POSCO International to build motor core plants in Poland, Mexico

POSCO International Corp., the energy and trading unit of South Korea’s steel giant POSCO Holdings Inc., said on Monday it will build new traction motor core plants in Poland and Mexico to expand its presence in the global eco-friendly vehicle market.

The company approved the construction plans at its board meeting on Friday with the participation of newly appointed Chief Executive Lee Kye-in.

Lee, formerly POSCO International’s global business unit chief, was named to take the helm of the company during a recent POSCO Group executive reshuffle. He will officially take office upon approval at the company’s annual general meeting in March.

In Poland, the company will build a motor core manufacturing plant on a 100,000 square-meter plot of land in the southwestern city of Brzeg, close to electric vehicle production bases for major automakers in Germany, the Czech Republic, Slovakia and Hungary.

POSCO International will break ground on the factory in June with a plan to complete construction by May 2025. The plant will have an annual production capacity of 1.2 million units by 2030, it said.

Motor cores produced at the plant will also be supplied to Korea’s top two automakers, Hyundai Motor Co. and Kia Corp. for their EVs to be sold in Europe.

MEXICO PLANTS TARGETING NORTH AMERICAN MARKET

POSCO International’s new plant in Mexico will be built in Ramos Arizpe, a city in the Coahuila state.

The company is already operating a motor core plant built last October in the city.

The second plant, to be located near the first one, will break ground in May and be completed next March, the company said.

Once the second factory is up and running, POSCO International will have an annual production capacity of 2.5 million units in Mexico, it said.

The new plant will largely supply motor cores to Hyundai Motor’s US electric vehicle plant, Hyundai Motor Group Metaplant America LLC (HMGMA), in Georgia.

Last September, POSCO International won a 900 billion won ($676 million) deal to supply more than 3.5 million motor cores for Hyundai EVs.

GLOBAL PRODUCTION CLUSTER

With the construction of two new plants in Poland and Mexico, POSCO International will have production bases in five countries, including Korea, China and India.

The company aims to garner a global market share of at least 10% by producing 7 million motor cores a year by 2030.

POSCO International runs the EV motor core business through its affiliate POSCO Mobility Solution, which was spun off from the parent in 2020.

A traction motor core, called the second heart of an EV as it generates power for an electric motor, makes up about 40% of the expense of producing a motor. The motor accounts for about 15% of EV manufacturing costs, the second largest after batteries, which make up some 30%.

POSCO Mobility Solution is Korea's No. 1 motor core maker.

Write to Woo-Sub Kim at duter@hankyung.com


In-Soo Nam edited this article.