South Korea’s top steelmaker POSCO is reportedly pushing for integration of its processing centers in China by setting up a special team.
“POSCO is planning to merge 12 processing centers in China into around three key divisions in order to save cost,” Money Today quoted an unnamed source as saying.
“The company will first reduce the number of employees sent from headquarters in Korea instead of cutting local staff,” it reported.
Currently, POSCO is operating 12 processing centers in China to provide steel sheets for its clients which include carmakers, technology companies and shipbuilding companies. These centers mostly produce materials for automobiles, except for one in Dalian whose clients are shipbuilders.
Some processing centers are likely to be assembled into the center in Chongqing, close to the plants of global automakers such as Hyundai, Ford, Volkswagen, GM and Suzuki, according to market experts.
Industry watchers said the restructuring appears not to be a response to the recession in the market but simply a means to improve organizational efficiency.
“The demand for automobile steel sheets is still high. POSCO, which currently produces and supplies 8 million tons of steel sheets annually, plans to raise the figure to 10 million tons down the road,” said Jun Seung-hoon, an analyst of KDB Daewoo Securities. “Considering the booming market, the integration appears simply to be to improve efficiency and save cost.”
POSCO’s spokesperson, however, denied the news report. He said: “Although the group is now moving to streamline the business, it is not true that we have set up a special team to integrate the processing centers in China.”
By Shin Ji-hye (shinjh@heraldcorp.com)