Posco aims to become the world’s second-largest steelmaker next year by increasing its annual output by 11 per cent to 34m tonnes.
The South Korean steelmaker said its new technology, called Finex, will help it boost cost competitiveness to overtake Nippon Steel of Japan, but its output will remain far behind industry leader Arcelor Mittal’s 110m tonnes.
“Amid faster consolidation among global steelmakers and bigger challenges from smaller rivals, the next-generation and economical Finex plant will help enhance Posco’s competitive edges,” Lee Ku-taek, chief executive, said in a statement.
Posco on Wednesday held a ceremony to celebrate the completion of a $1.1bn furnace using the Finex technology. The company said the technology would cut production costs by up to 15 per cent and reduce pollution emissions by more than 95 per cent, compared with conventional furnaces. The new plant in the south-eastern port city of Pohang will have an annual output capacity of 1.5m tonnes.
Posco has invested $1.14bn over the past three years to develop the Finex technology. The company plans to gradually convert its domestic blast furnaces to the new technology. It has 10 furnaces in its Pohang and Gwangyang steelworks.
Posco also plans to adopt the Finex method in its $12bn Indian steel project and planned plants in Vietnam.
The construction of the India project has been delayed, but analysts expect the plant to increase its capacity by 40 per cent when it is completed by 2015.