1. 2004.10. 4 Steel and Karma - India and Korea - Steel and Karma - India and Korea - POSCO

2. 1 Heo, Hwang-Ok(AD33~AD89) Referred to as Empress Heo. Progenitor of the Heo family today and queen to King, Kim Soo-Ro, who ruled the ancient Gaya Kingdom that flourished in the South East of ancient Korea, with their advanced steel culture. Originally a princess of the Ayuta kingdom (currently Oudh/Awadh region) of India. Came to Gaya in AD48 and became a queen. ■ Prologue  Engaging in Relation (Karma)

3. 2 EU 18~19C (100Yrs) EU 18~19C (100Yrs) USA 1900~’60s (60Yrs) USA 1900~’60s (60Yrs) JAPAN ’60~’90s (40Yrs) JAPAN ’60~’90s (40Yrs) INDIA CHINA 21C? CHINA 21C? ■ Overview of World Steel Industry  Mega Trend of World Steel Industry

4. 3 (unit: 100 mn tons) Led by developed countries (800 mn people) ‘The 2 nd Steel Era’ Overview of Industry  World Crude Steel Production Continue Led by BRICs (2.6 bn people)

5. 4 (unit: mn tons) EU (15 ) China Japan US India  Crude Steel Production by Country Overview of Industry

6. 5 Abundant Resources Skilled Human Powers Government Policy Huge Potential for Demand World No.11 in GDP 100 mn middle class earning more than U$3,000 English speaking: 150 mn First satellite launched in Asia 4 Novel prize winners Iron ore reserves13.5 bn tons Coal (5), Chrome (5) Ease regulations Encourage relations with ASEAN and China Indian Culture  Growth Potential of India’s Steel Industry Overview of Industry

7. 6 ChinaJapanUSRussiaKorea Germany Ukraine India 220.1 110.5 90.4 62.7 46.3 44.8 36.9 31.8 (unit: mn tons) Arcelor (France) LNM (Netherlands) NSC (Japan) JFE (Japan) POSCO Baosteel (China) SAILTISCO 42.835.331.330.228.919.812.44.3 By company  Steel Production(2003) Overview of Industry

8. 7  April 1968 - POSCO established  1970 ~ 1981 - Pohang Works constructed (13 mn tpa)  1985 ~ 1992 - Gwangyang Works constructed (17 mn tpa)  October 2000 - Privatization completed KOREA Pohang Works Gwangyang Works Seoul  Brief History ■ POSCO since 1973

9. 8 0 500 1,000 1,500 2,000 2,500 3,000 (unit: 10 th tons) 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 2000 2003 Crude steel Production 2,890 Car making 0 500 1,000 1,500 2,000 2,500 3,000 (th.) #1 BF (1973. 6) Ship building (GT)  Production & Consuming Industries POSCO since 1973

10. 9 2,140 2,990 650 1,590 Semi-Products : 1,400 (unit : th tons) Pohang Works Gwangyang Works Hot Rolled Coil Electrical Steel Plate Cold Rolled Coil Wire Rod Stainless Steel 10,520 9,270 POSCO since 1973  Product Mix in 2003

11. 10 2001200220032004 P Crude steel production 27.828.128.930.0 Export ratio (%) 24.223.324.224.8 Revenue 9.510.012.316.9 Operating income ratio (%) 12.915.621.324.7 Net profit 0.70.91.73.1 Employees 19,19319,16919,37319,400 (unit: mn tons, U$ bn) POSCO since 1973  Operational Performance

12. 11 Sustainability mgmt.Sustainability mgmt. IT mgmt. (ERP, SCP, etc)IT mgmt. (ERP, SCP, etc) 6 Sigma6 Sigma US: USS-POSCO(’86)US: USS-POSCO(’86) China: Zhangjiagang STS(’96)China: Zhangjiagang STS(’96) Qingdao STS(’02), Benxi(’04) Qingdao STS(’02), Benxi(’04) Brazil: KOBRASCO(’96)Brazil: KOBRASCO(’96) 2 World Top Steel Mills2 World Top Steel Mills FINEX/POSTRIP processFINEX/POSTRIP process High value added productsHigh value added products Free cash flow: U$1.5 bn/YFree cash flow: U$1.5 bn/Y World best credit ratingWorld best credit rating POSCO since 1973  Competencies

13. 12 ‘Global POSCO’ ‘Global POSCO’ Increase production capacity in Korea - 30 mn tons(’03) → 32 mn tons(’08) - Total U$10 bn investment Increase production capacity in Korea - 30 mn tons(’03) → 32 mn tons(’08) - Total U$10 bn investment Build new production sites abroad - Production of over 10 mn tpa (within 10 yrs) - Focus on BRICs countries Build new production sites abroad - Production of over 10 mn tpa (within 10 yrs) - Focus on BRICs countries POSCO since 1973  Globalization

14. 13  Steel Trade Overview (’03)  Iron ore: 2.2  Alloy, etc: 0.25  Steel products: 0.3 U$189 mn U$135 mn * POSCO: 0.14 (unit: mn tons) ■ Steel Cooperation of India & Korea

15. 14  Iron ore purchasing by POSCO (’03) Australia 63.2% Brazil 25.1% India 5.0% South Africa 2.6% Etc 4.1% * Japan’s purchase ratio from India: 10.7% Countrymn tons Australia25.9 Brazil10.3 India2.0 S. Africa1.1 Etc1.7 Total41 Steel Cooperation

16. 15  Proposed by POSCO-BHPB consortium (Aug ’04) To build world class integrated steel mills with 10 mn tpa capacity(slab) To develop iron ore mines with 30 mn tpa production Coal supply requirements for the mills will be supplied by BHPB  Total capital investment: U$ 8.4 bn  Operation Start (expt.): Dec 2009 ■ New Chapter of Cooperation  Orissa Project

17. 16 Win-Win Situation  Resources  Human power  Growth potential  Open policy  Capital  Technology  Innovative Management  Overseas experiences  Co-Prosperity New Chapter

18. 17 1929 : Rabindranath Tagore “O Korea, You were a shining light in Asia in the Golden Era of the Orient Torch it once more, Then, Thou wilt be a light of the Orient once more.” ■ Epilogue  Rejuvenating Relation (Karma) through Steel