POSCO will invest 6.2 billion yuan (US$998 million) jointly with Chongqing Iron & Steel Co. to establish two joint ventures producing cold-rolled steel sheets and galvanized steel sheets.
A POSCO official said on August 10, "Recently we signed an agreement with Chongqing Iron & Steel to create two Chinese companies." POSCO will invest 10-25 percent in the cold-rolled steel unit and 51 percent in the galvanized steel unit. Both companies will be located in Chongqing for automotive manufacturers there.
Since the early 2000s, the Korean steel maker has focused on producing higher value-added automotive steel products. Its sales of automotive steel sheets will be increased to 9.5 million tons by 2017 from 8.3 million tons last year. China is the world's largest automobile market with an annual output of more than 20 million, for which POSCO puts its special marketing effort together with India.
Kwon Oh-joon, POSCO chairman, recently said in a briefing session, "Even though the global steel market is in doldrums, the demand for automotive steel products is strong, with the annual output of cars in China expected to reach 35 million sooner or later. POSCO has been one of the world's leaders in automotive steel for the past 15 years." The two companies signed a memorandum in September 2013 to build an integrated steel mill based on POSCO's proprietary "FINEX" technology in response to the growth of automobile industry in the Chongqing area.
