POSCO Holding Chief Strategy Officer and CEO Jeong Ki-seop speaks at Value Day on July 12, 2024 (Courtesy of POSCO)
POSCO Holdings Inc. aims to raise its corporate value through an ambitious scheme, which includes securing 2.6 trillion won ($1.9 billion) through restructuring for its steel and battery materials investment and retiring 2 trillion won worth of treasury stocks by 2026.
The holding firm of South Korean steel giant POSCO Group will sell or liquidate more than 97% of 120 non-core assets and businesses with low profitability by 2026, the company said on Friday at its annual event Value Day prepared for institutional investors and analysts.
POSCO Holdings will secure 2.6 trillion won through restructuring and inject the fund in the battery materials business, its new growth engine led by POSCO Future M Co. The company is testing solid-state electrolyte and lithium metal anode and aims to accelerate early commercialization of the key materials for advanced rechargeable batteries.
Its sulfide-based solid-state electrolyte is under a verification procedure led by Samsung SDI Co. which plans to produce a sulfide-based all-solid-state battery in 2027, according to industry insiders.
POSCO Future M is also manufacturing prototypes of lithium metal anode materials and testing the samples with a global carmaker. The battery materials unit of POSCO is developing anode with better reliability, which has 600 millimeter-width and a protective coating.
POSCO’s anode production plant in Sejong, South Korea (Courtesy of POSCO)
SALES GOAL ADJUSTED
POSCO has set a goal of 11 trillion won in annual sales of battery materials, such as cathode, anode, lithium and nickel, by 2026. The company is poised to complete the construction of facilities by 2026 to produce 395,000 tons of cathode, 114,000 tons of anode, 96,000 tons of lithium and 48,000 tons of nickel.
The company adjusted the sales goal from last year’s plan of a 16 trillion won yearly revenue in battery materials by 2025, amid the prolonged slowdown in global electric vehicle demand.
POSCO will also invest in manufacturing of upstream steel products, semi-finished products such as slabs and billets, in India and the US. The company particularly needs to produce them in the US as the country has import quota on Korean steel.
POSCO Group headquarters in Seoul (Courtesy of POSCO)
SHARE RETIREMENT
POSCO aims to achieve 200 trillion won in the entire group’s market cap by 2030 from the current 70 trillion won under the leadership of Chair and Chief Executive Chang In-hwa, who started his three-year term in March.
For the treasury shares it buys back from now, the holding company will cancel the shares shortly after the repurchase except for the stocks it should hold for employees, said POSCO Holdings Chair and CEO Jeong Ki-seop on Friday.
POSCO Holdings will retire 2 trillion won worth of treasury stocks by 2026 in effort to achieve the goal and increase shareholders’ value.
The holding firm plans to first retire 1.9 trillion won worth of the shares, 10% of the treasury stocks it holds. It has already retired 660 billion won worth of the shares, the company said in its regulatory filing on Friday.
Additionally, it has bought 100 billion won worth of stocks back and retired them, according to the regulatory filing.
By Hyung-Kyu Kim
khk@hankyung.com
Jihyun Kim edited this article.
