South Korea's Dongkuk to spin off steel units, focus on sustainable expansion

South Korea's Dongkuk Steel said Feb. 28 aims to "green" and expand its steel business by spinning off into a holding company and two steel companies.

"Each company after spinoff is planning to promote growth and operate, focusing on core business," the company said in a statement.

Dongkuk Holdings will focus on creating new businesses and reorganizing existing ones. Dongkuk Steel Mill Co. Ltd. will take control of hot-rolled steel manufacturing and lead the conversion of steelmaking processes under a "Green for Steel" program, which will seek additional good-recycled product or GR certification for H-beams and hot-rolled steel for construction made using steel scrap.

Dongkuk CM will take on cold-rolled steel production and global expansion, look to enter Vietnam and expand in countries such as Australia, Poland and the US.

Dongkuk Steel's board approved the spinoffs Dec. 9, which are subject to shareholder approval May 17 and are scheduled for completion by June 1.

The reorganization comes after Dongkuk Steel posted mixed results for 2022, with rebar and sections output edging up 0.8% year on year to 3.74 million mt, cold-rolled steel output falling 12.5% to 1.37 million mt and steel plate output rising 8.4% to 804,000 mt.

It also follows a similar move by rival POSCO, which spun off its steel business into a separate unlisted entity on March 1 last year, also to focus on expansion and making its business more eco-friendly.