POSCO begins work on steel plant in Turkey

SEOUL, Sept. 29 (Yonhap) -- POSCO, South Korea's leading steelmaker, said Thursday that it has started work on building a cold-rolled stainless steel plant in Turkey as part of efforts to meet rising demand in eastern Europe.
The factory in Izmit will have an annual capacity of 200,000 tons, when its construction is completed by April 2013, the steelmaker said. POSCO plans to spend US$350 million on the project.
At a breaking ground ceremony held on Wednesday, POSCO Chief Executive Officer Chung Joon-yang said the plant will produce high-end stainless steel products, which will help the steelmaker solidify its presence in the region, according to the company.
"This plant will also contribute to the growth of the Turkish economy through job creation," Chung was quoted as saying.
POSCO and its 68.15 percent-owned trading house affiliate Daewoo International Corp. have a combined 70 percent stake in the project with Turkey's Kibar Holding owning the remaining.
According to POSCO, Turkey relies wholly on imports of stainless steel to meet demand. Stainless steel demand in Turkey and its neighboring countries is estimated to reach 1.4 million tons in 2015, but a supply shortfall of around 1 million tons is expected.
POSCO was the world's largest steelmaker in terms of cold-rolled steel production capacity last year with 2.91 million tons.
In a meeting with reporters there, Chung also said POSCO plans to boost the portion of cold-rolled steel goods to 80 percent of its total by 2015, allowing it to better compete with foreign rivals. Currently, the ratio stands at 60 percent, according to the company.
POSCO also runs a comprehensive auto steel processing center in Turkey with an annual production capacity of 170,000 tons of automotive steel. The steel processing center is the Korean steel giant's first processing facility specializing in the metal in Europe.
sam@yna.co.kr
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