantial Debt
High debt could
have a major impact on the operational performance of the company as a major
portion of its earnings would be diverted towards servicing of its debt
obligations. This could concern the investors as well as make it difficult for
the company to raise funds at favorable terms from the market. POSCO’s total
debt component increased to KRW26,856,516.31m in 2011 from KRW21,181,353m in
2010. Its total liability increased to KRW40,052,488.01m in 2011 from
KRW32,842,740m in 2010. As a result, the debt to equity ratio of the company
increased from 57.9% in 2010 to 70% in 2011. Such huge debt increases the debt
servicing obligations of the company and impacts its cash flows adversely. It
could limit its ability to raise debt in future and pursue other strategic
opportunities. It would also increase the company’s vulnerability to adverse
economic and industry conditions.
Revenue Concentration: Korea
POSCO has
operations in Korea, Japan, China, Asia, Europe and North and South America.
However, the company generates majority of its revenue from domestic market,
Korea. In the fiscal year ended December 2011, POSCO generated KRW53,986,926m
from the Korean market, which accounted for 78.3% of its total revenue. In
2010, the company generated around 78.9% of the total revenue from domestic
market. The over-dependence on domestic market not only affects POSCO’s
revenue generation ability but also affects its business growth prospects.
Lawsuits and Project Delays
Involvement in
litigations adds to costs, which could have an adverse impact on the operations
and financial position of the company. POSCO and its subsidiaries have been
subjected to lawsuits and legal proceedings in the process of its normal
business operations. The company is defendant in a case filed by the United
States Steel Corporation and Nucor Corporation against Union Steel, Posco,
Pohang Coated Steel Co., Ltd., and Hyundai Hysco. The case is relating to
antidumping issue relating to certain corrosion-resistant carbon steel flat
products from Republic of Korea. The case has been forwarded for reconsideration
and redetermination. POSCO’s plans to expand its business operations in
Orissa, India has been facing various environmental related issues and local
protests, as a reason the project has been delayed for a long time. The
outcomes are still pending and are unpredictable. Any adverse outcome would
have a significant effect on POSCO’s financial performance and results of
operations.
Trade Account Receivables
The company’s
increasing accounts receivables affects its competitive and profitability
position. POSCO’s total receivables increased to KRW12,732,925m in 2011 from
KRW10,094,168m in 2010, an increase of 26.1% over the previous period. Its
total account receivables increased to KRW11,509,543m in 2011 from
KRW9,266,839m in 2010. The increasing doubtful debts, along with accounts
receivables, reflect the inefficient credit management by the company. In the
backdrop of economic conditions, the probability of defaults by any of the
creditors could increase, which may impact the overall financial position as
well as profitability of the company.
Opportunities
Rebound in Steel Demand
The World Steel
Association (WSA) expects the outcome of government stimulation packages, a
sustained stabilization in financial systems and a return of some consumer
confidence to have a positive impact on the steel demand. According to the
estimates provided by the WSA, the global crude steel production increased to
1,527 megatonnes (Mt) in 2011. The production increased 6.8% as compared to
2010 and set a new record for global crude steel production. In Asia, the
production increased to 988.2 Mt of crude steel in 2011, representing an
increase of around 7.9% compared to 2010. In Europe, the production of crude
steel increased to 177.4 Mt, an increase of 2.8% over 2010. North America also
reported increase in crude steel production in 2011, with production levels
reaching to 112.6 Mt, an increase of 4% over 2010. In 2011, Russia produced
around 68.7 Mt of crude steel that represented an increase of around 2.7% over 2010
and Ukraine recorded an increase of 5.7% with production of 35.3 Mt in 2011.
With steel remaining a critical material for construction activities, steel
manufactures could positively respond to evolving market conditions. POSCO
would be benefited with improvement in global market condition.
Strategic Collaborations
The company in
order to expand its business presence enters into strategic agreements with
various industry leading players. In March 2012, POSCO along with Korea
Resources Corporation (KORES) entered into a heads of agreement to establish a
joint venture with COMIBOL to carry out a lithium battery business in Bolivia`s
administrative capital La Paz. In February 2012, the company entered into a
Memorandum of Understanding (MOU) with the Great Wall motor company. The Great
Wall motor company will incorporate POSCO’s compelling high-strength steel
technology in new cars. POSCO-Africa and Legend Mining Limited announced an MOU
to form a joint venture to discover Legend’s Ngovayang iron ore project in
Cameroon. The company also signed a memorandum of agreement (MOA) with Swiss
Gurta and Zimbabwean Anchor Holdings to purchase a stake in Maranatha, a
Zimbabwean ferrochrome smelting company. In January 2012, POSCO-ICT signed a
MOU with Kibar holding and Daewoo International. This agreement has enabled the
company to seek an advantage in expanding its steel manufacturing business as
well as other main operations in Turkey. With such strategic collaborations,
POSCO would be able to gain technical expertise in various new markets and
technologies, which would help the company in its growth prospects. POSCO is
proactively seeking various materials businesses with growth potential besides
investing in companies to become a complete materials company.
Operational Expansion Initiatives
The company in
order to meet the increasing demand for steel and related products is expanding
its production facilities. In April 2012, POSCO completed an annual 750,000 ton
scale Continuous Galvanizing Line factory at Pohang Steelworks. With the
completion of the facility, it can produce various products including plated
steel sheets and others with consistent quality and high strength. In March
2012, the company and Yonsei University opened the POSCO Green Building to develop
a low-energy consumption architecture model. It also completed the construction
of an annual 150,000 ton scale stainless cold-rolled plant within the Nhon
Trach Industrial Complex. With the completion of the factory, the annual
production of POSCO VST, its Vietnam subsidiary, increases to 235,000 tons
annually. In April 2011, POSCO declared to build its no.3 FINEX plant and no.4
wire rod plant and a new stainless steel plant. The third FINEX plant would
have a production capacity of two million tons and is scheduled to be completed
in June 2013. The fourth wire rod plant would have a capacity of 700,000 ton
annual production and is expected to be completed by May 2013. The new
stainless steel plant is expected to be operational by February 2013, and would
be capable to produce 400 series grade stainless steel products. Earlier, in
March 2011, POSCO-TMC and POSCO-IPPC in a joint venture (JV) launched
POSCO-CORE INDIA. The JV aimed to target the Indian transformer market, which
is expected to produce 6,000 tons of El Core and 10,000 tons of Lamination on
an annual basis. In January 2011, POSCO’s affiliate Daewoo International
declared to start the development of gas resources at Myanmar’s A1 and A3
offshore blocks in early 2013. With such strategic initiatives POSCO will be
able to expand its business presence in various geographies with increased
production that would help it to meet the increasing demand for its various
products.
Threats
Operational Risks
The metal and
mining companies are subject to various risks associated with the industry and
its processes. These risks range from prospecting to extraction and getting the
product to the market. The risk category includes project risks, technical
risks, social risks, product chain risks, and political and security risks.
Project risks include factors such as feasibility determination, mine
development and mine closure while technical risks include mine planning, grade
control, reserve risk, metallurgic risk, input costs and extraction risks.
Social risks include employee health, safety, community and environmental while
product chain risks include stockpiling, intermediate processing, blending,
joint and by products and transportation. The company also faces political and
security risks associated with political uncertainties as well as mine and
product security risks. Any failure by the company in assessing its risk
exposure as well as processes and procedures could have a major impact on its
business operations.
Volatile Raw Material Prices
The volatile raw
material prices could have a material impact on the operational costs of the
company. The primary raw materials used in the steel production include iron
ore and coking coal. The higher raw material costs increases the production
costs for companies, which forces them to either raise the prices of its
products by placing the burden on the consumer, or to take the burden
themselves by absorbing the higher costs and decreasing profit margins. The
production plants and its machines are powered by oil and natural gas, whose
price is also volatile in nature. Thus, price fluctuations and non-availability
of raw materials may have an adverse effect on the profitability and operations
of the company.
Environmental
Regulations
The mining and exploration operations of the company are subject to various governmental regulations including regulations pertaining to environmental protection. The company also requires government approvals and permits to maintain mining and exploration activities. If it fails to comply with these regulations, it may be imposed with hefty fines and penalties, which could have a material impact on the profitability of the company. The company may also be denied new projects, which may hamper its business prospects.
|
Corporate Family |
Corporate
Structure News: |
|
|
POSCO |
|
POSCO |
|
|
Company
Name |
Company
Type |
Location |
Country |
Industry |
Sales |
Employees |
|
Parent |
Pohang |
Korea, Republic of |
Iron and Steel |
56,444.3 |
17,623 |
|
|
Subsidiary |
Pohang, Kyongsangbuk Do |
Korea, Republic of |
Iron and Steel |
|
9,000 |
|
|
Subsidiary |
Pohang |
Korea, Republic of |
Software and Programming |
1,001.4 |
2,527 |
|
|
Subsidiary |
London |
United Kingdom |
Computer Services |
3.0 |
12 |
|
|
Subsidiary |
Beijing, Beijing |
China |
Scientific and Technical Instruments |
|
12 |
|
|
Subsidiary |
Pohang |
Korea, Republic of |
Construction Services |
6,776.5 |
2,340 |
|
|
Subsidiary |
Quito, Pichincha |
Ecuador |
Construction Services |
40.5 |
|
|
|
Subsidiary |
Tampico, Tamaulipas |
Mexico |
Electronic Instruments and Controls |
7.5 |
|
|
|
Subsidiary |
Seoul |
Korea, Republic of |
Miscellaneous Capital Goods |
15,593.2 |
2,050 |
|
|
Subsidiary |
Bukhara |
Uzbekistan |
Textiles - Non Apparel |
|
9,237 |
|
|
Subsidiary |
Guangzhou |
China |
Construction and Agriculture Machinery |
|
100 |
|
|
Subsidiary |
Yangon |
Myanmar (Burma) |
Construction and Agriculture Machinery |
|
100 |
|
|
Subsidiary |
Tokyo |
Japan |
Construction and Agriculture Machinery |
|
50 |
|
|
Subsidiary |
Osaka |
Japan |
Construction and Agriculture Machinery |
|
50 |
|
|
Subsidiary |
Singapore |
Singapore |
Construction and Agriculture Machinery |
|
40 |
|
|
Subsidiary |
Nagoya |
Japan |
Construction and Agriculture Machinery |
|
30 |
|
|
Subsidiary |
Lagos |
Nigeria |
Construction and Agriculture Machinery |
|
30 |
|
|
Subsidiary |
Hamburg, Hessen |
Germany |
Construction and Agriculture Machinery |
|
28 |
|
|
Subsidiary |
Shanghai |
China |
Construction and Agriculture Machinery |
|
25 |
|
|
Subsidiary |
Delta, BC |
Canada |
Computer Hardware |
|
20 |
|
|
Subsidiary |
Dalian |
China |
Construction Services |
|
20 |
|
|
Subsidiary |
Pathumwan, Bangkok |
Thailand |
Miscellaneous Capital Goods |
|
17 |
|
|
Subsidiary |
Ridgefield Park, NJ |
United States |
Computer Hardware |
2.4 |
15 |
|
|
Subsidiary |
Taipei |
Taiwan |
Construction and Agriculture Machinery |
|
13 |
|
|
Subsidiary |
Qingdao |
China |
Construction and Agriculture Machinery |
|
13 |
|
|
Subsidiary |
Sao Paulo |
Brazil |
Investment Services |
|
12 |
|
|
Subsidiary |
Lagos |
Nigeria |
Construction and Agriculture Machinery |
|
10 |
|
|
Subsidiary |
Buenos Aires |
Argentina |
Construction and Agriculture Machinery |
|
7 |
|
|
Subsidiary |
Johannesburg, Sandton |
South Africa |
Construction and Agriculture Machinery |
|
7 |
|
|
Subsidiary |
New Malden |
United Kingdom |
Construction Services |
8,733.3 |
6 |
|
|
Subsidiary |
Cairo, Maadl |
Egypt |
Construction and Agriculture Machinery |
|
6 |
|
|
Subsidiary |
Madrid |
Spain |
Construction and Agriculture Machinery |
|
4 |
|
|
Subsidiary |
Warsaw |
Poland |
Construction and Agriculture Machinery |
|
4 |
|
|
Subsidiary |
Issaquah, WA |
United States |
Construction Services |
|
3 |
|
|
Subsidiary |
Colon |
Panama |
Construction and Agriculture Machinery |
|
3 |
|
|
Subsidiary |
Algiers, Alger |
Algeria |
Construction and Agriculture Machinery |
|
3 |
|
|
Subsidiary |
Luanda |
Angola |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Algiers |
Algeria |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Fergana |
Uzbekistan |
Apparel and Accessories |
|
|
|
|
Subsidiary |
Caracas |
Venezuela |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Budapest |
Hungary |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Riyadh |
Saudi Arabia |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Kuwait |
Kuwait |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Nairobi |
Kenya |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Saint Leonards, NSW |
Australia |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Amsterdam |
Netherlands |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Tripoli |
Libyan Arab Jamahiriya |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Dubai |
United Arab Emirates |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Anaheim, CA |
United States |
Miscellaneous Capital Goods |
|
|
|
|
Subsidiary |
Tehran |
Iran |
Construction and Agriculture Machinery |
|
|
|
|
Subsidiary |
Khartoum |
Sudan |
Apparel and Accessories |
|
|
|
|
Subsidiary |
Seongnam-si, Gyeonggi-do |
Korea, Republic of |
Engineering Consultants |
649.1 |
1,400 |
|
|
Subsidiary |
Pohang |
Korea, Republic of |
Construction - Raw Materials |
1,149.8 |
1,357 |
|
|
Subsidiary |
Pohang |
Korea, Republic of |
Metal Mining |
850.9 |
1,247 |
|
|
Subsidiary |
Inchon, Inchon |
Korea, Republic of |
Chemical Manufacturing |
16.6 |
24 |
|
|
Subsidiary |
Hwasong, Kyonggi-Do |
Korea, Republic of |
Construction Services |
5.6 |
14 |
|
|
Subsidiary |
Incheon |
Korea, Republic of |
Miscellaneous Fabricated Products |
|
|
|
|
Subsidiary |
Changwon |
Korea, Republic of |
Public Sector and Government |
1,501.0 |
1,238 |
|
|
Subsidiary |
Seoul |
Korea, Republic of |
Engineering Consultants |
|
800 |
|
|
Subsidiary |
Seoul |
Korea, Republic of |
Electric Utilities |
1,730.8 |
717 |
|
|
Subsidiary |
Bien Hoa, Dong Nai |
Viet Nam |
Iron and Steel |
|
700 |
|
|
Subsidiary |
Pohang-si, Gyeongsangbuk-Do |
Korea, Republic of |
Construction Services |
380.1 |
615 |
|
|
Subsidiary |
Bangkok |
Thailand |
Construction - Supplies and Fixtures |
349.9 |
400 |
|
|
Holding |
Pohang |
Korea, Republic of |
Construction - Supplies and Fixtures |
757.4 |
361 |
|
|
Subsidiary |
Ansan |
Korea, Republic of |
Construction - Supplies and Fixtures |
|
325 |
|
|
Joint Venture |
Dalian |
China |
Iron and Steel |
|
300 |
|
|
Subsidiary |
Kunshan, Jiangsu |
China |
Auto and Truck Parts |
|
230 |
|
|
Facility |
Bang Pakong, Chachoengsao |
Thailand |
Auto and Truck Parts |
|
230 |
|
|
Subsidiary |
Haiphong |
Viet Nam |
Iron and Steel |
|
204 |
|
|
Subsidiary |
Foshan, Guangdong |
China |
Construction - Supplies and Fixtures |
305.1 |
160 |
|
|
Subsidiary |
Haiphong |
Viet Nam |
Construction - Supplies and Fixtures |
|
150 |
|
|
Subsidiary |
Seoul, Seoul |
Korea, Republic of |
Business Services |
15.4 |
106 |
|
|
Subsidiary |
Pelabuhan Klang, Selangor |
Malaysia |
Miscellaneous Fabricated Products |
110.3 |
100 |
|
|
Joint Venture |
Yangon |
Myanmar (Burma) |
Oil and Gas Operations |
|
100 |
|
|
Joint Venture |
Chon Buri |
Thailand |
Iron and Steel |
|
80 |
|
|
Subsidiary |
Dalian |
China |
Construction - Supplies and Fixtures |
|
80 |
|
|
Subsidiary |
Pohang, Kyongsangbuk-Do |
Korea, Republic of |
Construction Services |
|
57 |
|
|
Subsidiary |
Bursa |
Turkey |
Iron and Steel |
|
40 |
|
|
Subsidiary |
Seoul, Seoul |
Korea, Republic of |
Advertising |
|
35 |
|
|
Subsidiary |
Fort Lee, NJ |
United States |
Miscellaneous Capital Goods |
66.0 |
25 |
|
|
Subsidiary |
Tokyo |
Japan |
Miscellaneous Capital Goods |
|
24 |
|
|
Subsidiary |
Wanchai |
Hong Kong |
Iron and Steel |
|
20 |
|
|
Subsidiary |
Kwangyang, Chollanam-Do |
Korea, Republic of |
Miscellaneous Transportation |
90.9 |
19 |
|
|
Subsidiary |
Sydney, NSW |
Australia |
Metal Mining |
|
15 |
|
|
Subsidiary |
Sydney, NSW |
Australia |
Miscellaneous Capital Goods |
|
14 |
|
|
Subsidiary |
Singapore |
Singapore |
Electronic Instruments and Controls |
873.8 |
12 |
|
|
Subsidiary |
Sydney, NSW |
Australia |
Coal |
425.5 |
12 |
|
|
Subsidiary |
Pohang, Kyongsangbuk-Do |
Korea, Republic of |
Nonclassifiable Industries |
16.0 |
10 |
|
|
Subsidiary |
Vancouver, BC |
Canada |
Coal |
1.1 |
5 |
|
|
Subsidiary |
Wanchai |
Hong Kong |
Commercial Banks |
|
3 |
|
|
Subsidiary |
Seoul, Seoul |
Korea, Republic of |
Miscellaneous Capital Goods |
15,354.7 |
|
|
|
Subsidiary |
Dubai |
United Arab Emirates |
Business Services |
|
85 |
|
|
Subsidiary |
Frankfurt Am Main, Hessen |
Germany |
Miscellaneous Financial Services |
428.4 |
27 |
|
|
Subsidiary |
Ciudad De Mexico, Distrito Federal |
Mexico |
Business Services |
|
13 |
|
|
Subsidiary |
Milan, Agrate Brianza |
Italy |
Construction and Agriculture Machinery |
326.6 |
10 |
|
|
Subsidiary |
Sydney, NSW |
Australia |
Miscellaneous Capital Goods |
515.6 |
9 |
|
|
Branch |
Dalian, Liaoning |
China |
Business Services |
|
7 |
|
|
Branch |
Makati, - - |
Philippines |
Personal Services |
|
|
|
|
Subsidiary |
Rewari, Haryana |
India |
Iron and Steel |
111.1 |
|
|
|
Subsidiary |
Mudanjiang, Heilongjiang |
China |
Paper and Paper Products |
|
|
|
|
Subsidiary |
Osaka |
Japan |
Iron and Steel |
|
|
|
|
Subsidiary |
Fukuoka |
Japan |
Business Services |
|
|
|
|
Subsidiary |
Jakarta |
Indonesia |
Apparel and Accessories |
|
|
|
|
Joint Venture |
Vitoria, ES |
Brazil |
Aerospace and Defense |
|
|
|
|
Subsidiary |
Bhubaneswar, Orrisa |
India |
Construction - Supplies and Fixtures |
|
|
|
|
Subsidiary |
Tokyo |
Japan |
Iron and Steel |
|
|
|
|
Subsidiary |
Kobierzyce |
Poland |
Miscellaneous Fabricated Products |
65.5 |
59 |
|
|
Subsidiary |
Izumiotsu, Osaka |
Japan |
Iron and Steel |
|
|
|
|
Subsidiary |
Beijing |
China |
Investment Services |
|
|
|
|
Hubei
Huaerliang Posco Silicon Science & Technology Co., Ltd. |
Subsidiary |
Jingmen, Hubei |
China |
Iron and Steel |
48.6 |
600 |
|
Branch |
Santiago, Santiago |
Chile |
Engineering Consultants |
|
|
|
|
Joint Venture |
Rayong |
Thailand |
Construction - Supplies and Fixtures |
|
|
|
|
Subsidiary |
Ho Chi Minh City |
Viet Nam |
Iron and Steel |
|
|
|
|
Joint Venture |
Zhangjiagang, Jiangsu |
China |
Iron and Steel |
|
|
|
|
Joint Venture |
Zhangjiagang, Jiangsu |
China |
Iron and Steel |
|
|
|
|
Subsidiary |
Kitakyushu |
Japan |
Construction - Supplies and Fixtures |
|
|
|
|
Subsidiary |
Altamira, Zacatecas |
Mexico |
Miscellaneous Fabricated Products |
|
|
|
|
Subsidiary |
Seoul |
Korea, Republic of |
Iron and Steel |
|
|
|
|
Subsidiary |
Inchon, Inchon |
Korea, Republic of |
Miscellaneous Fabricated Products |
82.3 |
95 |
|
|
Subsidiary |
Gwangyang, Cheonnam |
Korea, Republic of |
Miscellaneous Fabricated Products |
|
|
|
|
Subsidiary |
Tianjin |
China |
Construction - Supplies and Fixtures |
|
|
|
|
Facility |
Imari, Saga |
Japan |
Miscellaneous Capital Goods |
|
|
|
|
Subsidiary |
Shenyang |
China |
Auto and Truck Parts |
|
|
|
|
Facility |
Suzhou |
China |
Construction - Supplies and Fixtures |
|
|
|
|
Subsidiary |
Gwangyang, Jeollanam-do |
Korea, Republic of |
Iron and Steel |
|
|
|
|
Subsidiary |
Qingdao, Shandong |
China |
Iron and Steel |
|
|
|
|
Subsidiary |
Nhon Trach, Dong Nai |
Viet Nam |
Miscellaneous Capital Goods |
|
|
|
|
Subsidiary |
Tan Thanh, VT |
Viet Nam |
Iron and Steel |
|
|
|
|
Facility |
Pohang, Kyungbuk |
Korea, Republic of |
Construction - Supplies and Fixtures |
|
|
|
|
Subsidiary |
Perth, WA |
Australia |
Textiles - Non Apparel |
|
|
|
|
Subsidiary |
Pohang, Kyungbuk |
Korea, Republic of |
Engineering Consultants |
|
|
|
|
Subsidiary |
Buxoro, Bukhara |
Uzbekistan |
Textiles - Non Apparel |
|
|
|
|
Subsidiary |
Huejotzingo |
Mexico |
Miscellaneous Capital Goods |
|
|
|
|
Subsidiary |
Seoul |
Korea, Republic of |
Electric Utilities |
|
|
|
|
Subsidiary |
Foshan, Guangdong |
China |
Miscellaneous Capital Goods |
|
|
|
|
Subsidiary |
Mexico |
Mexico |
Construction - Supplies and Fixtures |
|
|
Competitors Report
|
Company Name |
Location |
Employees |
Ownership |
|
ArcelorMittal |
Luxembourg, Luxembourg |
243,000 |
Public |
|
Baosteel Group Corp |
Shanghai, China |
116,702 |
Private |
|
Companhia Siderurgica Nacional |
Sao Paulo, SP, Brazil |
20,791 |
Public |
|
Corus Group Ltd. |
London, United Kingdom |
|
Private |
|
Dongbu Steel Co., Ltd. |
Seoul, Korea, Republic of |
1,737 |
Public |
|
Gerdau Long Steel North America |
Tampa, Florida, United States |
45,000 |
Public |
|
Hyundai Steel Company |
Incheon, Korea, Republic of |
9,353 |
Public |
|
JFE Holdings, Inc. |
Chiyoda-Ku, Japan |
54,133 |
Public |
|
JFE Shoji Holdings, Inc. |
Tokyo, Japan |
5,915 |
Public |
|
Kobe Steel, Ltd. |
Kobe-Shi, Japan |
35,496 |
Public |
|
Mechel OAO |
Moscow, Russian Federation |
96,868 |
Public |
|
Nippon Steel & Sumitomo Metal Corp |
Chiyoda-Ku, Japan |
60,508 |
Public |
|
Nucor Corporation |
Charlotte, North Carolina, United States |
22,200 |
Public |
|
Severstal OAO |
Cherepovets, Russian Federation |
52,919 |
Public |
|
Tata Steel Limited |
Mumbai, India |
81,622 |
Public |
|
Ternium S.A. (ADR) |
Luxembourg, Luxembourg |
16,600 |
Public |
|
ThyssenKrupp AG |
Essen, Germany |
151,405 |
Public |
Executive report
|
Board
of Directors |
|
|
|
|
||||||||||
|
Chairman & CEO |
Chairman |
|
||||||||||
|
|||||||||||||
|
Chairman of the Board, Co-Chief Executive
Officer |
Chairman |
|
|
|||||||||
|
|||||||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
Non-Executive Independent Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Outside Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
President & Head-Corporate Strategy
& Planning |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Outside Director |
Director/Board Member |
|
|
|||||||||
|
Non-Executive Independent Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Co-Chief Executive Officer, Vice President,
Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Co-President, Co-Chief Executive Officer,
Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Vice President, Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Non-Executive Independent Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Non-Executive Independent Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Non-Executive Independent Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Outside Director |
Director/Board Member |
|
|
|||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
Co-President, Co-Chief Executive Officer,
Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Outside Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Non-Executive Independent Director |
Director/Board Member |
|
|
|||||||||
|
|||||||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
Board Member |
Director/Board Member |
|
|
|||||||||
|
Executives |
|
|
|
|
||||||||||
|
Chairman & CEO |
Chief Executive Officer |
|
||||||||||
|
|||||||||||||
|
Co-Chief Executive Officer, Vice
President, Director |
Chief Executive Officer |
|
|
|||||||||
|
|||||||||||||
|
Chairman of the Board, Co-Chief Executive
Officer |
Chief Executive Officer |
|
|
|||||||||
|
|||||||||||||
|
Co-President and Co-Chief Executive
Officer |
Chief Executive Officer |
|
|
|||||||||
|
|||||||||||||
|
Co-President, Co-Chief Executive Officer,
Director |
Chief Executive Officer |
|
|
|||||||||
|
|||||||||||||
|
Co-President, Co-Chief Executive Officer,
Director |
Chief Executive Officer |
|
|
|||||||||
|
|||||||||||||
|
President & Head-Corporate Strategy
& Planning |
President |
|
|
|||||||||
|
|||||||||||||
|
Co-President |
President |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
Assistant Managing Director |
Managing Director |
|
|
|||||||||
|
|||||||||||||
|
VP-Operations & Technical & CTO |
Operations Executive |
|
|
|||||||||
|
|||||||||||||
|
COO, CTO & Senior Executive VP |
Operations Executive |
|
|
|||||||||
|
SVP Finance |
Finance Executive |
|
|
|||||||||
|
Head of Growth and Investment |
Investment Executive |
|
|
|||||||||
|
SVP Human Resources |
Human Resources Executive |
|
|
|||||||||
|
SVP Overseas Marketing |
Sales Executive |
|
|
|||||||||
|
SVP Marketing Strategy |
Marketing Executive |
|
|
|||||||||
|
SVP Communications |
Corporate Communications Executive |
|
|
|||||||||
|
Chief Technology Officer |
Engineering/Technical Executive |
|
|
|||||||||
|
Vice President |
Other |
|
|
|||||||||
|
|||||||||||||
|
Vice President |
Other |
|
|
|||||||||
|
|||||||||||||
|
Vice President |
Other |
|
|
|||||||||
|
|||||||||||||
|
Vice President |
Other |
|
|
|||||||||
|
|||||||||||||
Significant Developments
POSCO Acquires
Shares of DAE DONG STEEL CO., LTD. May 30, 2013
Daedong Steel Co.,
Ltd. announced that POSCO has acquired 941,379 shares of Daedong Steel Co.,
Ltd., representing a 9.41% stake.
Jindal Stainless
Ltd And Posco Sign Stainless Steel Deal-The Economic Times Apr 10, 2013
The Economic Times
reported that Jindal Stainless Ltd (JSL) has entered into a strategic agreement
with Korean steelmaker Posco, which will help JSL stabilise production of alloy
used in cars and home appliances. Under the agreement to be announced on April
10, 2013, JSL will sell stainless steel to be rerolled at Posco's South East
Asia units, according to two persons in the know of the development. The
commercial value of the offtake agreement could not be ascertained.
POSCO Announces
Appointment of New Co-CEOs Mar 22, 2013
POSCO announced
that it has appointed Park Gi Hong, Kim Jun Sik and Jang Yin Hwan as its new
Co-Chief Executive Officers (Co-CEOs), replacing Park Han Yong, effective March
22, 2013. The current Co-CEO, Jung Jun Yang, continues his duty as Co-CEO at
the Company.
POSCO Declares
Annual Cash Dividend for FY 2012 Feb 07, 2013
POSCO announced
that it has declared an annual cash dividend of KRW 6,000 per share of common
stock to shareholders of record on December 31, 2012 for the fiscal year 2012.
The dividend rate of market price is 1.70% and the total amount of the cash
dividend is KRW 463,466,664,000. The dividend is expected to be paid on April
11, 2013. The Company's annual cash dividend for fiscal year 2011 was KRW 7,500
per share.
POSCO Issues FY 2013 Revenue Outlook Below Analysts' Estimates Jan 29, 2013
POSCO announced that it expects its fiscal year 2013 revenue to record KRW 32 trillion. According to According to I/B/E/S, analysts on average are expecting the Company to report revenue of KRW 34,302.69 billion for fiscal year 2013.
POSCO, China Steel Corp, Consortium Buys $1.1 Billion Stake In Arcelormittal Operator- Jan 02, 2013 reported that A consortium which includes POSCO has agreed to buy a 15% stake in a Canadian iron ore mine operator controlled by ArcelorMittal for $1.1 billion. A POSCO spokeswoman confirmed a consortium involving POSCO signed a stock purchase agreement to acquire a stake in the iron ore mine operator, but declined to elaborate on details. South Korean wire service Yonhap Infomax reported, the consortium includes China Steel Corp, which will share a $540 million payment with POSCO. The remaining $560 million is expected to be paid by financial investors including the National Pension Service.
POSCO-Thainox PCL Announces Stake Investment by Individual from POSCO Dec 13, 2012
POSCO-Thainox PCL, a 79.532% owned subsidiary of POSCO, announced that POSCO has sold 10% stake or 779,570,000 shares of the Company to Mr. Chalermchai Mahagitsiri, worth THB 1.35019 per share or a total value of THB 1,052,567,618.30. Upon completion, POSCO holds 69.532% interest in the Company.
POSCO In Exclusive Talks For ArcelorMittal Canada Mine
Stake- Dec
03, 2012
reported that POSCO
has secured exclusive negotiating rights to acquire a stake in a Canadian iron
ore mine operator controlled by ArcelorMittal. POSCO is seeking to form a
consortium to buy the stake with South Korea's National Pension Service and
other investors, the source said, but declined to elaborate on the size of the
planned stake. The Korea Economic Daily reported on Tuesday that POSCO has been
picked as the preferred bidder for a 15% stake in ArcelorMittal Mines Canada, a
deal expected to be worth more than $1 billion.
POSCO to Acquire
Stake in DAEHO P&C CO., LTD Dec 03, 2012
DAEHO P&C CO.,
LTD announced that POSCO has acquired 7,821,489 shares of the Company,
representing a 15.86% stake.
POSCO To Set Up
World-class Steel Plant In Odisha-The Economic Times Nov 27, 2012
The Economic Times
reported that Notwithstanding delays in the implementation of its INR52,000
crore (INR520 billion) project in Odisha, POSCO said the company is determined
to establish a world class steel facility near Paradip.
POSCO Consortium
Eyes $1 Billion Stake From ArcelorMittal- Nov 14, 2012
reported that A
consortium including POSCO is seeking to acquire a roughly $1 billion stake in
a Canadian iron ore mine operator controlled by ArcelorMittal South Korean
financial publication Money Today reported. The bidding group seeks to acquire
about a 10% stake in ArcelorMittal Mines Canada, with POSCO looking to invest
$200-300 million and the rest coming from its partners, Money Today said.
Morgan Stanley is advising POSCO, it said. A POSCO spokeswoman said the Company
was studying the possibility of buying a stake in the operator, but nothing had
been decided yet. ArcelorMittal is exploring the sale of a minority stake in
its Canadian iron ore business.
Noble Group Ltd,
POSCO Drop $1.2 Billion Bid For Arrium Ltd- Oct 31, 2012 reported that Noble
Group Ltd and POSCO dropped a AUD1.2 billion ($1.24 billion) takeover bid for
Australia's Arrium Ltd on Wednesday, balking at paying more after the company's
board rejected a sweetened offer.
POSCO Not Serious About Buying ThyssenKrupp AG's Assets- Oct 23, 2012
reported that POSCO is not seriously considering buying ThyssenKrupp AG's steel
mills in Brazil and the United States. South Korea's POSCO submitted a
first-round bid, but it simply wanted to look at the assets, the source with
knowledge of the matter said on condition of anonymity because of the
confidential nature of the deal. Global steel companies including POSCO and
ArcelorMittal have made first-round bids for ThyssenKrupp's steel mills in
Brazil and the United States
POSCO Issues FY 2012 Revenue Outlook Below Analysts' EstimatesOct 23,
2012
POSCO announced that it expects the revenue for the fiscal year 2012 to
record KRW 36,300 billion. According to I/B/E/S Estimates, analysts on average
are expecting the Company to report revenue of KRW 37,926.07 billion for the
fiscal year 2012.
Bidders Including
POSCO Line Up For ThyssenKrupp AG's Steel Americas Mills- Oct 10, 2012 reported
that global steel companies including ArcelorMittal, United States Steel Corp
and POSCO have made first round bids for ThyssenKrupp AG's steel mills in
Brazil and the United States. Nucor Corporation, Japan's JFE Holdings, Inc.,
China's Baoshan Iron & Steel Co., Ltd.and Brazil's CSN also submitted bids.
ThyssenKrupp said in May it was considering all options for the loss-making
steel mills, including a partnership or a sale, to halt the losses and
concentrate on its European business. The plants were meant to give
ThyssenKrupp a foothold in the Americas, but the mills have had to struggle
with rising costs and sluggish demand. the mills separately for at least their
combined book value of EUR7 billion ($9 billion). Bids were at only about
EUR3-4 billion. Brazil's Usinas Siderurgicas de Minas Gerais S.A. and Gerdau
S.A., Japan's Nippon Steel & Sumitomo Metal Corp and AK Steel Holding Corp,
which had been named as possible bidders - have not made any indicative offers.
POSCO Announces Acquisition of Assets Between Subsidiaries
Sep 10, 2012
POSCO-Thainox PCL,
a 94.92% owned subsidiary of POSCO announced that on September 7, 2012, it has
agreed to acquire a plot of land area 9 Rai 3 ngan 65.9 square wah, factory and
other buildings totaling five buildings, and machines and equipments for metal
sheet slitting and cranes totaling nine machines, which located in Chonburi,
from POSCO (Thailand) Co., Ltd (PT), a 99.33% owned subsidiary of POSCO, worth
THB 147,823,931. As the above assets are mortgaged with financial institutions,
PT needs to remove the burden of mortgage before entering into transaction.
ThyssenKrupp Seeks
$8.8 Billion For U.S., Brazil Mills; ArcelorMittal, POSCO And Others Seems As
Potential Buyers- Aug 26, 2012
reported that
ThyssenKrupp AG plans to sell its U.S. and Brazilian mills separately for at least
the book value, which is about EUR7 billion ($8.8 billion). The group is now
slimming down to cut debt and focus on its European heartlands and, having sold
its stainless steel division and its super-yachts business, is looking at
selling other assets including Brazilian and U.S. mills. It put its 73%-stake
in the Brazilian mill and its brand-new U.S. flat-rolled carbon steel mill in
Alabama up for sale in mid-May after years of struggling with delays and cost
overruns. Analyst have also tipped ArcelorMittal, United States Steel Corp,
Hebei Iron and Steel Co., Ltd., Baoshan Iron & Steel Co., Ltd. and POSCO as
potential buyers of the assets.
POSCO Declares
Interim Cash Dividend for FY 2012 Aug 10, 2012
POSCO announced
that it has declared its interim cash dividend of KRW 2,000 per share of common
stock, for the fiscal year 2012, payable on August 23, 2012 to shareholders of
record on June 30, 2012. The total cash dividend amount is approximately KRW
154,488,888,000. The Company's interim cash dividend for fiscal year 2011 was
KRW 2,500 per share.
POSCO Specialty
Seeks Exchange Approval For IPO- Jul 26, 2012
reported that
POSCO's Specialty Steel Co has applied for approval for an initial public
offering from the stock exchange. POSCO Specialty, of which steelmaker POSCO
holds a 95% stake, is expected to raise between $500-$700 million through the
offering slated for the fourth quarter. The Company said Tong Yang Securities
and Korea Investment & Securities had been chosen as lead managers, while
Goldman Sachs (GS.N) and KB Investment & Securities were serving as
co-bookrunners.
POSCO Issues FY
2012 Revenue Outlook Below Analysts' Estimate Jul 24, 2012
POSCO announced that it expects its fiscal year 2012 revenue to record
KRW 37,500 billion. According to I/B/E/S Estimates, analysts on average are
expecting the Company to report revenue of KRW 38,347.16 billion for the fiscal
year 2012.
POSCO Announces Lawsuit Filed by Nippon Steel Corporation Jun 22, 2012
POSCO announced that Nippon Steel Corporation has filed a lawsuit against the Company, claiming for KRW 1,413,697,220,000 (JPY 98.6 billion) in return of damage payments.