POSCO new chief vows to keep fostering battery materials business

POSCO Holdings Inc.'s new Chairman Chang In-hwa on Thursday pledged to keep fostering its electric vehicle battery materials business, the group’s key next-generation growth engine, while improving the competitiveness of its core steel business.

“The steel business is POSCO’s base and the secondary battery materials business is the other growth drive of the group,” Chang told reporters after taking office as the chairman of the parent of the world’s No. 7 steelmaker POSCO. “I vowed to succeed in the battery materials business.”

“Both the steel and secondary battery materials businesses must become the world’s best together, I think,” stressed Chang, a former president of POSCO, South Korea’s top steelmaker.

Last month, the 69-year-old steel guru said he would concentrate on improving POSCO's steel business dented by its Chinese and Japanese rivals, stirring expectations that the group may slow investment in the battery material business.

Chang defied such predictions, however, saying the group,  subsidiaries of which include battery material supplier POSCO Future M Co. plans to keep investing in the sector.

“POSCO has been working on the secondary battery business for more than a decade, not for just one or two years,” he stressed. “The group has made tremendous efforts for new businesses. The secondary battery materials business is the best among them.”

“I don’t think we should stop investing because the market is bad,” he said. “We plan to make appropriate investments in a timely manner. We will never be passive (in investing).”

TOUGHER, BUT BETTER

Chang expected the battery materials business to suffer a downturn longer than the steel business slowdown. The global cell industry and materials sector have been hurt by the sluggish EV demand.

The chairman said the battery materials sector’s weakness could provide investment opportunities, however.

“The steel sector’s dip is unlikely to last long, while the secondary battery industry’s dip is expected to persist,” he said.

“But the crisis in both businesses is an opportunity, I think. We will thoroughly prepare, believing that the reward will be much greater when the markets revive if we enhance competitiveness by cutting costs during the crisis,” he said.

POSCO may normalize secondary battery-related factories recently completed during the downturn, he said. It usually takes a long time to ramp up the manufacturing yields of new plants.

The group last year completed a lithium hydroxide plant and a secondary battery recycling factory in South Korea.

GO GREEN

Chang plans to speed up efforts to replace energy for steel production with eco-friendly ones to enhance the group’s environmental, social and governance (ESG) management.

“It is not desirable just to stay still and wait for a supply of hydrogen, which is important for the green transition,” he said.

“We will use it as a new business opportunity with a plan to increase research and development investments for the green transition.”

Chang joined POSCO in 1988 as a researcher at the Research Institute of Industrial Science & Technology (RIST) under the company-sponsored advanced research college, Pohang University of Science and Technology (POSTECH).

He has mainly worked in the company's R&D divisions, including his role as the head of the POSCO E&C research team, senior RIST researcher, POSCO technology investment chief and president of POSCO.

Write to Sang Hoon Sung at uphoon@hankyung.com
 

Jongwoo Cheon edited this article.