POSCO Group is considering the sale of its only steel plant in China, POSCO Zhangjiagang Stainless Steel (PZSS), as part of Chairman Jang In-hwa's strategy to reduce low-performing assets and focus on core businesses. Established in 1997 in Jiangsu Province, PZSS was POSCO's primary entry point into China’s stainless steel market.
According to industry sources, POSCO is preparing to select an advisor for the sale of PZSS and is evaluating various alternatives. POSCO Holdings and POSCO China hold an 82.5% stake in the joint venture, while Shagang Group, China's second-largest steel producer, holds a 17.5% stake. The plant has an annual crude steel production capacity of 1.1 million tons.
POSCO is considering putting PZSS up for sale due to ongoing financial losses. In 2023, PZSS recorded an operating loss of USD 130 million, marking it as the largest loss among POSCO’s 38 overseas subsidiaries. Once hailed as a successful Korean-Chinese joint venture, the plant's profitability has plummeted due to oversupply in China's stainless steel sector. The total stainless steel production capacity of 43 steelmakers across the country reaches 28.21 million tons, exceeding domestic consumption of 24.17 million tons.
This potential sale is part of POSCO's comprehensive plan to streamline 125 low-profit and non-core assets by 2030. The company has already completed 21 divestitures by the third quarter of this year, raising 652.4 billion won (approximately 501.85 million USD) in cash. This strategy allows POSCO to reallocate resources towards its most profitable and essential operations.
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