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| POSCO International CEO Jeong Tak gives an inaugural address at the company's headquarters, Monday, in Songdo, Incheon. Courtesy of POSCO International |
By Kim Hyun-bin
The merger between POSCO International and POSCO Energy will fuel the company's global energy competitiveness and help create a global powerhouse for the energy sector, the company said, Monday.
The integrated corporation of POSCO International and POSCO Energy was officially launched on Jan. 1.
Last week, POSCO President Jeong Tak was promoted to vice chairman and was appointed as the new CEO of POSCO International.
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| POSCO International CEO Jeong Tak |
The company is expected to rake in annual sales of 40 trillion won ($31.5 billion) and an operating profit of more than 1 trillion won, putting it in 11th place in terms of domestic corporate sales in 2021.
The merger increased management stability through strengthening the business structure, rebranding as a global eco-friendly energy company and improving the potential to accelerate new growth businesses, the company said.
"We will add our trading capabilities to our core businesses, such as energy, steel, food and eco-friendly future businesses, and strengthen our competitiveness through bold investments," Jeong said in his New Year's address, Monday.
POSCO International has been pushing to switch the focus from a general trading company and transition to strengthen core businesses in the fields of energy, food and parts and materials.
Enhancing the profitable energy sector is expected to have a positive impact not only on the advancement of the export sector but also on the growth of food and new growth sectors.
With the merger of the two companies, their earnings before interest, taxes, depreciation and amortization (EBITDA) will increase from 1.3 trillion won last year to 1.7 trillion won this year, and the debt ratio will be reduced from 200 percent to 160 percent, significantly improving its financial status.
The merger also further strengthened its image of becoming an eco-friendly energy company.
Through the merger, POSCO International will connect the entire LNG value chain from exploration to production, storage and power generation. It is expected that the profits generated will be used to accelerate the eco-friendly energy business.
In addition, new growth businesses are expected to gain momentum. The company has been able to speed up investment in promising companies and technology development, such as expanding its mobility business, entering the eco-friendly bio industry and establishing a low-carbon production/power generation system using hydrogen.
In the steel sector, the company plans to further strengthen its competitiveness as a professional exporter in order to become a global top-tier company, while actively developing new demand for future growth industries.
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