Choi Jung-woo "Pursuing High-Intensity Cost Reduction"... POSCO Lowers Operating Profit Margin to 8% This Year
[Asia Economy Reporter Hwang Yoon-joo] Choi Jung-woo, Chairman of POSCO (photo), declared emergency management in response to the spread of the novel coronavirus infection (COVID-19) at the regular shareholders' meeting on the 27th, stating, "We will secure an emergency response system and implement high-intensity measures according to changes in management conditions."
At the shareholders' meeting held at the POSCO Center in Gangnam-gu, Seoul, Chairman Choi said, "In 2020, difficulties will intensify due to the continuation of protectionism, delayed recovery of steel demand, and the global spread of COVID-19."
He added, "To overcome the management environment this year, we will promote high-intensity cost reduction and maintain the world's best profitability through company-wide technological innovation and development of future growth products," and stated, "In new growth areas, we will strengthen the growth foundation of the secondary battery materials business, which can attract attention in the mobility era, including the development of salt lakes in Argentina." He continued, "In particular, we will expand personnel related to secondary materials and strengthen research and development (R&D) for next-generation product development."
Earlier, POSCO discussed countermeasures to overcome the management environment, including lowering the operating profit margin target for this year, at a recently held emergency management meeting. At this meeting, the management lowered the operating profit margin target (separate basis) for this year to 8.0%, down 0.5 percentage points from last year.
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POSCO's operating profit margin once exceeded 15%, but has been declining since 2010 due to the slowdown in the upstream industry economy. POSCO plans to defend profitability by reducing costs and expanding sales of WTP (World Top Premium) products.
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