Posco rolls out new midterm plan under Choi’s leadership
Posco’s headquarters in Gangnam, Seoul. (Yonhap)
Posco Group, the world’s fifth-largest steelmaker by output, said Sunday that it would increase investment in future business opportunities, while making efforts to improve corporate governance in announcing its new midterm plan covering the three years from 2021 to 2023.
Under the second term of its chairman Choi Jeong-woo, the group expects to see improved outcomes from its key growth businesses, including hydrogen, liquefied natural gas, food and battery materials.
The group expects to raise its annual sales over 102 trillion won ($90 billion) by 2023, up 12 trillion won from that of 2020.
Major agendas in the three-year plan include the group’s environmental, social and corporate governance activities and investments in new businesses: Hydrogen business, auto parts manufacturing and development of core materials for secondary batteries.
Earlier this month, Posco announced that the group has established an ESG committee, through which it would discuss plans and strategies to reduce environmental damages and industrial accidents.
Through the committee, which is exclusively responsible for ESG policies, the group hopes to roll out detailed schemes for achieving carbon neutrality by 2050.
In line with the group’s efforts to achieve carbon neutrality, the group will push ahead with its hydrogen business. Posco aims to produce up to 5 million metric tons of hydrogen by 2050 to reduce its reliance on fossil fuels. The South Korean steelmaker’s current annual hydrogen production capacity stands at 7,000 tons, mostly through natural gas and byproducts from its power plants.
Posco last week forged a partnership with research institutions to develop technology required to mass produce hydrogen from ammonia, which is expected to give a boost to the group’s hydrogen production.
The firm has been expanding its business into in the hydrogen fuel cell market too. Posco last month inked a partnership with Hyundai Motor to supply hydrogen to fuel cell electric vehicles made by the automaker. Posco International’s steel processing unit Posco SPS will produce 10,000 tons a year of fuel-cell bipolar plates by 2027, enough to produce around 245,000 fuel-cell electric vehicles.
Posco will also step up its research and development of secondary battery materials, with an aim of establishing manufacturing facilities that can generate 23 trillion won in annual sales and earn a 20 percent share in the global market by 2030. Posco Chemical is on its way to boost its annual production capacity of cathodes to over 100,000 tons by 2023.
Posco is also increasing infrastructure investments in its businesses related to LNG, another alternative to fossil fuel. Last year, Posco Group began commercial operation of the company’s fifth LNG tank in Gwangyang, South Jeolla Province. Posco said it plans to start constructing its sixth tank this year.
Food business is another area that the group has been trying to enter. Posco International, the group’s international trading unit, plans to establish a global supply chain with a 10 million-ton capacity.
In the steel making industry, Posco will seek to develop multimaterial steel products that are lighter and stronger than conventional steel products. Posco signed a memorandum of understanding on March 8 to develop a lighter, new material for battery packs of electric vehicles, based on a steel-plastic composite.
During the next three years, the group will also invest around 1 trillion won to renew its manufacturing facilities to address workplace safety, it added.
By Shim Woo-hyun (firstname.lastname@example.org)