Posco, South Korea's largest steelmaker, plans to strengthen its presence in Southeast Asia's growing automotive industry by spending US$600 million to build new galvanising plants in Thailand and Indonesia.
Kim Sun-won, president of the Bangkok-based Posco-South Asia Co Ltd, said Posco is committing $300 million for each plant.
In Thailand, the company recently secured a site near Rayong, the centre of Thailand's automotive industry, for a continuous galvanising line (CGL) for automotive sheets, with an annual capacity of 400,000 tonnes.
It plans to start an environmental impact assessment next month, with the goal of a fully operational plant by the end of 2015.
The focus will be on domestic sales with some exports.
Thailand rolled out 2.45 million vehicles last year, a 68% leap over 2011.
Of these, 1.44 million vehicles sold domestically, surpassing the South Korean market (1.41 million) for the first time.
Exports topped 1 million, coming in at 1.01 million vehicles.
"With this investment, we expect to create 400 jobs in the area, directly and indirectly," said Mr Kim.
Because the auto industry in Asean is so robust, Posco expects to achieve sustainable growth here.
The integrated steel mill in Indonesia will have an annual capacity of 3 million tonnes and is scheduled to be completed by the end of this year.
Annual CGL capacity in Indonesia will be 400,000 tonnes.
This project is also aimed at serving domestic demand, while taking a multipronged approach to capturing Southeast Asia's automotive sheet market, said Mr Kim.
As the world's largest producer of automotive sheets, Posco supplied 7.3 million tonnes to global car makers last year including General Motors, Ford, Volkswagen and Toyota.
Since the beginning of 1997, Posco has steadily increased its investment in Thailand, opening a distribution centre near Bangkok.
The company also acquired the SET-listed Thainox, the country's largest maker of stainless steel, in 2011 from businessman-turned-politician Prayudh Mahagitsiri.
Renamed Posco-Thainox Plc and 94% owned by the South Korean firm, it produces 240,000 tonnes, with 30% of output for export.
Posco-South Asia's regional headquarters was opened in Bangkok in 2010 in a bid to expand the firm's presence in Southeast Asia.
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Article source: http://www.thethailandlinks.com/2013/03/25/posco-girds-for-600m-outlay/
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