OREANDA-NEWS. November 07, 2014. POSCO extends its drive into the automotive steel sheet market in Southeast Asia by building a hot-dip galvanized steel sheet production system in Thailand.

POSCO held the ground-breaking ceremony for its CGL (Continuous Galvanizing Line) producing quality galvanized steel sheet for automotive applications in Amata City Industrial Complex, Rayong Province, Thailand on October 16. The ceremony was attended by more than 80 POSCO executives/employees, including Vice President Young-hun Lee. The factory, which is designed to be capable of producing 450,000 tons per year, is slated for completion by June 2016.

Thailand is one of the top-10 countries in terms of automobile production capacity and leading Japanese/US/European automakers that have maintained a strategic partnership with POSCO for several years operate actively in the country.

Thailand is rising as the biggest automotive production base in Southeast Asia, with an annual production capacity that has increased to 3.2 million vehicles in the wake of facility addition/expansion by automakers in the past 3 years. JFE and Nippon Steel & Sumitomo Metal (NSSMC) of Japan recently completed and subsequently began operation of CGL in Thailand.

Judging that there would be consequent challenges to continuing to export automotive steel sheets to Thailand, POSCO decided to build a CGL on site in Thailand in a bid to make a greater dent in the automotive steel sheet market in Southeast Asia, including Thailand.

The CGL to be built is designed to produce GI (Galvanized Steel) and GA (Galva-annealed Steel) products and supply them to local automakers and automotive suppliers, with a plan to fortify pre-marketing activities to break even within the first year following completion of construction work. POSCO is expected to focus on the distribution of products bound for suppliers and interior automotive steel sheets in the first year past completion, and to increase the share of exterior steel sheets in distribution from the second year, securing cost-competitiveness earlier than anticipated.

Amata City Industrial Complex, where POSCO`s automotive steel sheet factory will be housed, is about 130km away southeast from the capital city Bangkok. Amata City is in fact the country`s biggest automotive industry center, with a cluster of automakers, steel makers, and automotive suppliers.

CEO Han Kwang-heum of POSCO-TCS (POSCO-Thailand Coated Steel) said, ``We will ensure the stably supply of quality automotive steel sheet and expand our close partnership with local automakers in a bid to take the initiative in the Southeast Asian automotive steel sheet market.``

Upon the completion of the Thailand CGL in June 2016, POSCO`s overseas automotive steel sheet production capacity will jump to 2.2 million tons per year. POSCO plans to expand overseas production bases for automotive steel sheets from Mexico, China, India and Thailand in a bid to maintain its competitiveness relative to other global steel makers.