TOP INTERVIEW
United We Stand
── POSCO × Yamato Kogyo's global strategy
POSCO YAMATO VINA STEEL JOINT STOCK COMPANY
Seo Kyeongcheol General Director
POSCO YAMATO VINA STEEL (PY VINA) is a joint venture (JV) company established in 2020 with POSCO, the
largest steel manufacturer in South Korea. POSCO is a world-famous company manufacturing various steel
products, including steel sheets, around the world. In addition to Yamato Kogyo, SYS, with expertise in
the Southeast Asian market, made an invested in PY VINA as well.
As the demand for electricity increases in Vietnam, PY VINA, whose main business is manufacturing and
selling H-beams, also contributes to the development of Vietnam's power infrastructure by supplying angle
steel used in power transmission towers. In June 2023, it became the first Vietnamese steel manufacturer
to acquire an Environmental Product Declaration (EPD) and is promoting sales in regions with high demand
for environmentally friendly products, such as Europe and Australia.
While customers’ awareness towards environmental conservation rises in Vietnam and overseas, PY VINA is
leading the Vietnamese steel industry.
Reborn After Predicament – How PY VINA Was Established
Prior to the JV’s establishment, it’s predecessor POSCO SS-Vina recorded large-scale losses for five
consecutive years after commencing operations in Vietnam. The loss was due to the JV’s inability to secure
cost competitiveness without technological foundation. Additionally, there are many domestic mills competing
in areas other than section steel markets which has caused an oversupply of rebar.
Whereas POSCO Group was considering the exit from business, Yamato Kogyo Group highly valued the growth
potential of the Vietnamese market and POSCO’s qualities as a partner, which lead to the collaboration with
POSCO Group.
The Asian market, including Vietnam, is attracting a lot of companies’ attention globally. The market is
expected to replace China, a global production base. Vietnam, in particular, has well-developed infrastructure
with opportunities to recruit excellent labor at low cost. Recording GDP growth rate of 5% every year, more
direct investment from overseas and a population of over 100 million, the country is expected to be one of the
first regions to grow if the currently sluggish global economy moves into a recovery phase. Within such
Vietnamese market, PY VINA has established itself as the only section steel production mill.
On top of its advanced technology, POSCO Group has the comprehensive strength to respond to changes in the
global business environment, including business operations in growing markets like Vietnam and the development
of green steel.
I think these regional advantages and Yamato Kogyo Group's high regard towards POSCO Group were the backbone
of the establishment of PY VINA. Of course, the reliability of Yamato Kogyo Group with excellent technology,
solid financial base and a wealth of global experience was the reason for POSCO Group to join hands.
PY VINA has revived since its establishment in April 2020. I believe this was made possible by the management
and technical support from Yamato Kogyo Group.
In particular, as POSCO Group’s knowledge or experience in electric furnaces and section steel rolling are
limited, we still rely on technical support from CPO and SYS in Thailand. All of these results were achieved
through the joint venture.
“The Answer Lies in the Field”
Every morning, I check the production line first. I am not an engineer, but I want to understand what is
happening on the production side and absorb as much know-how as possible. I also love data analysis, believing
that accurate data analysis provides important insights for decision-making.
For a company like PY VINA with a production site, all movements are expressed in data. Utilizing this data
would allow management to make more accurate decisions.
At the moment, comparing the main technical data between PY VINA’s and Yamato Kogyo Group’s, we feel a huge
gap as in elementary school student vs university student. PY VINA has a lot to learn and improve in all
areas, including production yield, electricity and gas consumption, and quality defect rates. Furthermore,
Yamato Kogyo Group has gained a wealth of know-how and networks over many years in areas such as purchasing
raw materials and selling products. This is something that PY VINA cannot easily imitate.
However, I believe PY VINA has the potential to become fully independent at an early stage. Despite many
challenges in the current market conditions, PY VINA is not significantly inferior to its competitors.
My motto and favorite phrase is “The answer is in the field”. I endeavor to learn Yamato Kogyo group’s
technical capabilities as quickly as I can.
The Path to Sustainable Development
Yamato Kogyo Group has established a solid competitive advantage by leveraging two key elements: “electric
furnace” and “markets”. Yamato Kogyo Group’s strength is the ability to strategically build a business
environment by preoccupying markets with growth potential in the US and Asia region ahead of competitors.
Nowadays, many global steel manufacturers cast a spotlight on electric furnace technology to reduce carbon
dioxide emissions. However, in the current market environment where local production is essential due to
recent trade issues, it is a company having both “electric furnace” and “markets” like Yamato Kogyo which can
ensure sustainable competitiveness.
On the other hand, PY VINA has issues to overcome. For example, limited production size due to equipment
constraints, a lack of technical capabilities to support cost competitiveness and the ability to stably
procure high-quality raw materials - all of which are important themes to be resolved for our growth.
These issues can be handled through cooperation with each base of Yamato Kogyo Group. Especially, if we can
promote joint purchasing of raw materials, mutual use of semi-finished or finished products and joint market
development, I am confident that PY VINA will grow and develop even more in the not-too-distant future.
Currently, our biggest issue is how to utilize the surplus steel making production capacity that remains after
the exit from the rebar business. We need to consider expanding our rolling mill, but it will take some time
before the demand for section steel in the Vietnamese market grows. Therefore, we need to carefully consider
the timing of the expansion. To make an appropriate investment decision at the right time, we need to explore
ways to contribute to Yamato Kogyo's 3 million tons plan in ASEAN.
United We Stand, Divided We Fall
There is a Korean proverb “United we stand, divided we fall”.
This phrase simply expresses the importance of working together.
It is essential for our future that POSCO Group and Yamato Kogyo Group work hand in hand to seek ways to
further develop Vietnam market. Moreover, from the perspective of ESG management, PY VINA must prioritize the
conservation of the global environment and the safety of its employees and be a company that generates
sustainable growth and maximum profits rooted in the local community.
POSCO Group is also forming a new global strategy. I sincerely hope that the cooperative relationship between
the two companies at PY VINA will deepen further and become the cornerstone of a new partnership in the future
global market.
