[The Industrial Heart Beats Again] Color Coated Steel's 'Super Gap' Market Dominance Through the Union of Iron and Color

World's Largest Single Color Factory in 48 Years
Communicating with 1,793 Clients in 89 Countries
Surging Orders, Average Shipping Time 2 Months
1Q Operating Profit 109.4 Billion KRW, Best in 19 Quarters
Vice Chairman Jang Se-wook's Bold Move for Structural Reform

A worker at Dongkuk Steel Busan Plant is managing the operation of the production line.

"Dongkuk Steel's color-coated steel sheets are leading the technological gap in the steel industry."

The history of domestic color-coated steel sheets goes hand in hand with Dongkuk Steel. Since starting the first domestic production of color-coated steel sheets in 1972, Dongkuk Steel has grown into the world's largest single color steel plant, producing 750,000 tons annually last year, 48 years later. In the steel industry, color-coated steel sheets are a core high value-added product.

Originally used mainly in home appliances such as refrigerators and washing machines, their application has expanded to premium architectural interior and exterior materials. Dongkuk Steel communicates with 1,793 global customers across 89 countries worldwide, including Samsung, LG, and the global elevator company Otis, continuously launching various new products that replicate textures of materials like marble and wood on steel sheets.

Even amid the worst crisis caused by the COVID-19 pandemic last year, the company managed to expand its profit margin alone, which was the secret to its continued success. The outlook for this year is even brighter. Operating profit on a consolidated basis for the first quarter of this year surged 94.8% year-on-year to 109.4 billion KRW, marking the highest in 19 quarters since Q2 2016. If this trend continues, record-breaking performance is expected again in Q2.

New 100,000-ton Production Line to Start Next Month

On the 9th, entering Dongkuk Steel's factory located in Nam-gu, Busan, dozens of types of color-coated steel sheets with various colors and patterns were on display. From the bright solid colors of the Appsteel products popular recently in home appliances to Dongkuk Steel's premium Luxsteel line, the colorful color-coated steel sheets surrounded the walls, resembling an art gallery. Kim Min-seok, head of the quality control team, said, "We produce a variety of products, including color-coated steel sheets with various colors and those expressing textures like marble and wood," adding, "Recently, orders from customers have been pouring in, so the production lines are running at full capacity, but it takes an average of over two months until shipment."

Currently, Dongkuk Steel's Busan plant produces up to 55,000 tons of color-coated steel sheets monthly through eight production lines (CCL). When the Lamina color-coated steel sheet line ‘S1CCL,’ with an annual production capacity of 100,000 tons, starts operation next month, the total annual production will reach 850,000 tons. Lamina steel sheets are premium products that attach films to steel plates to realize various colors and gloss.

The first process for producing color-coated steel sheets involves cleaning hot-rolled coils brought in through the factory's dock and applying pressure to achieve a uniform thickness. This is called the continuous pickling and cold rolling (PLTCM) process. Upon entering the continuous pickling and cold rolling plant, machines use hydrochloric acid to remove impurities such as iron oxide attached to the hot-rolled steel sheets and produce steel sheets with thicknesses ranging from 0.25 to 2.3 mm according to customer orders through cold rolling from an average thickness of 1.6 to 5 mm.

The processed hot-rolled steel sheets then undergo additional processes for zinc coating, and some are sent directly to customers in semi-finished form. The coating process is broadly divided into electro-galvanizing and hot-dip galvanizing. Hot-dip galvanized steel sheets feature a thicker zinc coating layer and excellent corrosion resistance. In contrast, electro-galvanized steel sheets have less coating adhesion than hot-dip galvanized sheets but feature a uniform coating thickness and smooth surface.

Entering the continuous hot-dip galvanizing line (5CGL), heat treatment and zinc coating processes extending up to 800 meters were underway. Kim said, "This plant is the largest among CGL lines capable of producing 400,000 tons annually," explaining, "Products after coating move to the CCL line to be transformed into color-coated steel sheets." Dongkuk Steel recorded a 35% domestic market share last year out of the approximately 2,044,000 tons of the domestic color-coated steel sheet market, ranking first. The proportion of color-coated steel sheets in the overall business has also grown from 11.5% in 2012 to over 20% for the first time last year, showing a growth trend.

Vice Chairman Jang Se-wook’s Ultra-Gap Strategy Paid Off

Dongkuk Steel strengthened its color-coated steel sheet business starting in 2014 when Vice Chairman Jang Se-wook took office and focused on restructuring. In the early 2010s, the global steel market downturn caused Dongkuk Steel to face difficult times, including business restructuring. In 2011, it launched ‘Luxsteel,’ the first premium architectural interior and exterior color-coated steel sheet brand in the domestic steel industry, followed by the 2013 launch of ‘Appsteel,’ a color-coated steel sheet brand for home appliances, signaling a revival.

In January 2015, Dongkuk Steel merged with Union Steel and expanded its business scope from B2B products such as long products and plates to color-coated steel sheets used in home appliances. The following year, it developed digital inkjet printing technology capable of printing photos on steel plates, leading the global premium color-coated steel sheet market.

As a result, the operating loss of 20.4 billion KRW in 2014 turned into an operating profit of 193.6 billion KRW in 2015. Dongkuk Steel recently became the first in the industry to operate a dedicated design team and develops new strategic product designs annually through the ‘Color-Coated Steel Sheet Design Trends and New Product Presentation.’ Last month, it launched the online platform ‘SteelShop.com’ and strengthened its non-face-to-face sales strategy. This is interpreted as a determination to capture even the small and medium-sized markets by moving away from the traditional face-to-face sales method after COVID-19.

Nam Don-woo, production director at Dongkuk Steel’s Busan plant, said, "Dongkuk Steel is the number one color-coated steel sheet producer in Korea and continues steady growth every year," adding, "We will continue to grow as a global company by developing and producing more diverse products in the future."

At Dongkuk Steel Busan Plant's color steel sheet production line, galvanized steel sheets are coming out with colored coating.