POSCO Group, South Korea’s largest steel maker, has decided to co-invest in Hyundai Motor Group’s Louisiana steel mill, putting aside their rivalry.
The two groups plan to be engaged in joint R&D on the production of steel products involving dramatical carbon reduction.
Hyundai Motor Group, the nation’s No. 3 conglomerate, is teaming up with POSCO Group, the nation’s No. 5 conglomerate, to partner on steel and batteries, automobile’s materials.
On April 21, POSCO Group held a signing ceremony for a memorandum of understanding for Mutual Cooperation in the Steel and Secondary Battery Fields with Hyundai Motor Group at Hyundai’s Gangnam-daero headquarters.
The parties agreed to create sustainable synergy in low-carbon steel and secondary battery markets amid global economic blocks and rapidly changing trade environments.
With this MOU, POSCO Group aims to establish itself as a global top-tier supplier of future mobility steel and secondary battery materials.
In contrast, as a worldwide top-three automaker, Hyundai Motor Group aims to lead the future automobile market by stably procuring customized premium materials.
The two companies will cooperate in global joint ventures to overcome trade environment challenges to effect carbon-neutral transitions for low-carbon steel production in the steel sector.
As the first fruit of the cooperation, POSCO Group will participate in Hyundai Motor Group’s recently announced US steel mill as part of its end-to-end localization strategy for the steel business.
This will allow POSCO Group to secure a foothold in the North American steel market, which has been restricted by protectionist trade barriers.
POSCO, the steel business company, will be able to establish a flexible global production and sales system through this joint investment in a Louisiana steel mill, enabling smooth material supply to the US and Mexico regions.
POSCO currently operates steel processing centers in North America (US/Mexico), including its automotive steel plant (POSCO-Mexico), serving various automakers as customers.
In the secondary battery materials sector, POSCO Group’s strategy is actively responding to the global electric vehicle market post-Chasm by establishing a stable supply chain with Hyundai Motor Group, a global top 3 automaker.
In particular, the two companies plan to find sustainable collaboration points in supply chain establishment and next-generation materials development, creating synergy between POSCO Group’s competitiveness on secondary battery materials business, from lithium to cathode and anode materials, and Hyundai Motor Group’s eco-friendly future mobility technology.
This strategic alliance has been under discussion between the two companies since last year as part of Chairman Chang In-hwa’s focus on strengthening POSCO Group’s position in overseas high-growth, high-profit steel markets through the ‘end-to-end localization strategy’ and flexibly responding to changes in the secondary battery materials market to prepare for the post-chasm era.
The MOU signing was attended by Han Seok-won, Senior Executive Vice President and Head of Planning & Coordination Division at Hyundai Motor Group, Lee Ju-tae, Head of Future Strategy Division at POSCO Holdings, and executives from both companies.
Lee Ju-tae, President of POSCO Holdings, said, “Based on the synergy between the two companies, we will be able to find solutions for sustainable growth across the group’s businesses, including steel and secondary battery materials, amid global trade pressures and paradigm shifts.”
Hyundai Motor Group and POSCO Group have grown into global leaders in the steel and automotive industries, beyond the domestic market through their partnership, which has continued since 1973.
With this strategic alliance as a stepping stone, the two companies expect to create synergy for sustainable growth through ‘low-carbon steel and eco-friendly mobility’ amid global industry restructuring and paradigm shifts.
Meanwhile, POSCO Group is reorganizing its business around steel, energy materials, and new businesses under ‘2 Core + New Engine,’ focusing on strengthening its fundamental competitiveness to build a long-term growth structure.
In particular, POSCO Group is building a portfolio of steel materials for future mobility, including ‘GIGA Steel’ for automotive steel plates that leverages high strength and lightweight advantages, as well as battery packs and electric vehicle motor materials, along with a secondary battery materials value chain equipped with cathode and anode material production and recycling capabilities based on global lithium salt lakes and mines.
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