POSCO to Pursue Automotive Steel Sheet Joint Venture with Hebei Iron and Steel in China

Contract Signed for Joint Venture with China Hebei Iron & Steel Group for Automotive Coated Steel Sheets
Chairman Choi Jung-woo: "We Will Strengthen Our Position as a Supplier in the World's Largest Automotive Steel Market, China"

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seonsik] POSCO (Chairman Choi Jeong-woo) is promoting a joint venture with Hebei Iron and Steel Group Co., Ltd. (hereinafter Hebei Iron and Steel) to produce and sell automotive galvanized steel sheets in China.

On the 25th, POSCO Chairman Choi Jeong-woo, Steel Division Head Kim Hak-dong, and Hebei Iron and Steel Vice President Yu Yong (于勇), General Manager Wang Nanyu (王南玉), and others attended an online joint venture contract signing ceremony and agreed to establish a joint venture company with each holding a 50% stake.

At the signing ceremony, Chairman Choi Jeong-woo said, “Through the joint venture with Hebei Iron and Steel, POSCO plans to strengthen its position as the most competitive supplier of automotive steel sheets in China, the world's largest automotive steel market.”

Hebei Iron and Steel, which produced 44 million tons of crude steel in 2020, is the second largest steelmaker in China and the third largest in the world, and is included in the Fortune Global 500 along with POSCO.

POSCO and Hebei Iron and Steel plan to invest U$300 million each, totaling U$600 million, to build a 900,000-ton capacity galvanized steel sheet production plant in the Laoting (??亭) Economic Development Zone, Tangshan City, Hebei Province, aiming to start construction in January next year and complete it by the end of 2023.

Additionally, POSCO plans to incorporate Guangdong CGL, which currently operates a 450,000-ton annual capacity plant in Guangdong Province, China, as a subsidiary. Accordingly, the joint venture company will have a production capacity of 1.35 million tons, and the cold-rolled coils (Full Hard) used as raw materials will be supplied equally by both companies according to their shareholding ratio.

POSCO is expected to establish a stable supply system to respond to the continuously growing demand for automotive steel sheets in China through this cooperation with Hebei Iron and Steel.

China, which produced 25 million vehicles last year, accounting for 32% of the world's total automobile production, is the world's largest automobile manufacturer and is expected to continue growing as the world's largest automotive steel sheet demand market.