New Energy Vehicles

02 Jan 2022

POSCO International to Expand Its Business Areas to Electric Vehicle Parts

02 Jan 2022  by CNBC   

POSCO International, the trading arm of POSCO Group, is pushing to establish a motor core plant in Eastern Europe. Motor cores are a key component of electric vehicles that generates electricity.

POSCO International and POSCO SPS, a 100 percent subsidiary of the trading company that produces motor cores, is considering Poland and Slovakia as the candidate countries for its European production subsidiary. The establishment of the European subsidiary will be finalized in the first half of next year. The subsidiary aims to kick off its operations in 2024. POSCO International and POSCO SPS are considering jointly making equity investments in the subsidiary or setting up a joint venture company.

POSCO SPS will be in charge of production while POSCO International will take responsibility for sales and marketing.

When a European factory is established in Poland or Slovakia, POSCO International will have a motor core production base in Asia, North America, and Europe. POSCO International established factories in China in 2005 and India in 2009, and recently finalize the establishment of a production corporation in Mexico. Its China subsidiary had churned out motor cores for home appliances such as refrigerators and washing machines, but began producing those for electric vehicles in 2019. Up to now, its India subsidiary is mainly making industrial motor cores and motor cores for transformers but is likely to switch to motor cores for electric vehicles.

In addition, ground will be broken for its Mexican plant in June 2022. The plant will go live in the second half of 2023. The initial production volume will be 300,000 units a year. POSCO International will significantly expand it to 1.5 million units a year by 2030 by investing 162 billion won.

The establishment of a European plant is the last puzzle in POSCO International's plan to become an eco-friendly car component company. POSCO International has chosen motor cores as one of its growth drivers as the global automobile market is shifting towards electric and hydrogen vehicles. It aims to secure a 20 percent share of the global market by expanding its production capacity to four million units by 2025, including two million units in Korea and another two million units abroad (900,000 units in China, 650,000 units in North America and 450,000 units in Europe). Its annual sales target is 750 billion won.

At the group level, strong support is being given to the driving motor core business of POSCO International and POSCO SPS. In November, POSCO decided to invest about 1 trillion won starting next year to establish a new production plant for non-oriented electric steel plates for motors. The company currently has an annual production capacity of 100,000 tons, but will quadruple it to 400,000 tons by 2025.

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