Korean steel maker POSCO (PKX) recently announced that POSCO Plantec has completed the construction of 5.5 MW solar plants on three sites in Sicily and Abarozoo. Built in just five months, the plant symbolizes POSCO Plantec’s excellence in Engineering Procurement Construction (EPC) capabilities.
POSCO’s advancement in the solar power market seems encouraging with the growing needs for alternate sources of energy. Italy, Europe and Southeast Asia are hot spots for development of solar power projects.
POSCO Plantec is also engaged in building 15 MW combined capacity solar power plants in the Italian southern region of Bari, Trani and Sicily. The construction of the plants is expected to be complete by June 2011.
POSCO is the world’s third largest steelmaker on the basis of output. We believe the company remains well positioned to benefit from wide regional diversification with its growing presence in the international markets through investments in Australia, China, India, Indonesia and Brazil. Also, the outlook for global steel market is promising with an expected surge in demand in the years ahead.
In addition, higher proportion of value-added products (such as cold-rolled steel, automotive steel plates and electric steel sheets) in the company’s product mix is a boost to revenue and earnings growth as these products attract better realizations and margins over commodity hot-rolled coils.
For fiscal year 2011, POSCO expects consolidated revenue of approximately KRW 66 trillion while POSCO’s revenue is targeted to reach KRW 36 trillion. It is anticipated that Product sales would amount to a total 34 of million tons and crude steel production to 36 million tons.
Consolidated investments are likely to be around KRW 9.8 trillion with the company’s investments totaling KRW 7.3 trillion. Cost savings are targeted at KRW 800 billion.
However, this growth momentum might get restricted due to headwinds emanating from its rival steel manufacturers worldwide, including Arcelor Mittal (MT), Nippon Steel Corp. and Hyundai Steel Company.
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