POSCO, South Korea’s largest steelmaker, established a strategy to dominate the Chinese market making high-quality products. Especially, POSCO focuses on automobile steel plates and stainless steels as growing needs for them in China with improvement in standards of living.
In November last year, the steel maker hosted its early vendor involvement (EVI) forum in China. EVI is a product-development program in which suppliers of component materials such as steel collaborate with carmakers, from the beginning of a new vehicle’s development, to produce materials specifically suited for the vehicle.
It is especially significant in an aspect that the event was hosted jointly with local automakers in China that has leaped into the world’s largest car manufacturer, pushing the U.S. and Japan to the second and third.
Around 80 integrated carmakers and 260 officials from vehicle component producers in China participated in the forum. There were a wide range of related organization and firms including Society of Automotive Engineers of China, China Association of Automobile Manufacturers (CAAM), China’s largest automaker Chery Automobile, China’s electric car producer BYD invested by Warren Buffet, and German-based global automobile component manufacturer Benteler.
In the forum, POSCO introduced products developed with the company’s original technologies such as TWIP (Twinning Induced Plasticity) steel, and revealed its plan to advance into the Chinese market in line with key local automakers through developments and advancements of lightweight future vehicles. There are 15 processing producing automobile steel plates in China among 40 plants in the world. Last year, POSCO-CWPC(China Wuhu Automotive Processing Center) was established in Anhui, China and it produces 150,000 tons of automobile steel plates a year.
The steel plates processing in the plant are procured from the largest steel mill in Gwangyang. Also the steel maker is going to expand exports while its rival local company expands its production.
POSCO also expects to create a synergy effect as POSCO-CWPC is located near the plants of Chery Automobile and DongFeng Peugeot Citreon Automobile Limited (DPCA).
Besides, POSCO rushed into stainless steel business in China that has the best conditions for growth such as huge land and developing infrastructures. Also, there are people in various income levels and growing needs for stainless steel. Chinese people’s fancy for splendid exterior also helps raise the needs.
With those reasons, the consumption of STS cold-rolled steel increased to 8.1 million tons from 1,450,000 tons in decade. POSCO expects it will continuously increase.
So, POSCO has built production facilities for Zhangjiagang Pohang Stainless Steel Co., Ltd. investing faster than any other Chinese local steel makers. POSCO regards Zhangjiagang Pohang Stainless Steel as a cornerstone for global development.
“We think that various managing experiences here will help us again when we crack huge overseas markets like India,” a POSCO official said.
POSCO will strengthen technology exchanges and cooperation with steel industries, and reinforce its investment company in China.
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