Posco has pushed ahead with its extensive support measures for small- and mid-sized companies in purchase, sales, human resources development, and partnership.

In an effort to encourage innovative cost reduction and quality improvement in suppliers, Posco adopted the Benefit Sharing system that is used by such prominent U.S. companies as John Deere and Raytheon. As part of its commitment to share the financial benefits of the system with its most outstanding suppliers, Posco recently awarded 2.7 billion KRW worth of rewards to five companies for completing the first 11 projects in the Benefit Sharing program. Daedong Heavy Industry Co., Ltd., Woojin, Pohang Ceramics, Chosun Refractories Co., Ltd., and POSREC are the first companies to receive rewards. Each company was given a monetary prize and a certificate honoring their achievements in the Benefit Sharing project.

Four members, including Mr. Kim Dong-Yun of the Pohang Works, were awarded the group prize for their significant efforts in providing technical support for suppliers. Mr. Chang Jae-Ryang, Mr. Choi Seon-Ho of the Gwangyang Works each received individual prizes honoring their contributions.

Posco introduced Benefit Sharing last July for the first time in Korea. It will provide full rewards For the first year, and 50% rewards each year from the second year. This system encourages suppliers to learn advanced management techniques like 6-Sigma as well as reduce costs. The system could also help Posco to improve its overall competency.

The Benefit Sharing system is evaluated as the most significant Win-Win management activity among all support measures that Posco has implemented for small- and
mid-sized companies.

In addition, Posco has increased the sales scale of Steel-N.com (www.steel-N.com), its cyber market for steel products, from 880,000 tons last year to 1.2 million tons this year. The company has opened its morning auctions to qualified small- and mid-sized clients, and limited the quantity of bidding by client and product to allow more clients to purchase each product. Clients can also modify their orders or cancel their bids directly online.

Posco held its first session on "Driving Overhead Cranes" for the Mid-term Education Consortium Professional Training Program at the HRDC last April 26th. The 1st Program is being held from April 25th to July 22nd with 30 students participating. Students learn about basic attitudes expected from new employees and garner professional field experience. They also receive information on technologies in IT, mechanics, and electricity. Posco launched its first Professional Training Consortium for Small and Medium Companies last March to improve the human resources competency of these companies.