South Korean Steel Major POSCO to Set Up PPGI Facility in Malaysia

POSCO (Kyongsahngbuk-Do, South Korea), the world's third-largest steel producer, plans to develop a coated sheet mill in Malaysia to produce about 70,000 tons per year of pre-painted galvanized sheets (PPGI). Industrial Info Resources (Sugar Land, TX) reports that the firm's venture in Malaysia is targeted toward an ever-growing demand for high value-added products in the region. The demand for PPGI is projected to grow at the rate of 9.1 percent per year during the next 10 years.

In 2007, POSCO acquired a stake of 60 percent in MEGS Industries Sdn Bhd (Selangor Darul Ehsan, Malaysia), the pioneer of steel electro-galvanizing technology in the country, for $16 million and formed POSCO-Malaysia Sdn Bhd (Selangor Darul Ehsan). POSCO-Malaysia has a production capacity of about 180,000 tons per year of electrolytic galvanized steel (EGI) coils of 0.35-2.3 millimeters of thickness. The EGI coils are mainly used in home appliances. POSCO also has steel-processing facilities in Thailand and Vietnam.

PPGI is widely used in the home appliances, construction, furniture, lighting and transportation sectors. The material is used for roofing and cladding in highrise commercial and industrial construction projects such as workshops, warehouses, convention centers, airport hangers and stadiums. The sheets also find use in the manufacture of microwaves, refrigerators and washing machines. Colored, corrugated variants of the sheets make for ideal roofing material for outdoor units.

POSCO's cold-rolling plant, located near Ho Chi Minh City in Vietnam, is set to commence a cold run in July 2009. The plant, which is 99 percent complete, has a production capacity of 1.2 million tons per year of steel. It will churn out 700,000 tons per year of cold-rolled steel and 500,000 tons per year of cold-rolled full hard steel products.

The $1.13 billion project started in August 2007 and is being executed in two phases. The $361 million cold-rolling plant at the Phu My Industrial Complex was built as part of the first phase. The plant is expected to commence operations in August 2009, with the first batch producing 40,000 tons of cold-rolled steel.

The second phase of operations will include the development of a hot-rolling plant with a capacity of 3 million tons per year and is expected to be functional by 2011. This will provide a continuous galvanizing line capable of producing 400,000 tons per year of automotive steel sheets. The second phase will be developed with an investment of $767 million.

POSCO plans to augment its cold-rolled steel production capacity to 100,000 tons per year by the end of 2009. Expansion operations will be carried out after completion of the first phase.

In order to identify potential sales channels, POSCO has undertaken a study of markets in the Southeast Asian region, which is the world's largest consumer of steel. The company has already set aside about 50 percent of the Vietnam plant's production for the country's domestic market.

POSCO has completed the construction of steel processing plants in Japan, Thailand and India. Steel feed for the Vietnamese venture is expected to come from the company's Indian operations.