SeAH Besteel Corporation Business Report FY ended Dec. 2014
Financial Overview |
(in millions of won) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | Rate of change |
Factors | |
| Sales | 2,202,367 | 2,112,649 | 4.2% | [Special steel business] -Special steel 2,057.2 billion won (93.4%) -Forged auto components (Crankshafts, axle shafts, CV joints, etc.) 22.9 billion won (1.0%) -Auto parts (Axle assemblies, etc.) 36.7 billion won (1.7%) |
| Operating income | 175,255 | 143,852 | 21.8% | - |
| Net income | 123,694 | 104,009 | 18.9% | - |
Acquisition
-The Company announced that it will acquire 52.3 percent of POSCO Specialty Steel Co., Ltd. shares from POSCO for KRW 567,215 million. POSCO Specialty Steel, headquartered in Changwon, is capitalized at KRW 180,321 million. Its sales reached KRW 1,316,781 million in 2013. (From a press release on December 4, 2014)
Business Partnership
-The Company announced that the company and Formetal Co., Ltd., a Korean forging supplier, have agreed to form a long-term partnership. In accordance with this agreement, Formetal will preferentially use specialty steel produced by SeAH Besteel, while SeAH Besteel will support Formetal's material procurement activities. Formetal, headquartered in Seosan, manufactures auto parts such as spindles, knuckles, arms, connecting rods and camshafts. (From a press release on November 6, 2014)
-The Company and Hanil Forging Co., Ltd., a forged parts supplier based in Changwon, Gyeongsangnam-do, have agreed to enter into a long-term partnership. In accordance with this agreement, Hanil Forging will preferentially use specialty steel produced by SeAH Besteel, while SeAH Besteel will fully support Hanil Forging's material procurement activities. Hanil Forging manufactures auto parts such as axle shafts for commercial vehicles. (From a press release on October 1, 2014)
-The SeAH Group and the Posco Group have signed a memorandum of understanding to discuss a merger between their specialty steel companies, namely, SeAH Besteel and Posco Specialty Steel Co., Ltd. The possible merger is expected to create one of the world's largest specialty steel manufacturers with the annual production capacity of 4 million tons. Its carbon alloy steel capacity is forecast to reach 3 million tons, and its stainless steel and specialty steel capacity is projected to reach 1 million tons per year. (From a press release on August 21, 2014)
Business Plan
-The Company aims to achieve yearly sales of 4 trillion won in 2015.
R&D Structure
-Number of engineers at the technical center : 51 (as of Dec. 31, 2014)
R&D Expenditure |
(in millions of won) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |
| Amount | 21,483 | 20,523 | 23,498 |
| % of Sales | 1.0% | 1.0% | 1.1% |
Recent Developments
| Development projects | Development period |
| VW4227/VW4521 steel for European vehicles | 12 months |
| Continuously cast bearing steel (AE5280) | 12 months |
| High concentration carburized steel | 12 months |
| Hub bearing steel for JTEKT Corporation | 12 months |
| Highly impact-resistant steel for hub bearings (AE1055M) | 12 months |
| Synchronizer cone bearing steel for Hyundai Motor in China | 12 months |
| GRADE 3K bearing steel for SKF | 12 months |
| SFMN436VST steel for 50K high-strength connecting rods | 12 months |
| Steel materials for low-cost hydraulic breakers | 12 months |
| Steel materials for mooring chains | 12 months |
| Steel materials for low-cost cylinders | 12 months |
| Vacuum induction melting technology | 12 months |
Investment in Korea
-In March 2012, the Company announced that it will establish a new manufacturing facility in Changnyeong-gun, Gyeongsangnam-do. The company decided to ramp up its production capacity in response to increase in demand for special steel in Korea. The investment plan, which will start in June 2012, is scheduled to be completed by August 2013. SeAH Besteel plans to spend approximately 190 billion won in this project. (From a press release on March 2, 2012)
Data
Sales |
(in millions of won) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |||
| Special steel |
Special steels | Export | 317,268 | 252,165 | 287,452 |
| Korea | 1,739,997 | 1,735,001 | 1,772,671 | ||
| Subtotal | 2,057,265 | 1,987,166 | 2,060,123 | ||
| Railway components | Export | 0 | 0 | 0 | |
| Korea | 0 | 0 | 190 | ||
| Subtotal | 0 | 0 | 190 | ||
| Forged auto parts | Export | 1,215 | 1,441 | 605 | |
| Korea | 21,746 | 18,527 | 22,170 | ||
| Subtotal | 22,961 | 19,967 | 22,775 | ||
| Subtotal | Export | 318,483 | 253,606 | 288,057 | |
| Korea | 1,761,743 | 1,753,528 | 1,795,031 | ||
| Subtotal | 2,080,226 | 2,007,133 | 2,083,088 | ||
| Large forging parts |
Ingots | Export | 0 | 0 | 0 |
| Korea | 16,292 | 5,849 | 21,705 | ||
| Subtotal | 16,292 | 5,849 | 21,705 | ||
| Forged products | Export | 11,483 | 10,279 | 9,298 | |
| Korea | 53,283 | 42,349 | 31,412 | ||
| Subtotal | 64,765 | 52,628 | 40,710 | ||
| Subtotal | Export | 11,483 | 10,279 | 9,298 | |
| Korea | 69,575 | 48,198 | 53,117 | ||
| Subtotal | 81,057 | 58,477 | 62,415 | ||
| Auto parts | Export | 22,314 | 21,563 | 24,490 | |
| Korea | 14,425 | 14,189 | 14,557 | ||
| Subtotal | 36,740 | 35,752 | 39,047 | ||
| Others | Export | 1,104 | 744 | 328 | |
| Korea | 3,240 | 10,543 | 9,203 | ||
| Subtotal | 4,344 | 11,287 | 9,531 | ||
| Total | Export | 353,384 | 286,192 | 322,173 | |
| Korea | 1,848,983 | 1,826,458 | 1,871,908 | ||
| Total | 2,202,367 | 2,112,649 | 2,194,080 | ||
Production Capacity |
| Division | Product | FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 |
| Special steel | Special steel (in thousand tons) |
2,650 | 2,650 | 2,700 |
| Forging (in thousand EA) |
4,200 | 4,200 | 4,200 | |
| Large forging parts | Ingot (in thousand tons) |
50 | 50 | 100 |
| Forging (in thousand tons) |
100 | 100 | 100 | |
| Auto parts | Assemblies (in thousand units) |
100 | 100 | 100 |
Production Result |
| Division | FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |
| Special steel | Special steel (in thousand tons) |
2,129 | 1,938 | 1,910 |
| Hot forging (in thousand EA) |
- | - | 132 | |
| Cold forging (in thousand EA) |
4,593 | 3,836 | 2,965 | |
| Auto parts | Axles (in thousand EA) |
124 | 117 | 112 |
| Assemblies (in thousand EA) |
54 | 57 | 67 | |
| Large forging parts | Ingot (in thousand tons) |
51 | 29 | 39 |
Capacity Utilization Rate
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |
| Special steel | 91.8% | 91.4% | 93.8% |
| Large forging parts | 62.7% | 50.6% | 46.5% |
| Cold forging parts | 56.5% | 62.9% | 63.8% |
| Assemblies | 95.1% | 94.3% | 54.0% |
*The utilization rate was calculated by dividing the actual number of operating hours by the maximum number of possible operating hours per year.>>>Financial Data