South Korea’s No. 1 steelmaker Posco has named former Posco Chemtech CEO Choi Jeong-woo as its ninth chairman, highlighting “With Posco” as its vision alongside possible restructuring, the company said Friday.
Choi was appointed the chief of the world’s fifth-largest steel company with 97.6 percent of votes from shareholders at a general meeting of stockholders on Friday morning.
“Posco needs to be armed with a new vision to leap forward in the next 100 years. Under the new vision ‘With Posco,’ we need to become a corporate citizen side by side with society,” Choi said during a press conference at Posco center in southern Seoul after the meeting.
Choi’s new vision encompasses “Business with Posco” to create greater value with partner firms, “Society with Posco” to improve society, and “People with Posco” to create a corporate culture based on credibility and creativity.
To accomplish these aims, Posco said it would further strengthen its steel business via world premium giga steel, while bolstering its non-steel business by developing new business opportunities.
As the first step to expanding Posco’s energy sector, Choi hinted at a possible merger of Posco Chemtech that produces secondary battery anode materials, and cathode material maker Posco ESM.
“I think there is a need to merge companies that make anode materials and cathode materials for synergy in terms of research and development, and marketing,” Choi said.
Posco will aim to generate 17 trillion won ($15.1 billion) in earnings in the secondary cell material business by 2030, it said during its second-quarter earnings conference call.
He added there are opportunities for Posco in the bio sector, which he described as a new growth engine “seed business”.
Choi viewed Posco’s search for new business opportunities so far as a failure, which he plans to turn around by scouting an outsider.
“Most workers at Posco think steel is the center (of the company). I’m thinking it would be better to hire a professional out of the company to create an enterprising and creative corporate culture,” Choi said.
Choi is Posco’s first chairman with a nonengineering background and the first non-Seoul National University graduate to lead the company in 20 years. The 61-year-old graduated from Pusan National University and joined Posco in 1983.
As an expert in finance strategy planning and corporate strategy development, Choi was the head of the Posco Value Management Office, the company’s de facto control tower, in 2015 and led the company’s four-year restructuring under former Chairman Kwon Oh-joon.
As a result of the overhaul, the number of Posco affiliates here was reduced to 38 companies from 71, and overseas affiliates to 124 from 181, the company said.
Choi was named president of Posco with Oh In-hwan in March 2017.
Based on his expertise in finance, Choi said he has a full understanding of how the company works, where money should be spent and the value of new technology.
“Although I am not a professional in steel, I see myself as an expert of the overall steel industry. Posco will transform into a strong and practical system,” Choi said.
Meanwhile, Posco’s earnings rose 7.6 percent on-year to 16.8 trillion won in the second quarter of this year, and its operating profit increased 27.9 percent to 1.2 trillion won, the company said.
Posco’s steel business accounted for 77.7 percent of its operating profit, and totaled 1 trillion won.
The nonsteel sector saw a 24.6 percent decline in operating profit to 293.3 billion won compared to the previous quarter.
By Kim Bo-gyung (email@example.com