The nation’s major steelmakers are diversifying into non-core businesses such as energy, construction and agriculture to shore up falling profits.
POSCO, the world’s fourth-largest steelmaker by output, has cut its number of subsidiaries to 46 from 70 as of Jan., 1 mainly by merging those with overlapping businesses, the company said in a press release. The number of POSCO’s affiliates surged after takeover deals for the past few years, including Daewoo International, a trading company specializing in oil and gas exploration overseas, in 2011.
“On the group level, POSCO has driven in-house reorganization since March last year under the three principles of strengthening core businesses, trimming overlapped businesses and closing non-core businesses without cutting personnel,” a company official said. The steel giant will wrap up the reorganization by the end of this year and the number of its subsidiaries is expected to be cut to 30. “The POSCO streamlining came amid diversification of its business portfolio into non-steel sectors,” Byun Jong-man, an analyst from Woori Investment and Securities, said.
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