South Korean steelmaker, Dongkuk Steel plans to invest KRW25bn ($21mn) for a new cold rolled steel facility to increase its profitability. The mill expects demand for cold-rolled coils to increase in the future and an additional supply could help it meet this demand.
On July 9, the steelmaker announced its plan to increase the annual production of high-quality color steel sheets by about 100,000mt or 12pc by the end of 2021. The company is likely to produce 850,000mt of the high-end products annually from the present 750,000mt, according to its statement.
After this expansion in the Busan region, Dongkuk hopes to be the world’s largest producer of high-end products with eight production lines compared to its competitors who produce up to 100,000- 400,000mt with a maximum of four lines.
Dongkuk Steel’s color steel sheet production has grown from 400,000mt of building materials till 2011, to an output of 600,000-700,000mt covering home appliances and premium construction materials from 2012.
The share of color steel sheets in Dongkuk’s sales expanded from 11.5pc in 2012 to 17.6pc in 2019. With this investment, the share is expected to reach 20pc.
Dongkuk Steel’s 50pc sales consist of bar and section steel products, of which, 30pc are cold-rolled steel products, such as color-coated steel and galvanized steel sheets and 15pc from shipbuilding or thick steel plates.
Color-coated steel is used in home appliances, elevators, roofs, walls, garage doors, and many other parts of buildings and houses.
In Q1 2020 (Jan-March), Dongkuk Steel recorded a net loss of KRW120.82bn from a net profit of KRW729.9mn in the prior-year quarter.