Under the terms of the pact, the Korean steel company will dispatch a group of engineers and administrators to Amurmetall for technical and marketing support in exchange for consulting fees. For the first year of the agreement, POSCO will administer a short-term program for such topics as cost saving and financial soundness management. Once the Russian company's management standing improves, the Korean company will begin a five-year program for market development, financial independence, and other topics.

 

After signing the agreement, POSCO chairman Chung said, "By leveraging our know-how and expertise in steel works management, we will do our best to lend support to Amurmetall in helping it get back on its feet. Beyond short-run management standing improvement, we want to make it a strong company capable of surviving in international competition."

 

Established in 1942, Amurmetall is the only electric-furnace steel mill in Khabarovsk, with an annual production capacity of 2.15 million tons. VEB took over the ownership of the steel maker after the outbreak of the global financial crisis in 2008. As the bank had little experience in running a steel mill, it had been looking for a steel company for management.