Ahead of its 50th anniversary next year, Posco is seeking to make a second leap forward by securing a new growth engine and keeping its global reputation as the world’s fourth-largest steelmaker at the same time, the company said Tuesday.

Despite an unfavorable market environment fueled by the growing fears over trade protectionism and oversupplies of steel products worldwide, the South Korean company posted an operating profit of 2.63 trillion won ($2.3 billion) last year, an 18 percent increase from the previous year. It was the first time in 11 years for the steel giant to post a two-digit percentage growth in profit, the company said, referring to its efforts in carrying out massive restructuring, cutting costs and focusing on sales of high value-added products.

This year, Posco plans to generate more profit by increasing the sale of high-strength and premium steel products exclusively developed and produced by the steelmaker.

The company plans to expand the global marketing of “giga steel,” referring to ultrahigh-tensile strength steel rated at more than 1 gigapascal.

The giga steel is lighter and strong enough to endure pressure of 100 kilograms per square millimeter and has been favored by global carmakers. Posco has produced 17 giga steel products for commercial use. The giga steel generates 5-20 percent higher operating profit than regular steel products, the company said. Last year, the South Korean steelmaker sold 9 million tons of automotive steel, accounting for about 10 percent of the market. It plans to expand the sale of automotive steel to 10 million tons after 2018.

Posco is building a smart factory in Gwangyang, South Jeolla Province, to test the feasibility of an automated production process from steelmaking to rolling. Using the Internet of Things, the planned smart factory offers comprehensive information on steelmaking and monitors the condition of equipment in real time for the safety of workers there and to prevent products with defects.

The steelmaker has also been accelerating its drive in the non-steel segment.

Earlier this month, Posco started producing lithium for commercial use for the first time in South Korea. The company has completed construction of a lithium extraction plant capable of producing 2,500 tons of lithium in Gwangyang.

The company plans to supply lithium carbonate to battery makers LG Chem and Samsung SDI, and to its affiliate Posco ESM, a local maker of anodes for rechargeable batteries. Korean battery makers have been relying on imported lithium so far. Posco supplying the material directly to battery makers will stabilize the supply chain, the company said, adding that it spent seven years developing the eco-friendly lithium extraction technology.

The lithium extraction development has been led by Posco Chairman Kwon Oh-joon, an in-house researcher turned CEO. Assuming his second term last month, Kwon said he would seek Posco’s growth from non-steel segments such as the development of advanced materials, construction and energy projects.

Kwon, while visiting Posco ESM on Feb. 10, said the company would invest 300 billion won more to the affiliate’s anode production for rechargeable batteries. Posco holds 75.32 percent of shares in Posco ESM by paid-in capital increase.

Posco ranked 35th in the Corporate Knights’ 100 most sustainable corporations list announced during the World Economic Forum last month. Posco is the first steelmaker to be listed over three consecutive years and the highest-ranked South Korean company, the company said.

The list evaluated 4,974 listed companies with market capitalization of at least $2 billion on 14 quantitative sustainability indicators that measure their management of resources, employees and finances.

By Cho Chung-un (christory@heraldcorp.com)