South Korea’s leading steel mill Posco plans to sell its proprietary steelmaking technologies to diversify revenue sources from hardware sale. Posco chief executive Kwon Oh-joon announced plans for the new business outline offering to market licensed steel-making technologies as well as engineering models for design and operation during a shareholders meeting on Friday. Posco has been forced to seek out a new revenue source amid prolonged global slump from overcapacity. It is confident of securing interest from other leading steelmakers on its unique steelmaking know-how. It expects royalties will help boost its overall revenue. Construction companies using Posco’s technology and engineering models could pay Posco from the proceeds they earn from winning building orders. Posco also will be willing to dispatch its engineers to oversee the projects. It will first field its signature FINEX and CEM (compact endless cast & rolling mill) technologies. FINEX is a streamlined eco-friendly iron making process using cheap iron ore fines and non-coking coal as feedstock. It would be useful to developing countries lacking in funding and infrastructure due to the cost-saving technology. CEM allows eco-friendly mass production of highly valuable hot-rolled products, which could sell well in advanced countries in need of less-carbon-emitting facility.
The company is in contact with 15 clients to sell FINEX technology and seven on CEM. It is also developing over 100 technologies. Despite unfavorable sale conditions, the company was able to pay out cash dividends of 8,000 won ($6.65) per share, the same as last year, through improvement in debt ratio from rigorous restructuring efforts.