Strike Could Damage Factory Builder

POSCO is getting damaged more and more by the construction labor union strike in Pohang, North Gyeongsang Province.

POSCO is concerned that its international credibility may drop as factory constructions are delayed and office works are paralyzed.

According to POSCO on July 16, the construction labor union’s strike that started from June 29 suspended 24 facility construction projects, including the FINEX factory, resulting in a damage worth of over 10 billion won a day and over 100 billion won in total as of that day.

The damage amount related to office work paralysis is difficult to estimate.

POSCO announced, “Almost all works, including contract, facilities, procurement, and personnel affairs, except production and sales, have been suspended since July 13 afternoon. We are in a situation where, even on holiday, office workers who have to do urgent assignments get scattered to take temporary seats, including research centers, or keep in contact through cell phones to do their jobs.”

POSCO is most worried about delays in FINEX factory construction.

FINEX, a new type of iron-manufacturing technique POSCO worked out, requires an investment amount 20 percent less than a shaft furnace type, and can extract melted iron with around a 10 percent higher energy efficiency rate.

POSCO is planning to complete this year the construction of a FINEX factory with a 1.5 million ton annual production capacity and to begin commercial production in early 2007.

The FINEX technique will be applied for an India iron mill, the construction of which will start next year.

POSCO said, “Whether commercial production through FINEX succeeds or not is capturing the attention of the iron-manufacturing field worldwide. Delays in the commercial production will affect our international credit standing.”