An engineer savvy in technological development took office Friday as chairman of the world's fifth-largest steelmaker, POSCO, with a four-point reform plan to enhance competitiveness and weather an industry slump.
POSCO's shareholders and board of directors formally approved Kwon Oh-joon, 64, as the company's eighth chairman. He will serve through March 2017, leading the country's sixth-largest conglomerate by assets.
"POSCO's boastful competitive advantage is on the brink of extinction as the global steel market faces a severe glut," the new chairman said at the shareholders' meeting.
"I will turn POSCO into a steelmaker with the world's highest competitiveness by revamping the financial structure and company operations, and increasing the competitiveness of steel products based on differentiated technologies."
Kwon said he will push ahead with a four-point reform plan during his term.
As part of efforts to beef up its competitiveness in the steel business, POSCO will set up a research center to preemptively meet the demands of its clients and to increase sales of its higher value-added steel products such as high functional thick steel plate.
Due to a global oversupply of steel products, POSCO's operating profit margin, a measurement of profitability, fell to 4.8 percent in 2013 from 17.2 percent in 2008.
POSCO also plans to seek new growth engines, Kwon said. The company will shut businesses that aren't globally competitive, and instead focus on developing materials such as lithium and nickel for future high-tech industries and clean energy.
POSCO will also seek to become more efficient by doing away with investments simply aimed at quantitative growth, listing qualified subsidiaries on the stock market and selling its stakes in them.
As of September 2013, POSCO had 215 subsidiaries -- 43 in South Korea and 172 in foreign countries.
In a bid to quicken the decision-making process, POSCO decided to reduce the number of its business divisions to four from six. In particular, the steelmaker plans to introduce a new system of assessing the achievement of executives every year in order to increase company productivity.
Kwon, who has a doctorate in metal engineering from Pittsburgh University, has worked for POSCO since 1986. He also served as chief of POSCO Technology Institute, and since 2012 has worked as POSCO president handling technology-related business.
The steelmaker has chosen its chief from inside the firm ever since its privatization in 2000, although outsiders have appeared on the shortlist on occasion. (Yonhap)