Hyundai Steel gains momentum with Hysco merger

DANGJIN, South Chungcheong Province ― Massive, red hot steel plates shot by along the rollers and back again.

The heat inside Hyundai Steel’s Dangjin plant was high, but the speed and precision with which steel plates were being prepared for further processing was overwhelming.

A few short decades ago, Korea was little more than a war-torn and ruined country, and its steel industry was able to get off the ground only as a result of the government’s relentless drive. 

Those days are long gone, and Hyundai Steel is now one of the world’s leading steelmakers, operating an unprecedented integrated mill, in which all raw materials are stored and transported within enclosed structures.

Based on the company’s projections, Hyundai Steel‘s latest merger with Hyundai Hysco will push the merged company’s annual sales to 25 trillion won ($22 billion), and make it the world’s eighth-largest steelmaker.

Located on an 8.82-square-kilometer plot of land in Dangjin, South Chungcheong Province, the plant boasts a size three times bigger than Yeouido, the financial district in Seoul. The mill pumps out 6 million tons of cold-rolled steel products each year, with about 5 million tons of that transformed into automobile parts.

The massive complex is the jewel of Hyundai Steel. Its construction completed Hyundai Motor Group’s plans for establishing a “resource cycling” system that allows steel to be produced from raw materials, processed into parts and then into automobiles, which in time become raw materials again as scrap metal. 

Having laid the foundations, the company is now seeking a new boost through its merger with Hyundai Hysco.

While much smaller, Hyundai Hysco was the key to completing the vision of “molten steel to automobiles.”

The absorption of the smaller Hyundai firm’s cold-rolling business was completed Wednesday and the company was able to boost its operating profit ratio to 8.9 percent.

Following the completion of an additional plant in the complex in April, Hyundai Steel expects an extra 1 trillion won in annual sales.

While the company is bulking up, the focus at the mill appeared more on developing specialized products such as lighter automotive plates.

The efforts to make lighter products while retaining structural strength began at Hyundai Hysco in the early 2000s, and the research and development drive is picking up more steam.

As the company pushes to gain an edge over the competition, increasing funds are being directed into research and development.

According to company officials, the emphasis placed on R&D is set to bring an additional 40 billion won investment for the area.

The company plans to inject 40 billion won into expanding the R&D facilities at the Dangjin mill by 2017. Along with facility investment, R&D personnel will rise from the current 550 to 800 by 2020.

“(The research investment) will strengthen the company’s ability to develop ultrahigh tensile strength steel products, and lead to expanding its ability to mass produce specialized steel products,” a Hyundai Steel official said.

“Facilities for testing and analyzing the reliability of products will also be set up, and the company plans to expand investment in R&D for products with high added value.” 

By Suk Gee-hyun (monicasuk@heraldcorp.com)