POSCO, the nation’s top steelmaker, said Friday it would reorganize its affiliates to create larger entities in order to reduce business overlap and speed up corporate decision making, considered vital to coping with the rapidly changing business climate.
In a board meeting at POSCO’s Seoul office, the steelmaker said all steel distribution and processing affiliates that handle materials such as carbon steel, stainless steel and certain steel plate products will come under the control of POSCO Processing and Steel, while business-to-business operations will be placed under PosMate, a POSCO unit dedicated to maintaining facilities and leasing.
The latest reorganization measure will merge five affiliates, including POSCO Ansan Stainless and POSCO TMC, into two larger business entities.
“Streamlining can help managers make faster decisions and create positive synergy by reducing overlapping business spheres,” the steelmaker said in a press release. The consolidation will also raise the value of the unified corporate entities, it added.
“When the market was fine it made sense to set up dedicated companies to handle production and marketing operations of products, but this stance is not viable during hard times when there is a need to cut back on spending,” a company insider said.
POSCO, like other global steelmakers, has been hit by excessive production and the slowdown in the global economy that hurt demand for steel products.
The company’s board also decided to sell off stakes in three affiliates to improve its fiscal status.
“POSCO plans to sell part of its holdings in the liquefied natural gas terminal in Gwangyang (South Jeolla Province) and spin off Posfine, an affiliate that sells ground blast-furnace slags to cement companies, and POSCO Uruguay,” the company said.
In addition, the corporate board announced it would pay 2,000 won per share to investors for cash-based interim dividends, which is the same level as a year ago.
By Seo Jee-yeon and news reports
(
jyseo@heraldcorp.com)
