Korea’s largest steelmaker POSCO is drawing up a plan in detail to integrate processing centers in China as part of its restructuring measures to save the cost and improve organizational efficiency, local reports said Thursday.

According to the reports, the steelmaker is considering integrating processing centers of stainless and steel sheets in China, such as POSCO-CZPC and POSCO-CQPC. It had previously decided to put the company’s overseas subsidiary Qingdao Pohang Stainless Steel up for sale. 


The processing centers process the steel sheets in various sizes and forms based on demand from buyers, including carmakers and shipbuilding companies.

POSCO is reportedly mulling cutting down the 13 processing centers in China to two or three, with an aim to integrate up to three centers by the end of this year.

Among the concerned processing centers, those for stainless, thick plates and graters for household utensils are at the top of the list, as they have faced business difficulties due mainly to oversupply issue in China.

According to China’s nationwide industrial organization China Special Steel Enterprise Association, the stainless production in China in the first quarter reached 5.3 million tons, jumping by 6.5 percent on-year. This is also the highest among first quarter figures in history.

Chances of restructuring POSCO-CDPPC, the processing center for thick plate, are also being speculated about. The concerned processing center in Dalian, which has provided 400,000 tons of thick plates a year, has faced hurdles to meet enough demand as shipbuilding companies around the center struggle with business challenges.

Earlier this year, POSCO chairman Kwon Oh-joon said that the company would integrate or sell 35 subsidiaries here and abroad to cut costs and boost operating efficiency.

By Lee Hyun-jeong (rene@heraldcorp.com)