Q&A with POSCO's Joon Yang Chung, AIST 2013 Steelmaker of the Year
07/24/2013 - Joon Yang Chung, chairman and chief executive officer of POSCO, was named AIST 2013 Steelmaker of the Year. He recently spoke with Iron & Steel Technology about his extensive career and the company’s path for the future.
The idea of creating a steel industry in South Korea began in the 1960s. Starting from scratch, with no capital, technology, or experience, the journey began with the founding of POSCO on 1 April 1968. The company’s first production line produced over 1 million tons of crude steel in 1973 and, after four expansions, its Pohang Steelworks was completed in 1983. The company has grown in tandem with the country’s economy, which saw tremendous growth from the 1960s to the late 1990s. South Korea to this day continues to be one of the fastest growing developed economies. POSCO was privatized in 2000 and shortly thereafter began constructing steel works overseas. Today it has a strong presence not only in South Korea, but also globally. In Pohang and Gwangyang, South Korea, POSCO operates two integrated steel works with a combined production capacity of 38 million tons of crude steel. Around the world, POSCO has 12 overseas production bases, 36 processing centers and 73 trading networks. In the U.S., these facilities include the USS-POSCO Industries joint venture and United Spiral Pipe LLC, a joint venture with U. S. Steel and SeAH.
Having joined the company just years after its founding, current chairman and chief executive officer Joon Yang Chung has played an integral role in helping to establish the company as one of the top global steelmakers. In 2012, POSCO was ranked fifth in overall steel production with 39.9 million tonnes of crude steel output, according to the World Steel Association. Joon Yang Chung recently spoke with Iron & Steel Technology about his extensive career and the company’s path for the future.
Iron & Steel Technology: You joined POSCO in 1975. Describe the journey that has led you to become the leader of a top global steelmaker.
Joon Yang Chung: For the first 15 years after joining POSCO in 1975, I steadily developed my knowledge and gained experience in steel production and technology. I served as the manager of the Steelmaking Technology Department, plant manager of the steelmaking plant, general manager of the Steelmaking Department and director of operational technology.
Before I became an executive at POSCO, I also had the opportunity to take a broader view into our industry while working as director of the in-house Technology & Research Center, and as managing director of POSCO’s EU office in Düsseldorf. During my tenure as the general superintendent of the Gwangyang Steelworks, then as the representative director and president of POSCO Engineering & Construction, I was given the chance to combine my expertise in the field of technology with my developed business management acumen. Due to my extensive experience, I was appointed chairman and CEO of POSCO in February 2009.
Taking on the responsibility of serving the company as its CEO requires a solid foundation of knowledge in steelmaking, applying this knowledge to POSCO’s operations, experiencing the global steel industry in the field, and striving to combine new technology with business management.
Even now, I never stop studying the future direction of our company by reading books on new technology and contemplating new ideas in order to implement innovative and efficient business practices. This is something I will continue to strive for and will always consider a work-in-progress.
Iron & Steel Technology: You are being honored with the AIST Steelmaker of the Year Award in part for your help in developing POSCO’s proprietary technologies, as well as raising existing technologies to the next level. What achievement are you most proud of? How will you ensure the continued development of new technology breakthroughs?
Joon Yang Chung: POSCO is continuously trying to create additional value for its customers through its own innovative future technologies.
POSCO is especially proud of a new technology development called POIST, which includes the already-commercialized FINEX ironmaking process. POIST stands for POSCO Innovative Steelmaking Technology,, and has been developed to secure POSCO’s future competitiveness. POIST aims to develop the next-generation steel processes that will allow extended use of low-quality raw materials and help to mitigate against price volatility.
The POIST process consists of: (1) a hybrid-FINEX facility, where pig iron and high-quality DRI with more than 92% of a reduction rate is produced by using large amounts of low-quality raw materials; (2) a PS-BOP converting furnace facility, where 50% of pig iron and 50% of scrap and DRI can be used; and (3) a compact endless cast rolling mill (CEM) facility, where hot rolled coil is produced with high-speed continuous casting technology, which performs at a speed of up to 8.0 meters per minute.
POSCO has always invested heavily in R&D to develop and maintain its lead in independent and innovative technologies. Once new technology is developed, full and complete support is provided until it is commercialized through the demo plant operations.
Also, in order to nurture these breakthrough technologies, POSCO has created an internal corporate culture in which smooth communication and active collaboration are encouraged for employees; this, in turn, motivates employees to constantly better themselves through education and challenge themselves to explore new ideas.
Iron & Steel Technology: What do you see as the next major technology breakthrough in the iron and steel industry?
Joon Yang Chung: The global steel industry has been developing continuously since the introduction of the Bessemer process in the 19th century. However, there has not been a breakthrough such as the Bessemer process since that time.
Any next-generation steelmaking process should be cost-efficient in terms of investment and production, but should also use eco-friendly technology. POSCO’s FINEX, which eliminates the sintering and coking processes, is considered next-generation technology that could replace traditional blast furnace technology.
Moreover, the CEM process developed solely by POSCO is a one-stop process in which molten steel turns into finished products through continuous casting. This innovative technology saves production costs and improves time efficiency.
Locally in the U.S, a steelmaking process that can utilize shale gas will certainly draw attention from the industry in the future.
Iron & Steel Technology: POSCO has been named the “World’s Most Competitive Steelmaker” by World Steel Dynamics for three consecutive years during your term as CEO. How have you achieved this? What will you do to ensure your company remains competitive?
Joon Yang Chung: WSD has rated POSCO highly in criteria such as technology innovation, employee skills, and facility expansion into emerging markets through M&A and joint ventures.
POSCO has continuously made an effort to become more competitive by balancing quantitative expansion and qualitative growth since the financial crisis in 2009.
To enhance its competitiveness, POSCO is producing more high value-added products and expanding business into local markets where consumer demand is high. These outcomes have been made possible through efforts such as human resources investment, technology development, innovation and expanding investment into downstream industries.
Above all else, POSCO maintains its competitive edge over others by adopting a differentiated approach which includes identifying our customers’ exact needs and reviewing and amending the overall value chain using their suggestions and comments.
POSCO is committed to being a steelmaker capable of providing total solutions to our customers rather than a mere supplier.
Iron & Steel Technology: Sustainability is one of POSCO’s values. How is your company working to ensure the sustainability of your company and the environment?
Joon Yang Chung: POSCO administers various kinds of initiatives to become a beloved company by designing its activities to be able to contribute to a sustainable society.
From a social standpoint, there are several outcomes that POSCO has attained due to its efforts to grow together with our business partners. POSCO runs a ”benefit sharing” system that advocates for our suppliers to share their innovative ideas to improve and make more efficient POSCO’s processes and systems, and POSCO, in return, shares the profitability of these solutions with the suppliers. Also, POSCO financially supports or provides consulting services to partner SMEs and even collaborates with them on technological projects.
In environmental aspects, I would like to mention POSCO’s low-carbon steel paradigm, which shifts risk into opportunity in response to climate change.
POSCO first announced its vision for low-carbon green growth with a voluntary greenhouse gas reduction target in February 2010. This plan calls for a 9% reduction in CO2 emission intensity by 2020 from 2.18 tCO2/tS, the average emission level reported in the preceding three years (2007–2009). In 2012, POSCO achieved a 6.9% reduction to 2.03.
Considering that this CO2 reduction in our steelmaking processes is a result of energy efficiency improvement, we are simultaneously attaining two goals: energy cost-savings and greenhouse gas reductions.
We have been contributing to improvements in vehicle weight reduction and fuel efficiency by supplying high-strength automobile steel sheets, as the representative high-energy efficiency steel product. In 2012, POSCO supplied 818,000 tons of high-strength automobile steel sheets, which contributed to 659,000 tons of CO2 reduction.
In the meantime, POSCO has developed and completed testing on its POSCO Body Concept-Electric Vehicle, or PBC-EV for short. PBC-EV is made of advanced high-strength steel, which is 20% lighter than existing sheets, and this is expected to further contribute to greenhouse gas emission reductions of 50% compared to existing vehicles manufactured from conventional sheets.
Iron & Steel Technology: What advice would you give to students considering a career in or just beginning their career in the iron and steel industry?
Joon Yang Chung: I believe that the future of the steel industry is bright, as steel is one of the most widely and frequently used materials, and superior to other materials in regards to price, usage, recycling and environment sustainability.
I am certain that anyone can become the future CEO of POSCO or any other company, if one strives to shape their future with a passion to realize one’s own talents, dreams and vision. One’s vision can become a reality through continuous self-development, especially in honing one’s technical expertise, foreign languages and other related skills. This is often my advice to new employees of POSCO.
If you think and behave with a positive mind, and assume ownership even through the hardships and difficulties, you will end up a winner in any field.
Iron & Steel Technology: What’s next for POSCO, in North America and globally? Where will you lead the company in the future?
Joon Yang Chung: POSCO has a vision to be Global Top 100 in size, Sustainable Top 20, the Most Admirable in the metal sector by 2020. Moreover, we are mapping out the “Steel — Materials — Energy” business portfolio in accordance with our strategy: Optimizing Business, Differentiating Competence, Maximizing Value and Minimizing Risk.
By focusing on its steel business, POSCO is trying to become the “Global Top Integrated Player” of the steel industry by 2020 by leading the market with its innovative future technologies and creating new value for its customers.
For its materials business, POSCO plans to develop a new business model by identifying 30 core businesses according to the harvest strategy, and utilize steel-related capabilities and infrastructure. POSCO also plans to secure technologies and opportunities for market entry through strategic partnerships. Our long-term goal is to become the “Global Leader of Multi-Materials.”
Iron & Steel Technology: What meaning does the AIST Steelmaker of the Year Award have to you?
Joon Yang Chung: I am well aware of AIST’s dedication in supporting the steel industry through its development of programs which encourage interaction between relevant groups, ongoing educational opportunities, promotion of the sustainability and advancement of the technical development in production, processing and application of iron and steel products.
With AIST’s vast network of 16,000 professional and student members from more than 70 countries around the world, there is no doubt that AIST provides a valuable platform for communication and interaction among various members worldwide.
I am very honored and pleased to be recognized as the Steelmaker of the Year. I am receiving this award not only for myself, but also on behalf of my company, as this award also proves that POSCO is well-respected in this part of the globe.
This article, written by Laura B. Miller, was published in the August 2013 issue of Iron & Steel Technology.
