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Posco to tap Africa, Siberia, poles for resources

Posco to tap Africa, Siberia, poles for resources

Seoul: Posco, the world’s No.3 steelmaker, said on Monday that it will develop resources in Africa, Siberia and polar areas to achieve 200 trillion won ($177.5 billion) in total group sales in 2020.

Posco, South Korea’s No.6 conglomerate in terms of assets with 58 subsidiaries -- said it aimed to achieve 120 trillion won of the total target from its steel business, 60 trillion won from energy, chemical, engineering and construction, and the remaining from new sectors, including environment-friendly undertakings.

The group’s 2010 sales results are not out yet, while its 2009 sales cannot be compared as they exclude Daewoo International Corp, which was acquired by Posco last year.

“To achieve these targets, Posco businesses will be expanded into Africa, Siberia and polar regions by focusing on resources development on top of Southeast Asia and America, where the group has a steel business foothold," chief executive Chung Joon-yang said in a new year speech.

Asked how the group would achieve the competitive edge in harsh frontier areas, Posco spokesperson Choi Doo-jin said it had not yet been decided. “We plan to tap these areas as resources are known to be undeveloped there," Choi said.

Last December, Posco said it planned to review entering a bid for a controlling stake worth about $1 billion in Korea Express Co Ltd, a deal that would complement Posco’s recent acquisition of the country’s top trading firm and reduce logistics costs.

The deal, if it moves forward, would be the second major acquisition by Posco after the $3 billion purchase of Daewoo International, its biggest ever M&A.

Chung has hailed a record 9 trillion won investment and acquisition spree in 2010 after the group failed in 2008 to land Daewoo Shipbuilding & Marine Engineering Co Ltd, one of its major customers.

Posco is still seen as a leading contender to buy Daewoo Shipbuilding, the world’s second-biggest ship maker, to be put up for sale again soon despite concerns raised by billionaire investor Warren Buffett, whose Berkshire Hathaway is Posco’s major shareholder.

Shares in Posco closed down 0.21 percent at 486,000 won on Monday, underperforming the record closing high of the broader market.

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