Korean steel maker Posco set for revamp
Seoul, March 15, 2014
Posco's new chief executive said the South Korean steelmaker will restructure non-steel businesses and not make any major investment in increasing steelmaking capacity, in a marked break from the strategy of his predecessor.
Kwon Oh-joon will sell non-core assets and list affiliates after a wave of investment and acquisitions left the world's fifth-biggest steelmaker with high debt and credit-rating downgrades.
Posco posted its third straight year of profit decline last year as it continued to grapple with steel oversupply and reduced customer demand,
"Posco's biggest task is to improve its financial structure," Kwon said at a news briefing after starting a three-year term as chief executive and chairman. "First of all, we have to improve our core competitiveness in steel and generate profit."
To that end, Posco will restructure its materials and energy businesses, and focus on lithium, nickel, fuel cells and clean coal, Kwon said.
Posco will also seek mergers and acquisitions in non-steel businesses such as clean coal, and "take the bold step of shedding non-core" operations, he said at an annual meeting of shareholders before the briefing.-Reuters