Posco Group Also Enters Emergency Management System Amid '3 Highs'... "Proactive Response to Complex Crisis"

Group Presidents and Former Executives Attend on the 21st
'Group Management Meeting' Held... Discussion on Business-Specific Response Plans

Choi Jung-woo, Chairman of POSCO Group. Photo by POSCO Holdings

[Asia Economy Reporter Jeong Dong-hoon] POSCO Group announced on the 24th that it will enter an emergency management system at the company-wide level.

On the 21st, POSCO Group held a 'Group Management Meeting' chaired by Chairman Choi Jeong-woo, attended by presidents and all executives within the group, to establish an urgent crisis response plan for the entire group in preparation for the possibility of a global economic recession due to the full-scale impact of the three highs: exchange rates, interest rates, and inflation. The group decided to actively respond through an emergency management system.

At the meeting, the focus was on discussing risk factors and countermeasures for major businesses within the group, including steel, infrastructure, energy, and secondary battery materials, amid uncertainties in the management environment. POSCO Group diagnosed the current global economic situation as a complex crisis involving ▲ contraction of the global market due to sluggish demand industries and increased inventory assets ▲ rising raw material/energy and financial/procurement costs ▲ instability in raw material/energy supply chains. In response, the group decided to concentrate company-wide efforts on ▲ proactive profitability defense ▲ cost innovation through structural improvements in purchasing, production, and sales divisions ▲ risk assessment of overseas subsidiaries ▲ securing financial soundness through investment plan adjustments.

In particular, for the core steel business, the group will focus all efforts on securing profitability by operating an emergency sales system to defend against declining mill margins, cutting all costs except for safety/environment sectors, and securing stable cash reserves in preparation for potential financial market instability.

On the day, Chairman Choi Jeong-woo of POSCO Group said, "With growing concerns about the possibility of a global economic recession, we are immediately entering an emergency management system at the group level to proactively prepare for complex economic shocks such as demand contraction, cost increases, and supply chain crises. Each group company’s management must closely check key management factors and especially strengthen cash-centered management to ensure that cash flow and funding situations do not become problematic."

POSCO Group executives agreed that they must prepare for the deepening and prolongation of global economic uncertainties while continuing efforts to achieve the group’s mid- to long-term growth goals and enhance corporate value.

Accordingly, POSCO Group plans to thoroughly review its business portfolio, establish structural improvement measures to reflect in mid-term strategies, and actively invest in core growth businesses to enhance future competitiveness, thereby turning this crisis into an opportunity to improve the group’s organizational structure.

Chairman Choi Jeong-woo stated, "The group’s new growth businesses must accelerate progress without interruption even in crisis situations. The more severe the crisis, the more we must move away from a defensive stance and instead use it as an opportunity to enhance the group’s future competitiveness and fundamentally improve its structure." At last month’s Future Technology Strategy Meeting, Chairman Choi also emphasized, "POSCO Group’s new business areas, such as hydrogen and secondary battery materials, must accelerate investment speed and devote more effort to securing new technologies and talent."

Meanwhile, POSCO Group will hold a 'Group Management Meeting' every quarter attended by presidents and all executives within the group to discuss group management performance, outlook, and crisis response measures together. The group will also activate a 'Company-wide Integrated Crisis Response Team' centered on the management strategy team.

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