Integration of Structural Steel Manufacturing, Distribution, and Sales Divisions within the Group
SeAH Steel Holdings is expanding its market competitiveness in the structural pipe business through the integration of the structural pipe business within the group.
On the 11th, SeAH Steel Holdings announced that it will reorganize its structural pipe business by integrating SSIK, a specialized distribution corporation for structural pipes, and Dong-A Steel, a structural pipe manufacturing corporation, into SeAH Steel. This business reorganization involves SeAH Steel acquiring 100% of SSIK's shares from SeAH Steel Holdings for approximately 83.4 billion KRW, aiming to maximize synergy by integrating the manufacturing, distribution, and sales sectors of the structural pipe business, which had been operated separately within the group.
Recently, the market has seen intensified cutthroat competition due to the massive influx of Chinese-made structural pipe products. To establish a sustainable growth strategy for the structural pipe business, SeAH Steel Holdings established a 'Structural Pipe Business Task Force (TF)' last year and has been exploring various ways to secure business synergies. The integration of the structural pipe business into SeAH Steel is expected to have a positive impact not only by expanding internal synergies but also by enhancing the competitiveness of the domestic structural pipe industry.
In fact, the structural pipe market has a lower entry barrier compared to piping and energy-oriented steel pipes, making product assortment, rapid logistics, and price competitiveness crucial. Through this structural pipe business reorganization, SeAH Steel Holdings plans to secure product price competitiveness by 'eliminating overlapping inefficiencies' and 'improving the logistics system,' while also creating integration synergies in sales and marketing by 'securing a stable sales distribution network' and 'offering a broad steel pipe portfolio.' In particular, by supplying verified high-quality structural pipes with price competitiveness to the domestic market from a magnanimous perspective, it is expected to positively address quality issues in construction materials caused by the massive influx of Chinese structural pipe products.
A representative from SeAH Steel Holdings stated, "This business structure reorganization will be a turning point to create integration synergies and maximize operational efficiency for the structural pipe business, which had been dispersed within the group." He added, "Based on the high customer trust of SeAH Steel, the number one steel pipe company in Korea, we plan to lead the structural pipe market and pursue continuous growth."
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