"Breaking Business Boundaries" POSCO Inter Evolves into an Eco-Friendly Integrated Business Company

Establishing Energy, Food, and Material Supply Chains by 2030
Successful Business Diversification After Joining POSCO Group
Achieving Quantitative and Qualitative Growth Including Operating Profit

"Employees say the speed at which the company is changing this year is so fast that it makes them dizzy. I dare say that we will develop into a completely different global integrated business company compared to the past."

Lee Gye-in, Head of the Global Business Division at POSCO International, held a press conference on the afternoon of the 4th at The Plaza Hotel in Jung-gu, Seoul.
[Photo by POSCO International]

POSCO International announced that it will transform from a traditional general trading company into a global eco-friendly integrated business company. By 2030, it plans to establish supply chains for its three core businesses?energy, food, and materials?and promote convergence among these sectors. On the afternoon of the 4th, Lee Gye-in, Head of POSCO International’s Global Business Division, stated at a press conference held at The Plaza Hotel in Jung-gu, Seoul, "We will become a company that breaks down and expands the boundaries of our business."

POSCO International started as Daewoo Group's general trading company but has diversified its business to become a comprehensive business company after being incorporated into the POSCO Group in 2010.
[Photo by POSCO International]

The company started as a general trading company under the former Daewoo Group but has diversified its business since being incorporated into the POSCO Group in 2010 to become an integrated business company. In the energy sector, instead of focusing solely on resource development centered on the Myanmar gas field, it expanded its business by acquiring the Australian company Senex and exploring new gas fields. It also increased the number of terminals for storing liquefied natural gas (LNG) and entered renewable energy businesses such as offshore wind power to build supply chains. In the food sector, it operates a palm plantation in Indonesia covering 70% of the area of Seoul (the fruit is the basis of palm oil) and built a grain terminal in Ukraine. In the materials business, it ventured into producing and selling key electric vehicle components such as drive motor cores (parts that generate electricity in motors).

In 2015, the proportion of operating profit earned through the energy business was 91% of the total operating profit. Profits from trade and investment accounted for 6% and 3%, respectively. In contrast, last year's operating profit proportions were 35% energy, 35% trade, and 30% investment.
[Photo by POSCO International]

The results began to show from last year. The company recorded sales of 40.9 trillion KRW and operating profit of 1.2 trillion KRW last year. This represents approximately a sevenfold increase in sales and a tenfold increase in operating profit compared to 6.4 trillion KRW in sales and 103.4 billion KRW in operating profit in 2001. The proportion of operating profit is also well balanced. In 2015, 91% of total operating profit came from the energy business, including the Myanmar gas field, while profits from trade and investment accounted for only 6% and 3%, respectively. In contrast, last year’s operating profit distribution was 35% energy, 35% trade, and 30% investment.

Lee said, "The foundation of the three core businesses is eco-friendliness, and we will firmly establish supply chains in each business and become a robust company interconnected like a web through links between different businesses."

POSCO International plans to establish supply chains for its three core businesses?energy, food, and materials?by 2030 and promote convergence among these businesses.
[Photo by POSCO International]

Executives from key divisions also directly revealed growth strategies for each business by 2030. Gong Byeong-seon, Head of the Food Business Development Office, set targets of 7.1 million tons of global grain production, 20 million tons of handling volume (including overseas sales and domestic imports), and 2.34 million tons of processing volume by 2030. Specifically, the plan is to secure grains through acquisitions of farming companies in Australia and Ukraine and contract farming in South America, and to trade using existing trade networks. They also plan to focus on processing by investing in joint ventures (JVs) such as a U.S. soybean processing JV and a Vietnamese starch and sugar JV.

Jo Joon-su, Head of the E&P (Exploration & Production) Business Office, expressed ambition to build a supply chain centered on LNG production, stating that there is no competitor among domestic companies. Currently, new explorations are underway in Malaysia and Indonesia, and by 2026, three additional tanks will be added to the LNG import terminal in Gwangyang, Jeollanam-do. At the Incheon LNG combined power plant, they plan to replace thermal units and promote the country’s first gigawatt (GW)-scale hydrogen co-firing (a method of generating electricity by burning hydrogen and natural gas together) power generation project.

They are also advancing offshore wind power and clean hydrogen supply. Park Hyun, Head of the Energy Business Development Division, said, "By 2030, we plan to secure offshore wind power business rights totaling 2.2 GW and supply 140,000 tons of hydrogen to the Incheon power plant." He added, "We will also enter the ammonia business and build two storage facilities in Gwangyang, Jeollanam-do, and Samcheok, Gangwon-do."