POSCO to Increase Investment by 51% to 7.4 trillion won in 2007

POSCO will increase investment by 51% to 7.4 trillion won in 2007 from 2006. The firm expends 2.9 trillion won for domestic facilities, 1.7 trillion won for offshore projects and raw materials and 1.2 trillion won for new business and alliance. The firm modernizes domestic facilities including relining of blast furnace to shift higher valued products while the firm expands offshore business including start of infrastructure construction for Indian integrated steel works. The firm tries to maximize the profit by increasing high valued steel supply capacity in strategic items including automotive steel and in growing markets. The firm starts commercial operation of commercial plant of new iron making process, FINEX in April after the completion of construction. The firm also starts construction of port at Indian integrated steel plant in October while the firm starts construction of Mexican continuous galvanizing line and Vietnamese cold rolling mill in October. The firm expands the pig iron output capacity by 670,000 tonnes for no.3 blast furnace at Gwangyang works by relining and expanding works in October-December. The firm rationalizes no.2 continuous caster, no.3 hot strip mill and no.4 cold rolling mill at Gwangyang in second half of 2007. The firm also increases the offshore steel processing facilities to 25 sites in 8 countries from current 14 sites in 6 countries. The firm announced on Thursday the consolidated net profit decreased by 20.1% to 3.207 trillion won in 2006 from 2005. The firm expects the operating profit will increase by 11.5% to 4.9 trillion won in 2007 under higher steel price. The firm increased the sales of strategic products by 18.5% to 14.7 million tonnes in 2006 from 2005. The sales rate increased by 9.5 percentage points to 57.1%. The firm expects the rate will increase to 63% in 2007 toward the target of 80% in 2008.