Welcome to POSCO-India

POSCO gears up for global leadership; India investments to propel growth
Landmark decisions made at shareholders meeting in Seoul

Realigns global management for improved efficiencies, transparency and corporate governance
POSCO-India Managing Director Soung-Sik Cho appointed Standing Director and Board Member
Registers record performance for 2005 with sales of KRW 21.7 trillion (USD 21.1 Billion) and operating profits of KRW 5.9 trillion (USD 5.8 Billion)

Bhubaneswar, February 24, 2006: In a landmark decision, POSCO, the fifth largest steel manufacturer in the world, announced the appointment of POSCO-India Managing Director, Mr Soung-Sik Cho as Standing Director in the POSCO Board. This is the first time in the 38-year history of POSCO that a head of overseas subsidiary has been appointed a board member. This move is reflective of the significance of the POSCO-India project in the ambitious growth plans the company has chalked out to establish global leadership. Mr Cho, who joined POSCO in 1974, has also been promoted as Senior Executive Vice President in the company. Mr. Tae-Hyun Jeong, the Deputy Managing Director of POSCO-India has been promoted as Vice President of POSCO.

This was announced at its 38th Shareholders Meeting held at the POSCO Center in Seoul today. POSCO also announced a slew of management realignments in order to improve efficiencies; lend greater transparency and enhance corporate governance within the organization. Decisions were announced to separate the CEO and Head Board of Directors positions; make adjustments on operations of CEO Candidate Recommendation Committee for facilitating transparent appointment of the ideal CEO who would spearhead POSCO’s global growth.

Under the new restructured management system, the Chief Finance Officer (CFO), Chief Marketing Officer (CMO), Chief Operating Officer (COO), Chief Technology Officer (CTO), Chief Staff Officer (CSO), and other senior officers will be allowed to fully represent the company in their concerned departments, and work as a whole team, thereby facilitating faster decision-making and increasing work efficiencies.

POSCO Chairman Ku-Taek Lee said, “The year 2005 saw POSCO registering a record performance. Stepping up domestic investments; usage of innovative technology; emphasis on value added strategic products; and improved cost efficiencies aided this performance. Our vision is to be a continually growing, globally superior enterprise and we will aim for a 35-million ton production base in Korea.”

In 2005, POSCO had registered Crude steel production of 30.54 million tons; sales of KRW 21.7 trillion *(Approx USD 21.1 Billion, Rs 92,800 crore) and operating profits of KRW 5.9 trillion *(Approx USD 5.8 Billion, Rs 25,300 crore). POSCO’s exceptional management performance was made possible by the favorable upturn of the steel market in the first half of last year and the remarkable increase in the sales of its high-value-added products, such as automotive steel sheets, API steel sheets, and electric steel sheets. The operation margin, which represents its management profitability, has stayed above 20% for three consecutive years-21.3% in 2003, 25.5% in 2004, and 27.2% in 2005.

The announcements made at the shareholders meeting are expected to further enhance POSCO’s corporate governance practices. POSCO has a track record of laying the highest emphasis on transparent management practices and corporate social responsibilities. In recognition of POSCO's tireless efforts in the area, the company won the prestigious Transparent Management Award instituted by five economic organizations, including the Korea Employers Federation. POSCO is also highly regarded for its cooperative policies for coexistence with small and medium businesses in regions where it operates.

“We will do our best to be the leading centre of the steel industry, making structural changes in the global steel industry by doubling the company’s profitability and competitiveness, and creating more value, among other initiatives. Progress in our investments in India and China will form the bedrock for our global growth,” added Chairman Lee.

Since the signing of the MoU in June 2005 and the setting up of POSCO’s Indian subsidiary in August 2005, POSCO has made an initial capital investment of USD 51.3 million in the project. The application for prospecting license for three areas was filed by POSCO-India on September 26-27, 2005. Additionally, proclamation of the Government land amounting to 3,556 acres was announced on November 23, 2005 and 4(1) notification of the private land for the steel plant is expected to be published soon.

POSCO-India’s steel plant project is the largest foreign direct investment in India and is a significant part of the company’s strategy to enhance its global competitiveness. The investment proposed is to the tune of US$12 billion (Rs 51,000 crore). By setting up the 12 mtpa steel plant, POSCO-India is striving to become a global leader in steel production.

India will see significant benefits from the POSCO project like creation of approx. 48,000 jobs in the region and approx. 467,000 man years of employment during the construction phase. A total of US$ 278.6 billion is the projected economic effect of the project, considering taxes and royalty incomes for the central government, as well as the government of Orissa.

About POSCO

Founded in 1968 and headquartered in the southeastern port city of Pohang in Korea, POSCO operates two of the world’s premier steel works--the Pohang and Gwangyang works. The Pohang works produces crude steel of 13 million tonne and specializes in small-lot production of a broad range of products, including hot-rolled coil and cold-rolled sheet, plate, wire rod, electrical steel, and stainless steel. The Gwangyang works focuses on mass-production of limited high-demand products such as hot and cold rolled sheet and produces crude steel of 17 million tonne. POSCO’s products are shipped to over 60 countries around the globe, satisfying some of the world’s most quality-sensitive customers.

* Exchange rate of USD 1$ - KRW 1027.6 / IND Rs. 1 -KRW 23.37