POSCO aims to quadruple operating profits by 2030

POSCO Group, South Korea’s No. 1 steelmaker, has set an ambitious goal of quadrupling its operating profits and doubling revenue by 2030 with a focus on steel products and rechargeable battery materials, as well as aerospace materials.

The drastic profit growth, if achieved, is expected to nearly triple the combined market capitalization of its subsidiaries, including POSCO Holdings Inc. and POSCO Future M Co., to 200 trillion won ($144 billion) by 2030 from the current 70 trillion won, POSCO Holdings said on Tuesday.

In a town hall meeting with 100 employees of POSCO units on Monday, POSCO Group Chairman and Chief Executive Chang In-hwa unveiled the goals, envisioning becoming the world's No. 1 materials supplier for both rechargeable batteries and next-generation industries.

The town hall meeting was hosted to celebrate the 100th day of Chang’s inauguration as the group chairman and to review the progress the group has made to cut costs and improve operational efficiency. As part of such efforts, it has been scaling back businesses where it is losing money, or sees no growth potential.  

STEEL

For its mainstay steel business, its cost-cutting and efficiency improvement efforts paid off, reducing costs and creating additional revenue by a combined 230 billion won since Chang took the helm of the group, POSCO said in a statement.

POSCO’s steel business is focused on India and North America.

Its emission reduction technology, dubbed hydrogen reduction ironmaking (HyREX) technology, is transforming the steel giant into an eco-friendly company, POSCO added. The technology, developed by POSCO, uses hydrogen instead of fossil fuels to make steel products.

BATTERY MATERIALS

To diversify the sources of raw materials and sales channels, POSCO has invested in salt lakes and mines containing lithium in Chile and Argentina, while collaborating with mining and resource companies in North America and Australia.

In developed markets, it concentrates on materials for ternary lithium batteries made of nickel-cobalt-manganese (NCM), nickel-cobalt-manganese-aluminum (NCMA) and nickel-cobalt-aluminum (NCA). In emerging markets, it focuses on lithium iron phosphate battery materials.

MATERIALS FOR NEW BUSINESSES

Materials for future mobility, aircraft and spacecraft will become POSCO's new growth driver. By 2030, it aims to generate more than 5 trillion won in sales from the materials for next-generation industries.

To build its presence in those segments, POSCO is pursuing mergers and acquisitions.

CORPORATE GOVERNANCE

To ensure independent and transparent management, POSCO launched the Governance Innovation Task Force team when Chang took over as chairman in April this year.

Achieving fair and transparent corporate governance is one of the seven key missions he promised in April to pursue during his term. 

POSCO is seeking to strengthen the independence of its board, including in selecting outside directors and evaluation of the company’s management. Chang also has pledged to introduce a system to foster a pool of CEO candidates.

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

Yeonhee Kim edited this article.