With the production of 30.2 million tonnes of crude steel last year, Posco opened an age of 30 million tonnes of crude steel productivity and consolidated the foundation for a new take-off.

In 2004, Posco achieved its best management performance for two straight years in overall management fields such as sales and net income by concentrating in creating a large value added revenue structure through the biggest production of crude steel and advancement of sales mix last year.

At Posco’s recent CEO Forum, CEO Ku-Taek Lee announced that Posco had achieved an unprecedented management performance in 2004 with sales of 19.7920 trillion Won, operating income of 5.54 trillion Won and a net income of 3.826 trillion Won. Performances in 2004 represent a 37.8% increase over 2003 sales and a 65.2% increase over 2003 operating income. Posco’s ROS (Return on Sales) was 25.5%, up 4.2% over last year, and ROE (Return on Equity) was 26.3%, up 10.1% over last year.

Posco’s outstanding performance in 2004 was driven by increasing steel prices due to thriving steel consumer markets abroad, the increasing sales ratio of highly value-added products, and the highest production of crude steels. More importantly, Six Sigma, emphasized by CEO Lee, was expanded company-wide, resulting in a financial performance reaching 490 billion Won. Such a performance was accomplished by the implementation of a management system encouraging high productivity and low cost in accordance with such successful management innovation as ethical management.

In its CEO Forum, Posco acknowledged that the dividends would be 8,000 Won per share (a 33% increase over last year), including 1,500 Won for the interim dividends this year. In this case, the dividend yield ratio is about 4.3%.

Posco will produce 31.1 million tonnes of crude steels and sell 30.1 million tonnes of it this year. With ambitious management goals, Posco set the sales goal to 23.01 trillion Won, 16.3% higher than last year. In determining the investment of 4.081 trillion Won, 79.2% higher than last year, Posco will take the initiative in activating a domestic economy that has been stagnating due to a reduction in investments.

Meanwhile, Posco will expand the domestic crude steel productivity to 34 million tonnes by 2008. Four million tonnes of crude steel productivity will be additionally secured, comprising 15 million tonnes from the Pohang Works and 19 million tonnes from the Kwangyang Works. Furthermore, Posco will realize its goal to be a global leader by implementing local production bases through aggressive entrance into regions with higher potential in the steel industry, such as China, India and Brazil.

Posco has laid out a plan to be included in the Top 3 Global Steel Producers, especially for stainless steel, by securing a crude steel productivity of 3 million tonnes in Korea and abroad.

Along with the expansion of crude steel production, in the field of technology Posco will be a technology leader in the global steel industry through the commercialization of Finex, an innovative steel production technology of the next generation, which minimizes pollutants and streamlines processes, and Strip Casting, an innovative technology directly rolling the steel without making slabs. To this end, Posco will invest 16 trillion Won for five years, comprised of 70% for the domestic steel market, 25% for the overseas steel market and 5% for the non-metal market. Posco plans to improve investment around the steel business.

Meanwhile, CEO Lee announced that he would elevate 6 Sigma to the corporate culture innovation level and cultivate 6 Sigma experts for accelerating management innovation along with continuous growth, and so realize the visions of Global Posco.