Jang In-hwa, chairman of POSCO Group, is focusing on improving management performance in the second half of the year as he approaches the end of his term early next year. The market views the recovery of profitability in the steel sector, growth in the lithium business, and safety management outcomes as key factors determining the success of Jang's leadership.
According to industry sources, Jang's term lasts until March 2027. Within POSCO, there is uncertainty regarding Jang's reappointment due to the company's decision in 2023 to eliminate the priority review system for the current chairman's reappointment, meaning he must undergo the same evaluation as other candidates.
Jang has not officially expressed his intention to seek reappointment. However, analysts suggest that his recent direct involvement in announcing the group's portfolio restructuring and long-term investment strategies may indicate preparations for a potential reappointment.
Jang faces several challenges during his term. The most urgent issue is restoring competitiveness in the core steel business. While POSCO Holdings reported increases in both revenue and operating profit in the second quarter of this year, the operating profit in the steel sector fell by 33% year-on-year to 403 billion won.
Compared to the previous quarter, there was a recovery due to rising sales prices and increased sales volume. However, structural pressures remain, including oversupply from China, competition from low-cost products, and sluggish domestic construction activity.
Frequent safety incidents also pose risks. Since taking office, Jang has worked to strengthen safety management systems by establishing a special task force for safety inspections and launching a safety-focused subsidiary, POSCO Safety Solutions. However, ongoing industrial accidents at POSCO E&C and steel mills have raised concerns about the effectiveness of safety management.
The lithium business, which Jang aims to develop as a future growth pillar, is also under scrutiny. POSCO Argentina recorded its first quarterly profit in eight years in the second quarter, signaling potential profitability improvements. However, the market is more focused on sustainability than one-time results.
With initial cost burdens from new plant operations and ongoing price volatility in lithium, there is a need to demonstrate a stable profit-generating structure.
On a positive note, POSCO Holdings is on the verge of receiving approval from the Argentine government for a large-scale investment attraction system (RIGI), making it the first Korean company to do so. If approved, the company could benefit from various tax incentives, including corporate tax reductions and customs exemptions, which are expected to enhance the profitability of its local lithium operations.
One industry insider remarked, "The position of POSCO chairman has far more variables regarding reappointment than that of a typical corporate CEO. Achieving solid performance is essential, but the management must also demonstrate results that are convincing to both the government and the market to strengthen the justification for reappointment."
* This article has been translated by AI.
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