Sep. 2006 — Posco will construct an automotive steel plates plant in Mexico, the emerging automotive production base of North America, in order to stabilize its position as a world-leading automotive steel plates supplier.

Posco signed a memorandum of understanding for construction of the automotive steel plates plant with the State Government of Tamaulipas, City of Altamira, and Altamira Industrial Complex. Posco will make full investment in the plant to start the construction in 2008 and the operation in 2009.

Posco says the plant will produce about 400,000 tons of zinc-plated steel alloy plates and zinc-plated steel plates for automobiles a year. Posco will directly supply the raw materials.

Mexico, which guarantees low labor costs, represents a powerful concentration of leading motor companies, and about 1,000 automotive parts suppliers—making it a rising new global base of automotive materials and parts supplies. Altamira also is close to the southeastern part of U.S., including Alabama, which has the capacity to produce over 2,200,000 automobiles with GM, Nissan, Hyundai, Mercedes-Benz, etc. Alabama is also known as an optimal automotive steel plate supplier base.

As over 1,600,000 tons of zinc-plated automotive steel plates are demanded in Mexico and the southeastern part of U.S. every year and only 300,000 tons are currently supplied, Posco believes that its automotive steel plate plant in Mexico will help to normalize its business.

With the plant, Posco will be able to supply its products to the U.S. market based on the 1992 NAFTA between the U.S., Canada, and Mexico, thus helping it to avoid the strict trade issues of the U.S. Government. By doing so, Posco will establish stable supply channels to the U.S. plants of Korea-based motor companies, such as Hyundai.