[Steel CEO Overcoming Crisis] Jang Se-wook's 'Bold Experiment' Shines in the COVID-19 Era

Steel Division Q1 Operating Profit Up 67.4% Year-on-Year
First in Industry to Launch Premium Color Steel Brand 'Luxteel'

[Asia Economy Reporter Hwang Yoon-joo] In the era of the novel coronavirus infection (COVID-19), Dongkuk Steel Vice Chairman Jang Se-wook's strategy to strengthen profitability is shining. Although steel sales volume decreased due to reduced demand in upstream industries, the operating profit growth rate jumped to double digits. The secret lies in bold moves.

He positioned color steel sheets, once considered a 'niche product' in the steel industry, as a main focus and promoted production executives who know the products best to sales executives. The executives who returned to production had a distinctly different perspective on the products than before. They became 'Dongkuk men' capable of creating the optimal products customers want. The results of Vice Chairman Jang's bold experiments in product portfolio and tactical deployment are being evaluated as successful.

Vice Chairman Jang Se-wook said in a phone interview with Asia Economy on the 19th, "The solid performance in the first quarter was the result of employees' hard work," giving credit to his team. He cautiously forecasted, "In fact, the steel industry is a downstream industry, so the impact of COVID-19 will be felt more in the second quarter than in the first."

He added, "Overall, overseas sales were similar to last year, and the product portfolio performed well across both hot-rolled and cold-rolled products," and said, "We plan to focus on minimizing damage in the second half and maintaining profitability." Despite declining sales due to reduced demand, Vice Chairman Jang's strategy is to expand sales of high value-added products to maintain profitability.

Color steel sheets are a representative example. Dongkuk Steel's color steel sheets, which maintain a significant market lead, greatly developed when Vice Chairman Jang was appointed president of Union Steel, then a subsidiary of Dongkuk Steel, in 2010. With his support, Dongkuk Steel launched 'Luxsteel,' the industry's first premium color steel sheet brand. Vice Chairman Jang's strategy is also becoming an industry trend.

Recently, POSCO has also strengthened color steel sheet marketing under the brand 'POSART.' Riding on the strategy to expand profitability centered on high value-added products, Dongkuk Steel's consolidated operating profit for the first quarter of this year was 56.2 billion KRW, a 16.3% increase compared to the same period last year.

Looking in detail, operating profit in the steel division increased about 67.4%, from 29.4 billion KRW in the first quarter of last year to 49.2 billion KRW this year. Specifically, the increase in operating profit was prominent in Dongkuk Steel's strength, the cold-rolled division (galvanized steel sheets, color steel sheets), and the long products division also saw increased operating profit. Although sales decreased in the U.S. and domestic markets due to strengthened protectionist policies, sales expanded in China, Japan, Mexico, and other countries, which is also notable.

A Dongkuk Steel official said, "This is the result of strengthening profitability-focused sales not only in color steel but also in galvanized steel sheets, rebar, and shaped steel products."

This content was produced with the assistance of AI translation services.