CONTENTS1. Introduction Of posco

2. History of posco

3. Subsidiaries and competitors of posco

4. Posco in india

5. 1st of posco in india

6. A long wait for posco

7. Objective

8. Mission and vision of posco

9. Corporative overview

10. First phase of Orissa steel plant

11. significance

Introduction

POSCO, the world's fourth largest steel producer and one of the most competitive steel companies (World Steel Dynamics 2006) has contributed immensely to the rapid socio-economic development of South Korea. It started out 38 years ago with empty fields and rural fishing villages, to create today’s phenomenal steelworks.

Once crushed by Japanese colonial rule, Korea began its journey towards infrastructure development and modernization in the 1960s. The need for steel led to the establishment of POSCO at Pohang in 1968, and the steel industry saw its birth in the country. Its visionary leaders and determined employees took on challenges of mythical proportions in their quest to build POSCO as a global steel maker. POSCO’s meteoric growth was paralleled by the development of Korea, as a globally competitive nation. Now firmly established as a leader in the global steel industry, POSCO is a respected industry innovator, with production bases and sales foothold across the globe.

The implementation of sustainable and efficient facilities and the increase in productivity of crude steel took POSCO to the zenith of the world's steel industry in 1998.

The year 1999 was witness to a total revamping of the company's overall processes in procurement, production, sales and the construction of an integrated digital system. POSCO was privatized in 2000 and since 2004 has been evaluated as a top

global company with corporate transparency and a sound financial structure.

TypePublic (NYSE: PKX, LSE: PIDD, TYO: 5412, KRX: 005490)

Industry SteelFounded 1968

Headquarters Pohang, Republic of Korea

Key people Park Tae-Joon,Founder and Honorary ChairmanChung Joon-Yang,Chief Executive OfficerChoi Jong-Tae,Chief Financial & Planning OfficerPark Han-Yong,Chief Staff OfficerOh Chang-Kwan,Head of Stainless Steel Business DivisionKim Jin-Il,Head of Carbon Steel Business Division

Cho Noi-Ha,Chief Technology OfficerYoon Yong-Won,Head of Growth and Investment DivisionPark Ki-Hong,Chief Risk Management OfficerShin Jung-Suk,Chief Marketing Officer

ProductsHot Rolled Steel, Steel Plate, Wire Rod, Cold Rolled Steel, Electrical Steel, Stainless Steel

Revenue36.9 trillion Korean Won

(2009)

Operating income3.87 trillion Korean Won

(2009)

Net income3.24 trillion Korean Won

(2009)Employees 29,648 (2009)Website http://www.posco.com

history

1968–1971In the 1960s, South Korean President Park Chung-hee's administration concluded that self-sufficiency in steel and the construction of an integrated steelworks were essential to economic development. Since South Korea had not possessed a modern steel plant prior to 1968, many foreign and domestic businesses were skeptical of Seoul's decision to invest so heavily in developing its own industry. Despite the skepticism, under founder Park Tae-Joon's lead, POSCO was established as a joint venture between the Korean Government and TaeguTec (then Korea Tungsten Company). It began production in 1972, just four years after the company's inauguration in April 1968 with thirty-nine employees.

Japan provided the money for the construction of the initial plant, following an agreement made at the Third South Korea-Japan Ministerial Meeting in 1969. Financing included US$73.7 million in government grants and loans, US$50 million in credit from the Japan Export-Import Bank, and technical assistance from Nippon Steel and other corporations. This cooperation

was one consequence of the normalization of relations with Japan in 1965 and reflected the view of the government of Japan as noted in the Nixon-Sato communique of November 21, 1969, that "the national security of the Republic of Korea is essential to the security of Japan."

1972–1992POSCO first began to sell plate products in 1972 and focused its sales policies on the domestic market to improve steel self-sufficiency at home. It made special efforts to supply quality iron and steel to related domestic companies at below export price to strengthen their international competitiveness.

POSCO produced 6.2 million tons of raw steel in 1980, recording a 13% increase over the previous year, and was one of the few exceptions when almost all areas of the Korean economy were in economic depression. Domestic industries absorbed POSCO's major products such as automobile and home appliance manufacturers consuming hot rolled products, shipbuilding and construction and engineering companies consuming medium plates, and electric motor and transformer manufacturers consuming electrical sheets. Some over-produced products were exported to foreign countries but the significant import of sections for construction left

Korea as a net importer. Globally, POSCO was already the most efficient steel producer in certain products.

By the late 1980s POSCO's growth had been immense. It was the fifth biggest steel company in the world, with an annual production approaching 12 million tons worth 3 trillion won. POSCO's continued to expand productivity and size at a time when the steel industries of the United States and Japan were declining. POSCO completed its second-phase mill at Gwangyang in August 1988. A third-phase mill completed in 1992 further increased crude steel production to a total output of approximately 17.2 million tons a year. In terms of productivity, POSCO was the world's best steel manufacturer throughout the late 1980s and also was at the top in terms of facilities.

Pohang, previously a fishing port whose major industry was processing fish and marine products, became a major industrial center with almost 520,000 people. In addition to the huge integrated steel mill, Pohang became an industrial complex housing companies that manufacture finished steel products of raw materials provided.

1992–1997

Changes in managerial systems and organizational structure accelerated in 1993 when POSCO's president and founder, Park Tae-Joon, who had wielded absolute managerial authority for more than 25 years, resigned.

These changes were not without controversy however. Park Tae-Joon was ousted under the Kim Young-sam government for alleged slush fund building and money laundering, which was later proven to be false, and went into "voluntary exile" in Japan. Most of the top management under him at the time were also fired. After the inauguration of the Kim Dae-Jung government and Park's rehabilitation and climb to power, most of these former managers were returned to their previous posts at the state owned steel maker. Then POSCO chairman Ryu Sang-bu and president Lee Ku-taek, and POSCO Development chairman Park Doo-pyo and managing director Cho Yong-kyong, all received support from Park who later went on to become the Prime Minister of Korea.

With the change in leadership—from Park Tae-Joon to Ryu-Sang Bu, POSCO increased decentralization and diversification. POSCO's management emphasized greater flexibility, autonomy, and consensual decision-making processes. The chairman also moved to devolve more autonomy to the profit centres and changing from a strictly hierarchical organizational structure to one based on teams.

In July 1994, POSCO created two subsidiary companies, POSTEEL and POSTRADE. POSTEEL is the domestic sales and service arm of the company, while POSTRADE handles international trading of POSCO products. Both subsidiaries commenced full operation in September 1994, with all international POSCO affiliates transferred to POSTRADE by the end of that year. The landmark Posteel Tower on Tehran Street, in Seoul's Gangnam district (not to be confused with the POSCO Center, also on Tehran Street) was completed in 2003.

1997–2000In 1997, Seoul announced that it was going to transform POSCO into a private company in line with the government's new policy of privatizing government-owned corporations. The government planned to retain a majority share of the stock;

initial reports in the South Korean press in 1998 indicated that the sale of public shares was going slower than anticipated. However, the administration led by Kim Young Sam changed the initial policy direction of privatization of POSCO and decided not to sell government-owned stock to keep it as a government investment enterprise.

But, the Kim Dae Jung administration following the Kim Young Sam administration listed privatization of public enterprise as a high priority policy in economic policy agenda to implement mainly because of outbreak of the economic crisis. The new administration decided to privatize POSCO and by 1998, the South Korean government had reduced its ownership of shares in POSCO to less than 20%, and more than 50% of the shares in POSCO were in the hands of foreign investors. In 2000, full privatization of POSCO was completed.

2001–presentAs part of the privatization process, new Chairman Lee Ku-Taek began efforts to introduce a professional management and governance system of global standards for POSCO. Under the new governance system, management made accountability to shareholders a priority. POSCO also introduced

a new performance-based evaluation and compensation system. Throughout most of its privatization drive, POSCO increased its revenue and business profit. Thanks to robust demand at home and in China, POSCO recorded the largest profits in the global steel industry in 2004. Net earnings from POSCO's array of steel products - used in everything from screws to skyscrapers - shot up 80% to $1.66 billion in 2004 from the previous year.

With increasing global competition, POSCO looked to China and India for new opportunities. South Korean wages were too high to support a whole range of activities and POSCO looked elsewhere for new projects while keeping the areas where they have a comparative advantage in South Korea. By 2006, POSCO had 26 subsidiaries and invested over $2.4 billion in fresh investment on mainland China, especially in galvanized and stainless steel to supply global auto and appliance makers that have opened plants there. In 2006, POSCO started operating the Zhangjiagang Pohang Stainless Steel(ZPSS) steel mill capable of producing 600,000 tons of stainless steel and hot-rolled products annually in China’s Jiangsu Province. As a result, POSCO became the

first foreign firm operating an integrated stainless steel mill in China, handling the entire production process from smelting iron ore to finished products, including the cold rolled stainless plant it already operates.

In June 2005, POSCO signed a memorandum of understanding with the State of Orissa in India. Under the agreement, POSCO plans to invest US$12 billion to construct a plant with four blast furnaces, an electricity plant, housing, and an annual production capacity of 12 million tons of steel, which is slated to start production in 2010. The project, which would start with a 3 million tonne capacity initially, would fetch revenue for the government to the tune of Rs 700 crore to Rs 800 crore (Rs 7-8 billion) annually. It would also provide direct employment to 13,000 people and ensure indirect employment for another 35,000. The Orissa State government also promised to provide a total of 600 million tons of iron sources, and will allow POSCO to use iron ore from these sources over the next 30 years. If the project goes ahead, it will be the single largest foreign direct investment in India as well as being the world's biggest greenfield steel plant ever.

However, from 2005 till date (as of August 7, 2010), the India project has not been able to proceed due to strong opposition from the local residents in the area proposed to be given for the steel plant. There have been allegations that the federal and State governments have been illegally trying to take lands and forests for the project, in violation of the Forest Rights Act.[4] There have also been claims that the project will only benefit the company while displacing more people than it employs, damaging the environment and taking India's mineral resources at a very low price.

POSCO have pursued investment opportunities in other developing countries such as Vietnam and Mexico. It was announced in August 2006 that POSCO will build a large-scale steel mill in southern Vietnam. POSCO plans to build the US$1 billion plant in two phases for hot-rolled and cold-rolled products by 2012. When completed, the mill is expected to produce three-million tons of steel products annually. Posco also plans to build a $250 million plant in the city of Altamira, Mexico, to produce 400,000 tons of galvanized steel sheet a year for automakers . The venture will be Posco's first wholly owned steel-plate plant in North

America. Posco plans to begin construction in early 2008, and start operations in 2009, producing galvanized and galvannealed steel.

On June 30, 2006, POSCO completed the construction of its sixth continuous galvanizing line (CGL) at its Gwangyang mill in the South Jeolla Province. With this new addition, POSCO becomes the no. 2 producer of sheet-steel just behind ArcelorMittal.[6]

In early 2007, Warren Buffett's Berkshire Hathaway purchased a 4% stake in POSCO.[7]

ntegrated Steelworks 

Location: Jagatsinghpur District of Orissa (10 km south of Paradip Port) 

Plant Capacity: The 12 MTPA integrated steelworks will be completed in three phases of 4 MTPA each. In

Phase I, hot rolled coil (2.5MT) and slab (1.5 MT) will be produced. The construction for Phase I is scheduled to be completed by 2011~12. 

Proposed Technology:FINEX, Mini Flat Mill - innovative and environment-friendly technologies.

Posco head office

POSCO's Headquarters, along with the POSCO Center, form the 'brain' of the company, overseeing major tasks, such as the management, planning, and finances of the steelworks at Pohang and Gwangyang. The construction of POSCO headquarters at 1 Goedong-dong, Nam-gu, Pohang, was completed on April 1, 1987, and has since become a structure that symbolizes the entire company.

POSCO CenterWinner of the 1995 Seoul Architectural Award for its progressive combination of modern design and eco-friendly engineering, POSCO Center is regarded as Korea's first state-of-the-art intelligent building. This landmark in the heart of southern Seoul's Teheran Valley high-tech

venture corridor also hosts a wide variety of free cultural programs, events, and exhibitions throughout the year.

Subsidiaries

POSCON POSBRO - A WiMAX/WiBro Mobile Internet

terminal manufacturer.

POSDATA - An IT solutions provider

POSCO Engineering & Construction

POSMEC

Competitors ArcelorMittal Nippon Steel

JFE Group

Nucor Corporation

Tata Steel

Bhushan Steel

Arcelor S.A.

Bechtel Group, Inc.; Corus Group plc

Fluor Corporation

Kawasaki Steel Corporation

Kobe Steel, Ltd.

Nippon Steel Corporation

Shanghai Baosteel Group Corporation

Toyota Tsusho Corporation.

Posco in indiaPOSCO-India Private Limited is a subsidiary of POSCO, the world’s fourth largest steel producer and one of the most competitive steel companies in the world (World Steel Dynamics 2006). POSCO-India’s proposed investment is the highest ever Foreign Direct Investment in India. The making of this world class steelworks with 12 million tons per annum will not only provide extensive value addition to the mineral wealth of Orissa but also take the state and nation to the zenith of global steel industry.

The mega integrated steel plant of POSCO-India in Orissa will lead to significant growth and investment in the country. Owing to the unique nature of the steel industry, which requires large equipment facilities, the project is envisaged keeping in mind sustained advancement over decades.

The project as a foundation to industrialization and growth in the state will create enormous opportunities for developing ancillary and down-stream industries. It will be a true locomotive for

futuristic growth and innovations.

In India, the thriving steel industry is a significant indicator of the rapid growth of the Indian economy. POSCO-India with an investment of US$12 billion (Rs 51,000 crore) and 12 MTPA fully integrated steel plant in Orissa, will leverage India’s resources and use an eco-friendly, state-of-the-art FINEX technology to help make its mark in the global steel arena.

POSCO-India desires to nourish hope and dreams for the new generation who will grow together with the development in this region. Be part of this exciting venture by contributing to the progress of India.

POSCO CEO Ku-Taek Lee took the final decision for the POSCO India Project. He envisioned a grand project for a giant steelworks with unlimited possibilities. Many factors were involved in this grand scheme; capital strength of POSCO, resources of Orissa, world class technological strength of POSCO and the potential of the Indian people, along with a meteoric investment of USD 12 billion.

The Government of Orissa and POSCO had a series of discussions spanning over a year, and eventually chose a site near Paradip, Orissa as the place to build the steelworks. Interestingly, the topographic features like the soil and vegetation of Pohang (Korea) and Paradip (Orissa) are very comparable. The Pohang project was successfully able to rehabilitate 67,000 residents from the project site; this tremendous experience will be replicated in Orissa as well. The site near Paradip is sandy like Pohang, Korea. It also has stretches of forest like Pohang; the latest estimate says that about 2,000 people of 400 households have to be relocated from the site for the Orissa project whereas about 67,000 residents were rehabilitated for the project site in Pohang.

In 2004, the final decision for POSCO's India Project was taken and both governments confirmed it on the 30th anniversary of the establishment of amity between India and Korea.

1st step of posco in india

POSCO signed a Memorandum of Understanding (MoU) with the Government of Orissa in June 2005, to set up a 12 MTPA green field steel plant near Paradip, Jagatsinghpur District, Orissa, with an estimated investment of USD 12 billion. The company will build a 4 million-ton per annum capacity steel plant in Orissa, during the first phase of its project by 2011~12, and expand the final production volume to 12 million tons per annum. POSCO-India Pvt. Ltd. was incorporated on 25th August 2005 with the Registrar of Companies, Orissa, under the Companies Act 1956.

A long wait for PoscoJan 2009Govt. of Orissa recommends PL for Khandadhar mines to POSCO-India.

Nov 2008Ac.313 non forest govt. land leased to POSCO-India.

Aug 2008Forest Diversion Clearance by Supreme Court on 8th Aug.

Feb 2008Field enquiry along with boundary demarcation by GoO at POSCO-India plant site area.

Jan 2008Transit camp constructed for displaced families.

Oct 2007Ac. 193 of non forest Govt. land was leased to POSCO-India.

Jul 2007 Environmental Clearance for 4MTPA steel plant

and captive power plant (400 MW) obtained.

May 2007Union Ministry of Environment & Forest approves construction of captive port proposal.

Apr 2007 Public Hearing for EIA clearance for 4MT steel Plant construction & Captive port at Jatadhar.

Mar 2007 Empowered Group of Ministers approves SEZ status.

Dec 2006Govt. of Orissa recommends GoI to sanction PL to POSCO-India for Khandadhar.

Oct 2006  MoU with RVNL for Railway SPV from Haridaspur-Paradip.

Sep 2006Govt. of India gives in-principle approval for SEZ. 

Aug 2006Govt. of Orissa recommends for CRZ & EIA Clearances for the port.

Aug 2006 Kujang R&R office opened. 

Aug 2006 Government of Orissa recommended POSCO-India’s SEZ Proposal to the Government of India. 

Jun 2006 1,135 Acres of Government Land Approved. 

Jan 2006 Paradip construction office opened.

Dec 2005 Application submitted for Captive Port development at Paradip. 

Dec 2005 POSCO Board of Directors gave its official approval for the first phase of the POSCO-India project.

Nov 2005 Land acquisition was approved by the Orissa State Government. 

Sept 2005 Application was submitted for Prospective License

for iron ore. 

Sept 2005 POSCO paid capital of USD 51.3 million (Rs. 237 crore).

Aug 2005 POSCO-India Pvt. Ltd was incorporated in Bhubaneswar.

Jun 2005 MoU for USD 12 Billion project was signed between POSCO and the Government of Orissa.

Oct 2004 An agreement between POSCO and the Government of Orissa to enter into a Memorandum of Understanding (MoU) was discussed at the India-Korea Summit meeting. 

Aug 2004Investment Proposal was initiated with talks between POSCO and the Government of Orissa. 

Objective

The objective of the project is to build one of the world’s most competitive steelworks with advanced technology and stable iron ore supply from captive mines, together with the economic development of Orissa.

We believe that the Sustainable Competitive Advantages will be attained when the strengths of India and POSCO are combined. India’s huge growth potential, human resources, its open policy, and vast natural resources create an ideal environment for investment. We believe POSCO India can effectively utilize these resources, in combination with POSCO’s experience for successfully constructing and operating 2 integrated steel plants in Korea, along with its advanced technology and solid financial structure.

National Steel Policy (NSP), 2005 estimates that India’s steel production of 40 million tons in 2005-06 will rise to 110 million tons by 2019-20. With the

changed scenario it is expected that the steel production will skyrocket to 200 million tons by 2019-20. The government is actively encouraging steel consumption so that the steel industry will act as the locomotive for economic growth. To realize this goal and catapult India into a steel superpower, POSCO India will contribute 12 million tons per annum from its envisioned Greenfield project.

When such favorable conditions are utilized effectively, it will create a win-win situation for all parties involved. 

A bi-national Project between India and Korea, the POSCO India project has three main elements, consisting of the integrated steel plant, as well as the development of mines and related infrastructure.

Violations of the Forest Rights ActEven as the clearance juggernaut carried on, and the people's movement continued to face myriad challenges, POSCO could not initiate any project-related work on the ground. In the latest set of approvals, the forest clearance for POSCO was granted in December 2009. But the legality of this too was questionable.

The Scheduled Tribes and Other Forest-Dwellers Recognition of Forest Rights Act, 2006 (henceforth, FRA) provides for settlement of rights by recognising the right of forest-dwellers to occupy, cultivate, use and protect areas within which they were residing before 13 December 2005. The rules for the Act were notified in January 2008. So, the forest clearance for the project could not have been granted till this process of filing claims and conferring rights was initiated and completed. This is especially so because, back in March 2008, the Palli sabha in Dhinkia village had already passed a resolution

citing sections of the legislation declaring that they did not consent to any proposed diversion.

Since 30 July 2009, there has also been a circular of the Ministry of Environment and Forests (MoEF) in operation which also seeks the above, not just for POSCO but for all projects coming up before the MoEF for forest clearance. The circular clearly states, "The State/UT Governments, where process of settlement of Rights under the FRA is yet to begin, are required to enclose evidences supporting that settlement of rights under FRA 2006 will be initiated and completed before the final approval for proposals.".

Nonetheless, Within five months, the forest clearance for POSCO was granted without the FRA process in the area being complete. As a compensation, the clearance letter included a condition that the processes under the FRA would need to completed before the clearance became effective.

This and many other violations were brought to the attention of Jairam Ramesh, Minister of Environment and Forests (MoEF).

Corporate overview

POSCO India Private Limited is a subsidiary of POSCO, the world’s fourth largest steel producer and one of the most competitive steel companies. POSCO signed a Memorandum of Understanding (MoU) with the Government of Orissa in June 2005, to set up a 12 MTPA green field steel plant near Paradip, Jagatsinghpur District, Orissa, with an estimated investment of USD 12 billion. The company will build a 4 million-ton per annum capacity steel plant in Orissa, during the first phase of its project, and expand the final production volume to 12 million tons per annum. POSCO-India Pvt. Ltd. was incorporated on 25th August 2005.

POSCO, the parent company operates two of the world’s premier steelworks at Pohang and Gwangyang, having a combined production capacity of 31 million tons per annum (MTPA). The Pohang steelworks produces 13.5 million tons of crude steel and specializes in the production of small lots in a broad range of products, including hot-rolled coil and cold-rolled sheets, plates, wire rods, electrical steel and stainless steel. The

Gwangyang works focuses on mass production of limited high-demand products such as hot and cold rolled sheets, and produces 17.5 million tons of crude steel. POSCO’s products are shipped to over 60 countries around the globe, satisfying some of the world’s most quality-sensitive customers. 

First phase of the Orissa steel plant to entail production of 3 million tonnes of steel

23 June, 2005: Global steel giant POSCO yesterday signed a Memorandum of Understanding (MoU) with the Government of Orissa in Bhubaneswar for the construction of a steel plant as well as development of iron ore mines in the state. This is the first step towards the construction of a steel plant in Orissa.

The MoU was signed by Mr. Soung-Sik Cho, Executive Vice President of POSCO and Mr. Bhaskar Chatterjee, Principal Secretary of the Government of Orissa, with the participation of Mr. Ku-Taek Lee, Chairman and CEO of POSCO and Mr. Naveen Patnaik, Chief Minister of Orissa.

According to the MoU, POSCO will build a 3 million tonne capacity steel plant, blast furnace or Finex route, during the first phase in Paradeep, Orissa between 2007 and 2010 and expand the final production volume to 12 million tonnes. The investment proposed is to the tune of US$12 billion, including an initial investment of US$ 3 billion during the first phase.

The Government of Orissa will grant POSCO mining lease rights for 30 years that will ensure an

adequate supply of 600 million tonnes of iron ore to POSCO. This in turn will ensure the competitive operations of the POSCO India steel plant. The government will also promote the construction plan for railways, roads, industrial water and electricity keeping up with the steelwork construction plan of POSCO.

POSCO, as the MoU with the Orissa state government states, will establish a local corporation in August 2005 and after conducting a detailed investigation and economic feasibility analysis, expects to do land purchase, rehabilitation and resettlement programme, and sign a final Memorandum of Agreement (MoA) later this year.The key factors that have been taken into account by POSCO for entering India include the highest projected growth rates over 2006-2020, the skilled workforce and abundant natural resources, especially of iron ore, coal and chrome. The Indian governments progressive policies have also helped ease regulations to set up such projects.

Significance of project

Bhubaneswar, June 6 : Around 7,000 people would get direct employment when the first phase of the Rs 52,000 crore steel plant of Posco-India, the Indian subsidiary of South Korean company Posco is completed by 2010, company sources said on Tuesday.

In keeping with Posco's endeavour to create a truly Indian company, 97% of the plant's total employee strength would comprise Indians during phase one--the critical phase, which would lay the foundation of the 12 million tonne project, the sources said here. This is just the beginning of the significant benefits India will derive from the Posco-India project, Posco-India chairman cum managing director Soung-Sik Cho, said.

India will derive significant benefits from the project once it is functional, including job creation of 48,000 jobs in the region and 467,000 man years of employment during the

construction phase. Foreign exchange inflows of US$23 billion are projected, with taxes and royalty incomes of US$20.3 billion for the central government and US$5.1 billion for the Orissa government.

The $12bn plant is India’s largest foreign investment project.

“Projects such as that of Posco have considerable economic, technological and strategic significance for the country,” the environment ministry said in a statement.

Based in the port city of Paradip, it is expected to create nearly 50,000 jobs.

ntegrated Steelworks 

Location: 

Jagatsinghpur District of Orissa (10 km south of

Paradip Port) 

Plant Capacity: 

The 12 MTPA integrated steelworks will be

completed in three phases of 4 MTPA each. In

Phase I, hot rolled coil (2.5MT) and slab (1.5 MT)

will be produced. The construction for Phase I is

scheduled to be completed by 2011~12. 

Proposed Technology:

FINEX, Mini Flat Mill - innovative and

environment-friendly technologies.