Posted on 01 Sep 2016
POSCO has opened an automotive steel plate plant in Thailand, the first of its kind in Southeast Asia, to bolster its business in the rapidly growing regional economy.
The new facility will produce 450,000 tons of automotive plates annually for Toyota, Nissan, Ford and other automakers operating factories nearby.
The world's fourth-largest steelmaker held a ceremony Wednesday marking the completion of its new continuous galvanizing line in Pluak Daeng, Rayong Province, about 140 kilometers southeast of Bangkok.
POSCO Chairman Kwon Oh-joon attended a ribbon-cutting ceremony with 200 high-ranking Thai government officials, including Deputy Prime Minister Tanasak Patimapragorn, and executives of its domestic business partners.
POSCO began the construction of the $300 million plant in September 2014 to take advantage of the rapidly expanding car production in the Southeast Asian nation.
Despite the booming car industry, there were only two steel plate manufacturing facilities operated by Japanese steelmakers, only producing a combined 760,000 tons annually. JFE Steel Galvanizing Thailand, set up in April 2013, produces about 400,000 tons every year, with Nippon Steel Galvanizing Thailand making 360,000 tons since October 2013.
Japanese and U.S. automakers in Thailand have been importing significant volumes of the plates from other countries.
Thailand accounts for more than 50 percent of automobile production in Southeast Asia and is projected to manufacture more than 2.8 million vehicles annually by 2020 as Japanese and other global automakers continue to increase operations there.
"Given Thailand is an automobile production hub of Southeast Asia, we have been looking to become a major supplier of steel plates for carmakers in the country," Kwon said. "By opening the largest steel plate factory in Thailand, we will offer differentiated, high-quality, premium products to our clients at affordable prices."
Using its latest steel plate factory in Thailand as a springboard, the steelmaker plans to expand its presence outside Korea, Kwon said, adding that Korea's steel industry has reached a saturation point.
"Korea is no exception to the worldwide steel oversupply. POSCO cannot sustain its growth anymore if it focuses only on the domestic market," the chairman said. "It is a must for us to find new business opportunities abroad, and produce steel plates and other high value-added products. We will continue to build more steel plate factories in Southeast Asia to become a more globally competitive, profitable steelmaker."
The newly opened plant has bolstered POSCO's automotive steel plate production capacity to 2.25 million tons annually. By building more such plants in Korea, China and elsewhere, it plans to increase its annual production to over 10 million ton in 2019.
