Hyundai Steel vies for position with new steelworks

Hyundai Steel vies for position with new steelworks

Hyundai Steel, the nation’s second-biggest steelmaker, launched a new integrated steelworks powered by eco-friendly technologies yesterday to meet growing demand for automobiles and construction.


The Hyundai Kia Automotive Group affiliate began work on the 6.23 trillion won ($5.54 billion) plant in Dangjin South Chungcheong Province in October 2006. A blast furnace, the first of the two planned for the plant, was fired up in January.

"Today we are at the site of the new beginning of Korea’s steel industry,” President Lee Myung-bak said at the event.

“Due to the unprecedented financial crisis, many companies held back investment, but Hyundai Steel went ahead with daring investment plans, making today possible.”

The president was among the 2,500 government and industry leaders including Roger Agnelli, chief executive of the Brazilian mining firm Vale, and Alberto Calderon, chief commercial officer of the Australian mining firm BHP Billiton attending the ceremony.

“The Dangjin integrated steelworks was built with the aim of becoming a ‘green steelworks’ equipped with world class eco-friendly facilities and technologies,” Hyundai Kia Automotive Group chairman Chung Mong-koo said at the ceremony.

The Dangjin plant is the world’s first to be equipped with enclosed storage for raw materials to prevent the spread of dust, which is one of the more problematic pollutants associated with steel mills, according to the company.

“With the completion of the plant, Hyundai Kia Automotive Group is able to complete the world’s first ‘resource circulating business structure’ that goes from molten iron to automobiles.”

Under the resource circulating business structure, steel produced at the Dangjin plant will be processed by Hyundai Hysco into cold-rolled products, which will then be used in Hyundai Motor Co. and Kia Motors Corp.’s vehicles.

The steel from scrapped vehicles will then be melted down at Hyundai Steel’s electric blast furnace and used to produce construction materials, which will be used by the group’s construction firm Amco.

The plant currently has an annual production capacity of 4 million metric tons, but the figure will be raised to 8 million tons following the completion of the second blast furnace in November. In addition, the company plans to add another 4 million ton capacity blast furnace to the Dangjin facility at a later date.

Pilot operations of the second blast furnace are scheduled for the final two months of the year, and full operation is set to begin in January 2011.

“Of the 8 million ton output, 6.5 million tons will be used for hot rolling with automobile plates being the main product. The rest will be used to produce thick plates, mainly ship plates,” executive vice president Oh Myung-suk said.

“We have completed developing 104 of the 120 hot-rolled products we plan to develop by 2012. The company will also develop exterior automobile plates by the end of the year.”

He added that the company currently has a 400-person research and development team including personnel from the group’s carmakers, and that the steelmaker is planning to expand research facilities.

The new plant also significantly increases Hyundai Steel’s production capacity, making it one of the world’s top 15 steelmakers in terms of production.

According to the World Steel Association, Hyundai Steel was the world’s 30th largest steelmaker in 2008 with an annual output of 9.9 million metric tons in that year.

Including the company’s 11.5 million ton production capacity from electric blast furnaces, the addition of the second blast furnace will push up Hyundai Steel’s annual production capacity to 19.5 million tons.

“The company is changing from a down stream process to an up stream process. The significant thing is that the company’s profit structure is changing,” said SK Securities Co. analyst Lee Won-jae.

“As you move up stream, the profit margin increases. An electric blast furnace provides between 5 percent and 10 percent profit margin, but what POSCO is doing allows 15 percent to 20 percent profit margins when conditions are good.”

However, Lee said that moving upstream in the steel industry is not without its risks.

“There are some investors who think that the new plant is risky because it is a venture into a new area and the market is concerned about raw material prices.” he said.

“For about 40 years, steel raw material prices were set annually, but now they will be decided in quarters. POSCO is likely to raise prices soon, but the concerns are whether the increase in costs can be reflected sufficiently in product prices and for Hyundai Steel the worries are amplified as the company is new to the market.”

Korea ranks 15th in green efforts among OECD members

Korea ranks 15th in green efforts among OECD members
　The nation’s effort to promote low-carbon and green growth ranked 15th among the members of the Organization for Economic Cooperation and Development, said a report released by a state-run think tank on Thursday.

　The Science and Technology Policy Institute said the findings are based on an evaluation system which calculates the resolve of the government and its systematic support. It also considers setting up of a low carbon paradigm that is accepted by the public.

　The review system, which broadly examines multiple data -- such as policy resolve, a support process and the results of green growth endeavors -- said Korea ranked 14th out of a total of 30 OECD member nations in the input category.

　Germany recorded the highest in this field, followed by Sweden and Australia, it said.

　Involving support – covering the benefits for firms striving for eco-friendly growth -- Seoul was 18th. The country was ranked 17th in terms of output.

　Denmark ranked first in the process evaluation scheme, with Luxembourg finishing at the top on results attained by green growth policies.

　The institute, affiliated with the education and science ministry, said Switzerland scored best among the 30 OECD member countries in the overall evaluation scheme, with Sweden and Denmark making the top five. Germany and France ranked fourth and fifth, respectively. Japan came in eighth and the United States finished 26th.

Korea, India to Upgrade Strategic Partnership(4)

Korea, India to Upgrade Strategic Partnership(4)

Cooperation in International Arena


• Recognized the legitimate and long-term interests of both countries in the peace and prosperity of the Asia-Pacific region, and the importance of developing an open and inclusive economic regional architecture that is based on the principles of mutual benefit and shared opportunity.

In this context, they affirmed that both the ROK and India have a significant role to play in such a regional architecture and agreed to maintain regular consultations and close coordination in the EAS, ARF, ACD and ASEM processes.

• Agreed to work for comprehensive United Nations reform, including Security Council expansion, with a view to enhancing its representativeness and, consequently, its effectiveness, authority and efficiency, as well as its capacity to address various challenges facing the international community.

• Reiterated their commitment to the eradication of terrorism in all its forms and manifestations, and agreed to enhance cooperation in this area, including through information sharing.

• Reiterated their common commitment on nuclear disarmament and the non-proliferation of weapons of mass destruction and their means of delivery.

• Valued the G-20 as the premier forum for international economic cooperation and commended its timely and strong policy response during the economic crisis. They welcomed the Framework for Strong, Sustainable and Balanced Growth launched at Pittsburgh and looked forward to its implementation.

• Welcomed the Copenhagen Accord. They reaffirmed their determination to work closely together in the negotiations both under the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol toward an Agreed Outcome to be adopted at the 16th Session of the Conference of the Parties.

Korea, India to Upgrade Strategic Partnership(3)

Korea, India to Upgrade Strategic Partnership(3)

Science and Technology Cooperation


• Recognized the importance of strengthening cooperation in the field of science & technology. They welcomed the outcome of the Meeting of the Joint Committee on Science & Technology held in Seoul in December 2009 and endorsed the decision of the two sides to consider creating a dedicated fund of $10 million (with a contribution of $5 million by each side) to promote joint research.

• Agreed to strengthen cooperation in the information technology sector including through the expansion of mutual investment and personnel exchanges.

• Welcomed the signing of the MOU on cooperation in the peaceful uses of outer space between the Indian Space Research Organisation (ISRO) and the Korea Aerospace Research Institute (KARI) and expressed confidence that the MOU will facilitate strong cooperation between the two countries in this important sector.

• Shared the view that nuclear energy can play an important role as a safe, sustainable and non-polluting source of energy. They agreed to facilitate development of a framework for bilateral civil nuclear cooperation.

Social and Cultural Cooperation

• Agreed to designate the year 2011 as the Year of Korea in India and the Year of India in the ROK.

• The Indian side also welcomed the ROK initiative to open a Korean Cultural Centre in New Delhi in 2011, which will go a long way in further promoting awareness about Korean life and culture in India.

Korea, India to Upgrade Strategic Partnership(2)

Korea, India to Upgrade Strategic Partnership(2)
Economic and Trade Cooperation


• Shared the view that the CEPA will contribute to enhancing trade and investment flows between the two countries. They also reaffirmed their commitment to ensure the smooth implementation of the CEPA. It was agreed that the first meeting of the Joint Committee headed by trade ministers of the two countries or their representatives will be held in the second half of 2010 to review the status of the implementation of the CEPA.

• Agreed to set a target of $ 30 billion for bilateral trade to be achieved by 2014. They also agreed to strengthen cooperation in trade and investment, SMEs, SPS and Standards related measures, trade remedies and IPR issues.

• Agreed to enhance cooperation in the financial sector through bilateral consultations on macroeconomic policy, budget, taxation, finance, and public sector reform.

• Agreed to enhance cooperation and support at governmental level to nurture a favorable environment, including through mutual agreement on a revised Double Taxation Avoidance Convention (DTAC) before the end of 2010.

The Indian side hoped that investment from the ROK into India will expand, including in the infrastructure and manufacturing sectors.

In this context, referring to the project to set up a Korean industrial complex and technology zone in the State of Gujarat, the two leaders noted its potential to further accelerate the bilateral trade and investment linkages.

• Recognized the need to expedite the implementation of the POSCO project in the State of Orissa. The Korean side hoped that Indian investment in the ROK will also expand. It was agreed that the fourth meeting of the ROK-India Joint Committee on Investment Promotion will be held in New Delhi in 2010.

• Agreed to explore the possibility of enhancing air connectivity between the two countries. They also agreed to consider the early conclusion of a mutually beneficial Maritime Shipping Agreement.

Korea, India to Upgrade Strategic Partnership(1)

Korea, India to Upgrade Strategic Partnership(1)


The following are excerpts from a joint statement issued following a summit between President Lee Myung-bak and Indian Prime Minister Manmohan Singh in New Delhi, Monday

• Considering that the ROK-India partnership is a factor for peace and stability in Asia as well as between the two countries, the two leaders decided to enhance bilateral relations to a Strategic Partnership.

Political and Security Cooperation

• Agreed to maintain regular contacts, including on the margins of international meetings and conferences.

• Reiterated the importance of the ROK-India Joint Commission co-chaired by the foreign ministers of the two countries and acknowledged the necessity of holding the Joint Commission on an annual basis.

• Agreed that the Foreign Policy & Security Dialogue will be raised to the level of vice foreign minister, Ministry of Foreign Affairs and Trade (MOFAT) of the ROK, and Secretary (East), Ministry of External Affairs (MEA) of India.

• Agreed to strengthen dialogue and exchanges in the area of defense through regular high-level military exchanges. They also agreed to explore the possibilities of joint venture cooperation in research & development, and manufacturing of military equipment including through transfer of technology and co-production.
• Agreed on the need for greater cooperation between the navies and coast guards in areas pertaining to the safety and security of international maritime traffic

Korea-India CEPA — New Opportunity

Korea-India CEPA — New Opportunity

As the Comprehensive Economic Partnership Agreement (CEPA) between Korea and India finally came into effect last January, improvements are expected not only in the economies but also in mutual trades in terms of quality and quantity.



CEPA will be India's second ecoomic agreement and seventh for Korea, and its strategic vision and goal will be the same for both countries. Through the effects of CEPA, Korea wants to grow as the economic and logistic hub in East Asia, and India wants to diversify its trade partners from traditional Western countries to Asian countries. While trade between Korea and India has continously improved, there was a problem of imbalance. The Korean imports from India traditionally consisted of low value added items slowly shifting to industrial products while Korea's exports to India were high value added products - brands like LG, Samsung and Hyundai have a huge presence in India.


Witthis new agreement, which took three years and six months of negotiating, Korea has abolished the import tariff of 93% on Indian imports and India has done the same on 75% of Korean imports. Besides, the agreement would increase the interactive trade account as it includes investment in various sectors like goods, services and even interllectual property. It will thus have a ripple effect in diverse fields.


Korea can now expect increased diversity and investment effects not only for large companies, but also for small and medium sized ones. Famous economic experts are of the opinion that the lack of a strong presence of small and medium sized firms is one of the weak points in the Korean economy. The abolition of tariffs between the two countries will help these companies advance into the global market through the huge Indian market consisting of 1.2 billion people.


SungHan LEE, a vice minister of the Ministry of Strategy and Finance, recently said, ``With CEPA, small Korean exporters will have price competitiveness in the Indian market.'' For example, in the case of automobile parts, the tariff will be cut down from the current 12.5 percent to between 1 and 5 percent in 8 years, and export tariffs on steel will reduce by 50 percent in 10 years, while the general tariff on steel will be phased out in 5 to 8 years. The effect will be an increase in exports of raw industrial materials to Korea.


According to the KIEP, due to the CEPA agreement, it is expected that the trade account between the two countries will increase by 3.3 billion dollars, and Korea's GDP will increase by approximately 1.3 trillion won.


As these facts show, CEPA, which is now in its initial stage, is expected to improve the relations between the two countries and bring unprecedented economic growth. As the two countries welcome the new agreement, farsighted policies and investment based on prudent decisions are essential. It will contribute to the stable industrial structure that will help small and medium companies with high-end technology and open management expand into the gloabl market.


With CEPA, Korea and India will break the existing trade barrier and not only will they open up the global market for small and medium companies with strong technology and transparnet business management, they will also form a safe industrial structure. The countries will develop their industries together. Ten years from now, I expect to see not only the expansion of their bilaterial trade to a greater height, but also a solid friendship like no other in the world.