Hyundai Steel Co., South Korea's second-largest steelmaker, on Friday started building the nation's third integrated steel mill with an annual output capacity of 7 million tons in this southwestern coastal city.
Hyundai Steel, an arm of Hyundai Motor Group, held a ceremony marking the construction of the steelworks with two blast furnaces in Dangjin, about 123 kilometers southwest of Seoul, earlier in the day. The facility is scheduled to be completed by 2011.
President Roh Moo-hyun, Commerce Minister Chung Se-kyun and other dignitaries attended the ceremony. The group's Chairman Chung Mong-koo also took part in the event. He had been imprisoned on fraud charges after he was found to have created 103.4 billion won (US$109.2 million) in slush funds, but was released on bail in late June.
"Hyundai Steel's steelworks are expected to contribute to boosting the competitiveness of the local steel industry and other key industries, including shipbuilding," Chung said.
"The construction of the steelworks is expected to help reduce the high dependency on imports, as well as facilitate technological advances along with the automobile industry," President Roh said at the ceremony. It is also expected to heat up competition and cooperation with other companies, which helps improve quality, he said.
Hyundai Motor Group, which owns the nation's two largest carmaking companies, Hyundai Motor Co. and Kia Motors Corp., has been pushing to construct the facility to secure a stable supply of steel for its carmakers. Hyundai Steel plans to invest about 5 trillion won to build the steelworks, with the aim of becoming the world's sixth-largest steelmaker, it said.
"If the steelworks runs at its full capacity, it can produce up to 8 million tons of steel products annually," a company official said. The company plans to upgrade the facility's capacity to 12 million tons by 2015, he added.
The company also said it has signed preliminary deals with global resources companies, including Australian mining giant BHP Billiton, to procure raw materials. Hyundai Steel's integrated steel mill is expected to heat up competition in the local industry, where the world's No. 4 steelmaker POSCO is a dominant player, industry sources said.
Presently, only POSCO, which has an annual output capacity of 30 million tons of crude steel, runs two integrated steel mills in the country.
South Korea's steelmakers have imported about 5 million tons of hot-rolled steel plates to produce cold-rolled steel plates annually, sources said. Cold-rolled steel plates are used to produce cars.
But if the construction is completed as scheduled, Hyundai Steel is expected to produce an additional 5.5 million tons of hot coils and 1.5 million tons of steel plates, sources said.
Hyundai Steel's envisioned project is expected to help job creation and boost the South Korean economy, as it is forecast to have 11 trillion won worth of production annually by the time the mill is in operation, government officials said.
Hyundai Steel, now only equipped with electric furnaces, produces 3.8 million tons of hot coils with iron scrap in Dangjin.
It took over the facility from now-defunct Hanbo Iron & Steel Co. in 2004.
Dangjin, South Korea, Oct. 27 (Yonhap News)
S. Korea's Hyundai Steel starts building integrated steel mill |
