POSCO completes auto steel processing plant in China

HONG KONG (Yonhap News) ― POSCO, South Korea’s leading steelmaker, said Thursday that it has dedicated a car steel processing plant in north eastern China as part of efforts to expand its presence in China’s steel market.

The new plant in the Jilin province, initially capitalized at $165 million, will process 200,000 tons of cold and hot-rolled steel annually. The completion came about one year after POSCO and a Chinese steelmaker jointly began in August last year.

In June 2011, the South Korean firm signed a deal with Tonghua Iron and Steel Group, the largest steelmaker in Jilin, to set up a joint venture that processes steel. POSCO owns 60 percent of the JV, with the remaining stake owned by the Chinese partner.

POSCO said steel products from the plant will be supplied to automakers in the northeastern part of China.

POSCO has been working closely with Chinese local governments to develop manufacturing areas specialized in steelmaking in a bid to meet growing demand among automakers and shipbuilders based in China.

In July 2011, POSCO completed construction of a steel-plates plant in Liaoning Province, which has an annual production capacity of 400,000 tons of steel goods, for local shipbuilders.

The top steelmaker has been keen in advancing into China’s three northeastern provinces ― Heilongjiang, Jilin and Liaoning, which together expect to see their economies grow rapidly by 2020, POSCO officials said.

Since 2003, the Chinese central government has implemented the “Revitalize the Northeast” strategy as a part of its regional development plans.

The northeastern region is known for being a business-process outsourcing destination mainly for South Korean and Japanese firms.