South Korean steelmaker struggles amid virus woes
POSCO, South Korea’s largest steelmaker and one of the country’s largest business conglomerates, faces multiple challenges this year after the outbreak of the novel COVID-19 coronavirus.
The Federation of Korea Maritime Industries, which represents the country’s shipping companies, held a press conference Tuesday to criticize POSCO’s plan of setting up its own logistics unit, called Global Smart Platform.
The federation said that the plan deals a deadly blow to the shipping industry, which is already hit hard by the pandemic, because Global Smart Platform is feared to monopolize POSCO’s maritime logistics. POSCO is one of the largest Korean exporters.
Earlier this month, POSCO held a board meeting to decide to establish Global Smart Platform this year to take charge of logistics of the company and its affiliates like POSCO Daewoo International.
POSCO said that the new outfit will not make a foray into the shipping business, but suspicions do not disappear.
“Contrary to POSCO’s claims, the company’s measure is tantamount to advancing into the shipping industry,” Prof. Kim In-hyun of Korea University said during the conference.
POSCO itself is also negatively affected by COVID-19, as demonstrated by its deteriorating bottom lines.
The firm netted 434.7 billion won ($350 million) in profit during the first quarter of this year, down 44.2 percent from a year ago. Its sales also dipped 9.2 percent year-on-year.
POSCO expected that downturn in the automobile and construction industries will continue to weigh on the steelmaker during the second quarter. It even predicted a deficit in case its foreign factories remain shut down due to the virus.
Against this backdrop, Korea Investors Service downgraded the credit outlook of POSCO Monday from “positive” to “stable.” It expected that POSCO’s profitability will worsen for the time being due to the global economic slump.
The Seoul-based rating agency is an affiliate of Moody’s Investors Service.
UPI News Korea provides this article. _ ED.