- Found a joint venture for LED business in China with 10 billion won capital.
- 9 areasincluding integrated production management, logistics automation, energy efficiency system and so forth.

POSCO ICT (CEO Bong-Rae Cho) agreed with Tangshan Steel on mutual cooperation on 9 areas, including the joint venture for LED lighting business. Tangshan Steel is the affiliated company of Hebei Iron and Steel, which is the second largest crude steel producer in the world.

For LED lighting business, POSCO LED, the affiliated company of POSCO ICT, will establish a local company with Tangshan Steel in China this year with a 50% investment. The capital seems to be around 50 million Yuan. The joint venture agreement was signed by both Bong-rae Cho, CEO of POSCO ICT, and We Yong, chairman of Tangshan Steel. The formal company name is TangSteel-POSCO LED, and will be officially founded in November after various preparations.

TangSteel-POSCO LED will be based in Tangshan Shi, Hebei Province, and will focus on factory lights, street lights, and indoor lights first. Factory lights secured a captive market, by supplying the product to five factories first, including Tangshan Steel, Chengde Steel, Xuanhua Iron & Steel, Handan Iron & Steel, North China Mining. It is estimated that the company has sufficient domestic demand to enter the initial market, such as the street light replacement project for Tangshan Shi, together with Tangshan Steel - the core state-run company of Hebei Province.

Semi-finished products (modules) manufactured by POSCO LED will be assembled in China to manufacture finished goods. Later, individual parts will be assembled in China. It is expected that POSCO LED can lay the foundation of leading the market, by securing cost competitiveness through the significant reduction of manufacturing cost, by establishing various supply chains in China.

Market research institutes currently estimate that the LED lighting market size of China amounts to about 4.4 trillion won, and expect that the market will grove by 2.4 times by 2015 (10.6 trillion won). In particular, the Chinese government set up the plan that replaces incandescent lights with LED light by 2015. The Chinese government implements the government supply project that selects model cities and replaces street lights.

On the occasion of LED company foundation, POSCO ICT and Tangshan Steel agreed to cooperate in 9 areas in total. For this, two companies signed a contract of developing a unmanned crane system at Tangshan Steel. Two companies also agreed to diagnose the current systems of Tangshan Steel in 9 areas, including overall logistics automation, integrated production management system, energy management system, environment system (electric precipitator); and develop new systems over the next few years.

"We agreed with Tangshan Steel, the affiliated company of Hebei Iron and Steel ranking second in the world in terms of the crude steel production quantity, regarding business cooperation in 9 areas including the joint venture for LED lighting business. The agreement will give an opportunity of make a new business model through mutual cooperation, by exporting advanced technological skills and know-how of POSCO ICT to overseas markets including China," said one POSCO-ICT related official.