Jeil Steel, Plans to Expand Annual CAPA by 180,000 Tons... "Expecting Improvement in Scale and Profitability"

[Asia Economy Reporter Hyunseok Yoo] Jeil Steel has recorded strong performance with first-half sales already surpassing last year's total sales, and is now embarking on a full-scale expansion of its production capacity (CAPA), making it likely to continue delivering earnings surprises this year and next.

Jeil Steel announced on the 19th that starting from the second half of this year through next year, it will expand its annual CAPA to more than double the current production volume. Significant growth in scale through increased production capacity and supply volume, as well as substantial profitability improvement, are expected.

Jeil Steel, which processes and produces rebar, hot-rolled wire rod, and cold-drawn wire rod, currently produces about 7,000 tons of steel products monthly on average. The company plans to first expand its monthly CAPA to 10,000 tons in the second half of this year, and then increase it to between 13,000 and 15,000 tons per month next year, aiming for an annual CAPA of 180,000 tons. This is due to the easing of oversupply from Chinese steel products following China's steel production cut policies and increased steel export tariffs, as well as the recovery of the global steel market, which is driving market demand expansion.

To this end, Jeil Steel has already established a smart factory and introduced an automated documentation system in its manufacturing processes. Through automated prediction systems, it is minimizing operational losses and focusing on improving process yield. Additionally, it is strengthening productivity by expanding its workforce of experts with 20 to 30 years of experience and know-how in the machinery steel industry.

In line with the increasing market demand for steel products, Jeil Steel plans to operate its production facilities for 16 hours in the future. By introducing a 2-3 shift work system aligned with the 52-hour workweek regulation, the company aims to more than double its production capacity and yield through 16-hour facility operation.

A company official explained, “Steel products are processed by electrically heating raw materials to ultra-high temperatures to form the desired shapes, and maintaining a consistent and high temperature in the production facilities is a crucial factor for high efficiency. Since it takes considerable time and cost to raise the temperature again after it drops following facility operation, operating the facilities for 16 hours going forward is expected to not only expand productivity but also improve yield and significantly enhance profitability.”

He added, “Thanks to the recovery of the steel market, first-half sales have already exceeded last year's sales, and greater growth is expected in the second half. If monthly CAPA expands to 10,000 tons in the second half, second-half sales are predicted to surpass first-half sales. With additional CAPA expansion next year and the full-scale promotion of exports overseas, including to Japan, surpassing this year's growth trend will be achievable.”

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