[People 人] Steel, a Dream Beyond... POSCO Chairman Choi Jeong-woo Transforms into Holding Company After 54 Years (Comprehensive)

Posco's 100-Year Vision Forged in Hydrogen and Secondary Batteries

From New Employees Saying "I Will Become Chairman" with Big Dreams
Non-Engineers, Non-Seoul National University Graduates
Overcoming Labels to Become the 9th Chairman

Posco Holdings Launch as a Bold Move
Aiming to Leap into the 100 Trillion Won Group Value Era

Chairman Choi Jeong-woo of POSCO (second from the left in the front row) is demonstrating the extraction of underground brine at the lithium salt lake exploration site in Argentina in October 2019. Photo by POSCO

[Asia Economy Reporter Jeong Dong-hoon] ‘Sucheojakju Ipcheogaejin (隨處作主 立處皆眞)’

This is the motto of Chairman Choi Jeong-woo, who led the biggest change of transitioning POSCO to a holding company system. It is an old saying meaning, ‘If you always live as the master of your mind in whatever you do, your life will be true.’ Whenever Chairman Choi stands before company members, from executives to field workers, he repeats this phrase. Through this holding company system, POSCO dreams of expanding its business areas beyond steel to eco-friendly future industries such as hydrogen, secondary batteries, and minerals. Chairman Choi’s motto also conveys a message emphasizing flexibility to work beyond the framework of the steel industry and POSCO’s future potential. He has stressed to executives, “(POSCO executives) must have a thorough sense of ownership and demonstrate leadership that benefits not only internal employees and stakeholders but also partners and local communities with a heart of consideration and respect under the paradigm of cooperation and equality.”

◆Shareholder-friendly gambit, surpassing POSCO’s biggest turning point= Amid industrial upheaval, the launch of the holding company ‘POSCO Holdings’ on the 2nd of next month is a scene where Chairman Choi’s gambit succeeded. After deciding to transition to a holding company system, concerns about shareholder value dilution arose in many places, but they were overcome with shareholder-friendly policies.

Last month, Chairman Choi announced in a shareholder letter that treasury shares would be canceled and a minimum dividend of 10,000 KRW per share would be planned. In fact, POSCO’s dividend per share for the last fiscal year reached 17,000 KRW. Under Chairman Choi’s judgment that there is no future without seeking change during industrial restructuring, he actively persuaded shareholders. The National Pension Service and major overseas proxy advisory firms expressed support, and the voting behavior of minority shareholders also shifted. At POSCO’s extraordinary general meeting on the 28th of last month, the transition to a holding company system was approved with 89.2% of the votes in favor.

Chairman Choi explained the background of the holding company system decision, saying, “I judged that innovation in the management system is urgently needed to actively respond to the anticipated revolutionary environmental changes and to sustain company growth. The global low-carbon transition is fundamentally shaking the competitiveness of existing industries including steel. POSCO, at the center of this change, will be able to increase corporate value further through the holding company system.” Even after the transition, the steel business will continue to play a pivotal role as the group’s core business, and plans are in place to further expand and strengthen investments in eco-friendly facilities such as hydrogen reduction steelmaking and electric furnaces to gradually transition to a carbon-neutral production system and enhance green steel competitiveness.

Choi Jung-woo, Chairman of POSCO, visiting the site of Pohang Steelworks Blast Furnace No. 2 shortly after his inauguration in 2018. Photo by POSCO

A photo of POSCO Chairman Choi Jeong-woo visiting the No. 2 blast furnace at the Pohang Steelworks shortly after his inauguration in 2018. Photo courtesy of POSCO

◆Mountain village boy dreams of becoming ‘Chairman’= Chairman Choi is from a small rural village in Guman-myeon, Goseong-gun, Gyeongnam Province. During middle school at Hoihwa Middle School, he had to walk 6 km every day to school, and despite being small and having never eaten his fill due to poverty, he never missed being first in his class. After graduating from Pusan National University and joining POSCO as a new employee, he habitually told his peers, “I will become chairman.” Eventually, in July 2018, he became the 9th chairman of POSCO. Although labeled as a ‘non-engineer’ and ‘non-Seoul National University graduate,’ he understood the roots of the steel industry better than anyone by gaining experience in accounting, cost management, audit analysis, and auditing.

Chairman Choi joined POSCO in 1983 and served as head of the finance office. In 2008, he was the head of the management strategy office at POSCO Engineering & Construction. In 2014, he served as head of planning and finance at Daewoo International (now POSCO International), and in 2018, he was CEO of POSCO Chemtech (now POSCO Chemical), which operates in the secondary battery materials business. Having experience in steel, construction, trading, and future new businesses such as secondary batteries, he is regarded as the right person to open the ‘POSCO 2.0’ era.

◆Corporate value triples... POSCO Group opens the 100 trillion KRW era= From the beginning of his tenure, Chairman Choi emphasized a divisional head responsibility management system rather than direct intervention. Before his inauguration, he stressed, “Based on 50 years of successful experience, it is time to leap forward as a genuine 100-year company,” and “A different mindset and belief from before are necessary.” After emphasizing responsible management in non-steel business sectors such as energy and secondary batteries, POSCO Group recorded its best-ever performance last year, three years later.

Chairman Choi expressed his ambition to raise corporate value through POSCO’s transition to a holding company system. He said, “Despite last year’s best-ever management performance, POSCO’s market capitalization is less than half of its peak in 2007,” and “With the transition to a holding company system, balanced growth between steel and new businesses will accelerate, and the business identity as an eco-friendly future materials company will expand, so growth efforts will be properly reflected in corporate value.” POSCO Group currently estimates that its corporate value, at about 43 trillion KRW, will increase more than threefold through the holding company system transition. To this end, it plans to accelerate growth strategies centered on seven core businesses.

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