South Korea: POSCO Signs Strategic MOU with GE

POSCO signed a strategic alliance MOU with GE on 31 May to cooperate in the energy and infrastructure fields.

POSCO and GE selected 5 fields, including steel material supply and equipment production in the energy field, joint advance in the private power generation business, joint development of infrastructure business in emerging markets, ICT (Information & Communication Technology), and business management, for detailed businesses.

Especially, through the cooperation, POSCO will preferentially develop steel and usage technologies for energy plants to create new demand and supply competitive replacement material to lead the steel material market for energy plants. Also, the company expects to gain engineering capabilities in the energy plant field through equipment production.

With the existing steel material market for automobiles, home electronics, and construction almost fully saturated, POSCO has been focusing on the field of steel materials for energy plants where new demand creation is expected. Among those, the marine plant field is especially requiring a higher level of technology in steel material development due to the rigor application environment such as the polar regions, deep sea, and high corrosion.

POSCO, with joint development with GE, will not only develop steel materials for energy plants, but also provide total solutions such as usage technology to clients, and contribute to GE`s cost reduction if developing and providing alloy steel and hot forged bars as alternative materials. Through the MOU, both companies expect to create synergy effect as leading materials and equipment companies in accordance with the growth of the energy field.

Also through this MOU, both companies will proactively cooperate with each other in the business of emerging market infrastructure and private power generation to reduce mutual risk and expand business opportunities. In the ICT field, the two will drive technology cooperation in nuclear power and steam-power generation control system, share business management techniques such as HR, corporate culture, and training, and discuss various exchanges such as having POSCO employees participate in Crotonville training. In addition, the strategic alliance scope will be expanded to R&D, new business and CSR fields.

Meanwhile, POSCO has been carrying out proactive management activities such as creating new demand and introducing new management systems through alliances with global companies that hold unparalleled competitiveness in each field. In addition to this, the company expects to preoccupy the steel material market for energy plants which is expected to have an annual demand of 80 million ton and continue to drive competitive strategies to overcome the current steel market situation where concerns for oversupply exist.

As a part of these strategic management activities, POSCO entered into cooperation with Siemens this May for steel material and new material supply in the renewable energy field including marine wind power generation, and a long-term supply agreement with Shell on last September to provide steel plates for marine structures.

Also on last November, the company entered into cooperation with Google for a virtual steelworks establishment, and introduction of a global logistics monitoring system and safety disaster prevention system, driving change to become a smart steel company.

[mappress]

Offshore WIND staff, June 11, 2012; Image: POSCO