South Korean steel giant Posco said Wednesday it has suspended operations of its steel manufacturing plant in the southeastern city of Pohang, Gyeongsang Province, due to flooding caused by Typhoon Hinnamnor that passed by the peninsula Tuesday.
It is the first time that operations at the Pohang plant has come to a complete standstill since its establishment in 1973.
The suspension comes after storms and heavy rains swept the region, causing power outage at key facilities at the plant, including all three blast furnaces. The company said production will resume as soon as electricity is reconnected.
Even though the company is still assessing the exact size of the damage, it is estimated that Posco would be losing out on at least 50 billion won ($36 million) for each day that operations are suspended.
Pohang was the hardest-hit city after the typhoon skirted the country Tuesday morning, leaving seven dead in floods and landslides. Up to 505 millimeters of rain per hour and 38.3 meters per second of wind were recorded.
Rain and sea water that submerged the raw materials for steel and already produced steel products means all damaged inventory must be scrapped and remade, further deepening losses.
Posco Holdings, the holding company of the steel giant, said in a regulatory filing on the same day that it is unclear when it can resume operations, but the company would transfer part of the production volume to another steel plant located in Gwangyang, South Jeolla Province.
Posco Group Chairman Choi Jung-woo immediately visited the scene and ordered full-scale support and repair work at the Pohang steel plant during an emergency meeting held Tuesday, the company said.
“Due to the record-high 500 millimeters of rain in the region, most facilities have been inundated and operations have suspended, but we should repair the damage as soon as possible and resume work to minimize the risk to the industry and local economy,” said Choi during the emergency meeting.
Choi also ordered officials to come up with supportive measures for the local community that have suffered huge damages, as well as to seek measures to minimize risks of its clients.