Posco is moving forward with its co-survival management strategy through setting and enforcing an extensive small and medium enterprise support plan in all units including sales, procurement, outsourcing and human resource management.

For solving the difficulties that small and medium customers face in procuring steel, Posco is determined to increase steel sales for them by 1.36 million tonnes to 7.63 million tonnes, and to procure an amount equivalent to KRW 260 billion purchased by large enterprises and foreign firms to small and medium enterprises in Korea. Transactions between Posco and small and medium enterprises would increase to KRW 7.27 trillion, up KRW 1.23 trillion from last year.

Posco's strategy in this area follows the same route taken by the government’s small and medium enterprise support policy, which emphasizes joint growth between large enterprises and small and medium enterprises. Posco’s strategy also complies with the management principles of CEO Ku-Taek Lee, who has continuously deployed co-survival management strategies with small and medium enterprises since his inauguration. Posco has also extensively reformed the transaction conditions for expansion of financial supports for small and medium enterprises.

The discount rate for procurement in cash that is applied when small and medium enterprises procure cold rolled and stainless steels using cash, has been increased from 1–2% to 1.5–2.5%. The discount rate for advanced payment, which is applied when small and medium enterprises settle their balance for account sales before the due date, has been raised 1%.

The target banks for Network Loans, in which small and medium enterprises can get loans for manufacturing costs only upon confirmation of a procurement agreement with Posco, have now expanded to include all commercial banks. This move will further facilitate fund-raising by small and medium enterprises. Moreover, Posco will compensate KRW 25 billion through 40 projects with 15 firms this year by pursuing productivity improvement or cost reduction jointly with suppliers.

For activating joint research and development with small and medium enterprises, Posco will donate KRW 2 billion for research expenses, dynamically lead small and medium enterprises to cultivate human resources through opening 42 vocational training programs, and transfer Posco's patented technologies. In particular, Posco will support small and medium enterprises for the next three years to enable 55 outsourcing partners to implement a wage increase rate by 5% more than Posco.

To this end, Posco is determined to support KRW 149 billion in total by 2007.

Besides transaction expansion, the other above mentioned support policies will enable further support of KRW 106 billion for small and medium enterprises this year alone.

Posco’s support for small and medium enterprises will create even more effects through the active participation of POSTEEL and cold and hot rolled steel distributors. POSTEEL plans to increase sales of import steels from 620,000 tonnes to 1 million tonnes, and to extend the period of account sales by 10 days over 40 to 70 days in the past. And, distributors will expand credit sales and maintain appropriate sales margins at their discretion.

Posco’s co-survival management with small and medium enterprises will alleviate the economic gap and provide a favorable opportunity to stimulate the domestic economy as it is expanded to other large enterprises.