With the onset of the Russia-Ukraine War in 2022, the company suspended operations at its factory in St. Petersburg, aiming to mitigate the effects of the downturn and boost steel sales.
The factory will supply steel sheets to Hyundai Motor's factory in Russia. Hyundai Motor sold its St. Petersburg factory to AGR Automotive Group in 2022. AGR Automotive Group reopened the factory to produce vehicles under the Solaris brand and requires steel sheet supplies from Hyundai Steel.
Hyundai Steel's facility in Russia was a significant source of income for the company before 2022. Generating an annual net profit of approximately 5 billion won ($3.7 million), the facility began to incur losses after the closure of Hyundai Motor's factory in the country in 2017.
Hyundai Steel's operating profit halved in 2023 to 807.3 billion won ($606 million) compared to the previous year. The downturn negatively impacted steel demand, reducing the company's profitability.
Returning to steel production in Russia may help Hyundai Steel balance the effects of the downturn and increase steel sales. The company hopes to achieve better financial performance in 2024 with this move.
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