April 25, 2024

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[THE INVESTOR] POSCO Daewoo said it has completed the process of absorbing the steel business of its affiliate Posco P&S and has officially launched as a newly integrated firm as of March 1.

The general trading company said in a statement that with the completion of the merger, it will be able to simplify the steel distribution channels in South Korea as well as in the global market by directly engaging in steel trading, processing and scrapping. 

It said it expects the business of steel processing to enable customized solution marketing for clients.

“With the merger, Posco Daewoo has cemented global competitiveness in the steel business,” said Kim Young-sang, CEO of Posco Daewoo.

“As a general trading firm, we will have a stronger standing with a stable structure of profit making in the steel business and more synergy created across businesses in the future.”

The company announced in November that it would absorb the main businesses of Posco P&S.

Posco Daewoo was formerly named Daewoo International before the name change after the takeover by Posco Group in 2010.

On March 14, Posco Daewoo plans to issue new shares to shareholders of Posco P&S in a stock split ratio of Posco Daewoo to Posco P&S at 1:0.4387662, the company said.

Posco Daewoo saw its sales rise by 28.5 percent to 4.92 trillion won ($4.32 billion) in the fourth quarter of 2016 from the previous quarter and its operating profit went up by 8.3 percent to 71.9 billion won during the same period.

The rise in operating profit was mainly attributed to profits from offshore gas fields in Myanmar.

Meanwhile, the company said it has set steel and resources development as its two core businesses.

Its three other strategic businesses are agricultural products, automotive components and independent power producer, or IPP, which refers to a private firm, not a public utility firm, generating power for sale to consumers.

By Kim Yoon-mi/The Korea Herald (yoonmi@heraldcorp.com)