Steel industry hastens restructuring drive to benefit from new law

Korea's steel industry is expediting restructuring, hoping to complete a market review within months to decide whether to seek state help, industry sources said Wednesday.

According to the sources, the Korea Iron & Steel Association has picked Boston Consulting Group to write up a report, detailing areas and products of overcapacity. They said the report is due out in about two months.

The restructuring drive has won over support from both the government and private companies as the local industry has been falling to a flood of cheaper imports from China that in March accounted for more than 60 percent of local demand. 

"Some products need restructuring, some do not," a government official said. "The report will intensively assess each product. We will know the scale and the direction of restructuring after the report is out."

There already have been actions at the corporate level. POSCO, the country's largest steelmaker, has sold or merged 34 of its affiliates in and out of the country last year, and plans follow-ups on 35 more subsidiaries this year.

Steelmaking is one of the five industries singled out by the government for overhaul, and the commerce ministry is currently running a joint panel with leading steel companies for negotiations.

The drive is gaining momentum as a new corporate-related law is due to take effect on Aug. 13. The law, locally referred to as the "one-shot law," removes multiple regulations simultaneously for industries in need of urgent restructuring and is applied to companies that voluntarily take measures to improve their financial soundness. (Yonhap)