POSCO to establish a holding company by October in China
South Korean steel maker giant POSCO declared that they have decided to establish POSCO-
China Holding Corp. by October this year for the purpose to organize its operations and fund
investments in
China as well as commencing new
investments in the country. The holding company will have an initial capital of $35 million, $31.2 million of which accounts for 10% of total investment of three major projects; consisting of a cold rolling mill in Benxi, a cold rolled
stainless mill in Qingdao and a processing center in Suzhou. By the way, to acquire gradually %10 of POSCO's holdings in its Chinese subsidiaries in Zhangjiagang, Shunde and Dalian is among holding company's plans.
POSCO also gave details about company's plan to construct a cold rolling joint venture with Benxi Iron and Steel Company where $23.2 million, i.e. 10% of the total capital will be invested by POSCO and balance by Benxi. This joint venture will provide cold rolled coil for the subsidiaries of POSCO in Zhangjiagang, Shunde and Dalian with a
production capacity of 1.8 million tons per year in order to be prepared for the Chinese high grade steel market which is growing pretty fast.
Construction is planned to start in September 2003 and be completed by December 2005.
Meanwhile according to POSCO's financial results released last week for the first half of this year, South Korean steelmaker has reached its highest profit ever with Won 1 trillion (around $847 million) increasing 184%, compared to same period a year ago and operating profit grew up by 157% to Won 1 trillion as company succeeded in effective cost management.