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Posco to expand its battery materials business amid protectionism

June 1, 2023 - 16:30 By Shim Woo-hyun
A photo shows an interview between Posco Group Chairman Choi Jeong-woo (right) and Kathleen Stephens, a former US ambassador to South Korea, organized by the Korea Society in New York on Wednesday. (Korea Society)

Posco Group Chairman Choi Jeong-woo said the group is paying extra attention to the inflation-triggered financial market volatility and the growing geopolitical risks.

Choi added the group will overcome the difficulties by making aggressive investments in battery materials businesses, particularly those relating to the electric vehicle industry, during an interview organized by the Korea Society. The interview video was released by the non-profit organization on Wednesday.

“The recent hikes in inflation and interest rates will likely cause a growth recession and a global cutback on investments. Posco is no exception,” Choi said during an interview with Kathleen Stephens, a former US ambassador to South Korea.

“The COVID-19 (pandemic) sent the entire world into a dizzying spin. We all felt the close call of a near industry collapse. Hence, protectionism may be a natural manifestation of the post-crisis sentiments,” Choi added.

To overcome such difficulties Posco “plans to respond to the changing industrial landscape and make bold investment decisions to drive balanced growth in our core businesses,” Choi said.

The launch of holdings firm Posco Holdings and the structural change made last year was also to help the group advance its new businesses, particularly those relating to rechargeable battery materials. It was also a measure to rebrand the group, which has been widely perceived as a steelmaker.

Posco Group “will focus on rechargeable materials for EV batteries and automotive steel sheets, which are both inherently associated with the automobile industry,” Choi said.

According to Choi, the EV market will post a rapid growth in the next decade, particularly in the North American market, quoting the US government report that has anticipated the ratio of EVs in the US car market will reach 67 percent.

To take the lead in the market, Posco will “prove to be resilient against protectionism,” Choi said.

In terms of battery materials, Choi said the US Inflation Reduction Act currently poses concerns regarding its partner countries -- Argentina and Indonesia -- that are not in the list of countries that can benefit from the policy.

“We will continue to negotiate with the government so that our partner countries can be covered in the IRA,” Choi said.

Meanwhile, Choi also stressed that the group is continuing its efforts to reach carbon neutrality in the steel industry.

“10 years from now, I am convinced that POSCO Group will be an iconic provider of eco-friendly future materials,” Choi said.